Rimini Street, Inc. Q4 FY2025 earnings call

• Fourth quarter results reflect solid execution and continued accelerating sales growth adjusted for Oracle PeopleSoft support and services wind down. Grew core Rimini Support subscription billings and launched next-generation Agentic AI ERP solutions. Closed 19 new client transactions over $1 million in TCV totaling $58.1 million, added 73 new logos. - ERP software is peaking technically, and Rimini Street will deliver new ERP capabilities and process execution faster, better and cheaper with Agentic AI ERP solutions. Can be easily deployed over existing ERP software, reducing operating costs up to 90% for existing ERP software landscapes. - Announced release of first 20 Rimini Agentic UX solutions developed through partnership with ServiceNow, helping clients achieve significant operational gains like faster approvals, reduced order cycle times, etc. - Continue strengthening ecosystem of global partners and alliances, extending reach, bringing complementary expertise and helping clients execute modernization strategies.

Fourth quarter 2025 revenue was $109.8 million, full year 2025 revenue was $421.5 million. Excluding support services for PeopleSoft products, Q4 revenue decreased by 0.4% and full year 2025 revenue increased 1%. Billings for Q4 were $171.3 million, relatively flat year-over-year; full year 2025 billings were $427.9 million, an increase of 1.2%. Excluding billings associated with support services for PeopleSoft products, full year 2025 billings increased by 4.2% year-over-year. Annualized recurring revenue (ARR) for Q4 2025 was $411.4 million, a year-over-year decrease of 0.8%. Revenue retention rate for service subscriptions (making up 96% of revenue) was approximately 88%, with approximately 86% of subscription revenue noncancelable for at least 12 months. Gross margin was 60.4% of revenue for both Q4 and full year 2025. On a non-GAAP basis, gross margin was 60.8% for Q4 and 60.9% for full year 2025. Operating expenses: reorganization charges for Q4 were $2.6 million, full year 2025 were $4.5 million. Sales and marketing expense as a percentage of revenue was 37.7% for Q4 and 36% for full year 2025. On a non-GAAP basis, it was 36.8% for Q4 and 35% for full year 2025. General and administrative expenses as a percentage of revenue (excluding outside litigation costs) was 15.8% for Q4 and 16.6% for full year 2025. On a non-GAAP basis, it was 14.7% for Q4 and 15.4% for full year 2025. Net income attributable to shareholders for Q4 2025 was $724,000 or $0.01 per diluted share. Full year 2025 net income was $0.39 per diluted share. On a non-GAAP basis, Q4 net income was $6 million or $0.06 per diluted share. Full year 2025 non-GAAP net income was $0.23 per diluted share. Adjusted EBITDA for Q4 2025 was $11.5 million or 10.4% of revenue. Full year 2025 adjusted EBITDA was $49.8 million or 11.8% of revenue. Deferred revenue as of Dec 31, 2025 was $288 million. Remaining performance obligations (RPO) as of Dec 31, 2025 was $653 million, an increase of 11% from prior year. Revenue from PeopleSoft Support services was 4% of revenue for Q4 and 5% for full year 2025, down from 8% when the wind down began in 2024.

• First quarter 2026 revenue guidance is in the range of $101.5 million to $103.5 million. - Reiterating full year 2026 guidance: revenue growth in the 4% to 6% range with adjusted EBITDA margins in the 12.5% to 15.5% range.

Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. Encourage to review most recent SEC filings, including Form 10-K filed today for a discussion of risks that may affect future results or stock price.

Q: The implied revenue change in the first quarter of '26 is about a 1.5% year-over-year decline, plus or minus. The obvious math is that the year-over-year comparisons are going to have to grow more than 4% to 6% for the remaining 3 quarters in 2026. So I'm curious as to the visibility of this, not only return to growth, but exiting the year close to 6%. Is it supported by expected new business wins or already signed business wins? And then remind us, once a contract has been awarded to Rimini, whether it's traditional maintenance or your new Agentic AI offering, how quickly does it begin and then ramp?

A: Seth Ravin said they expect Q1 numbers to be solid as they are components of signed Q4 business. Michael Perica said when excluding the PeopleSoft component, it would be a growth period and they have improved visibility relative to entering the year in the last couple of years. Seth Ravin also said contracts for Agentic AI projects have a mix of services, with professional service revenue coming right away and subscription components taking a little longer to ramp.

Q: We look at both the COGS line and the sales and marketing lines, the absolute dollar spending came in pretty well above recent trending levels. Are there any onetime items in there? Or do you view this as sort of a new level to hit ahead? And then maybe more specifically in the sales and marketing, how much of that is maybe new heads being brought on or as a result of better billings?

A: Seth Ravin said they are investing in sales and marketing due to new products and services, hiring roughly 20 new sellers, raising quotas for sellers, and increasing marketing spend for launching the Agentic line. These are not new levels expected to keep, and they expect to be in the mid-30s, 33% to 35% range at scale.

Q: On your -- Michael, RPO was a strong 12% ex PeopleSoft that accelerated from 9% last quarter. Any specific drivers of that? And this is well above your revenue growth guide? Is this just conservatism? Or is there any reason why it would take longer to translate into a higher revenue number?

A: Michael Perica said there was no particular trend that altered from last quarter with regard to the constitution on the duration of RPO, and they believe it gives increased confidence in being able to at least achieve and potentially beat on the top line expectations, though 2 quarters doesn't make a long-term trend but they are encouraged by the momentum.

Q: Curious, do you expect the return to growth this year to be driven more so by increasing acceleration growth of new clients or better retention? Or is it really more about higher spend per customer as more clients adopt the new Agentic AI offering?

A: Seth Ravin said it's a combination. They expect growing support sales due to software vendors pushing customers to new versions, etc., and their ability to stabilize environments and show the path forward with Agentic AI on top, creating a combination that drives growth in all categories.

Q: This is Daniel on for Jeff. Seth, maybe just starting off on the adoption to date on Rimini Agentic UX. I know that came out in December, and then we had the GA here in January of the 20 additional solutions. You talked on this call about a few specific adopters. If you could help us understand the scale of that adoption. Are we talking about a handful of early adopters? Are we talking dozens? Just what stage those are at as well, whether we're talking pilots or full-scale production?

A: Seth Ravin said customers are interested but it will take a while for everyone to understand how the technologies work together as AI is an overwhelming component of change. They are starting to get projects installed and build a reference-able customer base, with adoption expected to start more towards the back half of the year.

Q: This is Daniel on for Jeff. Michael, on the model, just the $5 million beat very nice. I know -- I think you called out that was $2.1 million, if I heard correct, that was onetime. Just anything else to call out in terms of the sources of strength on the quarter? And then also your thoughts on why that didn't flow into the -- I believe EBITDA was around the midpoint. Just your thoughts on the flow-through.

A: Michael Perica said there were no other elements up and down the P&L that were onetime-ish nonrecurring in nature of any size. The drop-through to the bottom line was due to longer-term commitments where revenue was pulled into the period versus 1 to 2 years out.