LAS VEGAS-Thursday 6 August 2020 [ AETOS Wire ]
Quarterly revenue of $78.4 million, up 12.2% year over year
Quarterly gross margin of 61.2%, down from 64.2% year over year
2,159 active clients at June 30, 2020, up 13.9% year over year
(BUSINESS WIRE)-- Rimini Street, Inc. (Nasdaq: RMNI), a global provider of enterprise software products and services, the leading third-party support provider for Oracle and SAP software products and a Salesforce partner, today announced results for the second quarter ended June 30, 2020.
“For the second quarter, we continued to execute well against our strategic growth plan. We achieved record quarterly revenue, within guidance, delivered quarterly gross margin above guidance, maintained a revenue retention rate over 90 percent, produced another quarter of net income, generated $17.9 million of operating cash flow and further strengthened the balance sheet with record total cash of $73.0 million at quarter end,” stated Seth A. Ravin, Rimini Street co-founder, CEO and chairman of the board. “Prior to the pandemic, we were making investments to meet increasing global demand for our expanded product and service portfolio. We have since accelerated our investments to take advantage of additional demand driven by the pandemic and global economic slowdown. Today, we issue guidance for third quarter revenue growth, raise the low-end of 2020 revenue guidance and affirm our commitment to the long-term goals of improving free cash flow and growing GAAP profitability.”
Second Quarter 2020 Financial Highlights
- Revenue was $78.4 million for the 2020 second quarter, an increase of 12.2% compared to $69.9 million for the same period last year.
- Annualized Subscription Revenue was $311 million for the 2020 second quarter, an increase of 12.0% compared to $278 million for the same period last year.
- Active Clients as of June 30, 2020 were 2,159, an increase of 13.9% compared to 1,896 Active Clients as of June 30, 2019.
- Revenue Retention Rate was 92% for both the trailing 12 months ended June 30, 2020 and for the comparable period ended June 30, 2019.
- Gross margin was 61.2% for the 2020 second quarter compared to 64.2% for the same period last year.
- Operating income was $5.1 million for the 2020 second quarter compared to $7.2 million for the same period last year.
- Non-GAAP Operating Income was $9.7 million for the 2020 second quarter compared to $8.4 million for the same period last year.
- Net income was $3.5 million for the 2020 second quarter compared to $6.1 million for the same period last year.
- Non-GAAP Net Income was $8.1 million for the 2020 second quarter compared to $7.3 million for the same period last year.
- Adjusted EBITDA for the 2020 second quarter was $9.6 million compared to $8.5 million for the same period last year.
- Basic and diluted net income (loss) per share attributable to common stockholders was a net loss per share of $(0.05) for the 2020 second quarter compared to a break even result for the same period last year.
- Employee count as of June 30, 2020 was 1,343, a year-over-year increase of 14%.
Reconciliations of the non-GAAP financial measures provided in this press release to their most directly comparable GAAP financial measures are provided in the financial tables included at the end of this press release. An explanation of these measures, why we believe they are meaningful and how they are calculated is also included under the heading “About Non-GAAP Financial Measures and Certain Key Metrics.”
Second Quarter 2020 Company Highlights
- Announced the global availability of Rimini Street Support for SAP S/4HANA, broadening the Company’s SAP service portfolio to offer more choice to clients, regardless of software release. The Company also announced that leading pharmaceutical distributor in Mexico, Nadro, switched to Rimini Street Support for its highly customized hybrid deployment of SAP S/4HANA, SAP Business Suite 7 and SAP HANA Database.
- Appointed seasoned IT veteran, Gerard Brossard, to the newly created role of executive vice president and chief operating officer responsible for the Company’s global field operations, and the global sales and success of Rimini Street’s Support and Application Management Services for Oracle and SAP.
- Expanded investment in Latin America and appointed Alejandro González to the newly created role of general manager for Mexico and Central America to service the Company’s growing client base and meet the growing demand in the region for its enterprise software support services.
- Introduced the Company’s new patent pending Rimini Street Artificial Intelligence Support Applications, which delivers a better client experience and has reduced software resolution times by 23%.
- Named in Zippia Career Experts’ Top 20 Companies to Work for in Las Vegas.
- Announced several companies globally who have switched from Oracle or SAP to Rimini Street Support including:
- Announced that Airservices Australia, Australia’s air navigation service provider, further extended its maintenance and support agreement for its mission-critical SAP platform with Rimini Street.
- Closed over 8,000 support cases across 49 countries, and delivered nearly 20,000 tax, legal and regulatory updates to clients in 38 countries, while achieving an average client satisfaction rating on the Company’s support delivery of over 4.8 out of 5.0 (where 5.0 is rated excellent).
- Presented at eight virtual CIO, CFO and IT and procurement leader events worldwide, including the Japan Association for CFOs, HMG Strategy’s CIO Virtual Summit in St. Louis, MO, and IT for Business’ “Sustaining Your ERP Investments” event in France.
- Donated to 30 charities around the world through the Rimini Street Foundation, including supporting charities via the Foundation’s Emergency Disaster Relief Fund.
2020 Revenue Guidance
The Company is currently providing third quarter 2020 revenue guidance to be in the range of $78.5 million to $80.5 million. The Company is also raising the low-end of full year revenue guidance from $310 million to $314 million and currently providing full year 2020 revenue guidance to be in the range of $314 million to $320 million.
Webcast and Conference Call Information
Rimini Street will host a conference call and webcast to discuss the second quarter 2020 results and select third quarter 2020 performance to-date commentary at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time on August 5, 2020. A live webcast of the event will be available on Rimini Street’s Investor Relations site at https://investors.riministreet.com. Dial-in participants can access the conference call by dialing (800) 773-2954 in the U.S. and Canada and enter the code 49852238. A replay of the webcast will be available for at least 90 days following the event.
Company’s Use of Non-GAAP Financial Measures
This press release contains certain “non-GAAP financial measures.” Non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles. This non-GAAP information supplements, and is not intended to represent a measure of performance in accordance with disclosures required by U.S. generally accepted accounting principles, or GAAP. Non-GAAP financial measures should be considered in addition to, and not as a substitute for or superior to, financial measures determined in accordance with GAAP. A reconciliation of GAAP to non-GAAP results is included in the financial tables included in this press release. Presented under the heading “About Non-GAAP Financial Measures and Certain Key Metrics” is a description and explanation of our non-GAAP financial measures.
About Rimini Street, Inc.
Rimini Street, Inc. (Nasdaq: RMNI) is a global provider of enterprise software products and services, the leading third-party support provider for Oracle and SAP software products and a Salesforce partner. The Company offers premium, ultra-responsive and integrated application management and support services that enable enterprise software licensees to save significant costs, free up resources for innovation and achieve better business outcomes. Over 2,100 Fortune 500, Fortune Global 100, midmarket, public sector and other organizations from a broad range of industries rely on Rimini Street as their trusted application enterprise software products and services provider. To learn more, please visit http://www.riministreet.com/, follow @riministreet on Twitter and find Rimini Street on Facebook and LinkedIn. (IR-RMNI)
Certain statements included in this communication are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “may,” “should,” “would,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “seem,” “seek,” “continue,” “future,” “will,” “expect,” “outlook” or other similar words, phrases or expressions. These forward-looking statements include, but are not limited to, statements regarding our expectations of future events, future opportunities, global expansion and other growth initiatives and our investments in such initiatives. These statements are based on various assumptions and on the current expectations of management and are not predictions of actual performance, nor are these statements of historical facts. These statements are subject to a number of risks and uncertainties regarding Rimini Street’s business, and actual results may differ materially. These risks and uncertainties include, but are not limited to, the duration of and economic, operational and financial impacts on our business of the COVID-19 pandemic, as well as the actions taken by governmental authorities, clients or others in response to the COVID-19 pandemic; catastrophic events that disrupt our business or that of our current and prospective clients, changes in the business environment in which Rimini Street operates, including inflation and interest rates, and general financial, economic, regulatory and political conditions affecting the industry in which Rimini Street operates; adverse developments in pending litigation or in the government inquiry or any new litigation; our need and ability to raise additional equity or debt financing on favorable terms and our ability to generate cash flows from operations to help fund increased investment in our growth initiatives; the sufficiency of our cash and cash equivalents to meet our liquidity requirements; the terms and impact of our outstanding 13.00% Series A Preferred Stock; changes in taxes, laws and regulations; competitive product and pricing activity; difficulties of managing growth profitably; the customer adoption of our recently introduced products and services, including our Application Management Services (AMS), Rimini Street Advanced Database Security, and services for Salesforce Sales Cloud and Service Cloud products, in addition to other products and services we expect to introduce in the near future; the loss of one or more members of Rimini Street’s management team; uncertainty as to the long-term value of Rimini Street’s equity securities; and those discussed under the heading “Risk Factors” in Rimini Street’s Quarterly Report on Form 10-Q filed on August 5, 2020, and as updated from time to time by Rimini Street’s future Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other filings by Rimini Street with the Securities and Exchange Commission. In addition, forward-looking statements provide Rimini Street’s expectations, plans or forecasts of future events and views as of the date of this communication. Rimini Street anticipates that subsequent events and developments will cause Rimini Street’s assessments to change. However, while Rimini Street may elect to update these forward-looking statements at some point in the future, Rimini Street specifically disclaims any obligation to do so, except as required by law. These forward-looking statements should not be relied upon as representing Rimini Street’s assessments as of any date subsequent to the date of this communication.
© 2020 Rimini Street, Inc. All rights reserved. “Rimini Street” is a registered trademark of Rimini Street, Inc. in the United States and other countries, and Rimini Street, the Rimini Street logo, and combinations thereof, and other marks marked by TM are trademarks of Rimini Street, Inc. All other trademarks remain the property of their respective owners, and unless otherwise specified, Rimini Street claims no affiliation, endorsement, or association with any such trademark holder or other companies referenced herein.
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