Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Rimini Street Inc (NASDAQ:RMNI) achieved positive momentum in billings, new clients, and client renewals during the fourth quarter.
• The company reported a 7.1% year-over-year improvement in quarterly billings, driven by strong performance in Latam, EEA, and Asia Pacific regions.
• Rimini Street Inc (NASDAQ:RMNI) has expanded its services to more software products, including new support for VMware, which has shown strong sales potential.
• The company has implemented a new go-to-market strategy in the Americas, adopting the Hunter Farmer sales model to drive growth in both new and existing client sales.
• Rimini Street Inc (NASDAQ:RMNI) achieved a support client case satisfaction average rating over 4.9 out of 5.0, indicating strong client satisfaction.

Negative Points

• Revenue for the full year 2024 decreased by 0.6%, and annualized recurring revenue saw a year-over-year decrease of 4.1%.
• The company is facing ongoing litigation with Oracle, which has resulted in significant legal expenses, including a $58.5 million payment for Oracle's attorneys' fees.
• Rimini Street Inc (NASDAQ:RMNI) has suspended guidance on future financial results due to uncertainties related to litigation with Oracle.
• Operating cash flow decreased by $38.8 million in 2024 compared to an increase in the previous year, partly due to litigation settlement expenses.
• The company is reassessing its exit from the PeopleSoft business, which has seen a decline in revenue contribution.

Q & A Highlights

• Warning! GuruFocus has detected 9 Warning Signs with RMNI.

Q: Can you discuss the changes in sales and restructuring efforts, and how they might impact revenue growth in North America and internationally? A: Seth Raven, CEO, explained that the company has made significant changes in sales strategy, including restructuring efforts to focus on multi-product solutions rather than single products. This has involved developing new products and deploying capabilities globally. He expressed optimism about returning to growth and higher profitability, indicating that the company is on the upswing after a challenging period.

Q: How has the litigation with Oracle impacted the pipeline, and what is the current status? A: Seth Raven noted that the Remini2 ruling in July 2023 had a negative impact on the pipeline, but the recent positive appellate court decision in December 2024 is expected to provide uplift. However, the impact of this decision was not measurable in the fourth quarter due to its timing.

Q: Can you provide more details on the cost savings and operating expenses in the fourth quarter? A: Michael Parika, CFO, clarified that the company achieved $18 million in net annualized cost savings by the end of 2024, with a target of $22 million by mid-Q1 2025. The variance in reported figures is due to one-time project-related non-recurring expenses.

Q: What contributed to the billing strength in the fourth quarter, and which areas showed the most growth? A: Seth Raven attributed the billing strength to improved global execution, leadership changes, and execution improvements, particularly outside the US. The US also saw higher year-over-year bookings, indicating broad-based strength in the fourth quarter.

Q: How is the partnership with ServiceNow progressing, and what are the expectations for 2025? A: Seth Raven described the partnership with ServiceNow as complex, involving new consulting offerings and global alignment. Significant pipeline has been built, and both companies are making necessary investments. The partnership is expected to drive accretive sales opportunities and contribute positively in 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.