Rimini Street (RMNI) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 was $103.1 million, down 3.1% year-over-year, with both U.S. and international revenues declining; H1 2024 revenue was $209.9 million, down 1% year-over-year.

• Gross margin fell to 59.1% (GAAP) from 63.0% year-over-year, with net loss of $1.1 million and non-GAAP net income of $6.1 million.

• Company is winding down Oracle PeopleSoft services, which represented 8% of revenue, with the process expected to take over a year.

• Ongoing litigation with Oracle continues to impact costs, guidance, and operational risk; guidance remains suspended.

• Initiated a reorganization and cost reduction program targeting $35M in annualized savings, with $15M realized in Q2 and $20M targeted for Q3.

Financial highlights

• Q2 2024 revenue: $103.1M (down 3.1%); H1 2024 revenue: $209.9M (down 1%).

• Gross margin: 59.1% (GAAP), 59.5% (Non-GAAP), both down from prior year.

• Adjusted EBITDA for Q2 2024 was $8.8M (8.5% of revenue), and $19.5M for H1 2024.

• Net loss for Q2 2024 was $1.1M (–$0.01 per diluted share); non-GAAP net income was $6.1M.

• Cash and short-term investments at quarter end were $134.2M.

Outlook and guidance

• Guidance for future financial results remains suspended due to ongoing Oracle litigation and uncertainty.

• Management expects cost reductions to improve profitability, with more impact in Q3 and Q4.

• Margin pressure expected to continue due to client attrition, unfavorable mix, and investment in new offerings.

• Cash and operating cash flow are expected to be sufficient for at least 12 months, barring significant adverse events.