Rimini Street (RMNI) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $104.7 million, down 2.6%–3% year-over-year, with international clients representing 51% of revenue and U.S. revenue declining 7%–7.4%.

• Net loss attributable to shareholders was $43.1 million, or $0.47 per diluted share, primarily due to a $58.5 million litigation expense accrual.

• Non-GAAP net income was $19.9 million, or $0.22 per diluted share, up from $0.13 per share a year ago.

• Gross margin declined to 60.7% from 62.7% year-over-year.

• Company began winding down Oracle PeopleSoft services, which represented 8% of revenue for the nine months ended September 30, 2024.

Financial highlights

• Annualized recurring revenue was $401.5 million–$402 million, down 3.6% year-over-year.

• Revenue retention rate for service subscriptions was 89%, down from 94% a year ago.

• Deferred revenue was $202.3 million–$223.3 million, down from $238.4 million a year ago.

• Calculated billings for Q3 2024 were $65.2 million, up from $60.5 million in Q3 2023.

• Adjusted EBITDA was $13.7 million, or 13.1% of revenue, down from $18.2 million and 17% in the prior year quarter.

Outlook and guidance

• Guidance for future financial results remains suspended due to ongoing litigation with Oracle and related uncertainties.

• Management is optimistic about a return to growth and profitability, citing improved sales execution and cost optimization.

• Wind-down of Oracle PeopleSoft services expected to reduce related revenue over time, but timing of full exit is unclear.

• Company expects continued margin pressure due to lack of new client contracts, unfavorable mix, and ongoing investments.

• Management believes current liquidity and credit facility are sufficient for at least 12 months, barring significant adverse events.