Rimini Street Announce
Rimini Street Announces Fiscal Second Quarter 2022 Financial Results
Quarterly revenue of $101.2 million, up 10.5% year over year
Gross margin of 63.1%, up from 62.2% year over year
Quarterly Billings of $101.6 million, down 5.3% year over year
2,905 Active Clients at June 30, 2022, up 9.8% year over year
LAS VEGAS -- (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, 2022.
“For the second quarter, we had many positive financial and operational achievements, including strong subscription renewals and extensions, increased cross-sales of our expanded solution portfolio to existing clients and we maintained our excellent, industry-leading client satisfaction rating of more than 4.9 out of 5.0 for cases and onboarding,” stated Seth A. Ravin, Rimini Street co-founder, CEO and chairman of the board. “However, in line with other companies, we faced global macro environment and currency exchange rate headwinds that impacted revenue growth by 1%. We believe that the macro environment will ultimately benefit our business, and we are addressing it and other opportunities with changes that include my return to oversee global revenue operations to re-accelerate growth.”
“For the second quarter, we achieved record revenue of $101.2 million and a record Revenue Retention Rate of 95% on subscription revenue, a gross margin greater than 63%, generated $15 million of operating cash flow, a record end of quarter cash balance of more than $160 million and delivered solid operating income, Non-GAAP Operating Income and Adjusted EBITDA results,” stated Michael L. Perica, Rimini Street chief financial officer. “Additionally, during the quarter, we increased our common stock repurchase plan from $15 million over two years to $50 million over four years and prepaid $5 million of our term loan without any early prepayment penalty.”
Second Quarter 2022 Financial Highlights
Revenue was $101.2 million for the 2022 second quarter, an increase of 10.5% compared to $91.6 million for the same period last year.
U.S. revenue was $53.9 million, an increase of 8.8% compared to $49.6 million for the same period last year.
International revenue was $47.3 million, an increase of 12.5% compared to $42.1 million for the same period last year.
Annualized Recurring Revenue was $396.7 million for the 2022 second quarter, an increase of 9.6% compared to $362.1 million for the same period last year.
Active Clients as of June 30, 2022 were 2,905, an increase of 9.8% compared to 2,645 Active Clients as of June 30, 2021.
Revenue Retention Rate was 95% for the trailing twelve months ended June 30, 2022 and 94% for the comparable period ended June 30, 2021.
Subscription revenue of $99.2 million, which accounted for 98.0% of total revenue for the 2022 second quarter compared to subscription revenue of $90.5 million, which accounted for 98.8% of total revenue for the same period last year.
Gross margin was 63.1% for the 2022 second quarter compared to 62.2% for the same period last year.
Operating income was $5.7 million for the 2022 second quarter compared to $4.6 million for the same period last year.
Non-GAAP Operating Income was $11.9 million for the 2022 second quarter compared to $9.8 million for the same period last year.
Net income was $0.1 million for the 2022 second quarter compared to a net income of $6.8 million for the same period last year.
Non-GAAP Net Income was $6.4 million for the 2022 second quarter compared to $8.4 million for the same period last year.
Adjusted EBITDA for the 2022 second quarter was $11.0 million compared to $9.9 million for the same period last year.
Basic and diluted net income (loss) per share attributable to common stockholders was a net income per share of $0.00 and $0.00, respectively, for the 2022 second quarter compared to a net loss per share of $0.06 for the same period last year.
Cash balance (not including restricted cash) of $160.2 million at June 30, 2022, an increase of 45% compared to $110.4 million for the same period last year.
Employee count as of June 30, 2022 was 1,834, a year-over-year increase of 17.9%.
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 2022 Company Highlights
Announced representative new clients who switched to, or existing clients who expanded their agreements with, Rimini Street, including:
Labeyrie Fine Foods, a French fine food manufacturer
Sajo Systems, an affiliate of Sajo Group, a major fisheries company in Korea, that supports IT, logistics and assets
SK Networks, South Korean household appliances and electronic goods merchant
AllianceCorp Manufacturing, Malaysia integrated contract manufacturing solutions for precision parts
Lwart, a pioneer in oil recycling in Latin America
E-LAND Innople, an IT affiliate of the South Korean conglomerate E-Land Group
State Library of Victoria, Australia’s oldest library
Closed more than 9,411 support cases and delivered nearly 9,813 tax, legal and regulatory updates to clients across 30 countries, while achieving an average client satisfaction rating on the Company’s support delivery of more than 4.9 out of 5.0 (where 5.0 is rated excellent).
Recognized in UK’s Best Workplaces™ and Ranked among the UK’s Best Workplaces™ for Wellbeing by Great Place to Work®
Presented and participated in almost 30 CIO and IT leader events worldwide.
The Rimini Street Foundation provided financial aid to 25 charities and dedicated 350 employee hours to 7 charities in Malaysia, Singapore, and USA. In May, the Foundation celebrated the winners of its $50,000 RMNI LOVE Grant Program, supporting 5 notable charities in Las Vegas with a donation of $10,000 each. For Pride Month in June, The Rimini Street Foundation proudly contributed $10,000 to OutRight Action International, a global organization advocating for equal rights for the LGBTIQ community.
2022 Business Outlook
The Company is guiding to a revenue range of $100.5 million to $102.5 million for the 2022 third quarter and we are maintaining full year 2022 revenue guidance to be in the range of $402 million to $411 million.
Webcast and Conference Call Information
Rimini Street will host a conference call and webcast to discuss the second quarter 2022 results and select third quarter 2022 performance to-date commentary at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time on August 3, 2022. 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 (888) 999-2501 in the U.S. and Canada. A replay of the webcast will be available for one year 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 within 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. To date, over 4,800 Fortune 500, Fortune Global 100, midmarket, public sector and other organizations from a broad range of industries have relied 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 amount and timing of repurchases, if any, under our stock repurchase program and our ability to enhance stockholder value through such program; the impact of our credit facility’s ongoing debt service obligations and financial and operational covenants on our business and related interest rate risk, including uncertainty from the discontinuance of LIBOR and transition to any other interest rate benchmarks; 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 pandemic; changes in the business environment in which Rimini Street operates, including the impact of any recessionary economic trends, including inflation, rising interest rates and changes in foreign exchange rates, as well as general financial, economic, regulatory and political conditions affecting the industry in which Rimini Street operates and the industries in which our clients operate; the evolution of the enterprise software management and support landscape facing our clients and prospects and our ability to attract and retain clients and further penetrate our client base; catastrophic events that disrupt our business or that of our current and prospective clients, including terrorism and geopolitical actions specific to an international region; adverse developments in and costs associated with defending pending litigation 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, including under our credit facility; our ability to maintain an effective system of internal control over financial reporting and our ability to remediate any identified material weaknesses in our internal controls; changes in laws and regulations, including changes in tax laws or unfavorable outcomes of tax positions we take, or a failure by us to establish adequate reserves for tax events; competitive product and pricing activity; challenges of managing growth profitably; customer adoption of our products and services, including our Application Management Services (AMS) offerings, in addition to other products and services we expect to introduce in the future; the loss of one or more members of Rimini Street’s management team; our ability to attract and retain qualified employees and key personnel; uncertainty as to the long-term value of Rimini Street’s equity securities; the effects of seasonal trends on our results of operations, including the contract renewal cycles for vendor supplied software support and managed services; our ability to prevent unauthorized access to our information technology systems and other cybersecurity threats, protect the confidential information of our employees and clients and comply with privacy and data protection regulations; and those discussed under the headings “Risk Factors” and “Cautionary Note About Forward-Looking Statements” in Rimini Street’s Quarterly Report on Form 10-Q filed on August 3, 2022, 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.
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