Rimini Street Announces Fiscal Third Quarter 2020 Financial Results

Quarterly revenue of $82.5 million, up 19.3% year over year

Quarterly calculated billings of $68.3 million, up 33.3% year over year

2,365 active clients at September 30, 2020, up 16.4% year over year

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 third quarter ended September 30, 2020.

“For the third quarter, we continued to execute well against our strategic growth plan. We achieved record quarterly revenue above guidance, record new sales invoicing and backlog, calculated billings growth of 33.3% year-over-year, quarterly gross margin above guidance, maintained a revenue retention rate over 90 percent, produced another consecutive quarter of net income, further strengthened the balance sheet with record total cash of $83.7 million at quarter end and generated $31.8 million in year-to-date operating cash flow, a 51.7% year-over-year improvement,” stated Seth A. Ravin, Rimini Street co-founder, CEO and chairman of the board. “We also continued making investments to take advantage of growing global demand for Rimini Street’s support solutions, including our new AMS services, and additional demand driven by the pandemic and global economic challenges. Today, we are issuing guidance for fourth quarter revenue, raising the full year 2020 revenue guidance range and affirming our continued commitment to the long-term goals of improving free cash flow and growing GAAP profitability.”

• Revenue was $82.5 million for the 2020 third quarter, an increase of 19.3% compared to $69.2 million for the same period last year.
• Annual Recurring Revenue was $327 million for the 2020 third quarter, an increase of 18.6% compared to $275 million for the same period last year.
• Active Clients as of September 30, 2020 were 2,365, an increase of 16.4% compared to 2,032 Active Clients as of September 30, 2019.
• Revenue Retention Rate was 92% for both the trailing 12 months ended September 30, 2020 and for the comparable period ended September 30, 2019.
• Gross margin was 61.2% for the 2020 third quarter compared to 62.5% for the same period last year.
• Operating income was $4.5 million for the 2020 third quarter compared to $2.2 million for the same period last year.
• Non-GAAP Operating Income was $10.5 million for the 2020 third quarter compared to $7.1 million for the same period last year.
• Net income was $3.3 million for the 2020 third quarter compared to $1.4 million for the same period last year.
• Non-GAAP Net Income was $9.3 million for the 2020 third quarter compared to $6.3 million for the same period last year.
• Adjusted EBITDA for the 2020 third quarter was $11.0 million compared to $7.3 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 third quarter compared to a net loss of $(0.08) for the same period last year.
• Employee count as of September 30, 2020 was 1,384, a year-over-year increase of 13%.
• Subsequent to the third quarter close, the Company repurchased $5 million face value of Series A preferred stock for an approximate 10% discount to face-value (par); no make-whole payments were required and the purchased preferred shares were retired.

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.”

Third Quarter 2020 Company Highlights

• Completed a follow-on public offering of approximately 6.1 million shares of the Company’s common stock, with net proceeds of approximately $25.1 million.
• On October 1, 2020, announced the appointment of seasoned finance leader Michael L. Perica as executive vice president and CFO to support the next phase of the Company’s growth.
• Announced several client successes with new and existing clients which have switched from Oracle or SAP to Rimini Street Support or have increased their subscription services with Rimini Street, including:
  • Hyundai-Kia Motors, one of the world’s leading auto manufacturers, which extended its support agreement with the Company to include all of its overseas branches and affiliates worldwide;
  • Vedacit, a leading manufacturer of construction products based in Brazil;
  • FP Corporation, the largest maker of plastic food containers and packaging materials in Japan;
  • Green Cargo, the Swedish state-owned rail logistics operator, who renewed its support agreement;
  • Rassini NHK Automotive, a parts and accessories manufacturer in Brazil; and
  • Elders, a leading agribusiness in Australia.
• Closed more than 8,300 support cases across 46 countries, and delivered more than 14,000 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).
• Announced the further enhancement of the Company’s industry-leading service response guarantee for clients, with new SLAs shortened from 15 minutes to 10 minutes for critical Priority 1 cases, and from 30 minutes to 15 minutes for serious Priority 2 cases.
• Won eight awards for excellence in client service and Company product and employee engagement innovations, including Gold Stevie awards for Company of the Year, Employer of the Year and Innovation of the Year.
• Presented at 15 virtual CIO, CFO and IT and procurement leader events worldwide including CXOsync in Washington, D.C., IDG’s Future IT in Boston, and MIT Sloan CIO Digital Learning Series.
• Donated to 32 charities around the world through the Rimini Street Foundation.

2020 Revenue Guidance

The Company is providing fourth quarter 2020 revenue guidance to be in the range of $82.5 million to $83.5 million. The Company is also raising full year revenue guidance to be in the range of $321.5 million to $322.5 million, up from a range of $314 million to $320 million.

Webcast and Conference Call Information

Rimini Street will host a conference call and webcast to discuss the third quarter 2020 results and select fourth quarter 2020 performance to-date commentary at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time on November 5, 2020. A live webcast of the event will be available on Rimini Street’s Investor Relations site athttps://investors.riministreet.com. Dial-in participants can access the conference call by dialing (800) 708-4540 in the U.S. and Canada and enter the code 49989778. 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.

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