Quarterly gross profit of 60.6%
1,581 active clients at March 31, 2018, up 23% year over year
Rimini Street, Inc. (Nasdaq: RMNI), a global provider of enterprise software products and services, and the leading third-party support provider for Oracle and SAP software products, today announced financial results for its first quarter ended March 31, 2018.
“Rimini Street executed well in the first quarter of 2018, in revenue, service delivery and global operations,” stated Seth A. Ravin, Rimini Street co-founder and CEO. “We increased our investment in sales and marketing, and invested in the development of several new product and service solutions launched in April and May. We also had positive developments in our ongoing litigation with Oracle, including the U.S. Court of Appeals reversing and vacating certain awards, and ordering Oracle to refund approximately $50 million (which Oracle has done, a portion of which has been paid into escrow). Rimini Street plans to fuel growth and continue improving operating leverage by recruiting and hiring additional senior executive talent, further increasing sales and marketing investments, ramping up sales of new product and service offerings, and expanding global service delivery capabilities.”
“Revenue in the first quarter of fiscal year 2018 came in within our guidance range, and was driven by balanced growth across all geographies. The litigation refund of $21.5 million we received from Oracle in the quarter was used primarily to pay down debt obligations under our credit facility on April 3, 2018,” stated Tom Sabol, Rimini Street CFO. “This decreased our total debt obligations while lowering our go forward debt servicing costs. In addition, we remain committed to further reducing our cost of capital and improving free cash flows to fund investment in growth opportunities.”
Launch of New Product and Service Solutions
On April 24, Rimini Street announced the immediate availability of Rimini Street Mobility and Rimini Street Analytics - its latest offerings in a new family of solutions designed to provide an improved competitive advantage to organizations with mature and valuable enterprise software investments. Rimini Street Advanced Database Security was the first offering in this new family of products, and launched in 2017. Rimini Street’s new solutions enable an organization to quickly and cost-effectively modernize their current enterprise software with the latest desired features and capabilities, future-proof their technical platforms against yet-unknown technology changes, and secure their systems against a constantly evolving threat environment. Rimini Street’s new solutions allow organizations to leverage their existing systems as a solid foundation for an innovative hybrid IT strategy.
Additionally, today, Rimini Street announced the extension of its proven, award-winning support model and global capabilities to SaaS products, beginning with the launch of services for Salesforce Sales Cloud and Service Cloud products. The Company’s goal is to help clients achieve greater success by optimizing their investment across the hybrid enterprise, which now includes support for traditionally-licensed and SaaS enterprise software. Salesforce customers can leverage Rimini Street’s award-winning, ultra-responsive support services to supplement and complement their core Salesforce-provided maintenance program to accelerate delivery of capabilities, optimize total operating costs and maximize ROI. These new services will enable Salesforce customers to benefit from Rimini Street’s proven 24x7x365 operational support with 15-minute guaranteed response for urgent issues, in addition to managed system administration and configuration, customization and integration project services.
Press releases that contain additional information about the new product and service solutions are posted on the Company’s website.
First Quarter 2018 Financial Highlights
· Net Revenue was $59.8 million for the quarter, an increase of 22% compared to $49.1 million for the same period last year.
· Annualized Subscription Revenue was $239 million for the quarter, an increase of 22% compared to $196 million for the same period last year.
· Active Clients as of March 31, 2018 were 1,581, an increase of 23% compared to 1,285 as of March 31, 2017.
· Revenue Retention Rate was 92.9% for the trailing 12-months ended March 31, 2018, compared to 93.6% for the comparable period ending March 31, 2017.
· Gross Profit Percentage was 60.6% for the quarter compared to 62.6% for the same period last year, reflecting increased infrastructure investment and tax, legal and regulatory deliverables for certain countries.
· Operating Income was $25.2 million for the quarter compared to $2.8 million for the same period last year and includes $21.3 million from the Oracle litigation refund. Non-GAAP Operating Income was $6.1 million for the quarter compared to $7.1 million for the same period last year.
· Net income was $3.5 million or diluted earnings per share of $0.05 based on 68.2 million weighted average fully diluted shares outstanding compared to a net loss of $14.5 million, or a diluted loss per share of $0.59 based on 24.4 million weighted average fully diluted shares outstanding for the same period last year. Non-GAAP net loss for the quarter was $16.3 million compared to $4.5 million for the same period last year.
· Cash flow from operations for the quarter was $18.7 million compared with $6.6 million in the same period last year.
· Adjusted EBITDA for the quarter was $6.7 million compared to $7.7 million for the same period last year.
· During March 2018, Oracle was ordered by the U.S. Court of Appeals to refund approximately $50 million paid by Rimini Street to Oracle for overturned and vacated awards related to litigation. On March 30, 2018, Rimini Street received $21.5 million from Oracle. In addition, on May 2, 2018, as agreed upon between Rimini Street and Oracle, Oracle placed an additional $28.5 million in a court-controlled escrow account to be distributed following the outcome of a remand decision on attorney’s fees. We currently expect the U.S. Federal District Court to rule on this matter sometime in 2018.
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 and how they are calculated is also included under the heading “About Non-GAAP Financial Measures and Certain Key Metrics.”
First Quarter 2018 Company Highlights
· Expanded the Rimini Street senior management team with the appointment of Gregory Symon as senior vice president, Worldwide Field Operations. Mr. Symon is a 30-year veteran of enterprise technology and software sales with proven success in sales team leadership, business development and sales strategy, including senior sales leadership roles at Intel, Red Hat and Sitecore.
· Appointed Hyungwook “Kevin” Kim as country manager, South Korea. Mr. Kim brings over 20 years of sales and sales leadership experience to Rimini Street. Most recently he served as senior sales director for Oracle Korea, and previously served in sales at SAP Korea.
· Saved clients over $3 billion in total maintenance costs to date since its inception.
· Closed more than 7,000 support cases across 49 countries, and once again achieved an average client satisfaction rating on the Company’s support delivery of 4.8 out of 5.0 (where 5.0 is “excellent”).
· Recognized by the Stevie Awards for Sales & Customer Service with five awards including Customer Service Department of the Year and Customer Service Leader of the Year.
· Presented at 11 CIO and IT and procurement leader events worldwide, including events in Brazil, Japan, Netherlands, South Korea, the UK and the U.S.
Second Quarter 2018 Revenue Guidance
The Company is currently providing second quarter 2018 revenue guidance to be in the range of approximately $60.0 million to $61.0 million.
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