Rimini Street (RMNI) 8-KRimini Street Announces Fiscal Fourth Quarter and Annual 2022 Financial and Operational Results

FOR IMMEDIATE RELEASE

 

Rimini Street Announces Fiscal Fourth Quarter and Annual 2022 Financial and Operational Results

Financial Highlights Include:

Quarterly revenue of $108.6 million, up 9.4% year over year

Fiscal year revenue of $409.7 million, up 9.4% year over year

Quarterly Billings of $160.4 million, up 2.9% year over year

Fiscal year Billings of $409.3 million, down 2.0% year over year

Quarterly gross margin of 64.5% compared to prior year of 65.1%

Fiscal year gross margin of 62.8% compared to prior year of 63.6%

3,020 Active Clients at December 31, 2022, up 6.0% year over year

 

“We were pleased with our improved Q4 performance in quarterly sequential billings growth and gross margin, as well as maintaining a strong Revenue Retention Rate on subscription revenue,” stated Michael L. Perica, Rimini Street chief financial officer. “Additionally, for full year 2022, we repurchased $4.7 million of our common stock and reduced the balance on our term loan outstanding from $88 million to $78 million, resulting in year-end cash and investments of $129 million and net cash of $51 million. We are also issuing guidance today for the first quarter and full year 2023 revenue, full year 2023 Adjusted EBITDA, and affirming our continued commitment to the long-term goals of increasing operating cash flow and growing earnings per share.”

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.”

Business Outlook

The Company is providing first quarter 2023 revenue guidance to be in the range of $101.0 million to $103.0 million, full year 2023 revenue guidance to be in the range of $420.0 million to $430.0 million and full year 2023 Adjusted EBITDA guidance to be in the range of $52 million to $58 million.

Webcast and Conference Call Information

Company’s Use of Non-GAAP Financial Measures

About Rimini Street, Inc.

Forward-Looking Statements

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, adverse developments in and costs associated with defending pending litigation or any new litigation; changes in the business environment in which Rimini Street operates, including the impact of any recessionary economic trends and changes in foreign exchange rates, as well as general financial, economic, regulatory and political conditions affecting the industry in which we operate and the industries in which our clients operate; the evolution of the enterprise software management and support landscape and our ability to attract and retain clients and further penetrate our client base; significant competition in the software support services industry; customer adoption of our expanded portfolio of products and services and products and services we expect to introduce; our ability to sustain or achieve revenue growth or profitability and manage our cost of revenue; estimates of our total addressable market and expectations of client savings relative to use of other providers; variability of timing in our sales cycle, and risks relating to retention rates; the loss of one or more members of our management team; our ability to attract and retain qualified employees and key personnel; challenges of managing growth profitably; 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; the impact of environmental, social and governance (ESG) matters; actions in response to any lingering impacts of the COVID-19 pandemic and its economic, operational and financial impacts on our business; risks associated with global operations; 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 regulations; our ability to maintain an effective system of internal control over financial reporting; our ability to maintain, protect and enhance our brand and intellectual property; 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 tax reserves; 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 transition to SOFR or other interest rate benchmarks; the sufficiency of our cash and cash equivalents to meet our liquidity requirements; the amount and timing of repurchases, if any, under our stock repurchase program and our ability to enhance stockholder value through such program; uncertainty as to the long-term value of Rimini Street’s equity securities; catastrophic events that disrupt our business or that of our clients; and those discussed under the heading “Risk Factors” in Rimini Street’s Annual Report on Form 10-K filed on March 1, 2023, 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.

© 2023 Rimini Street, Inc. All rights reserved. “Rimini Street” is a registered trademark of Rimini Street, Inc. in the United States and other countries, and Rimini Street, the Rimini Street logo, and combinations thereof, and other marks marked by TM are trademarks of Rimini Street, Inc. All other trademarks remain the property of their respective owners, and unless otherwise specified, Rimini Street claims no affiliation, endorsement, or association with any such trademark holder or other companies referenced herein.

RIMINI STREET, INC.

Unaudited Condensed Consolidated Balance Sheets

RIMINI STREET, INC.

Unaudited Condensed Consolidated Statements of Operations

RIMINI STREET, INC.

GAAP to Non-GAAP Reconciliations

About Non-GAAP Financial Measures and Certain Key Metrics

To provide investors and others with additional information regarding Rimini Street’s results, we have disclosed the following non-GAAP financial measures and certain key metrics. We have described below Active Clients, Annualized Recurring Revenue and Revenue Retention Rate, each of which is a key operational metric for our business. In addition, we have disclosed the following non-GAAP financial measures: non-GAAP operating income, non-GAAP net income, EBITDA, Adjusted EBITDA and Billings. Rimini Street has provided in the tables above a reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. A reconciliation of Adjusted EBITDA is not available on a forward-looking basis because the Company is unable to predict its net income with reasonable certainty due to the effects of foreign currency exchange rates, income tax provisions, future interest rates on our variable rate indebtedness, the non-cash component of employee compensation expense, changes in its working capital and financing needs, and other such items without unreasonable effort. Similarly, the high variability of certain expense items renders us unable to provide a reconciliation to the guidance as to margin and selected expenses as a percentage of revenue presented in our earnings conference call. These items, which depend on various factors and could be material to the Company’s results computed in accordance with GAAP, are uncertain. Due to a valuation allowance for our deferred tax assets, there were no tax effects associated with any of our non-GAAP adjustments. These non-GAAP financial measures are also described below.

 

The primary purpose of using non-GAAP measures is to provide supplemental information that management believes may prove useful to investors and to enable investors to evaluate our results in the same way management does. We also present the non-GAAP financial measures because we believe they assist investors in comparing our performance across reporting periods on a consistent basis, as well as comparing our results against the results of other companies, by excluding items that we do not believe are indicative of our core operating performance. Specifically, management uses these non-GAAP measures as measures of operating performance; to prepare our annual operating budget; to allocate resources to enhance the financial performance of our business; to evaluate the effectiveness of our business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of our results with those of other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results; and in communications with our board of directors concerning our financial performance. Investors should be aware however, that not all companies define these non-GAAP measures consistently. 

 

 

 

 

Specifically, management is excluding the following items from its non-GAAP financial measures, as applicable, for the periods presented:

 

Dean Pohl

Rimini Street, Inc.

+1 925 523-7636

 

Janet Ravin

Rimini Street, Inc.