Rimini Street Announces Fiscal Fourth Quarter and Annual 2020 Financial Results

Quarterly revenue of $87.8 million, up 15.4% year over year

Fiscal year revenue of $326.8 million, up 16.3% year over year

Fiscal year operating cash flow of $42.1 million, up 107% year over year

2,487 active clients at December 31, 2020, up 20.6% year over year

LAS VEGAS–(BUSINESS WIRE)–$RMNI #RMNIRimini 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 fourth quarter and fiscal year ended December 31, 2020.


“For the fourth quarter and full year 2020, we continued to execute well against our strategic growth plan to achieve $1 billion in annual revenue by 2026 and exceeded quarterly and full year guidance. We accelerated year-over-year revenue growth for the fourth quarter from 11.7% to 15.4% and for the full year 2020 from 10.9% to 16.3%, respectively, achieved record quarterly and full year results for revenue, new sales invoicing, Calculated Billings, backlog and total gross profit and maintained a Revenue Retention rate of over 90 percent,” stated Seth A. Ravin, Rimini Street co-founder, CEO and chairman of the board. “Throughout the year, we continued making investments – including key executive leadership additions – to take advantage of growing global demand for Rimini Street’s support solutions, including our new application management, security, interoperability and professional services.”

“We produced another consecutive quarter of net income, further strengthened the balance sheet with record cash of $87.6 million at year end 2020 and generated $42.1 million of operating cash flow for full year 2020, a 107% year-over-year improvement,” stated Michael L. Perica, Rimini Street chief financial officer. “Today, we are issuing guidance for first quarter and full year 2021 revenue and affirming our continued commitment to the long-term goals of increasing operating cash flow and growing GAAP profitability.”

Additional details about the Company’s strategic growth plans and operations were presented during Rimini Street’s Investor Day 2021 on February 1, 2021, and the video and slide presentation materials can be found here on the Company’s Investor Relations page through January 2022.

Fourth Quarter 2020 Financial Highlights

  • Revenue was $87.8 million for the 2020 fourth quarter, an increase of 15.4% compared to $76.1 million for the same period last year.
  • Annual Recurring Revenue was $349 million for the 2020 fourth quarter, an increase of 15.4% compared to $302 million for the same period last year.
  • Active Clients as of December 31, 2020 were 2,487, an increase of 20.6% compared to 2,063 Active Clients as of December 31, 2019.
  • Revenue Retention Rate was 92% for both the trailing 12 months ended December 31, 2020 and for the comparable period ended December 31, 2019.
  • Gross margin was 61.8% for the 2020 fourth quarter compared to 60.2% for the same period last year.
  • Operating income was $4.5 million for the 2020 fourth quarter compared to $1.6 million for the same period last year.
  • Non-GAAP Operating Income was $11.9 million for the 2020 fourth quarter compared to $5.1 million for the same period last year.
  • Net income was $3.7 million for the 2020 fourth quarter compared to a net loss of $(0.2) million for the same period last year.
  • Non-GAAP Net Income was $11.1 million for the 2020 fourth quarter compared to $3.3 million for the same period last year.
  • Adjusted EBITDA for the 2020 fourth quarter was $12.9 million compared to $4.7 million for the same period last year.
  • Basic and diluted net loss per share attributable to common stockholders was $(0.04) for the 2020 fourth quarter compared to $(0.10) for the same period last year.
  • Employee count as of December 31, 2020 was 1,425, a year-over-year increase of 12%.

Full Year 2020 Financial Highlights

  • Revenue was $326.8 million for 2020, an increase of 16.3% compared to $281.1 million for 2019.
  • Gross margin was 61.4% for 2020 compared to 62.6% for 2019.
  • Operating income was $17.9 million for 2020 compared to $22.1 million for 2019.
  • Non-GAAP Operating Income was $41.1 million for 2020 compared to $26.8 million for 2019.
  • Net income was $13.0 million for 2020 compared to net income of $17.5 million for 2019.
  • Basic and diluted net loss per share attributable to common stockholders was $(0.19) per share for 2020 compared to $(0.12) for 2019.
  • Non-GAAP Net Income was $36.2 million for 2020 compared to $22.0 million for 2019.
  • Adjusted EBITDA was $42.6 million for 2020 compared to $27.0 million for 2019.
  • During the third quarter, the Company completed a follow-on public offering of approximately 6.1 million shares of common stock, with net proceeds to the Company of approximately $25.1 million.
  • During the fourth quarter, the Company repurchased $5 million face-value of Series A preferred and subsequent to the fourth quarter close, the Company repurchased an additional $10 million, for a total of $15 million face-value of Series A preferred stock at an approximate 10% discount to face-value; no make-whole payments were required and such 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.”

Full Year 2020 Company Highlights

  • Celebrated the 15th anniversary of the Company’s founding in 2005 to redefine the enterprise software support market and bring choice and value to software licensees around the world.
  • Saved clients more than $5 billion in total maintenance costs since the Company’s inception.
  • Launched the global availability of Rimini Street Support for SAP S/4HANA, extending the Company’s award-winning support services to S/4HANA licensees.
  • Announced the new patent pending Rimini Street Artificial Intelligence Support Applications, a result of the Company’s continued investment in optimizing support processes and ensuring global service delivery outcomes at scale. Using the AI Applications, Rimini Street has been able to deliver a better client experience and reduce software issue resolution times by 23%.
  • Further enhanced the Company’s industry-leading service response guarantee for clients, shortening response times for critical Priority 1 cases from 15 minutes to 10 minutes and for serious Priority 2 cases from 30 minutes to 15 minutes.
  • Closed more than 33,000 support cases and delivered nearly 89,000 tax, legal and regulatory updates for 58 countries, including more than 6,000 emergency updates related specifically to the global pandemic.
  • Achieved a record average client satisfaction rating on the Company’s support delivery of 4.9 out of 5.0 (where 5.0 is “excellent”), an increase from an average of 4.8/5.0 in 2019.
  • Appointed two new senior executive leaders to support the Company’s next phase of growth including:

    • Gerard Brossard to the newly created role of executive vice president and chief operating officer (COO); and
    • Michael L. Perica as executive vice president and chief financial officer (CFO).
  • Expanded the Company’s investment in Mexico and Central America, including the appointment of Alejandro González to the newly created role of general manager for the region.
  • Announced a whole-of-government volume sourcing agreement with the Australian government, designed to make the procurement process faster, easier and more cost-effective for agencies to access Rimini Street’s support services.
  • Awarded three Brazilian public sector contracts to support Oracle and SAP software as part of the government’s initiative to deliver transparency, efficiency, economy and optimization of public resources.
  • Announced that leading global automobile manufacturer, Hyundai-Kia Motors, significantly expanded its use of Rimini Street Oracle Database support to include its overseas branches and affiliates worldwide.
  • Announced that Green Cargo, the Swedish state-owned rail logistics operator, and Airservices Australia, Australia’s air navigation service provider, renewed their support agreements to continue to receive the Company’s ultra-responsive, high-quality support. Also announced many new clients from around the world including:

  • Honored with 33 awards, including two Gold Stevie Awards for “Company of the Year” and “Employer of the Year,” and 13 awards for customer service excellence.
  • Announced that the Company was named one of the Top 20 Companies to Work for in Las Vegas based on Rimini Street’s employee diversity, competitive salaries and financial health.
  • Presented at more than 50 CIO and IT and procurement leader events worldwide.
  • Supported more than 120 charities around the world through the Rimini Street Foundation, providing financial contributions, volunteer hours and in-kind donations including personal protective equipment to healthcare workers, senior centers, food banks and youth organizations globally. The Foundation also extended its charitable work in 2020 to Hong Kong, Malaysia, Mozambique, Sweden and the UAE.

2021 Revenue Guidance

The Company is providing first quarter 2021 revenue guidance to be in the range of $87.5 million to $88.5 million and full year 2021 revenue guidance to be in the range of $370 million to $380 million.

Webcast and Conference Call Information

Rimini Street will host a conference call and webcast to discuss the fourth quarter and full year 2020 results and select first quarter 2021 performance to-date commentary at 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time on March 3, 2021. 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 (800) 708-4540 in the U.S. and Canada and enter the code 50079791. 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.

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, more than 4,000 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)

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, the duration of and economic, operational and financial impacts on our business of the COVID-19 pandemic impact, as well as the actions taken by us, governmental authorities, clients or others in response to the COVID-19 pandemic; catastrophic events that disrupt our business or that of our current and prospective clients, changes in the business environment in which Rimini Street operates, including inflation and interest rates, and general financial, economic, regulatory and political conditions affecting the industry in which Rimini Street operates; adverse developments in pending litigation or in the government inquiry 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; the terms and impact of our outstanding 13.00% Series A Preferred Stock; changes in taxes, laws and regulations; competitive product and pricing activity; difficulties of managing growth profitably; the customer adoption of our recently introduced products and services, including our Application Management Services (AMS), Rimini Street Advanced Database Security, and services for Salesforce Sales Cloud and Service Cloud products, in addition to other products and services we expect to introduce in the near future; the loss of one or more members of Rimini Street’s management team; uncertainty as to the long-term value of Rimini Street’s equity securities; and those discussed under the heading “Risk Factors” in Rimini Street’s Annual Report on Form 10-K filed on March 3, 2021, 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.

© 2021 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

(In thousands, except per share amounts)

   

ASSETS

 

December 31,
2020

 

December 31,

2019

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

87,575

 

 

$

37,952

 

Restricted cash

 

334

 

 

436

 

Accounts receivable, net of allowance of $723 and $1,608, respectively

 

117,937

 

 

111,574

 

Deferred contract costs, current

 

13,918

 

 

11,754

 

Prepaid expenses and other

 

13,456

 

 

15,205

 

Total current assets

 

233,220

 

 

176,921

 

Long-term assets:

 

 

 

 

Property and equipment, net of accumulated depreciation and amortization of $10,985 and $9,847, respectively

 

4,820

 

 

3,667

 

Operating lease right-of-use assets

 

17,521

 

 

 

Deferred contract costs, noncurrent

 

21,027

 

 

16,295

 

Deposits and other

 

1,476

 

 

3,089

 

Deferred income taxes, net

 

1,871

 

 

1,248

 

Total assets

 

$

279,935

 

 

$

201,220

 

LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

Current liabilities:

 

 

 

 

Accounts payable

 

$

3,241

 

 

$

2,303

 

Accrued compensation, benefits and commissions

 

38,026

 

 

27,918

 

Other accrued liabilities

 

21,154

 

 

23,347

 

Operating lease liabilities, current

 

3,940

 

 

 

Deferred revenue, current

 

228,967

 

 

205,771

 

Total current liabilities

 

295,328

 

 

259,339

 

Long-term liabilities:

 

 

 

 

Deferred revenue, noncurrent

 

27,966

 

 

29,727

 

Operating lease liabilities, noncurrent

 

15,993

 

 

 

Accrued PIK dividends payable

 

1,193

 

 

1,156

 

Other long-term liabilities

 

2,539

 

 

2,275

 

Total liabilities

 

343,019

 

 

292,497

 

Redeemable Series A Preferred Stock:

 

 

 

 

Authorized 180 shares; issued and outstanding 155 shares and 155 as of December 31, 2020 and 2019, respectively. Liquidation preference of $154,911, net of discount of $17,057 and $155,231, net of discount of $23,915, as of December 31, 2020 and 2019, respectively

 

137,854

 

 

131,316

 

Stockholders’ Deficit:

 

 

 

 

Preferred Stock, $0.0001 par value per share. Authorized 99,820 shares (excluding 180 shares of Series A Preferred Stock); no other series has been designated

 

 

 

 

Common Stock, $0.0001 par value. Authorized 1,000,000 shares; issued and outstanding 76,406 and 67,503 shares as of December 31, 2020 and 2019, respectively

 

8

 

 

7

 

Additional paid-in capital

 

101,047

 

 

93,484

 

Accumulated other comprehensive loss

 

(318

)

 

(1,429

)

Accumulated deficit

 

(301,675

)

 

(314,655

)

Total stockholders’ deficit

 

(200,938

)

 

(222,593

)

Total liabilities, redeemable preferred stock and stockholders’ deficit

 

$

279,935

 

 

$

201,220

 

 

RIMINI STREET, INC.

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

   

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Revenue

 

$

87,828

 

 

$

76,128

 

 

$

326,780

 

 

$

281,052

 

Cost of revenue

 

33,584

 

 

30,320

 

 

126,211

 

 

105,106

 

Gross profit

 

54,244

 

 

45,808

 

 

200,569

 

 

175,946

 

Operating expenses:

 

 

 

 

 

 

 

 

Sales and marketing

 

30,298

 

 

29,670

 

 

114,741

 

 

107,280

 

General and administrative

 

14,063

 

 

12,705

 

 

52,222

 

 

47,364

 

Impairment charges related to operating lease right-of-use assets

 

1,167

 

 

 

 

1,167

 

 

 

Litigation costs and related recoveries:

 

 

 

 

 

 

 

 

Professional fees and other costs of litigation

 

4,246

 

 

1,875

 

 

13,493

 

 

8,002

 

Litigation appeal refunds

 

 

 

 

 

 

 

(12,775

)

Insurance costs and recoveries, net

 

 

 

(61

)

 

1,062

 

 

3,939

 

Litigation costs and related recoveries, net

 

4,246

 

 

1,814

 

 

14,555

 

 

(834

)

Total operating expenses

 

49,774

 

 

44,189

 

 

182,685

 

 

153,810

 

Operating income

 

4,470

 

 

1,619

 

 

17,884

 

 

22,136

 

Non-operating income and (expenses):

 

 

 

 

 

 

 

 

Interest expense

 

(42

)

 

(23

)

 

(77

)

 

(398

)

Other income (expenses), net

 

473

 

 

(866

)

 

(258

)

 

(1,495

)

Income before income taxes

 

4,901

 

 

730

 

 

17,549

 

 

20,243

 

Income tax expense

 

(1,242

)

 

(937

)

 

(4,569

)

 

(2,714

)

Net income (loss)

 

$

3,659

 

 

$

(207

)

 

$

12,980

 

 

$

17,529

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common stockholders

 

$

(3,086

)

 

$

(6,780

)

 

$

(13,829

)

 

$

(7,914

)

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.04

)

 

$

(0.10

)

 

$

(0.19

)

 

$

(0.12

)

Weighted average number of shares of Common Stock outstanding:

 

 

 

 

 

 

 

 

Basic and diluted

 

76,325

 

 

67,310

 

 

71,231

 

 

66,050

 

 

RIMINI STREET, INC.

GAAP to Non-GAAP Reconciliations

(In thousands)

   

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

December 31,

 

 

2020

 

2019

 

2020

 

2019

Non-GAAP operating income reconciliation:

 

 

 

 

 

 

 

 

Operating income

 

$

4,470

 

 

$

1,619

 

 

$

17,884

 

 

$

22,136

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Litigation costs and related recoveries, net

 

4,246

 

 

1,814

 

 

14,555

 

 

(834

)

Stock-based compensation expense

 

2,036

 

 

1,704

 

 

7,461

 

 

5,532

 

Impairment charge related to operating lease right-of-use assets

 

1,167

 

 

 

 

1,167

 

 

 

Non-GAAP operating income

 

$

11,919

 

 

$

5,137

 

 

$

41,067

 

 

$

26,834

 

Non-GAAP net income reconciliation:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,659

 

 

$

(207

)

 

$

12,980

 

 

$

17,529

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Litigation costs and related recoveries, net

 

4,246

 

 

1,814

 

 

14,555

 

 

(834

)

Post-judgment interest in litigation awards

 

 

 

 

 

 

 

(212

)

Stock-based compensation expense

 

2,036

 

 

1,704

 

 

7,461

 

 

5,532

 

Impairment charge related to operating lease right-of-use assets

 

1,167

 

 

 

 

1,167

 

 

 

Non-GAAP net income

 

$

11,108

 

 

$

3,311

 

 

$

36,163

 

 

$

22,015

 

Non-GAAP Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

3,659

 

 

$

(207

)

 

$

12,980

 

 

$

17,529

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Interest expense

 

42

 

 

23

 

 

77

 

 

398

 

Income tax expense

 

1,242

 

 

937

 

 

4,569

 

 

2,714

 

Depreciation and amortization expense

 

493

 

 

452

 

 

1,813

 

 

1,913

 

EBITDA

 

5,436

 

 

1,205

 

 

19,439

 

 

22,554

 

Non-GAAP adjustments:

 

 

 

 

 

 

 

 

Litigation costs and related recoveries, net

 

4,246

 

 

1,814

 

 

14,555

 

 

(834

)

Post-judgment interest in litigation awards

 

 

 

 

 

 

 

(212

)

Stock-based compensation expense

 

2,036

 

 

1,704

 

 

7,461

 

 

5,532

 

Impairment charge related to operating lease right-of-use assets

 

1,167

 

 

 

 

1,167

 

 

 

Adjusted EBITDA

 

$

12,885

 

 

$

4,723

 

 

$

42,622

 

 

$

27,040

 

Calculated Billings:

 

 

 

 

 

 

 

 

Revenue

 

$

87,828

 

 

$

76,128

 

 

$

326,780

 

 

$

281,052

 

Deferred revenue, current and noncurrent, end of the period

 

256,933

 

 

235,498

 

 

256,933

 

 

235,498

 

Deferred revenue, current and noncurrent, beginning of the period

 

204,297

 

 

186,925

 

 

235,498

 

 

196,706

 

Change in deferred revenue

 

52,636

 

 

48,573

 

 

21,435

 

 

38,792

 

Calculated billings

 

$

140,464

 

 

$

124,701

 

 

$

348,215

 

 

$

319,844

 

Contacts

Investor Relations Contact
Dean Pohl

Rimini Street, Inc.

+1 925 523-7636

dpohl@riministreet.com

Media Relations Contact
Michelle McGlocklin

Rimini Street, Inc.

+1 925 523-8414

mmcglocklin@riministreet.com

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