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Rimini Street (RMNI) Q3 Earnings call transcript Oct 30, 2024

Daily EarningsThursday, Oct 31, 2024 3:59 pm ET

2min read

EFSC -- NOW -- ORCL -- RMNI --

In Rimini Street's third quarter 2024 earnings call, the company highlighted its strategic focus on cost optimization, growth initiatives, and the announcement of a significant partnership with ServiceNow. The call, led by CEO Seth Ravin and CFO Michael Perica, provided investors and analysts with insights into the company's financial performance, strategic direction, and future outlook.

Financial Performance and Strategic Focus

Rimini Street reported a decrease in revenue for the third quarter, attributed to the wind down of services for Oracle PeopleSoft products and the termination of several large renewal agreements. Despite these challenges, the company demonstrated a 7.7% year-over-year improvement in quarterly billings, driven by solid results in contract renewals and extensions. The company also achieved significant new logo acquisitions, including major brands, and delivered 19 new client sales transactions with TCV over $1 million.

The company's focus on cost optimization was evident in the implementation of a cost optimization plan, with approximately $14.9 million of net annualized reductions achieved so far. The company expects to complete this plan by the end of the current quarter.

Strategic Partnership with ServiceNow

A notable highlight of the call was the announcement of a strategic partnership with ServiceNow. The partnership aims to deliver a comprehensive enterprise software solution that enables clients to maximize their existing software investments and achieve faster paths to transformation without disruption. This solution, which includes an exclusive enterprise application modernization and AI solution for existing SAP, Oracle, Infor, and Microsoft ERP and other siloed software, is expected to provide significant savings, immediate business transformation value, and ROI for clients.

Outlook and Future Prospects

Looking ahead, Rimini Street remains optimistic about its future prospects, with a focus on driving operational leverage, improving systems and processes, and managing costs. The company is confident in its ability to accelerate growth and enhance shareholder value, despite potential challenges related to ongoing litigation with Oracle.

The company's strategic partnership with ServiceNow represents a significant opportunity for growth, particularly in the areas of enterprise application modernization and AI. The partnership is expected to enable Rimini Street to offer a more comprehensive suite of services and solutions to its clients, further solidifying its position as a leading provider of end-to-end enterprise software support and innovation solutions.

Investor and Analyst Questions

During the Q&A session, analysts probed into various aspects of Rimini Street's financial performance, strategic initiatives, and future outlook. Questions ranged from the timeline for completing the cost optimization plan to the potential revenue impact of the ServiceNow partnership and the company's approach to managing ongoing litigation with Oracle.

The company's executives provided detailed responses, offering insights into the company's strategic thinking, financial performance, and growth prospects. They emphasized the importance of operational efficiency, cost optimization, and strategic partnerships in driving future success.

Conclusion

Rimini Street's third quarter 2024 earnings call provided a comprehensive update on the company's financial performance, strategic initiatives, and future outlook. Despite challenges related to cost optimization and ongoing litigation, the company remains confident in its ability to accelerate growth and enhance shareholder value. The strategic partnership with ServiceNow represents a significant opportunity for growth, particularly in the areas of enterprise application modernization and AI. With a focus on operational efficiency, cost optimization, and strategic partnerships, Rimini Street is well-positioned to navigate the challenges of the current market landscape and capitalize on emerging opportunities.

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