Rimini Street, Inc. (DE) Common Stock 2026 Q3 Earnings Call

Please go ahead. Thank you, operator.

I would like to welcome everyone to Rimini Street's fiscal third quarter 2026 earnings conference call. Joining me today are Seth Ravin, our CEO and President, and Michael Perica, our CFO. Today, we issued our earnings press release for the third quarter ended September 30, 2026, which is available on our website under the Investor Relations section. Reconciliations of GAAP to non-GAAP financial measures are included in the tables following the financial statements in the press release. Additional explanations of these measures and why we believe they are useful can also be found in the press release under About Non-GAAP Financial Measures and Certain Key Metrics. As a reminder, today's discussion will include forward-looking statements about our operations that reflect our current outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

We encourage you to review our most recent SEC filings, including the Form 10-Q filed today, for a detailed discussion of the risk factors that may affect our future results or stock price. Before taking questions and moving on to our prepared remarks, I would like to announce that our next Investor Day will be held on January 14, 2027, in New York City. We will be sharing invitations and additional details shortly. With that, I would like to turn the call over to Seth.

Thank you, Dean, and thank you, everyone, for joining us. Third quarter results. Our third quarter results demonstrate three consecutive quarters of achievement against our fiscal 2026 plan and guidance provided at our December 2025 Investor Day. Mark five consecutive quarters of improving financial and growth results, and we are reiterating our fiscal 2026 Rule of 20 guidance. We had continued strong demand from our enterprise software solutions and achieved record third-quarter sales of services for SAP software. Further, we completed new partnerships that expand sales leverage, launched new solutions that expand market opportunities, and strengthened our global executive leadership team. Sales to new clients and cross-sales to existing clients included a mix of our products, services, and solutions across a broad set of industries and geographies.

New logo sales included major global brands, and we delivered a strong ARR subscription renewals quarter as well. New service billings during the quarter were primarily driven by a mix of new subscription and project-based professional services. Sales included 17 new client transactions in the quarter with TCV over $1 million, and these contracts totaled TCV of $43.7 million. These larger contracts also contributed to another strong quarter of year-over-year RPO growth. In the third quarter, we fielded a larger global team of quota-carrying sellers, ending the quarter with around 80 sellers. A significant number of the sellers are ramping, and we hired a new global revenue enablement leader, who joined us from Kyndryl, to accelerate the ramp time to full seller productivity, drive increased seller participation in quarterly results, and an increased number of sellers achieving and exceeding their fully ramped annualized quota.

Market focus drives growth and profitability. Rimini Street helps clients use technology to lower total operating costs, improve profitability, and enhance competitive advantage. We specialize in the operation, support, and modernization of the core big and complex transaction enterprise software and systems that run a business or government agency. We have a unique combination of proven and reliable proprietary systems, processes, and patented technology that, along with unparalleled enterprise software and technology skills, knowledge, and experience, delivers a unique set of services and competitive advantage in the IT services market. Large-scale ERP and enterprise software replacements are expensive, time-consuming, and often fail to deliver the expected business value. Real innovation is not often achieved just by implementing a software vendor's next AI release, and there is simply not enough labor, time, or money to perform all vendor-pushed upgrades and migrations.

We help organizations avoid unnecessary and costly ERP or other enterprise software upgrades, migrations, or replatforming projects, and leverage their existing software infrastructure as a long-term foundation that can be built on and around. Rimini Street operates, supports, and modernizes these existing systems with ultra-responsive service and at a significant cost savings, and provides our innovative Rimini Agentic AI ERP solutions over the top of existing ERP software to deliver faster, better, cheaper, and more agile ERP process execution, funded within the client's current IT budget. End-to-end agentic AI solutions. During the quarter, we launched Rimini Govern for AI, a comprehensive governance, security, and control offering delivered as a service to help enterprises quickly and easily deploy, manage, and scale AI agents across their organizations.

The solution leverages ServiceNow Control Tower solution as part of our strong and growing partnership with ServiceNow, and addresses one of the most significant barriers to enterprise AI adoption. Rimini Govern for AI joins our agentic AI solution suite, which also includes Rimini Agentic UX, our AI-driven experience and automation layer that is deployed right over existing client ERP software and delivers automated workflows, persona-based user experiences, modernization, and innovation in weeks, not years, and at a fraction of the cost of a major upgrade, migration, or replatforming project. Rimini Agentworks, our comprehensive AI agent lifecycle service that enables organizations to move from AI concepts to trusted production deployment. The service helps clients define agent strategies, design and build AI agents and workflows, validate interoperability, perform functional and security testing, and certify operational readiness.

Rimini Agentworks tests and certifies both AI agents developed by Rimini Street and those from other third parties. Together, Rimini Agentworks, Rimini Agentic UX, and Rimini Govern for AI provide organizations with an end-to-end set of services to design, deploy, govern, and optimize AI agent operations across mission-critical enterprise environments. Partners, alliances, and channels. During the third quarter, we completed millions of USD of sales transactions with partners and continued our focus on growing sales leverage from the indirect channel. New strategic partnerships announced during the quarter include Datacom, a leading technology services provider in Australia and New Zealand. Datacom now offers support services, security, and compliance solutions powered by Rimini Street. Rimini Street made further progress in maturing several of its global strategic partnerships, such as ServiceNow.

Rimini and ServiceNow executives continue to share alignment on vision and execution for ServiceNow's AI tools and governance solutions being integrated into Rimini's two primary AI offerings, Rimini Agentic AI ERP solutions and Rimini Govern for AI as a service. Client success stories. We are helping clients across many industries, geographies, and software platforms protect and optimize their core ERP systems while funding innovation and modernization, including fixing broken processes, automating workflows and functions, and using AI to solve specific business challenges, all without disruptive, costly, and risky ERP software upgrades, migrations, or replatforming. Here are several third-quarter examples of how clients are reducing operating costs and redirecting savings towards innovation, transformation, and improved competitive advantage for clients across different geographies and industries.

Khimji Ramdas Group, one of Oman's largest privately held conglomerates, selected Rimini Support for SAP to reduce costs, reinvest savings in AI innovation, and maintain its highly customized SAP ECC 6.0 environment with zero downtime. The client noted that Rimini Street significantly reduced its total SAP support cost by 80%, bringing up funds that they are now investing in AI-driven innovation without undergoing migrations or replatforming. Chen Full International, a Taiwanese industrial engineering and manufacturing company, leveraged Rimini Support for SAP S/4HANA to improve cost efficiency and redirect resources towards AI-driven manufacturing innovation. The company noted that they believe Rimini Street is a company that delivers the best cost-performance ratio and would happily refer all IT and finance leaders to partner with Rimini Street for SAP support, savings, and scale.

AUTOBACS SEVEN, a leading Japanese automotive retail and services company, has leveraged Rimini Support for SAP ECC 6.0 to achieve 10 years of stable operations and reliable enterprise system performance and has expanded its partnership with Rimini Street to include its Oracle Database landscape. The company noted that whenever there are questions about how their IT budget should be spent, they seek advice from Rimini Street as we are a constant source of value creation for them. Summary. We remain focused on accelerating growth, improving profitability, and delivering shareholder returns in accordance with the plan and guidance we shared at our December 2025 Investor Day, and the 2027 plan and guidance we will share at our upcoming Investor Day. Now, over to you, Michael.

Thank you, Seth, and thank you for joining us, everyone. Third quarter results. Revenue increased 8.3% year-over-year to $112.1 million, while adjusted revenue excluding PeopleSoft increased 10.7%. This marks the second quarter in a row in which our adjusted revenue grew by double digits year-over-year. U.S. revenue increased 4.3% to $48.3 million, while international revenue increased 11.6% to $63.8 million. Subscription revenue was $105.2 million, representing 93.9% of total revenue. Adjusted annualized recurring revenue increased 9.8% to $410.4 million, and revenue retention was 90% compared to 89% a year ago. Calculated billings increased 21% year-over-year to $80.5 million. Adjusted calculated billings, excluding PeopleSoft, increased 21.9% to $78 million. On a year-to-date basis, calculated billings and adjusted billings rose 7.8% and 9.2% respectively.