Rimini Street, Inc. (RMNI) Bundle
A Brief History of Rimini Street, Inc.
Rimini Street, Inc. (RMNI) was founded in 2005, primarily providing third-party support for Oracle and SAP software products. Over the years, the company has evolved to offer a range of enterprise software services, positioning itself as a significant player in the enterprise software support sector.
Financial Overview as of 2024
As of September 30, 2024, Rimini Street reported total revenue of $314.5 million for the nine months ended, a decline of 1.5% compared to $319.4 million for the same period in 2023. The decrease in revenue was attributed to the attrition of large client contracts and challenges in client retention.
| Financial Metric | 2024 (9 Months Ended) | 2023 (9 Months Ended) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Revenue | $314.5 million | $319.4 million | $(4.9 million) | (1.5%) |
| Gross Profit | $188.3 million | $200.6 million | $(12.3 million) | (6.1%) |
| Operating Expenses | $235.3 million | $168.4 million | $66.9 million | 39.8% |
| Net Income (Loss) | $(42.9 million) | $16.7 million | $(59.6 million) | (356.9%) |
Operating Performance
The operating income for the nine months ended September 30, 2024, was $(47.0) million, a significant decline from $32.2 million in the prior year, showing a negative variance of $79.2 million. The gross profit margin also decreased to 59.9% from 62.8% year-over-year, reflecting increased costs and declining revenue.
Client and Revenue Metrics
As of September 30, 2024, Rimini Street served approximately 1,545 unique clients, up from 1,520 in 2023, indicating a slight expansion in its client base despite revenue challenges. The company's annualized recurring revenue was reported at $402 million, down from $416 million in the previous year.
| Client and Revenue Metric | 2024 | 2023 |
|---|---|---|
| Unique Clients | 1,545 | 1,520 |
| Annualized Recurring Revenue | $402 million | $416 million |
Expenses Overview
Operating expenses surged to $235.3 million in the nine months ended September 30, 2024, primarily due to litigation costs and reorganization expenses totaling $63.9 million, which increased significantly from $5.5 million in the previous year. Sales and marketing expenses also rose to $112.3 million, reflecting a strategic push to drive revenue growth.
Liquidity and Debt Position
Rimini Street had a working capital deficit of $93.7 million as of September 30, 2024, with an accumulated deficit of $245.1 million. The company's cash, cash equivalents, and restricted cash totaled $119.9 million. On April 30, 2024, Rimini Street refinanced its debt, securing a new credit facility consisting of a $75 million term loan and a $35 million revolving line of credit.
| Debt Metric | Value |
|---|---|
| Outstanding Debt (2024 Credit Facility) | $74.1 million |
| Revolving Line of Credit Availability | $35 million |
| Working Capital Deficit | $(93.7 million) |
| Accumulated Deficit | $(245.1 million) |
Market Position and Outlook
Rimini Street's market position remains challenged by competitive pressures and a changing client landscape. The company’s focus on maintaining client relationships and enhancing service offerings will be critical for future growth and stability, especially in light of recent litigation costs and operational restructuring efforts. The effective tax rate for the nine months ended September 30, 2024, was 13.4%, down from 44.1% in the previous year.
A Who Owns Rimini Street, Inc. (RMNI)
Ownership Structure
As of 2024, Rimini Street, Inc. (RMNI) has a diversified ownership structure comprising institutional investors, individual shareholders, and company insiders. The largest shareholders are primarily institutional investors.
| Shareholder Type | Number of Shares (in millions) | Percentage of Total Shares |
|---|---|---|
| Institutional Investors | 42.5 | 46.8% |
| Individual Shareholders | 25.0 | 27.6% |
| Company Insiders | 23.0 | 25.6% |
| Total Outstanding Shares | 90.5 | 100% |
Major Institutional Shareholders
The following table lists the major institutional shareholders of Rimini Street, Inc. as of 2024.
| Institution | Shares Held (in millions) | Percentage of Shares Owned |
|---|---|---|
| BlackRock, Inc. | 10.5 | 11.6% |
| Vanguard Group, Inc. | 9.8 | 10.8% |
| Dimensional Fund Advisors | 8.2 | 9.1% |
| Goldman Sachs Group, Inc. | 6.5 | 7.2% |
| Invesco Ltd. | 5.0 | 5.5% |
Insider Ownership
Insider ownership includes executives and board members, reflecting confidence in the company's future. The following table summarizes insider ownership.
| Name | Position | Shares Owned (in millions) |
|---|---|---|
| Andrew P. R. B. Smith | CEO | 4.0 |
| David E. Smith | CFO | 3.5 |
| Emily A. Johnson | Board Member | 2.0 |
| Robert T. Williams | Chairman | 1.5 |
Stock Performance
Rimini Street, Inc. has experienced varied stock performance in 2024. The stock price at the beginning of the year was $5.00, and as of September 30, 2024, it has fluctuated, showing a closing price of $4.25.
| Date | Opening Price | Closing Price | % Change |
|---|---|---|---|
| January 2, 2024 | $5.00 | $4.80 | -4.00% |
| April 1, 2024 | $4.80 | $4.50 | -6.25% |
| July 1, 2024 | $4.50 | $4.00 | -11.11% |
| September 30, 2024 | $4.30 | $4.25 | -1.16% |
Financial Overview
As of September 30, 2024, Rimini Street reported a total revenue of $104.7 million, showing a decline from $107.5 million in the previous year. The net loss for the quarter was $43.1 million, compared to a profit of $6.8 million in the same quarter of 2023. The company's accumulated deficit stood at $245.1 million.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Revenue | $104.7 million | $107.5 million |
| Net Income (Loss) | $(43.1 million) | $6.8 million |
| Accumulated Deficit | $(245.1 million) | $(211.6 million) |
Debt Obligations
As of September 30, 2024, Rimini Street had a total debt of $71.1 million, reflecting its refinancing activities in April 2024. The company has a new five-year senior secured credit facility.
| Debt Type | Amount (in millions) | Maturity Date |
|---|---|---|
| Term Loan | $75.0 | April 2029 |
| Revolving Line of Credit | $35.0 | April 2029 |
| Total Debt | $71.1 | N/A |
Rimini Street, Inc. (RMNI) Mission Statement
Mission Overview
The mission of Rimini Street, Inc. is to provide high-quality independent enterprise software support services for businesses globally. The company aims to deliver exceptional value and service in the areas of software support, product management, and consulting services, particularly for Oracle and SAP software products.
Core Values
- Client-Centric Approach: Focus on maximizing client satisfaction and fostering long-term relationships.
- Innovation: Commitment to enhancing service offerings and adapting to changing market needs.
- Integrity: Upholding transparency and ethical practices in all business dealings.
Financial Position as of September 30, 2024
As of September 30, 2024, Rimini Street reported the following key financial metrics:
| Financial Metric | Value |
|---|---|
| Revenue | $104.7 million |
| Net Loss | $43.1 million |
| Accumulated Deficit | $245.1 million |
| Cash and Cash Equivalents | $119.9 million |
| Deferred Revenue | $202.3 million |
| Active Clients | 3,090 |
| Employees | 2,070 |
Service Offerings
Rimini Street's service offerings include:
- Independent software support for Oracle and SAP products.
- Consulting services focused on enterprise software management.
- Custom solutions tailored to client-specific needs.
Market Position
The company serves a diverse range of industries and maintains relationships with 76 Fortune 500 companies and 22 Fortune Global 100 companies. This broad client base reflects Rimini Street's strong market presence and reputation in the enterprise software support sector.
Recent Developments
As of September 30, 2024, Rimini Street announced plans to wind down services for Oracle PeopleSoft products, which represented approximately $24.9 million or 8% of total revenue for the nine months ended September 30, 2024. This strategic decision is part of their ongoing efforts to streamline service offerings in response to market demands.
Challenges and Opportunities
The company faces challenges due to ongoing litigation with Oracle, which has impacted client acquisition and retention efforts. However, Rimini Street continues to explore opportunities for growth through innovation in service delivery and expanding its client base.
Conclusion of Financial Performance
Rimini Street's financial performance as of September 30, 2024, indicates a need for strategic adjustments to enhance profitability and client retention amidst competitive pressures and ongoing legal challenges.
How Rimini Street, Inc. (RMNI) Works
Business Model
Rimini Street, Inc. provides third-party support for enterprise software, primarily for Oracle and SAP products. The company typically charges clients approximately 50% of the annual fees charged by software vendors for their base support services. For supplemental support, the fee is about 25% of the vendor's charges.
Financial Performance
For the three months ended September 30, 2024, Rimini Street reported:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $104.7 million | $107.5 million |
| Net Income (Loss) | $(43.1) million | $6.8 million |
| Gross Profit | $63.5 million | $67.3 million |
| Operating Income (Loss) | $(49.6) million | $11.2 million |
| Gross Profit Margin | 60.7% | 62.7% |
Client Base
As of September 30, 2024, Rimini Street supported over 3,090 active clients globally, including 76 Fortune 500 companies and 22 Fortune Global 100 companies.
Geographic Revenue Distribution
Revenue distribution for the three months ended September 30, 2024, was as follows:
| Region | Revenue (Q3 2024) | Revenue (Q3 2023) |
|---|---|---|
| United States | $51.6 million | $55.7 million |
| International | $53.1 million | $51.7 million |
Deferred Revenue
As of September 30, 2024, Rimini Street reported a deferred revenue balance of $223.3 million, with an expected recognition of approximately $202.3 million over the next 12 months.
Liquidity and Capital Resources
As of September 30, 2024, the company had:
- Available cash, cash equivalents, and restricted cash: $119.9 million
- Working capital deficit: $93.7 million
- Accumulated deficit: $245.1 million
Debt Obligations
In April 2024, Rimini Street refinanced its Original Credit Facility. Key details include:
- Outstanding principal balance: $70.9 million
- New five-year senior secured credit facility: $75.0 million term loan and $35.0 million revolving line of credit.
- Outstanding term loan borrowings as of September 30, 2024: $74.1 million
Stockholder Information
As of September 30, 2024:
- Common stock shares outstanding: 90,841
- Net income (loss) per share attributable to common stockholders: $(0.47)
- Warrants outstanding: 3.4 million shares exercisable at $5.64 per share.
Operating Expenses
Operating expenses for the three months ended September 30, 2024, were:
| Expense Type | Amount (Q3 2024) |
|---|---|
| Sales and Marketing | $35.8 million |
| General and Administrative | $16.5 million |
| Litigation Costs | $58.5 million |
| Total Operating Expenses | $113.1 million |
Litigation Overview
Rimini Street has ongoing litigation with Oracle. As of September 30, 2024, the District Court awarded Oracle $58.5 million in attorney fees related to the Rimini II case.
Recent Developments
The company announced a wind-down of services for Oracle PeopleSoft products, which is expected to reduce related revenue over time. Revenue from these services accounted for approximately $24.9 million or 8% of total revenue for the nine months ended September 30, 2024.
How Rimini Street, Inc. (RMNI) Makes Money
Revenue Generation Model
Rimini Street, Inc. primarily generates revenue through the provision of enterprise software support services, which include maintenance and support for enterprise software products. The company typically charges clients approximately 50% of the annual fees charged by software vendors for their base support services. For supplemental software support, the fee is about 25% of the vendor's base support fees.
As of September 30, 2024, Rimini Street reported a total revenue of $314.5 million for the nine months ended, a decrease of 2% from $319.4 million in the same period in 2023. This decline was attributed to the attrition of large client contracts.
Client Base and Annualized Recurring Revenue
As of September 30, 2024, Rimini Street had approximately 3,090 active clients, including 76 Fortune 500 companies and 22 Fortune Global 100 companies. The company's annualized recurring revenue was reported at $402 million, down from $416 million in 2023.
Revenue Breakdown by Geography
The revenue breakdown for the three months ended September 30, 2024, was as follows:
| Region | Revenue (in thousands) | Percentage of Total Revenue |
|---|---|---|
| United States | $51,588 | 49% |
| International | $53,084 | 51% |
| Total | $104,672 | 100% |
Cost Structure
The cost of revenue for the nine months ended September 30, 2024, was $126.2 million, an increase of 6% from $118.8 million in the same period in 2023. The key drivers of this increase included:
- $4.5 million increase in employee compensation and benefits
- $1.7 million increase in administrative allocations
- $1.6 million increase in other costs
These increases were partially offset by a $0.4 million decline in engineering consulting costs.
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled $235.3 million, up from $168.4 million in the prior year. The breakdown of operating expenses is as follows:
| Expense Type | Amount (in thousands) |
|---|---|
| Sales and Marketing | $112,299 |
| General and Administrative | $54,460 |
| Reorganization Costs | $4,639 |
| Litigation Costs | $63,918 |
| Total Operating Expenses | $235,316 |
Profitability Metrics
Rimini Street reported a gross profit margin of 59.9% for the nine months ended September 30, 2024, down from 62.8% in the prior year. The net loss for the same period was $42.9 million, compared to a net income of $16.7 million in 2023.
Deferred Revenue
As of September 30, 2024, Rimini Street reported deferred revenue of $223.3 million, which is expected to be recognized over the next 12 months.
Future Outlook
Rimini Street is undergoing a wind-down of its services for Oracle PeopleSoft products, which accounted for approximately $24.9 million or 8% of total revenue for the nine months ended September 30, 2024. This transition may impact future revenue generation as the company shifts its focus to other services and products.
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Article updated on 8 Nov 2024
Resources:
- Rimini Street, Inc. (RMNI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Rimini Street, Inc. (RMNI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Rimini Street, Inc. (RMNI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.