Rimini Street, Inc.

Welcome to the Romini Street Earnings Call. My name is Darrell, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star, then 1 on your touch-tone phone. I will now turn the call over to Dean Polk. Dean, you may begin.

Thank you, Operator. I'd like to welcome everyone to Ramini Street's fourth quarter and fiscal year 2021 earnings conference call. On the call with me today is Seth Raven, our CEO, and Michael Parica, our CFO. Today we issued our earnings press release for the fourth quarter and fiscal year ended December 31st, 2021, a copy of which can be found on our website under investor relations. A reconciliation of GAAP to non-GAAP financial measures has been provided in the table following the financial statements in the press release. An explanation of these measures and why we believe they are meaningful is also included in the press release under the heading about non-GAAP financial measures and certain key metrics. As a reminder, Today's discussion will include forward-looking statements that reflect our current outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-K for fiscal year 2021, filed earlier today, for a discussion of risks that may affect our future results or stock price. Also, we recently asked Revell to complete an IR perception survey of investors and analysts. And we want to thank all of you who were able to participate and provide valuable feedback. We are evaluating the results and we'll be sure to take all the feedback into consideration as we move forward into our fifth year as a public company. Now, before taking questions, we'll begin with prepared remarks. With that, I'd like to turn the call over to Seth.

Thank you, Dean, and thank you, everyone, for joining us today. Q4 and fiscal year 2021 results. For the fourth quarter and full year 2021, we achieved a unique combination of record revenue exceeding our guidance, margin expansion, strong revenue retention, and cash flow generations. Also during 2021, we completed significant capital market transactions that materially reduced outstanding debt, our cost of capital, and potential equity dilution, and generated significant cash, ending 2021 with record cash of $119.6 billion. Taking these and additional factors into consideration, Today, we announced a stock repurchase plan of up to $15 million to further increase shareholder value. Michael will provide more of the plan details in his prepared remarks. From an operations perspective, we significantly expanded our full-year gross margin by delivering innovation that provides cost leverage and an even more extraordinary client experience. Innovations include proprietary, patented, and patent-pending AI and machine learning tools and technology. The implementation of just one AI tool alone, for example, has already led to an average 23% improvement in client case resolution time since its introduction in April 2021. Further differentiating ourselves with an extraordinary client experience We once again in the fourth quarter closed more than 9,700 support cases, delivered more than 31,000 tax, legal, and regulatory updates for 32 countries, and achieved an average client satisfaction rating on the company's support delivery and client onboarding services of 4.9 out of 5.0, where 5.0 is excellent. We believe our unique client experience and very high client satisfaction rating will drive increased loyalty, improved retention rates, and higher cross-sales. Since Rumini's inception in 2005, we have signed more than 4,600 clients, including over 180 Fortune 500 and Fortune Global 100 companies, and saved our clients more than $5 billion. We added a net of 56 and 362 new clients for the fourth quarter and full year 2021, respectively, a fiscal year-over-year increase of 14.6%. In addition, despite the global challenges with retention and recruitment in 2021 affecting many organizations, we were successful in expanding our global workforce by 16.9%, ending the year with over 1,660 employees. Pandemic and geopolitical impacts. So far, we believe we have navigated the pandemic well, and despite some continuing global risks and challenges related to existing and potential new COVID variants, we are taking steps globally to return to some office operations, attend select in-person marketing events, and increase our in-person sales activities. With respect to the Russian-Ukraine conflict, while clearly a terrible human tragedy and geopolitical event that could disrupt the global economy, Rumini Street does not have any offices or personnel in either Russia or Ukraine. We do have some clients headquartered in Russia and have multinational clients with operations in both Russia and Ukraine. We expect that we may experience some challenges serving Russian and Ukrainian clients or receiving timely payments from our Russian clients due to evolving sanction activity. Rimini Street's current annual revenue from Russian clients is not material. The full extent to which the pandemic and Russian-Ukraine conflict may affect our global business in 2022 and beyond will depend on numerous evolving factors that we cannot reliably predict at this time. demand and sales execution. Remini Street already serves many of the largest logos across different industries, and we believe our continued and growing focus on the specific needs of each industry will allow us to further penetrate the TAM in each industry with the breadth of our solutions portfolio. Accordingly, we continue to see a strong opportunity for our expanding portfolio of enterprise software support solutions and continue building and maturing our go-to-market capability to launch, sell, and deliver our full solutions portfolio to new and existing clients globally. Current sales opportunities and pipeline include more large deals at different stages of sales process than at any other time in company history. During the fourth quarter, we closed transactions with strategic plans local and global brands across diverse industries and geographies, and spanning the wider breadth of our solutions portfolio, including support, AMS, security, interoperability, monitoring, and professional services. Transactions were varying deal sizes, ranging up to our second largest sales deal in company history. We also continue to see growing momentum in cross sales through existing clients, where we believe at this time there's over $1 billion in annual white space sales opportunity. I shared with you during our last earnings call that more than half of our sellers and many within sales management have less than one year of experience in their remaining street roles. I'm pleased to note that we are seeing improved sales productivity. The close rates for the fourth quarter exceeded the close rates for the prior year fourth quarter, and we expect this trend to continue. In addition, we are seeing an increasing revenue growth rate in the U.S., where we have focused on building out feeder and regional sales leadership and capabilities. Client case studies. To highlight how clients are leveraging RominiStreet services globally to achieve their strategic goals across different industries, I'd like to share a case study from the fourth quarter. Cepasol, a leading automotive parts and service retail chain in Brazil, signed a seven-year agreement with RominiStreet to support its SAP applications. This move accelerates their digital transformation roadmap strategy by liberating limited resources, time, money, and personnel to focus on innovation projects. To support its business strategy, Tepesho sought partners that could align with its innovation and business transformation roadmap goals and vision. Their IT group was tasked with evaluating its current SAP system and the ROI of migrating to the next major SAP platform. After analyzing both the costs and risks associated with a complete platform re-implementation, it was determined there was no significant ROI to update or replace its current SAP applications. Nor could their IT team discern a benefit to its business transformation goals by doing so. Depecheur made the switch to Rumini Street because we are fully aligned with the way they want to run their business. The PASHOA thought Ramini Street was the right partner to keep their SAP ERP system running smoothly and help with their upcoming transformation and innovation projects. Oracle Litigation Update Ramini Street and Oracle have been in litigation for more than 12 years. While the U.S. courts have declared long ago that third-party software support is legal, we presently have two active proceedings with Oracle – the Rimini 2 and the injunction compliance dispute proceedings, both of which relate to the manner in which Rimini Street provides support services for certain Oracle product lines. Rimini Street versus Oracle, the case Rimini Street filed against Oracle in 2014 and known as Rimini 2, remains in a pretrial stage. We currently believe it is likely that the trial will proceed in 2023. With respect to the dispute the parties are currently engaged in over a permanent injunction that has been in place since 2018 and known as the injunction compliance dispute, the court issued an order on January 12, 2022, following an evidentiary hearing in September 2021. The permanent injunction at the center of the dispute defines the manner in which Remini Street could provide support services for certain Oracle product lines, but does not prohibit support of any Oracle products. Despite extensive discovery by Oracle that commenced over two years ago and included millions of pages of documents, only 10 items were ultimately before the court in the evidentiary hearing. In its finding an order from the hearings, The court ruled in favor of Ramini Street on five of the items. With respect to the other five items, the court found the company violated the permanent injunction, awarded sanctions of $630,000, and ordered that certain computer files be quarantined from use. The court also ordered Oracle may recover its reasonable attorney's fees. While Ramini Street respects and takes court orders and the law very seriously, and has implemented extensive processes and procedures to comply with both, we respectfully disagree with many of the court's findings. As such, we filed a Notice of Appeal to the U.S. Ninth Circuit Court of Appeals. In the meantime, we paid $630,000 to Oracle while preserving our right to be reimbursed for some or all of the payment on successful appeal. Following our Notice of Appeal, the U.S. District Court of Nevada issued a stay on the ordered reimbursement of Oracle's reasonable legal fees. Accordingly, we do not expect a resolution of a forthcoming appeal, possible reimbursement of some or all of the $630,000 in sanctions paid, or the amount of Oracle legal fees that may or may not be payable, if any at all, for likely at least a year or more. Please see our disclosures in the annual 10-day filing for additional information on the Oracle litigation. Summary. We continue working to complete our transformation and scaling project to support billion-dollar annual revenue operations and a 20% or better operating margin by 2026. Focusing on sales execution and productivity, exercising discipline, cash generation, and management, and bringing our litigation to a successful conclusion. Now with that, over to you, Michael.