Rimini Street, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Q1 2025 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded today, Thursday, May 1, 2025. I would now like to turn the conference over to Dean Paul, Vice President, Treasurer, Investor Relations. Please go ahead.

Thank you, Operator. I'd like to welcome everyone to Rimini Street's Fiscal First Quarter 2025 Earnings Conference Call. On the call with me today is Seth Raven, our CEO and President, and Michael Parika, our CFO. Today we issued our earnings press release for the first quarter ended March 31st, 2025, a copy of which can be found on our website under the investor relations section. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables 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 and our website under the heading 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 forward-looking statements are subject to risks and uncertainties that may cause actual results that differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-Q filed today, for discussion of risks that may affect our future results or stock price. 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, more than 2,000 Romini Street employees in 21 countries help clients leverage our unique, proven Romini SmartPath methodology to achieve better business outcomes, such as significant IT cost savings, more comprehensive, hyper-responsive software support, and the ability to fund AI, workflow, automation, and other innovation investments without the need for any additional IT budgets. We achieve this unique capability by helping our clients extend the useful life of their existing ERP and other enterprise software, avoid unnecessary upgrades, and then use the savings to fund innovation. We are the leading global third-party support provider for Oracle, SAP, and VMware software, and we run, manage, support, customize, configure, connect, protect, monitor, optimize, and transform enterprise application, database, and technology software landscapes. The company has signed and successfully delivered on thousands of contracts with Fortune Global 100, Fortune 500, mid-market, public sector, and government organizations who selected Rimini Street as their trusted, proven, and mission-critical enterprise software solutions provider. first quarter results. We maintained positive momentum in billings and cost controls during the first quarter. Sales included a mix of our products, services, and solutions, and a notable acceleration in sales of our new support subscriptions for VMware across a broad set of industries and geographies. We also achieved improved new logo acquisition sales including major brands and delivered five new client sales transactions in the quarter with TCV over 1 million. Operating expenses and cost of revenue as a percent of revenue declined 5.8% year over year due to our continuing cost optimization plan. We believe our focus on offering the right solutions, organizing around the right go-to-market strategy and maturing global sales and marketing execution is continuing to drive better sales execution and was reflected in the 7.2% year-over-year improvement in quarterly billings. The billings growth was primarily driven by a mix of new subscriptions and project-based professional services and geographically led by the EMEA and Asia-Pacific regions. New Growth Drivers In the first quarter, we continue to make investments that we believe enhance our short, medium, and long-term sales growth and profitability. One area of focus is the continued investment in the expansion of our global alliances, partnerships, and channels business to drive sales leverage beyond our own global sales force. For example, we continue to execute our go-to-market rollout with ServiceNow, in both sales and service delivery. Recently, ServiceNow rolled out the Rimini Street sales playbook to their approximately 6,000 global sellers, and we both are training our sales teams on the joint solution. In service delivery, our engineering teams collaborated on our first joint very successful project for a Brazilian pharmaceutical company, demonstrating our combined capabilities. ServiceNow plans to premiere and showcase the client solution at ServiceNow's upcoming Knowledge 2025 event in Las Vegas, May 6-8, where 25,000 attendees are expected. We also announced three new partnerships. First, we announced a new partnership with innovative security company Valley Cyber. whose proven hypervisor security product has been integrated into our support for VMware's solution. Second, we announced a new partnership with Workday, certifying Ramini Street as a new provider of application management services for the platform. Hundreds of Ramini Street clients use Workday, and Ramini Street is now offering to run the software for our clients. lowering operating costs, eliminating staffing challenges, and improving system operation. Rosario Alameda, Group Vice President, Global Partner Sales, Workday, stated, Rimini Street's addition as a Workday AMS partner will provide our community with valuable new capabilities for optimizing their Workday environments. Their established expertise in delivering excellent service and helping clients maximize their IT investment will empower Workday customers choosing to work with them to achieve greater efficiency and derive more value from their deployments. Third, we announced a new strategic partnership with T-Systems North America, where we will deliver an integrated approach to enterprise IT support Based on ReminiStreets, ReminiOne integrated support and management service for SAP, Oracle, and VMware. With a combination of ReminiStreets enterprise software expertise and T-Systems North America's deep knowledge of hosting the cloud infrastructure managed services, organizations will have the opportunity to extend the lifespan of their current IT products and releases while seamlessly adopting modern cloud and automation technologies, such as our ServiceNow solution. Cesar Martinez, CEO and Chairman of the Board for T-Systems North America, stated, Our partnership with Ramini Street marks a significant step in delivering end-to-end IT solutions that offer enterprises greater flexibility with alternative roadmaps, efficiency, and cost savings. Oracle Litigation Update. Rimini Street and Oracle have been in litigation for more than 15 years, including cases known as Rimini 1 and Rimini 2. With respect to Rimini 1, which was filed by Oracle against Rimini Street in 2010, the litigation has run its course and there are no current litigation activities related to Rimini 1. However, there is a Rimini 1 permanent injunction that remains in effect. With respect to Rimini 2, the trial was completed in 2022 and we appealed the District Court's order and injunction. In December 2024, the U.S. Court of Appeals issued many favorable rulings for us and later returned the case to the District Court for further proceedings on the open remaining matters. Oracle sought a rehearing of the appeal, which was denied in February 2025. In April 2025, the district court issued a modified Remini 2 injunction that removed provisions related to findings vacated and overturned by the appeals court and left only the provisions that prohibit Remini Street's use of four marketing statements no longer in use. and prohibit certain practices involving Oracle copyright notices that ceased long ago. Our only remaining active litigation matters with Oracle and the District Court include whether Romania is liable for certain legacy PeopleSoft development processes and activities, and if so, whether an injunction should prohibit these processes. Oracle lost its claims with respect to its other product lines at issue at the Remini II litigation, and in no case is Oracle entitled to any financial damages. The district court stated its intention to bring the remaining case items, now solely related to Oracle's PeopleSoft product, to final resolution within a year. Additionally, in the appeals court, we are continuing to seek the return of $58.7 million in Oracle's attorney's fees and costs plus interest that we paid under court order in the fourth quarter of 2024 before the favorable appeals court opinion. For additional information and disclosures regarding the company's litigation with Oracle, please see our disclosures on Form 10-Q, filed today, May 1, 2025, with the U.S. Securities and Exchange Commission. Please also note that, at this time, we are unable to provide material additional information beyond the disclosures and statements in our press releases, filings with the SEC, and court filings related to current Oracle litigation activity.