RMNI - Earnings call transcript Q1 2022

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Operator

Welcome to Rimini Street First Quarter Earnings Conference Call. My name is Adrian and I'll be your operator for today's call. [Operator Instructions]. I'll now turn the call over to Dean Pohl, Vice President. Dean Pohl, you may begin.

Dean Pohl

operator. you, Thank welcome Earnings to Rimini First Street's I'd Call. everyone XXXX Conference Quarter like to

On press me we A investor measures call has ended can Michael they're financial press the be with for reconciliation March Perica, been CEO provided Ravin release An tables measures the these the metrics. our the included copy our meaningful in believe of and financial XXth, in statements the our found under following XXXX. and in financial GAAP CFO. non-GAAP press certain of first non-GAAP on relations. about measures release. also Today we the key issued of A explanation release earnings today our to quarter is which why heading, and Seth under the is website

made discussion today. results a that statements Form for or may our price. are today most XXQ to include may filed encourage risks reminder, and forward-looking statements reflect including a review our SEC actual stock differ filings, recent will risks today's that statements our future our that As outlook. These subject to affect results forward-looking uncertainties you materially from of We discussion current to cause

begin I'd prepared call that, Now, the before taking questions, we'll to like with turn remarks. With over Seth. to

Seth Ravin

us XXXX results. QX today. and joining Thank for Dean everyone you, you thank

year Up on delivered year. the year, record a first million. XX% from rate of a XX.X% retention of up subscription XX% over For record quarter, achieved invoicing revenue we achieved $XX.X revenue first-quarter last and revenue

Oracle, as of and joining Lenovo, Chief Spicer roles, sales and America central and Kevin Marketing Oracle Hooper operations Jeff GM regional key fill IBM, to IBM, Officer from joining and continue as region HP. from VMware We including

client and history new quarter cross-sale our for client acquisitions regulatory Further experience, marketing than during Additionally, clients. sales and some remained and an than in growing and differentiating on support we maturing the largest countries. cases more and existing ourselves extraordinary global delivered updates more XX,XXX operations the and XX for sales with focused of our legal to services new of closed transactions we closed tax increased XX,XXX

of Additionally, of Client XXXX, of client X increased client rates client believe high out average Global increase loyalty, our companies, XXXX year-over-year on drive X, the a we delivery services added we've over is first totaling they XX XXX nearly signed including cross-sales clients, time. Onboarding the over Rimini their in an we that experience the more in satisfaction quarter new and and retention a clients clients $X of than net an have X.X to excellent. saved estimate XXX support our X,XXX, were will Street's We XXX where and company clients active satisfaction business. that achieved We rating inception Fortune of improved and higher unique reinvest Since with able for rating billion XX.X%. very

X,XXX over addition, workforce with successful despite in Pandemic organizations year-over-year and our impacts. with global XXXX were and many the we globally, geopolitical macroeconomic XX% the employees. ending recruitment affecting in by In retention challenges expanding quarter

beyond economic public and XXX and of thousands across navigate more sector to many organizations global operations have we to pandemic than geopolitical challenges surviving other governments, thriving. As helped continue the the and businesses commercial moving successfully and with impact challenges countries

and services protect software and XX cash who many preserve secure stable focus to us clients we're employees on unique the the for penetrate needs specific nearly investments During of to their life each Street to budget remote time of in continued most on would global industry our seeing new the interest Rimini global growing sales XX/X/XXX continue capability plan our and to and in people, impact offices. enterprise This our and will full solutions existing TAM infrastructure from Accordingly, to logos challenges allow solutions given each allowed globally. largest maturing connectivity to rates existing working Demand invest our existing and our and launch, but with further and we us added portfolio with across portfolio the uninterrupted inflation, countries operations solutions not rising also to believe mission-critical allowed the client and opportunity around guaranteed to industry safety portfolio. only XXX% to XX-minute issues. strategic profits, breadth initiatives. pandemic, related expensive already instead we us utilized clients of our our expanding choosing and the new their and sell the industry-leading different deliver ERP deliver limited projects labor clients execution. full-time building serves the systems home strong of for Today, refresh focus continue support and response and to of a of go-to-market recognized of see an on our extend with our industries support critical prospects in we financial and

million. with a first in and productivity, Close find East support, over were rates the annual rates for broadly geographies. deals led results. large were sales close and diverse interoperability, pleased strategic perspective, and attainment were it EMEA and the quota During in across Asia The to quarter, brands services. quarter. product monitoring geographies favorable, with across and AMS, security, industries Americas distributed We From $X we local global Pacific, closed fees professional particularly transactions results sales

long to IT We believe that will labor bring augment to Our and term environments a globally the services IT highlight for are their first the or to quarter. free seeing to use. up continued much environment Rimini workloads and licenses, for productivity and I'd initiatives. continue cloud SaaS existing simply across will clients Client will To different and studies to ERP pursue be like reality clients expected the leveraging strategic hybrid strategy new lifted are be share IT X that case engineers the than and growth achieve into resources study. strong IT from their add deployments longer shifted Street integrate majority cloud the goals licenses to case industries, and value of our clients allowing to how on-premise

largest negate need annual funds to Victoria cancer staff database capacity First reduce liberate spend IT of enterprise additional its Victoria, to spend. who switching within meet service support internal to demand screening organizations its increasing and Oracle to BreastScreen Rimini one By team, breast Australia's BreastScreen software. its the significantly support additional expanding its switched is Street software Rimini for Street, was able of to

resources can support always from a planned payroll more knew strategic quality focus daily PeopleSoft and enables on IT experience a project. job and AI regarding our takes ERP with weight operations that regulatory us faster including leverages job IT Any based mission by PeopleSoft a leading confidence faster and approve team company's environment Rimini claims Staffmark Oracle no legal proposition peace the capabilities center hesitation had tax enhancements Rimini support Crabtree, that high stated, Database process real, in support our and Australia plans and invest Darren such Rimini the staffing as of for team, that us Group, and could Next issue into functionality is is tax were critical Street to to available delivery Rimini assure Vice bullet cost large analysis that Rimini stated, Jill I migration on a system. Staffmark in all knowledge and must from would be BreastScreen we impact for local BreastScreen IT posting and running I experienced be IT their initiatives, to its and on-demand, Staffmark result, available and of Knowing switch Victoria's for now the execute legal its is smoothly would "Having run service employers our operating an value support enabled shoulders. to full and and President a team serving locally engineers efficiencies. seekers. primary offering engineer positive manager in improved catastrophic. focus a off mind." team firm. including Rimini Victoria would XX,XXX payroll support that and our to of significantly keep daily about US-based Since Staffmark PeopleSoft this responsiveness updates. support huge our create Street Staffmark. Payroll ultra-responsive additional additional data employees quality, and strategy. As accurately immediately. critical to at issue address Technology on. week. internal Staffmark of is the engineers dive globally, regulatory of Street recruiting extension compliance process them and improvements to an it past Street's to its has its approximately and this IT time a have is of updates savings automated Street market backed IT competitive innovation Street, going "We support brings making reinvest depth Firth,

we been For Rimini those been legal The than XX Street or litigation regulatory updates and to more phenomenal." receive litigation numerous related and COVID-XX, example, for to have years. customized support we've able tax there have changes. immediate in updates. get for updates been is Oracle Oracle

soon appeal to injunction third Circuit services relating to Street have compliance legal, party X proceedings United States US Court. for both respect courts is product ago to Oracle, the of provides the certain the in Street lines. Rimini rulings which the Rimini While Rimini active presently planning certain Oracle manner District dispute, Appeals and compliance dispute to of Court which the the to file With Ninth US the and long that relate with have proceedings, to is and II of of preparing confirmed injunction software we support support

stage. to Please a the Street Street XXXX, expect information trial that We later. see litigation. in a currently the II, We or a or Q proceed the come as ruling our a disclosures process in for ruling, and earlier Rimini believe is could known Oracle about appeals filing take Oracle, the XX receive filed Rimini will XXXX Summary. With respect remains case latest it on against the is trial case pre-trial but to later. likely the earlier additional proceed in versus Rimini the year but in could Oracle could

generation and litigation marketing and sales disciplined a on successful our and conclusion. focus continue with Oracle cash productivity, management to execution exercising and We bringing

to you, Now over Michael.

Michael Perica

was afternoon a Seth quarter and good increase everyone. Annualized recurring QX revenue million, year-over-year Revenue for the increase $XXX results. year-over-year Thank XXXX first $XX.X million, was a you, XX.X%. of revenue, subscriptions, at for non-cancelable more least with of XX.X%. our Revenue rate which retention than months. more subscription than XX for makes XX% revenue of up XX% was service of XX%

contributed clients XX%. United quarter the the For of total States, revenue international clients first XX% within represented while

year-over-year First quarter last growth improving aggregate States the from growth was XX.X%. growth international of XXXX the quarters continued year-over-year first has X%, for first X.X% growth current the X the X.X%. year-over-year to rate United note quarter while over clients revenue revenue We rate to in less year growth of than quarter that was the US improve

international We million also Billings by revenue increase for note an from through XXXX challenges. sales that flow million XX.X%. of reduced were $XX.X the $XX was quarter the of our negatively revenue compared growth to third year-over-year, impacted the quarter first

for quarter. prior New of process compensation stock-based for excludes and efficiencies which quarter and on last of XX.X% quarter for of revenue multi-year for revenue to to first the compared of well invoicing gross on to the revenue XX% XX.X% quarter methodically basis, XX.X% first prepayments renewals year, margin of our and expand for We and was non-GAAP revenue Gross the compared control. delivery first through were new both client continue executed and invoicing of notable leverage year. client margin expense in non-GAAP and a technology service the

basis. and Therefore, to new in We in deliver capacity service gross investing can year we XXXX, globally, with guide of revenue experiencing the client unparalleled we on labor organizations and GAAP satisfaction. of continue we global in class in a our services XX% delivery solutions and XX.X% to for to expenses. non-GAAP to to for our expect offerings capability our ensure are best continue range be the products, pressures other inflation. costs full Like Operating due on to XX% basis revenue of cost XX.X% to margin increased a

technology. meet positions However, a practices G&A ago revenue investments marketing We more a to thereby support expenses as as cost stock our a initiatives to expense challenge percentage a exploring XX.X% full focused compared ensure needed non-GAAP percentage able period. we GAAP part was by growth and a have this expenses as an during sales our excludes non-GAAP making continue quarter innovative targets. by outside year and to the employee-related software on year remain revenue and to marketing XX.X% were XX.X% successful of we and of are implementation for in talent first of to with XX% for and the On cost at and the need and broadening the which revenue, profitability other and costs recruit to prior of was to part XX.X% year expense, in the percentage General the impacting geographies a during we We ago expect XX.X% be mitigating revenue spend in compared available acquire the expenses at emphasis in first the options of quarter. sales litigation stock-based XX.X% lower the the one range XX.X% and to right period. time based hiring on in to the was versus administrative to all quarter XX.X% quarter. and been plan standpoint. excludes year to was non-GAAP basis, Sales XX% appropriate prior for items compensation quarter compensation year, for growth basis, various first on expenses compared which quarter. expenses On basis XX.X% excluding XX.X% and a the marketing XXXX using costs There first to our

as our XX.X% professional revenue to expect in the public expected similar personnel spend note results, our our for range. X% fiscal growth, a within of continue the global XX.X% to operation first systems, see a we non-GAAP and G&A investment However, did to first to XX% for for to to information Current on basis. be that the audit guidance prior cost additional do G&A million XX% the half of company, expenses XXXX first year. and and expense year cost quarter full a in compliance for half to second cost year XXXX nearly versus to the of and to quarter. insurance we within XXXX litigation trend the XXXX, $X.X compared outside a incremental $X.X as expenses this year full was includes Moreover, support million decline support fall we for Therefore, XXXX and legal costs. of spend range Net expect percentage the

attorney During the insurance costs to received of first an recovery litigation. quarter, related $XXX,XXX Oracle for we

and Our continue litigation each we $XX can million full to of in outside spend for is of range the $XX litigation Accordingly, be not linear expense and nature activities. fluctuate expect outside quarter year based the XXXX. to to on timing the litigation

the cash which outside for sheet. attributable spend EBITDA diluted $X.X $X.XX Balance first operating quarter receivable prior quarter, and quarter. client $XX operating quarter. preferred. our would of was cash year, proceeds healthy was year year from $XXX or our substantial XXst, diluted for net the revenue flow share. prior-year our the non-GAAP cents also of our as approximately which margins revenue March and or up future XXXX to attributable highlight share. pay I of the model. operating of was non-GAAP includes million per first billed, X approximately million balance a deferred, The Adjusted from and first first was operating of XX% for a margin, achieve million million accounts million in their first loss like revenue sum quarter, ability $X.XX quarter backlog prepayments confident compensation we million the were or quarter per of generated used quarter. through million included the raise with an to of million first underscoring $XXX impacted XX.X% million to We multi-year quarter, A the significant from $XX.X long-term as our non-cancelable, XX%. XX.X% increase basis, of challenges. target was of million excludes Up to revenue first to On Deferred in the which XX% first XXXX first for equity of million the income to first litigation cashflow $X.X March market million. prior Capital quarter by profitability to by stock-based the leverage Accordingly, excess per XXXX we from and driven versus On reduced remain compared shareholders was potential net though that for $XXX ended record $XXX mark for income collections. $XXX XXst, share share, diluted sales Backlog, of diluted compared down or the Series to a For the $XXX million $X.XX $XX.X prior flow $X.X quarter prior-year to the third of compared or shareholders $X.X basis, per transactions.

repurchase common authorized was quarter. commenced earnings last during discussed first stock call during newly that Our the the plan we

repurchased value retired. shares During million market of were we quarter, a XXX, repurchased common $X.X XXX,XXX shares with the the

Going forward, we at the deactivate repurchase to whether time. opportunities shares we additional to will full although, strategic discretion repurchase any on look or common reserve decisions plan or for activate not and

early growth, principal value strong interest plan there our our of rising the prepayment cash is company is addition, and debt position fund and model, we prepayment In execute return rate $XX a are and cash no in shareholders. generation of approximately environment, flow operating our the a $XX current believe a for penalty. consistent to able a With capital outlook. comfortably position Business we reduce and strong of term million cash approximately options, with million loan including evaluating which an

guidance to range are from providing $XXX of now $XX.X range to million our are $XXX of and currently raising revenue range Operator, we'll of in $XX.X million concludes to prepared be million in the previous $XXX take revenue we the questions. the our full-year million. XXXX the XXXX We This to $XXX to second guidance remarks. be quarter

Operator

And of Instructions]. Derrick Cowen [Operator comes our from Wood first and Company. question

Andrew Sherman

It's is through reported how international slowed guidance? Andrew quarter. XX% XX% I for a and Maybe you start, Europe you're to factors just into that there just Derrick. to think of revenues, seeing what Maybe us bit. Nice walk

Seth Ravin

to talk Good Sure. Andrew. Seth. This is to you. Thanks,

an terms there that year. of through international. terms the think of you're That the revenue last number, pipeline factor again, the important I in That's affecting what's In because flow through of is seen it's that what ratable revenue. the QX is of building year,

We also of about those well. points as but is the number, the very, certainly X in saw of business that The FX combination impacting quarter very strong. are

closed In merged LATAM really we we fact, very over the so well I good deal the recent fourth-largest with some Asia-Pac, operation through. the We third or seen as very did our quarters and Americas EMEA's history inside is think actual strong has just there it's of X, in very, an been see very, deals problem. well. This flow execution don't we've there.

Andrew Sherman

you Great. far, on org going do any America's maybe US touched it the planned new that's but how Kevin so color right LatAm, what has And structure, that? on can to growth, accelerate initiatives on continue there the maybe how on just that and

Seth Ravin

Eastern amount redundant little theater efficiencies that and Sure. by the sales management. saw a our of cutting The under down with well, we're we well, cost marketing seeing as a is did obviously and bringing in of these number, integration theaters the structures part where merged good that that in number Europe Israel moves. great reducing the bit. focus gaining we and going hence again, the you in and All of America's We're integration been EMEA, European have theater, took cost

big right year aim in gross year. in want the number accelerate the is because that line also course, are marketing really really number, the we're guidance achieve is but half still sales further down of getting number of We the getting and back we our about down that strong. where to focus be seeing back It's half will the G&A to the in and to of G&A

Andrew Sherman

number where Great. Then in the the towards the you of front, XXX just end how marketing are on Seth, the by did the end track that on and maybe quarter to hiring you sales XX and to the and target rep sales year? talk

Seth Ravin

announcing as who background well, Overall side, management did the joined Oracle course from really Sure. Spicer well. course, we us of of Jeff with the on

years Street by competition In a fact, you've now nasty have Spicer. of that have him actually marketing other globally, seen on Oracle us central. the the leading of out the It's developed the side on also the America done the and fill joining at from side GM well great fence for of lot the position the was Jeff marketing Lenovo for Rimini from we to Hooper to Kevin over charge

about number quarter, in we quarter. I and strong quarter as fourth good has sales know by in we've management opportunities from would've you really ASP ended I some growth during from up the sales of down execution The won't We guys to a hiring, Again, that board. the the bit think deals, well XXX gone but out in quarters are XXX about quarter. had of moving smaller we've team our built the great say number took little the there. XX we've liked some struggled, as the nearly down across and we XX there wound big the first

tenured up, of of remained steady. the haven't them thought number strong attainment to with not due harder some think Where and we those due I fairly we've the months than it we XX about numbers be. that fact they been they be, hires some it ramp to a been the their would found where fact some very the little to counsel losing completing fact, think, who that new That's out, we've In been losing. is reps, have has some over, folks

positions expecting great revenue we that there just some the have in recruiting and weeks addressed Leech an things we've who in recruiting few still revenue we expert that ago recruiting has at helm think challenge of brought been the we're really and the is a John I that, he's there. and area taken

Operator

is to Craig-Hallum. Van question Jeffrey from Rhee next The

Jeffrey Van Rhee

there. Great. flow Phenomenal cash

in the of couple a worth and year. questions and great I different XX% to about not quarter, point. sale you I sales focused your prior anymore, been got for so somewhat off right? of know to particular, start a skillset, but solution. Seth, sales a up understand follow you've recruiting on on things, very few on You've sell to want other a the want a It's I year's then a

You're the in selling not getting solution in terms in how hedge security, are you you of terms the execution sales your have, vision. you AMS, measuring success me the talk numbers, about their a you're Like on hedge that but how want to of team? building things? they other more Namely, or tracking selling are

Seth Ravin

the Well, over. our execution numbers thing is for I Jeff, that XX at think we're absolutely and we've think in of sellers overall number, the the course, been I looking sales are the consistent and first months attainment

and increase that tenured think of more part sell know those an are we We've cross-sell, seen for our in they few seeing has very average quarters. can I the the gone sellers selling well. the numbers seeing last in attainment solution. category, of so that been the XX% We're that we've

existing solution So out they're we're we to but as selling wider more of the the gate breaths new well. sold of not of seeing know that to, products only logos customers,

good seeing of in progress solution So we're definitely some world sell. the

position the few thought could just we hiring, took you expertise on we a is mentioned, Leech, sales, points. the it revenue brought sales while Spicer last in X the the the marketing. a John understand ramp the brought more who'd and really as getting pretty has ground so on challenge revenue in for business, to I last does in weeks, Jeff have bigger the been and hiring we've the this actual Getting and know, him a growing for excited here street Jeff ground. challenge been CMO, on us and in the Our as One, really team, and the that we're area second feet select year up, to waiting we've really and person been this new

ramp-up television over ads started see lot to TV week. all back our this that world, There's on. going of You're on a last the going

turning convinced and for that that getting eventually ramped of to really marketing a point sales the but business inflation, additional there, because for months formula world. bringing people is today. is all getting unbelievable ramping, the these really we're selling and This X of environment their they from months a solutions War, then hitting of XX economics, Rimini buzz out an a reps So Street opportunity. to fabulous Horrible around the the view. acceleration the that X has down and from customers a really have XX-month all up, challenges

the and for is they there race understanding it out are So a the there, have people our so getting us ramped now really accelerate solutions to we're we here, getting people that then getting hiring, and understand that closing marketing out out and the business.

Jeffrey Van Rhee

Yes.

the need of you revenue bottoms when the bright got growth does re-accelerate? incremental overall spots performance, year-over-year pushouts quarter, some and heads, hit does rate look to able overall change look the revenue on and when you so XX% when target XX% growth, that model, you I I being that, billings Obviously, bottom number So following and If you've in how at certainly terms mean, growth? recruit the your when obviously, I that, you you're expecting know, there. the a do on at to bigger on believe, bottom in in we sales know, those that numbers, timing CAGR, but

Seth Ravin

on color that pretty think and over know, progress. the This I complicated a a basis not we've I and think of being transition You last global making on we're the think lot to yet given company category in we're execution still quarters. Jeff, consistent is that few I a multi-product

we not Street's out biggest put half results baked with when had said and we growth we we We that acceleration of we complete the on perspective, and still the but building really is think and restructuring We of of my and the that rebuilding said felt don't the to from that execution think, coming the guidance. going back this I to it Rimini we're then half this see you 'XX, all was that, we to earn be life, ratable year. and to knew started there. seeing our much know, year, back into as as just year, going I that this revenue,

and So front and cadence, to were we all clients, into on selling we did macro-economic little and as did super going very challenges with we've conservative wanted risk we off a can to the of had you beat strong create although raise, the get that beat creates in the also know, the opportunities kick of so reflects, both that the we said from us tell raise, back our you year bit still with numbers. existing with the a the we opportunities, it renewals end

this, more of I accelerate to dollars that execution know about operation, billion towards have into order that. a talked all before, to stable All target moving coming into we of we've think, 'XX, sort more in 'XX. 'XX consistent as 'XX. and We really by And is 'XX,

'XX. to so engine revenue the And flow this start the and about X house that is in really to then really more increase see of kind order, in quarters get ramp

Jeffrey Van Rhee

on flows and they've changed? talking and win players quarter, win expand mostly know just more kind versus competitive Got on last it get so I specifically, then quarter, SAP-centric a me you from landscape rates I an would it. QX think One the maybe little how would-- and in sales ebbs I more? see about a trended? the you but how that of rates touched or just who was big execution, On you these briefly, in

Seth Ravin

our talked think very pipeline about over the win my with was if first you only pleased with but XX%. I numbers, actually prepared know, and in we rate Well, on remarks, that we the, retainment were you go, the not

those So really good very numbers. numbers, strong were

ramping now So execution's actually sales matter a of good. volume. It's

did deals also which less XX what? we large You'll little in very, that the the And we was last did very there double note quarter, well deals. but ASP. new net a in year, than

down we good against So and during some landscape, took from down a monster we deals the competitive Oracle SAP deals, really quarter up some took too.

come game volume competitive it. increase flow and there where I very on through to great the really and we going is revenue. the that very, across say out show for we being the wins to is board, we've This have are the So for a acceleration to got volume. That's would

Jeffrey Van Rhee

forward margins, Got gross a Well, there looking again, lot great to that sales like progress. job, it. and flow, to cash

Seth Ravin

Thank you, Jeff.

Operator

call And that the over for final answer question remarks. I'll turn session. our and concludes back

Seth Ravin

thank everybody you much, you earnings us. Well, I thank colleagues with busy also congratulate really how and joining want is to I and appreciate but strong know Great. very calls Rimini for remind everyone I the Street our right on now, we're kept the execution going really want a to world. moving, in in June day all the challenges I quarter. first XXth. out doing investor there that to through virtual XXXX, in have it We the also

along annual rate to there, profits. We and going get our our and with billion revenue vision we're operating will strategy $X continued to run target, achieve present margin operating XX% how

good families today. thoughts We all in of virtual will to issue charitable and support and a wish the press be our want who those your then, a this in shortly release way and for harm's will year you invitations health registration and event all days. are coming continued suffering It to until our and I

very you a day. So Have good everybody. much, thank

Operator

and ladies This today's participating. concludes for you, conference. gentlemen. you Thank Thank

standby You may Speakers, debrief. now disconnect. for your

Rimini Street (RMNI) 8 May 222022 Q1 Earnings call transcript