Rimini Street NASDAQ: RMNI reported higher third-quarter revenue, billings and profitability, citing demand for its enterprise software support and modernization offerings, including record quarterly sales of services for SAP software.
Revenue for the quarter ended Sept. 30 increased 8.3% year over year to $112.1 million. Adjusted revenue, excluding PeopleSoft support services that the company is winding down, rose 10.7%. U.S. revenue increased 4.3% to $48.3 million, while international revenue grew 11.6% to $63.8 million.
Chief Financial Officer Michael Perica said subscription revenue totaled $105.2 million, representing 93.9% of total revenue. Adjusted annualized recurring revenue increased 9.8% to $410.4 million, while revenue retention improved to 90% from 89% a year earlier.
Billings, profitability and balance sheet
Calculated billings rose 21% year over year to $80.5 million, while adjusted calculated billings excluding PeopleSoft increased 21.9% to $78 million. For the first nine months of 2026, calculated billings increased 7.8%, and adjusted billings rose 9.2%.
The company also reported improved margins and operating leverage. Gross margin expanded to 61.4% from 59.9% in the prior-year quarter, while non-GAAP gross margin rose to 61.7% from 60.4%. Sales and marketing expense fell to 34.8% of revenue from 36.7%, and general and administrative expense declined to 15% of revenue from 17.6%.
Adjusted EBITDA increased to $15.1 million, or 13.5% of revenue, from $9.9 million, or 9.6% of revenue, a year earlier. Non-GAAP operating income was $14 million, compared with $8.5 million in the prior-year period.
Perica said the company’s cost improvements were driven by workforce optimization and operating leverage. In response to an analyst question on efficiency gains, CEO and President Seth Ravin said Rimini Street was still in the early stages of using agentic artificial intelligence internally to reduce costs. He said current gains have been driven more by operational process improvements, systems investments and reallocating labor to areas with better returns.
Rimini Street ended the quarter with $93.3 million in cash and $43.4 million in debt, resulting in net cash of $49.9 million. During the quarter, it repurchased $5 million of common stock and prepaid an additional $5 million of debt. Year-to-date capital returns and debt reduction totaled $30.9 million.
Perica said that, based on the company’s current outlook, management has a greater near-term preference for share repurchases than debt repayment, though capital-allocation decisions could change depending on future opportunities.
Contracted revenue and sales activity
Deferred revenue was $235.5 million at quarter-end, up from $226 million a year earlier. Remaining performance obligations increased 6.8% year over year and 2.5% sequentially to $652.9 million, just below the company’s record high, according to Perica. Adjusted RPO excluding PeopleSoft increased 7.4% to $643.4 million.
Ravin said the company closed 17 new client transactions with total contract value above $1 million during the quarter. Those contracts represented combined TCV of $43.7 million and contributed to RPO growth. New service billings were primarily driven by a combination of new subscriptions and project-based professional services.
The company ended the quarter with about 80 quota-carrying sellers. Ravin said a meaningful number remain in the ramping stage, and the company hired a global revenue enablement leader from Kyndryl to help accelerate seller productivity and increase the number of salespeople achieving annualized quotas.
Rather than focusing on expanding sales headcount, management said it intends to place greater emphasis on productivity. Ravin said the company has reduced total headcount from its prior high and expects only some headcount growth, with a stronger focus on improving sales-force leverage.
AI offerings and partnerships
During the quarter, Rimini Street launched Rimini Govern for AI, a governance, security and control service designed to help enterprises deploy and manage AI agents. The offering uses ServiceNow’s Control Tower solution and joins the company’s existing Rimini Agentic UX and Rimini Agentworks offerings.
Ravin described the combined services as an end-to-end set of capabilities for designing, deploying, governing and optimizing AI agents in enterprise environments. However, he said the company does not yet have a clear view of the commercial contribution the agentic AI suite could make in 2027, as many customers are still determining their initial AI priorities and deployment approaches.
The company also announced a partnership with Datacom, a technology services provider in Australia and New Zealand, which will offer support, security and compliance solutions powered by Rimini Street. Ravin said the company completed millions of dollars in partner-related sales during the quarter, but remains several quarters away from its goal of having the indirect channel contribute about 40% of pipeline.
Ravin said the company is seeing improvements in Oracle-related sales activity as well as its record SAP services sales. He added that Rimini Street’s sales pipeline has remained relatively similar in size but has improved in quality, with management concentrating on opportunities it believes are more likely to close.
Outlook
Rimini Street expects fourth-quarter 2026 revenue of $117 million to $119 million and reiterated its fiscal 2026 Rule of 20 guidance. The company continues to wind down PeopleSoft support services, which generated $2.7 million in third-quarter revenue, down from $4.7 million a year earlier. The wind-down is expected to be completed by July 31, 2028.
The company plans to provide its 2027 plan and guidance at an Investor Day scheduled for Jan. 14, 2027, in New York City.
About Rimini Street (NASDAQ:RMNI)
Rimini Street, Inc provides enterprise software support, products and services for organizations using business applications and database systems. The company is best known for third-party support for software from Oracle, SAP and other enterprise technology providers, helping customers maintain existing systems while reducing the need for frequent upgrades.
Its offerings include application management, database support, interoperability services, security services, managed services and professional services.
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