Rimini Street Q1 2025 presentation: revenue beats, EPS falls short

Rimini Street Inc (NASDAQ:RMNI) reported mixed first-quarter 2025 results on May 1, with revenue slightly exceeding analyst expectations while earnings per share fell below forecasts. The enterprise software support provider continues to navigate challenges including ongoing litigation and macroeconomic headwinds.

Quarterly Performance Highlights

Rimini Street posted revenue of $104.2 million for Q1 2025, marginally above the forecast of $103.26 million but representing a 2.4% decrease year-over-year. The company reported earnings per share of $0.04, missing analyst expectations of $0.07.

Despite the earnings shortfall, Rimini Street demonstrated operational improvements with gross margin expanding to 61%, up from 59.8% in the same period last year. This margin expansion suggests the company’s cost optimization efforts are yielding positive results.

Billings for the quarter reached $79.4 million, marking a 7.2% increase compared to the previous year, which could indicate potential revenue growth in future quarters. The company reported net income of $3.4 million for the period.

Market Reaction

The market’s initial response to Rimini Street’s earnings was modestly positive, with shares rising 1.41% to $3.60 in aftermarket trading immediately following the announcement. However, more recent aftermarket data shows the stock trading at $3.40, down 4.23% from its regular session close of $3.55.

Rimini Street’s stock has demonstrated significant momentum over the past six months, gaining over 90% according to the earnings report, though it remains within its 52-week trading range of $1.53 to $4.15. Analyst price targets for the company range from $4 to $7, suggesting potential upside from current levels.

Strategic Initiatives

During the earnings presentation, CEO Seth Ravin emphasized the company’s ability to deliver innovation without requiring clients to undertake costly system upgrades.

"We can bring all that technology on top of their existing systems without major expensive and risky upgrades to ERP and other components," Ravin stated, highlighting Rimini Street’s differentiated approach to reducing IT maintenance costs.

The company continues to pursue strategic partnerships, particularly with ServiceNow (NYSE:NOW), which executives expect to generate meaningful revenue contributions by 2026. Additionally, Rimini Street is exploring growth opportunities in the U.S. Federal government market as part of its expansion strategy.

Challenges and Outlook

Rimini Street faces several challenges that could impact its performance in coming quarters. The company has suspended formal guidance due to ongoing litigation with Oracle (NYSE:ORCL), creating uncertainty for investors. The gradual wind-down of PeopleSoft support services has contributed to the year-over-year revenue decline, though this was partially anticipated.

Global economic uncertainties affecting IT spending and competitive pressures in the third-party support market represent additional headwinds for the company. However, management expressed optimism about future growth prospects, with analysts predicting continued profitability in 2025.

According to the earnings call, Rimini Street expects its strategic partnerships to serve as growth drivers moving forward, potentially offsetting the impact of the PeopleSoft wind-down. The company’s improved gross margins and increased billings suggest operational efficiency gains that could support future performance despite the current challenges.

Investors will likely focus on Rimini Street’s ability to execute its growth strategy while managing the ongoing litigation risks as they evaluate the company’s prospects for the remainder of 2025.

Full presentation:

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