Conference Transcript - RMNI 2026-05-13

Dean Pohl, Head of Investor Relations

Good afternoon. Thank you for joining us today. I'm Dean Pohl, VP, Treasurer, and Investor Relations at Rumini Street. Joining me today is our CFO, Michael Perica. We are excited to discuss the evolution of Rumini Street, as we have officially pivoted our identity to become the software support and agentic AI ERP company. This is not just a tagline. It represents a fundamental shift in how we help the world's largest organizations bypass forced vendor upgrades and instead modernize their existing ERP systems with cutting-edge AI-driven technology. Before diving in, please be aware of our standard safe harbor provisions. Our forward-looking statements are subject to risks and uncertainties that may cause results to differ materially from what is presented today. We encourage you to review our SEC filings Form 10K and 10Q. With that, let's get started. Our senior management team is unique in the industry, led by our founder, CEO Seth Raven, the architect of third-party ERP support. Our executive team consists of ERP and innovation-focused executives. We We have evolved from a litigation-ready disruptor to a strategic innovation partner. The team is currently executing our transition to a higher growth, higher margin, and longer lifetime value model, centered on the orchestration role in the AI-driven recurring revenue model. Rimini Street was founded in 2005 by Seth Raven, growing the company organically to 400 million ARR, headquartered in Las Vegas, although most of our global workforce works remotely. We are publicly listed on the NASDAQ global markets under the ticker RMNI, and we are a member of the Russell 2000. We have over 1,900 employees and over 3,100 active clients. We are a global company with over half our revenue from international operations with the US at 44%, APAC at 30%, EMEA 18% and so on. America's ex-US 8% rounds it out. Manufacturing by sector, revenue by sector, manufacturing is 31% services 23% and TMT 19% I would like to note that the public sector and education sector revenue represents 10% of our revenue we expect this to grow as of last August we are GSA approved vendor meaning we can sell directly to federal agencies state and local governments this certification exhibits our financial strength and reputation in the market as a premium software support provider. The GSA approval allows us to bypass the typically long approval and procurement process. Client success. Since inception, we have saved our 6,600 clients over $10 billion. That include over 200 Fortune 500 and Global 100 clients. With offices in 22 countries, we offer services covering over 150 countries. Our premium service consistently maintains a satisfaction rating of 4.9 out of 5.0. Our solutions portfolio. Our products and services include support services primarily for Oracle and SAP ERP and infrastructure software such as VMware that covers code configuration, enhancements, break-fix, and tax and legal regulatory updates. We also offer application-managed services where we are tasked with running the system, and we have successfully branched out to offer Remini Custom, where clients introduce additional software and code that we have successfully supported. Additional products and services include security, interoperability, monitoring, and health checks, along with cloud and license migration, technical functional consulting. In a whole, we offer a single vendor solution for the entire ERP software stack. We have pivoted to rebranding Raministreet as a partner and provider for Agentic AI ERP. In addition, internally, we have developed and offered 20 agentic AI UX solutions that we expect to grow to 100 by year end. Our strategy is to position Rimini Street as the bridge that allows companies to keep and leverage their stable ERP systems while adding modern AI capabilities on top. This slide shows how dramatically our addressable market has expanded. Historically, we served a roughly $15 billion support market focused on Oracle and SAP. Support now includes an incremental $65 billion opportunity driven by broader software coverage and offerings, including VMware and remaining custom, often within our existing client base. Optimize is a major growth driver. It expands TAM, strengthens support, and increases wallet share through services like application management, security, and modernization. Innovate through agentic AI ERP adds an accretive new layer on top of the stable ERP core systems. Support, optimize, and innovate work together to expand TAM, deepen client relationships, and drive long-term growth. Now, I'd like to turn the presentation over to Michael.

Michael Perica, CFO

Thank you, Dean. Thanks, everybody, for joining us today. I'd like to start off with the Rimini Smart Path, support, optimize, innovate. this is where we are having expanded more productive more today relevant conversations with our clients support for us means our traditional businesses denoted for the last two decades where we replace the vendor particularly where we focus have focus historically on the ERP that 22% maintenance revenue stream that the vendor has attached with the licenses that's where we replace the vendor in that case the optimize is to optimize the systems not only on ERP other systems even some SAS systems where we run the system for you as the noted application managed services then the innovation the innovation side is exciting for us we'll be spending a lot of time today outlining how we're approaching this what we are offering what we have offered and what we see why we're so encouraged and this is through the conversations with our clients uh for the growth opportunity and wealth creation here at ramini street in our investor day december of last year we gave a split here where roughly support is 87 88 of the business the others are optimized and a little bit on the innovation side but also wrapped around this is our professional services engagement based business that we frankly have this is more of a pull through from our clients and their needs for project specific work wrapped around our core offerings here what's most important on this slide here is this is something we've engaged with our clients our 3 000 plus clients as you folks know seeing the data is self-funded innovation historically the last couple of decades two three decades or so innovation has meant buying the latest or upgrading to the latest platform of the incumbent that has changed the market has recognized this as well right with the sentiment for the SAS industry and our enterprise software space has changed why this is a reality we've been instructing our clients and letting them know with the remaining solution where we can support your existing system of record that is working just fine I've We've had full SAT and CFO chair with a full Oracle ERP suite, a full SAP suite for global entities, and every single upgrade I was forced into gave me precisely zero value, but a cost and disruption. We've been assisting 3,000 plus clients with this, but the problem was we released this How do I spend to get true innovation? That has changed. as dean noted with the agentic ai opportunity not only ours with partners that we'll get into later in the presentation that freeing up that 40 to transform innovate the enterprise our conversations with our clients is focused on that because it is finally a reality where clients have optionality and clients have control and they can innovate as we say the future is already here although agentic ai is in the early stages there are ways to use it to apply it in a custom fashion and extract value out of it that's what we do that is our strategy in line with providing optionality of which we have been doing for decades and control to our clients and these new tools and these next generation tools are giving a whole new opportunity for enterprises and it's denoted even public sector folks that can see innovation. How have we done this? And it's all built on the core for the support. This can happen. This is a reality today, not only with the new tools, but obviate and circumvent the need to go down the vendor's roadmap. How do we do it with our 4.9 out of 5 for decades of client satisfaction? We have follow the sun. we have our own proprietary, some patented solutions, how we actually get in front of challenges with current systems. We're looking at systems, we're monitoring systems, and we're actually being proactive versus just reactive. But when there's an element of being reactive, nobody's quicker, nobody's more capable of solving these solutions. This is our core, this is our base, how we're building our optimized and our innovation and building greater partnerships with our clients here in the center in the black called our catalog we have we published our current catalog of agentic ai solutions workflows these are these are not only these are workflows that we have identified to using solutions in the core engine today it's it's with our partner service now and this is something that is not just out of the box this can be customized. And that's a very important point with tomorrow, how enterprise are extracting value with innovation is customization. We allow IT teams. This is a common theme. We're having conversations at the C-suite, not just CIOs, not just CTOs. These are CFO and CFO level discussions and even at board saying, we are giving you optionality. We're giving control. And these tools are giving you the ability to transform your IT teams into builders versus just buying what is the next rev of the enterprise software vendors the traditional vendors so we have centers of excellence around the world we are engaging with our clients as we say these solution blueprints so we're going to be building on our catalog and as we're putting more of this in right we will see with particular systems old new very new reasonably old very old but we can put innovation on those systems and that's where we have and we are really encouraged about our position to have leadership with solutioning to delivering the agentic AI ERP here would like to go through this stack and understand where replay and how we are attacking the market through our core partner service now we've announced and we have working our agentic UX that is on top and that is the interface to these agents with the service now engine at the core the now platform where you interface and you provide instructions there then you have as you see the service now layer and then that and this is where we come in and what we can do unparalleled or unmatched to anyone out there, we can tie it in not only into these systems, but because of how we support and understand and get the tentacles into these legacy systems, we can get it in there, we can get it to work, and we can optimize it. That is where we come in. And then, of course, we have our full suite of offerings at the bottom, support, manage, secure, monitor, innovate, and such, where we can wrap around, and this is solutioning, and this is customization to the enterprise business this is what's real exciting this is where we are having tremendous moments in front of clients because we don't have an exclusive relationship and there are also certain clients that will say well can you do this around other models other core engines and the answer is yes that's why we get back to we're giving your optionality we are giving you control and we're giving you the economics so you're able to innovate. That's what's exciting. That's what's different about Remini Street. And here's the opportunity for modernization if you want to look at some quadrants, but I would instruct everybody to the top right. The right hand side, 100,000 plus on-premise ERP systems still active today are expected now are able through Remini Street, can't happen without Remini Street, third party support because you would be forced to go out of support you would have to have the vendor typical path that everybody's been ingrained to do in the last two three decades to upgrade you don't have to do it anymore do it anymore moreover you have economics and you have a real solution to leapfrog the SaaS layer to have innovation moreover that innovation can be customized instead of buying and going through a really expensive systems integration in the millions and millions in some cases tens of millions of It's going to give you billions if you're a global Fortune 100 multinational and you have to customize an uncustom built piece of software that is so difficult to manage. Now, you can just take all of these dollars that are freed up less and you can have the innovation that is out of the gate, able to customize. That is what's so exciting for us. that's why in the top right in actuality we're seeing clients saying almost an aha relief moment that I still have my perpetual licenses that you folks can keep running for decades and I can have innovation around that and the economics are more favorable it is an exciting time for us at Rimini Street our value proposition has never been more understood and have value than what we're looking at now. And we feel really fortunate about this statement of owning the agentic ERP. Why? As I said previously, no one understands whatever Rev1 is on, if it's still functioning, we can't support it. We can continue to support it. We understand how it works. We have people calling us up telling us we need help with this solution, how we can get from the orchestration layer and get tools into the ERP system and or other systems of record. This is where we're at the center of this because as you show on the top, we know ERP processes. That's what we know. All businesses transact in our run on a core ERP system. And ERP systems haven't had innovation for quite some time. Worked well for the vendor. Great economics to them to transition to a rental fee. Not great for optionality control for the clients. AI is a leapfrog strategy. It's leapfrogging SaaS. We've seen what's happening in the market. The market's telling you that there are an alternative path. And it's a real path. But it's not download off the shelf. You just get a latest plug-in and it's going to work for you. No, you have to solution it, putting it in and you have to work with all the existing systems. Inter-Ramini Street, that's the value we have. And the total cost of ownership is just dramatically orders of magnitude more attractive. You get control, you get customization. We actually use this slide a lot with our clients and we engage existing and actual prospects. Look at the red line. Let's focus there. that's what vendors are telling you and that's just to get from an on-prem system to go to a SaaS system and if you were having one of the large ERP vendors that's telling support that's turning off in 2027 if they're talking to the clients you need to get to the new system if they're talking to investors they said oh we're going to get two to three times economics for that but if you're a client that's using the system what do you get for innovation not a whole lot a fancy interface but now you handed your economics over to the vendor and then after you do that now we can start talking about getting innovation look at the path that you have on the bottom and it's so far in the future the pace of innovation is going to change with the rumini smart path and our agentic ux we accelerate that we free up the economics we get you to looking towards whether you want a platform on top whether you want to do individual through workflows whether you want to do customization for certain processes and identify inefficiencies we're working with clients optionality control innovation in economics that's what we are providing you're pushing it out if you go down the vendor migration path that is many times point product or even a system of record that doesn't give you innovation but gets you the newer rev takes multiple years to put in and innovation will be accelerating and you're in a poor position to take advantage of that.

Michael Perica, CFO

We're on the green line.

Michael Perica, CFO

This is how we're going to, from our innovation, support, optimize the innovation piece, both with our direct do-it workflow by workflow or with our partners, put a platform on top. This is how we start. This is how we monetize. This is how we're going to grow. This is on the innovation side. However, from a value creation with Remini Street, ultimately we're going to see the true economics and the value creation on none of this happens without the pull through of our core l4 support business here is the early momentum with clients we show we show flash some of these clients also had them presented our december investor day there's a there's a logo on here e-pay in brazil the cto was even on stage telling us that been asking people for two years to innovate a certain process and say we didn't think you could do it and we did it in 30 days using our agentic AI solution and it made the difference this is just one example we have many examples out there with our existing with these folks building these systems in place and we're learning each every day those are the processes that we have that we can customize on the right column overall from a grow-to-market perspective as i was highlighting previously with our smart path our direct sales model is to land with remaining support our high margin core business as i said 87 88 percent of our revenue that we're really excited about uh our recent the growth of our recent rpo the growth of our recent billings and our overall revenue performance excluding adjusted for the people soft side truly has been built by the resurgence of our core high-margin support business. We land there directly, optimize to gain more, to give you the efficiency internally, to convert your internal staff, let us manage the existing platforms, convert your staff to the builders, and then we can assist you with solutioning, using the appropriate models, technologies, next generation through our innovation piece. Our partners are helping us in a different way below on the blue line. They are leading with the innovation, but then they're inserting Ruministreet, how we solve the problem of the need to, well, I have to upgrade this platform. Well, no, you don't. We bring in Ruministreet. As you know, Ruministreet, we have our generally available solutions on the core L4, mainly on the ERP, but many others, as Dean flashed previously platforms. But then we have Ruminicustom. We're having great conversations there where it's optionality control, where if you have something that you don't need to upgrade, even don't need to put innovation around it it just needs to be put aside for five years so we'll build a program for you when we can support it we have fortune 100 fortune 500 entities that have the aha moment oh you can do that for us as well as a partner yes we can support your large systems we can keep them active we can get innovation on top of the systems we can optimize to free up your staff so they can turn into builders versus buyers and implementers and we give the innovation piece as well what does all this lead to for value creation from the financial community the right arrow on the right the arrow on the right increasing retention that's a component of our growing and improving rpo billings and such that as folks are buying into this road map strategy and are looking at modernization using these tools leapfrogging sass and turning into builders this bodes well for our overall baseline retention we're really encouraged about the opportunity there just quickly touching on some financial metrics here q1 was out see the 106 million in revenue from a revenue perspective we started to build our momentum q3 of last year we've been using this in our engagement with the financial community talking about the momentum momentum. From a revenue perspective, excluding PeopleSoft, Q3 last year, two and a half percent growth, 0.5 percent growth-ish in Q4, 5.2 percent Q1. We're building that momentum. Looking at our billings, excluding the PeopleSoft, 6.7 percent over that same period, 1 percent, 22.9 percent in Q1. What we're really excited about is the RPO, that baseline that has a component of new bookings cross-selling, as well as our retention. Our RPO metrics, excluding the PeopleSoft purposeful, committed wind-out, 9.3%, 11.7%, 18.2% growth on our remaining performance application, excluding PeopleSoft. That's the momentum that we are building. It is driven by this trend in where we fit in the industry. Other metrics do want to highlight and address from our first quarter. We did have a lower than expected gross margin, but we had some on our engagement base, as I was saying. Professional service is another building prepping for our new bookings and new clients brought on an L4. We had a lower gross margin than we expected. Our thoughts for the year and our ability to deliver the leverage is unchanged as we're looking throughout the year. That was one of the drivers, as well as pull forward, given our excitement and our engagement with clients on our marketing spend. Pull forward, not change. Overall, the lower EBITDA in the first quarter. Revenue retention, very rearward looking, flatlining. We're feeling good with the trends, as I noted previously, that that moves slow down, that moves slow up. But we're seeing positive underlying trends. Getting back to the active client growth. as well. Just flashing what we did when we came, excuse me, with guidance in December of last year to Investor Day, seeing some familiar faces here that were with us. Our guidance is unchanged from that period from Q1, four to six percent on the top line to 12 and a half to 15 and a half percent on the bottom line for the full year. Yes, we expect the leverage to happen in the second half of the year future model at scale that's not going to be uh that's not needed to see that model near the billion dollar range that's something that we can see as we consistently continue to perform and the positive forward-looking metrics translate into our profit and loss statement that's the type of model we see that can get us to that combine the rule of 40 measurement certainly with the bottom line waiting just quick flash historical financial performance here again you'll see the q1 of 2026 i highlighted some of those items uh gap to non-gap reconciliation we did given volatility that we've seen from an fx perspective we are excluding non-cash unrealized the FX translation adjustments. It was rather substantial in Q1, the $1.3 million, almost to the same size that we had as you see the $1.6 in all of 2025. Just want to flash quickly from a capitalization perspective. Bottom, you see our net cash position of the $73.8 This is post-debt reduction that we did voluntarily unscheduled in Q1. As well as noting, there are associated, not with the SPAC, That these warrants and older two instruments ago, the 5.64, that expires this year in June of 2026. So overall, just to summarize before we get to a quick Q&A, our durable moat and our differentiated business model and where we, the pioneer in third party support, our value proposition has never been more relevant and more timely to assist clients in their transition down a completely different IT roadmap that they haven't had access to with any sort of reasonable economics in the past three decades. We do have, we believe, the first mover advantage in targeting the agentic AI component and how that helps processes within enterprise and our ability to get it deep into these systems with the understanding of these systems to have it work in a control but autonomous learning type structure you know the growing addressable market our large TAM and boy I Dean and I were joking about this the other day that it's probably been over nine months or so where we heard the melting ice cube everyone's gonna go to SAS so it's a melting ice cube for you folks to manage these these assets fully depreciate assets we don't hear that much anymore because that's not much of the conversation anymore because it's not a sure thing that the market will definitively eventually upgrade to the SAS they're all alternatives they are so attractive right land expand retain and extend our revenue growth opportunity through as I said the support optimize innovate our margin structure attractive but we're going to see the improvements and the leverage to the model in the second half of this year as we're going to translate those forward-looking metrics to flow through our p p l capital allocation right we had two priorities that we assess on a regular basis capital through return through share repurchases also debt reduction and then an experienced leadership team that's been around enterprise software but has that entrepreneurial spirit for many decades now and we couldn't be more encouraged and excited about this opportunity with our value proposition and this excitement's driven by our engagement current clients and our prospects. So thanks for listening in and happy to entertain any questions. so uh i'll repeat just didn't have the microphone so no no that's not you a good response from the team so uh the buying persona it is shifting as i highlighted previously in the c-suite and a lot of our marketing spend and the programs we're putting in place is to have the business level conversation not only with the business unit leads functional leads c-suite the most attractive is CTO, CIO, CFO, even CEO, where they're all having discussions and pressure appropriately from the board, how do you get to this AI, right? And this is an alternate roadmap, and the business folks hear it. The IT folks are still in the next, next, next, upgrade, upgrade, upgrade, have the latest rev on my CV. That's shifting, and it's shifting quickly. Secondly, with regard to sales cycle, when you're in front of the business leads and when you as an enterprise recognize just doing what the vendor says and continue to have siloed point products and their story of ai just within those products is not an enterprise-wide ai our sales cycles inbounds and converting into contracts seemingly are slowly shortening because it's buying them the optionality and to assess the control of how i want to go down my investment and innovation path enterprise-wide as an organization so slowly but those are two very important trends that we are seeing in our

Michael Turrin, Analyst — Wedbush

engagement with clients and then just a quick follow-up on the ai specifically and this is not not so much around like the agentic erp but like how is it you guys are thinking about ai internally right there's like a two routes that I've heard of predominantly one is like hey with AI we can become way more productive and so the level of breadth that we can introduce to the market it should increase materially from an R&D standpoint as an example right or we can drive cost savings right how is it you guys are implementing AI internally and what are your findings us for?

Michael Perica, CFO

So from a, I'll attack it in two different levels. From a, our engineers earning the revenue and performing support, AI models just out of simple copyright cannot train on that and then provide and compete with us. That is still human interaction with a very robust tested process of how we provide support that is the most refined process has been challenged legally as we all know in place and that's something where we're going to there's still a human element expected employee growth now then we get on the operating the operating expense the other administration tasks as well we have a combination we have where we have successfully used global capability centers around the world with three centers of excellence in the different hemispheres to not only offer the support but support our business and of course we're in the process and we uh meet our well above our requirements on sec financial reporting and i use the system from 2009 and i'm putting innovation around that system and we're having our internal analytics and our internal operations and we're absolutely identifying our inefficiencies and we're going to practice and we are practicing what we preach so there's a lot more to come for us to deliver, this can be a component of that leverage we're talking about on our P&L. Thank you.

Al, Analyst

I had a question about the over $1 million deals in the last quarter. How are we supposed to interpret that? Was there pent-up demand for those? Is that a running rate that continues? It seems like you had a huge signing period there. How do we interpret that?

Michael Perica, CFO

So, good to see you, Al. And the answer is it wasn't just Q1, right? For that period, I was highlighting some of our metrics. We saw this Q4, Q3 of last year, three quarters in a row. What's interesting is we've all highlighted our retention challenge in the last couple of years. And if you take a look at our U.S. rest of the world revenue, there's a clear bias as to what platforms are installed that we support, and oracle domestic sap rest of world and they have very strong market share in those two geos we saw strength in the last quarter domestically we saw strength in that area where we had our more challenging retention in our new bookings area bottom line if there's an interpretation the totality of what i've been discussing how we're engaging with clients larger deals longer durations and looking into a roadmap and how we provide them the opportunity to assess this roadmap and invest in the agentic AI and the building of innovation internally, that's an interpretation that there are signs and correlations to what we're seeing on those larger deals in the last three quarters.

Al, Analyst

You'd expect that pace to continue?

Michael Perica, CFO

We are working. We're encouraged. We're excited. we are having more and more engagements and we fully intend to continue thank you thank you and thanks everyone enjoy the rest of the conference