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Rimini Street (RMNI) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Jul 30, 2026

Source: earnings call transcript

Executive summary

Rimini Street Q2 FY26 — Strong Demand and AI Innovation Drive Growth

Rimini Street demonstrated continued momentum in Q2 FY26 with strong demand for its core offerings and increasing adoption of its AI solutions, leading to revenue growth and improved gross margins. The company reiterated its full-year Rule of 20 guidance, driven by strategic investments in AI innovation and an evolving go-to-market strategy, despite some short-term pressures on billings and profitability from these investments.

Highlights

5

  • Delivered four consecutive quarters of improved growth metrics, reiterating Rule of 20 guidance for FY26.

  • Closed 14 new client transactions over $1 million TCV, totaling $30 million in Q2 FY26.

  • Added 58 new logos in Q2 FY26, contributing to 108 new logos in H1 FY26.

  • Revenue increased 6.7% year-over-year to $111.1 million, with adjusted revenue (ex-PeopleSoft) up 10%.

  • Gross margin improved to 60.9% (GAAP) and 61.3% (non-GAAP), exceeding the 60% objective.

Concerns

4

  • Billings for Q2 FY26 decreased 8.8% year-over-year to $100.9 million, attributed to timing differences in client renewals.

  • Sales and marketing expense increased to 38.5% of revenue (GAAP) and 37.6% (non-GAAP) in Q2 FY26, reflecting investments in new offerings.

  • Adjusted EBITDA declined to $10.5 million or 9.5% of revenue in Q2 FY26, compared to $14 million or 13.4% a year ago.

  • Net income attributable to shareholders decreased to $2.4 million or $0.03 per diluted share, compared to $0.32 per diluted share in the prior year, which benefited from a $37.9 million Oracle settlement gain.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Rule of 20 results
Reiterated
high materiality
High
Full-year 2026 Revenue growth
4% to 6%
high materiality
High
Full-year 2026 Adjusted EBITDA margins
12.5% to 15.5%
high materiality
High
Q3 2026 Revenue
$110 million to $112 million
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
PeopleSoft products
Revenue declined to 3% of total revenue this quarter, down from 6% a year ago and 8% when the transition began in 2024, reflecting steady progress towards completing the wind down by July 2028.
Revenue as % of total revenue: 3%
————

Orderbook & backlog

Remaining Performance Obligations (RPO) $636.9 million June 30, 2026

increase of 8%

Includes billed deferred revenue, contract assets and noncancelable future revenue.

Adjusted RPO (ex-PeopleSoft) 8.8% June 30, 2026

increased 8.8%

Reflects continued growth momentum in new bookings and longer duration client commitments, excluding RPO associated with support services for PeopleSoft products.

Deferred revenue $267.1 million June 30, 2026

up from $262.9 million in the prior year second quarter

Product announcements

ProductTypeDetails
Rimini Govern for AIlaunch

Deals & partnerships

VIVERE Group Selected Rimini Support for SAP ECC 6

Indonesian interior contractor and furniture manufacturer. Strengthens business continuity, avoids costly SAP migration, redirects resources towards digital transformation and innovation.

One NZ Chose Rimini Support to optimize its Oracle environment

New Zealand telecommunications company. Optimized Siebel CRM and Oracle Database, accelerating AI transformation strategy. Described Rimini Street as a 'trusted co-innovation partner'.

Medical Microinstruments Leveraged Rimini Consult for Salesforce

Italian robotic microsurgery company. Maximized ROI on technology investments, eliminated unnecessary third-party software costs, implemented critical training/certification workflows, developed long-term sales force roadmap.

Cochlear Limited Chose Rimini Support for Oracle

Australian hearing technology leader. Gained greater control and flexibility over ERP roadmap, avoided vendor-driven upgrade cycles, freed critical resources for digital transformation and new AI-powered customer service/analytics initiatives.

ServiceNow Working with partners to build out pipeline

Strategic partner, sharing over 1,000 customers. Aiming to expand footprints together and build more pipeline.

T-Systems Working with partners to build out pipeline

Strategic partner, working to expand pipeline.

Risks & headwinds

Sales rep turnover due to evolving skill sets Current

Not quantified, but acknowledged as 'a little bit more turnover than I'd like'

Mitigation:Readjusting skill sets, aggressive hiring of sellers and sales support, retraining sellers to discuss AI and technology.

Increased sales and marketing costs Current, near-term

Sales and marketing expense was 38.5% of revenue (GAAP) and 37.6% (non-GAAP) in Q2 FY26, up from prior year.

Mitigation:Strategic investment in new AI-driven innovation offerings and go-to-market efforts; management believes they are around the peak for this as a percentage of revenue.

Increased Cost of Goods Sold (COGS) Current, near-term

Not explicitly quantified, but stated as a driver for gross margin management.

Mitigation:Balancing act when in growth mode and launching new products; committed to maintaining gross margin above 60%.

Billings lumpiness due to renewal timing Quarterly

Q2 FY26 billings down 8.8% YoY to $100.9 million, but H1 FY26 billings grew 3.2% YoY.

Mitigation:First half results provide a more complete view; focus on new bookings and longer duration client commitments.

What to watch in Q3 FY26

Sales and Marketing Expense Trajectory

next quarter
Current 37.6% of revenue (non-GAAP) in Q2 FY26
Target Stabilization or slight decrease as % of revenue

Why it matters

Management indicated S&M expenses are near their peak; verifying this trend is crucial for profitability.

I think we're at around the peak. There's still some pieces we're putting in place, but we launched a brand-new service, our Rimini Government for AI today, which is a big service. So there will still be a little bit of marketing push that goes with all those new products and services.

Find out whether RMNI delivers this. Inve re-checks your case every morning.

Q&A highlights

How much can AI impact Rimini Street's internal cost model, including sales efficiency and service costs, and its long-term adjusted EBITDA margins?

Seth Ravin stated that Rimini Street is using AI internally for sales (gathering prospect info, pipeline management with tools like Clari) and finance. He expects a meaningful reduction in total operating costs and more leverage in coming years.

“I think that, yes, we will achieve a meaningful reduction in total operating costs and more leverage as we move forward in the coming years.”

asked by Richard Baldry · answered by Seth Ravin

1 min read 4 chapters

Detailed narrative

AI Innovation and Strategy

Rimini Street is strategically evolving into an innovation company, focusing on Agentic AI ERP solutions. These solutions are designed to be deployed over existing ERP software, enabling clients to modernize and innovate without undergoing costly, risky, or disruptive ERP upgrades or migrations. This approach aims to reduce total operating costs, improve profitability, and enhance competitive advantage for clients, funded within their current IT budgets.

New Product Launches and Ecosystem

The company launched Rimini Govern for AI, a Governance as-a-Service solution, which rounds out its end-to-end AI capabilities. This new offering complements existing solutions like Rimini Agentic UX and Rimini Agentworks, providing a comprehensive suite for designing, deploying, governing, and optimizing AI agent operations across mission-critical enterprise environments. The company also continues to strengthen its indirect sales ecosystem, adding new partner managers and completing new partnership agreements to extend reach and accelerate adoption.

Go-to-Market and Sales Force Evolution

Rimini Street is actively adjusting its sales force skill sets to better discuss AI and technology with clients, acknowledging some turnover during this transition. The company is committed to growing its sales force and support teams, including a new AI support team. A separated sales model in the Americas, with 'hunters' for new logos and 'farmers' for existing clients, has driven significant new logo acquisition and improved client retention.

PeopleSoft Wind-down and European Commission Impact

The wind-down of PeopleSoft support services is progressing as planned, with PeopleSoft revenue declining to 3% of total revenue in Q2 FY26, down from 6% a year ago, and is on track for completion by July 2028. Additionally, the recent European Commission agreement with SAP regarding anticompetitive practices is viewed positively, as it is expected to increase competitive choice and benefit third-party providers by addressing software licensing challenges.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.