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    RMNI
    Earnings call· Jun 2026(Q2 FY26)

    Rimini Street Q2 FY26 earnings call RMNI

    Jul 30, 2026 Source

    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

    4
    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

    1
    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%
    		————

    Operational metrics

    33
    Revenue
    $111.1 millionup 6.7% year-over-year
    Q2 FY26

    Total revenue for the second quarter.

    Adjusted revenue
    10%year-over-year
    Q2 FY26

    Revenue growth excluding PeopleSoft products.

    FX impact on revenue
    -0.2%
    Q2 FY26

    Foreign exchange movements reduced second quarter revenue by approximately 0.2%.

    Annualized recurring revenue (ARR)
    $401.1 million8.1% increase year-over-year
    Q2 FY26

    Annualized recurring revenue excluding PeopleSoft products.

    Revenue retention rate for service subscriptions
    90%
    Q2 FY26

    Service subscriptions represent 93% of total revenue.

    Subscription revenue noncancelable for at least 12 months
    84%
    Q2 FY26

    Percentage of subscription revenue that is noncancelable.

    Billings
    $100.9 milliondown 8.8% year-over-year
    Q2 FY26

    Total billings for the second quarter.

    Billings (ex-PeopleSoft)
    8%year-over-year decline
    Q2 FY26

    Billings decline excluding PeopleSoft products.

    Billings
    3.2%year-over-year growth
    H1 FY26

    First half billings growth, providing a more complete view due to timing differences in client renewals.

    Billings (ex-PeopleSoft)
    4.7%year-over-year growth
    H1 FY26

    First half billings growth excluding PeopleSoft products.

    Gross margin
    60.9%compared to 60.4% in prior year period
    Q2 FY26

    Gross margin for the second quarter, exceeding the key objective above 60%.

    Gross margin
    61.3%up from 60.8% in prior year second quarter
    Q2 FY26

    Non-GAAP gross margin for the second quarter.

    Sales and marketing expense as % of revenue
    38.5%compared to 36.5% in the prior year period
    Q2 FY26

    Reflects investments in go-to-market of expanded and new service offerings.

    Non-GAAP Sales and marketing expense as % of revenue
    37.6%up from 35.5% a year ago
    Q2 FY26

    Reflects investments in go-to-market of expanded and new service offerings.

    General and administrative expenses as % of revenue
    15.6%down from 60.2% in the prior year period
    Q2 FY26

    G&A expenses for the second quarter. The prior year figure of 60.2% appears to be an ASR error, as it is highly improbable for G&A to be such a high percentage of revenue. The non-GAAP prior year figure was 14.9%.

    Non-GAAP General and administrative expenses as % of revenue
    14.5%down from 14.9% in the prior year second quarter
    Q2 FY26

    Non-GAAP G&A expenses for the second quarter.

    GAAP Net income attributable to shareholders
    $2.4 million
    Q2 FY26

    Net income attributable to shareholders for the second quarter.

    GAAP Diluted EPS
    $0.03compared to $0.32 per diluted share in the prior year period
    Q2 FY26

    Diluted earnings per share for the second quarter.

    One-time pretax gain
    $37.9 million
    Q2 FY25

    Benefited last year's net income, associated with the Oracle settlement.

    Non-GAAP Net income
    $5.9 million
    Q2 FY26

    Non-GAAP net income for the second quarter.

    Non-GAAP Diluted EPS
    $0.06versus $0.08 per diluted share a year ago
    Q2 FY26

    Non-GAAP diluted earnings per share for the second quarter.

    Adjusted EBITDA
    $10.5 millioncompared to $14 million in the prior year second quarter
    Q2 FY26

    Adjusted EBITDA for the second quarter.

    Adjusted EBITDA margin
    9.5%compared to 13.4% of revenue in the prior year second quarter
    Q2 FY26

    Adjusted EBITDA as a percentage of revenue.

    Cash balance
    $123.4 millionup from $101.3 million in the prior year second quarter
    as of June 30, 2026

    Total cash balance at quarter end.

    Cash flow conversion
    118%
    YTD H1 FY26

    Cash flow conversion for the first half, placing the company in a strong position to achieve its annual goal of 90%+ conversion.

    Debt prepaid
    $10 million
    Q2 FY26

    Amount of debt prepaid during the quarter.

    Outstanding debt
    $48.4 million
    as of June 30, 2026

    Total outstanding debt at quarter end.

    New client transactions over $1 million TCV
    14
    Q2 FY26

    Number of new client transactions with over $1 million in Total Contract Value.

    New client transactions over $1 million TCV
    25
    H1 FY26

    Number of new client transactions with over $1 million in Total Contract Value for the first half of the year.

    New logos
    58
    Q2 FY26

    Number of new logos added in the second quarter.

    New logos
    108
    H1 FY26

    Number of new logos added in the first half of the year.

    Pipeline close rate
    30%
    Q2 FY26

    Close rate for the sales pipeline, indicating a solid and clean pipeline.

    Pipeline growth
    double-digit growthyear-over-year
    Q2 FY26

    Growth in the overall sales pipeline.

    Industry KPIs

    9
    MetricValueDetails
    Revenue growth$111.1 millionUSD
    Arr net new arr$401.1 millionUSD
    Rpo current rpo$636.9 millionUSD
    Bookings billings$100.9 millionUSD
    Customer account count58new logos
    Large deal new logo metrics14transactions
    Operating FCF margin rule of 40Rule of 20
    Ai product adoption monetizationSeveral customers
    Net revenue net dollar retention90%%

    Orderbook & backlog

    3
    Remaining Performance Obligations (RPO)$636.9 millionJune 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 millionJune 30, 2026

    up from $262.9 million in the prior year second quarter

    Product announcements

    1
    ProductTypeDetails
    Rimini Govern for AIlaunch

    Deals & partnerships

    6
    VIVERE GroupSelected 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 NZChose 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 MicroinstrumentsLeveraged 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 LimitedChose 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.

    ServiceNowWorking with partners to build out pipeline

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

    T-SystemsWorking with partners to build out pipeline

    Strategic partner, working to expand pipeline.

    Risks & headwinds

    4
    Sales rep turnover due to evolving skill setsCurrent

    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 costsCurrent, 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 timingQuarterly

    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

    5

    Sales and Marketing Expense Trajectory

    next quarter
    Current37.6% of revenue (non-GAAP) in Q2 FY26
    TargetStabilization 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.

    Q&A highlights

    8

    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 read4 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.