Friday, 15 March 2019 10:38

Rimini Street records 2018 loss, but snares largest client contract

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Global enterprise software products and services provider Rimini Street has recorded a net loss of US$68 million for the full year 2018. The loss comes as the US-based company reports that a contract for approximately US$26 million over three years is the largest client contract in its history.

Rimini Street noted the contract, with an unnamed client, as it released fiscal fourth quarter and annual 2018 financial results revealing net loss was $68.0 million for 2018, compared to a net loss of $53.3 million for 2017.

And Rimini's record revenue for 2018 was $252.8 million for 2018, an increase of 19% compared to $212.6 million for 2017

As reported by iTWire, in January this year Rimini Street announced that more than 10 Australian Federal and State Government agencies have switched their enterprise software support from Oracle and SAP to Rimini Street.

Rimini Street said that among the government agencies making the switch were the NSW Department of Family and Community Services, Victorian Government Department of Economic Development, Jobs, Transport and Resources, Australian Hearing and Open Universities Australia.

And Rimini Street claimed these agencies were now achieving significant returns on their enterprise system investments, and had realised savings of up to 90% on total maintenance costs compared to what they were paying the software vendors.

In its 2018 results just released, the US-based company reported that quarterly revenue of US$67.7 million was up 17% year-over-year and fiscal year revenue of US$252.8 million, a 19% increase year-over-year.

“We ended fiscal 2018 on a high note by signing the largest client contract in company history and achieved record revenue and billings for the fourth quarter and fiscal year,” said Seth Ravin, Rimini Street co-founder, chief executive and chairman of the board.

“Additionally, we improved our balance sheet and made significant investments in new products and services, support capabilities, geographic expansion and sales and marketing infrastructure. We continue to see growing global demand for our enterprise software support products and services, and plan to continue making significant investments in 2019 to support growth.”

“Revenue in the fourth quarter and full fiscal year 2018 exceeded the high end of our guidance range and gross margin increased while managing sales and marketing spend within our guidance range,” said Tom Sabol, Rimini Street chief financial officer.

Fourth quarter 2018 financial highlights

  • Revenue was US$67.7 million for the 2018 fourth quarter, an increase of 17% compared to US$57.9 million for the corresponding period last year.
  • Annualised subscription revenue was approximately US$269 million for the 2018 fourth quarter, an increase of 16% compared to US$232 million for the corresponding period last year.
  • Active clients as of 31 December 2018 were 1802, an increase of 15% compared to 1566 active clients as of 31 December 2017.
  • Gross margin was 64.4% for the 2018 fourth quarter compared to 57.0% for the corresponding period last year.
  • Operating income was US$3.6 million for the 2018 fourth quarter compared to US$4.3 million for the corresponding period last year.
  • Non-GAAP operating income was US$10.0 million for the 2018 fourth quarter compared to US$5.6 million for the corresponding period last year.
  • Net income was US$2.3 million for the 2018 fourth quarter compared to a net loss of US$3.9 million for the same period last year.

Full year 2018 financial highlights

  • Revenue was US$252.8 million for 2018, an increase of 19% compared to US$212.6 million for 2017.
  • Revenue retention rate was 91% for the year ended 31 December 2018.
  • Gross margin increased to 62.0% for 2018 compared to 61.0% for 2017.
  • Operating income was US$25.4 million for 2018 compared to US$22.0 million for 2017.
  • Non-GAAP operating income was US$31.0 million for 2018 compared to US$29.8 million for 2017.
  • Net loss was US$68.0 million for 2018 compared to a net loss of US$53.3 million for 2017.
  • Basic and diluted net loss per share attributable to common stockholders was US$1.28 per share for 2018 compared to a net loss of US$1.65 for 2017.
  • Non-GAAP net loss was US$8.7 million for 2018 compared to US$32.9 million for 2017.
  • Adjusted EBITDA was US$31.3 million for 2018 compared to US$32.1 million for the 2017.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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