Q4 2023 Rimini Street Inc Earnings Call

[music].

Operator: Good day, and thank you for standing by. Welcome to Rimini Street's fourth quarter 2023 earnings call. At this time, all participants are in a listen-only mode.

Good day, and thank you for standing by welcome sure.

There are many street fourth quarter 2023 earnings call.

At this time all participants are in a listen only mode.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during this time, simply press star 1 on your telephone keypad. To withdraw your question, please press star 2. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dean Pohl, Vice President, Treasurer, and Investor Relations. Thank you, Operator.

After the Speakers' presentation there.

There will be a question answer session.

Chassis question. During this time simply press star one on your telephone keypad.

So if I draw your question. Please press star two.

Please be advised that today's conference is being recorded.

I would now like to hand, the conference what's your speaker today.

Oh, Vice President Treasurer, and Investor Relations.

Please go ahead.

Thank you operator, I'd like to welcome everyone to Rimini Street's fourth quarter and fiscal year 2023 earnings conference call on the call with me today is tough right then our CEO H, President and Michael <unk> our CFO.

Dean Pohl: I'd like to welcome everyone to Rimini Street's 4th Quarter and Fiscal Year 2023 Earnings Conference Call. On the call with me today is Seth Ravin, our CEO and President, and Michael Perica, our CFO. Today we issue our earnings press release for the fourth quarter and fiscal year ended December 31st, 2023, a copy of which can be found on our website under investor relations. Reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in the press release. An explanation of these measures and why we believe they are meaningful is also included in the press release under the heading about non-GAAP financial measures and certain key metrics.

Today, we issued our earnings press release for the fourth quarter and fiscal year ended December 31 2023.

Copies of which can be found on our website under investor Relations.

A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in the press release.

An explanation of these measures and why we believe they are meaningful.

Also included in the press release under the heading about non-GAAP financial measures and certain key metrics.

Seth A. Ravin: As a reminder, today's discussion will include forward-looking statements that reflect our current outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those made today. We encourage you to review our most recent SEC filings, including our Form 10-K filed today, for a discussion of risks that may affect our future results or stock price. Now, before taking questions, we'll begin with prepared remarks. With that said, I'd like to turn the call over to Seth.

As a reminder, today's discussion will include forward looking statements that reflect our current outlook.

Forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today.

We encourage you to review our most recent SEC filings, including our Form 10-K filed today for a discussion of the risks that may affect our future results or stock price.

Now before taking questions, we'll begin with prepared remarks with that I'd like to turn the call over to Seth.

Thank you Dean and thank you everyone for joining us today.

Seth A. Ravin: Thank you, Dean, and thank you, everyone, for joining us today. Since its founding 19 years ago, Rimini Street has grown and evolved into a different kind of full IT services company focused on the needs and goals of our clients. Other IT service companies are focused on getting their clients to spend as much as possible on projects that maximize sales of their software services and hardware vendor partners and meet their own financial objectives. Instead, Rimini Street works as a trusted partner to its clients and has no partnerships with other IT vendors that compromise or influence its independence in advice, counsel, and recommendations provided to clients. We only have technology partnerships that we use to provide our clients with value, leverage, and access to what we believe are strong solution opportunities.

Since its founding 19 years ago, Rimini Street has grown and evolved into a different kind of full it services company focused on the needs and goals of our clients.

Other IP service companies are focused on getting their clients to spend as much as possible our projects that maximize sales of their software services and hardware vendor partners and meet their own financial objectives.

Instead <unk>.

<unk> Street works as a trusted partner to its clients and has no partnerships with other vendors that compromise or influence its independence and advice counsel and recommendations provided to clients.

We only have technology partnerships that we used to provide our clients value leverage and access to what we believe are strong solution opportunities.

Seth A. Ravin: Rimini Street is focused on developing a Rimini smart, Roadmap, an ROI-driven analysis of options and strategic recommendations to clients on the best allocation of limited IT budget, people, and time resources to help them achieve their strategic, financial, and operational goals. When other IT firms say no, Rimini Street works to say yes, we will get you there. We help our clients achieve better business outcomes such as accelerated growth, lowered operating costs, increased investment in innovation, and improved competitive advantage. We believe we have already delivered over $8 billion of savings and reinvestment opportunities to our clients. Not only is Rimini Street a global leader in its deep technical capabilities to run, manage, support, protect, connect, monitor, customize, configure, and optimize mission-critical enterprise application, database, and technology software, but Rimini is also growing its technical and business capabilities to assist clients with innovation projects that include cloud, open source products, automation, workflow, data, analytics, AI, reporting, application modernization, license management, migrations, integrations, security, and global

Rimini Street is focused on developing a rimini smart.

Roadmap and ROI, driven analysis of options or strategic recommendations to clients on the best allocation of limited budget people and resources to help them achieve their strategic financial and operational goals.

Other firms say know Rimini works to say, yes, we will get you there.

We help our clients achieve better business outcomes, such as accelerated growth lowered operating costs increased investment in innovation and improved competitive advantage. We believe we have already delivered over $8 billion of savings and reinvestment opportunity to our clients.

Not only is Rimini Street, a global leader in its deep technical capabilities to run manage support protect kidnapped monitor customize configure and optimize mission critical enterprise application database technology.

Software, but <unk> is also growing technical and business capabilities to assist clients with innovation projects that include cloud open source products automation workflow.

Data analytics.

Reported application modernization license management migrations integrations security and global governance.

To date, we have served over 5500 Fortune 500, Fortune Global 100 mid market and public sector organizations in nearly 150 countries and a global operations with over 2100 employees across 21 countries.

Seth A. Ravin: To date, we've served over 5,500 Fortune 500, Fortune Global 100, mid-market, and public sector organizations in nearly 150 countries and have global operations with over 2,100 employees across 21 countries. We have an average engineer response time of less than 2 minutes, 24 by 7 by 365, and earn an average client satisfaction score on our support delivery and onboarding services of 4.9 out of 5, where 5 is excellent.

We have an average engineered response time of less than two minutes 24 by seven by 365 and earn an average client satisfaction score on our support delivery and Onboarding services. A 4.9 out of five were five is excellent.

Seth A. Ravin: Q4 and fiscal year 2023 results. For the fourth quarter of fiscal year 2023, we continue focusing on improving sales execution across our expanded portfolio of solutions and being able to deliver the full portfolio of solutions globally. As our current and prospective clients learn more about the unique offerings and value of our expanded solutions portfolio, they are responding positively and buying across the full portfolio. Accordingly, to meet the increased demand, we have substantially increased our seller count and sales capacity through 2024.

Q4, and fiscal year 2023 results.

For the fourth quarter and full year 2023, we continue focusing on improving sales execution across our expanded portfolio of solutions and being able to deliver the full portfolio of solutions globally.

As our current and perspective clients learn more about the unique offerings and value of our expanded solutions portfolio. They are responding positively and buying across the full portfolio.

Accordingly to meet the increased demand we have substantially increased our cellar count at sales capacity coming into 2024.

Seth A. Ravin: Throughout 2023, we saw our end-to-end ERP outsourcing solution, RiminiOne, solutions for SAP products, and the Salesforce AMS solution continue to gain sales traction globally. To enhance and accelerate lead, opportunity, and pipeline development and help close more large and strategic transactions for Rimini Street, our senior executives, including myself, continued our extensive in-person Rimini Street client and prospect meetings and attendance at third-party events and executive sales meetings in the United States and globally with many current and prospective clients. To deliver our full solutions portfolio globally, we continue to grow our workforce and expand our capabilities, backed by innovation and technology that provide additional leverage for increased capacity, profitability, and revenue growth. Demand Environment and Competitive Advantage

Throughout 2023, we saw our end to end ERP outsourcing solution Rimini, one solutions for SAP products and Salesforce Ams solution continued to gain sales traction globally.

To enhance and accelerate lead opportunity and pipeline development and help close more large and strategic transactions for Rimini Street, our senior executives, including myself continued our extensive in person Rimini Street client and prospect meetings and attendance at third party.

Advert that executive sales meetings in the United States and globally with many current and prospective clients.

To deliver our full solutions portfolio globally, we continue to grow our workforce and expand our capabilities backed by innovation and technology that provides additional leverage for increased capacity profitability and revenue growth.

Demand environment and competitive advantage.

Seth A. Ravin: We continue to see strong demand for a proven, reliable, trusted partner for mission-critical transaction system services that can allow organizations to consolidate their preferred IT service providers for streamlined vendor management, increased aggregated purchasing power, and better business outcomes. Organizations today need to figure out how to deliver both revenue growth and increased profitability. And now, as an end-to-end provider of mission-critical IT support, products, and services, Rimini Street has the broader portfolio of solutions needed to be recognized as a key IT service partner that can help enable our clients to lower operating costs and achieve their goals, from developing IT strategy and building roadmaps through plan execution, expanded software product support, and introducing Rimini Custom. This week, Rimini Street officially launched its Rimini Customs Solution. This program allows organizations to request custom support solutions for a broader set of enterprise software that they are using beyond Rimini Street's current supported product list.

We continue to see strong demand for our proven reliable trusted partner for mission critical transaction system services that can allow organizations to consolidate their preferred service providers for streamline vendor management increased aggregated purchasing power and better.

This outcomes.

Organizations today need to figure out how to deliver both revenue growth and increased profitability and now as an end to end provider of mission critical IP support products and services Rimini Street has the broader portfolio of solutions needed to be recognized as a key service.

Partner that can help enable our clients to lower operating costs and achieve their goals from developing strategy and building roadmaps through client execution.

Expanded software products support introducing Rimini custom.

This week Rimini Street officially launched its Rimini custom solution.

This program allows organizations to request custom support solutions for a broader set of enterprise software that they're using beyond Rimini Street's current supported product list.

Seth A. Ravin: Whether the client goal is to consolidate IT landscape support or manage services under a single trusted partner, extend the operating life of a software product or release, or just obtain better and more responsive support, we believe Rimini Custom is an exciting new solution. The Rimini Custom Service is now available to clients and new prospects. Rimini Street will work to say yes and present a proposal for any Rimini custom client request that meets license, supportability, and resourcing analysis. With our new Rimini custom offering, we believe that we are even better positioned to meet the current and evolving IT service needs of private and public sector organizations in the years ahead. Oracle Litigation Update. Rimini Street and Oracle have been in litigation for more than 14 years, including cases known as Rimini 1 and Rimini 2. In 2010, Oracle filed the Rimini One case against Rimini Street in U.S. District Court. As a result of the Rimini One case, with the trial completed in 2015 and subsequent appeals, the U.S. court has affirmed that third-party software support is legal.

Whether the client goal is to consolidate it landscape support our managed services under a single trusted partner extend the operating life of the software product or release, our adjusted came better and more responsive support we believe rimini customers and exciting new solution the remaining.

Cost of services now available to clients and new prospects.

There are many street will work to say, yes. It presents a proposal for any Rimini custom client requests that meet license support ability and Resourcing analysis.

With our new Romania custom offering we believe that we are even better positioned to meet the current and evolving it.

Service needs of private and public sector organization in the years ahead.

Oracle litigation update.

Rimini Street, and Oracle have been in litigation for more than 14 years, including cases, known as Rimini, one and Rimini two.

In 2010, Oracle filed the Rimini, one case against Rimini Street in U S District Court.

As a result of the remaining one case with trial completed in 2015 and subsequent appeals. The U S. Court has affirmed that third party software support is legal.

Seth A. Ravin: The U.S. courts issued a permanent injunction, known as the Rimini One injunction, enjoining certain activities related to the manner in which Rimini provides support for certain Oracle product lines. The Rimini 1 injunction does not prohibit Rimini from providing support to any Oracle product line. There are no current litigation activities related to Rimini 1.

U S courts issued a permanent injunction known as the <unk> injunction enjoining certain activities related to the manner in which Rimini provides support on certain Oracle product lines. The Rimini, one injunction does not prohibit remaining for providing support to any oracle product lines. There are no <unk>.

Current litigation activities related to Rimini one.

Seth A. Ravin: Subsequent to the Rimini 1 trial, Oracle filed or prevailed on certain claims in a contempt proceeding related to the Rimini 1 injunction. Rimini Street was fined and paid U.S. $530,000, and it settled and paid Oracle's attorneys' fees and costs for U.S. $9.7 million. In 2014, Rimini filed the Rimini 2 case against Oracle in the U.S. District Court. The trial occurred in 2022. While Oracle prevailed on liability for its DMCA and Lanham Act claims with no damages award, Oracle abandoned its $1.4 billion damages claim and all non-equitable claims of prejudice on the eve of a jury trial and lost its copyright claims for a majority of product lines at issue in the case, EBS, JDE, and Siebel. On the remaining product lines, PeopleSoft and Database, Oracle prevailed in the migration process, the use of certain rewrite files, and the use of certain automated tools.

Subsequent to the remaining one trial Oracle filed what prevails out certain claims and it can turn proceeding related to the Rimini one injunction.

<unk> Street was fined and paid U S $530000.

And settled and paid oracle's attorneys' fees and costs for U S $9 7 million.

In 2014, <unk> filed the remaining two case against Oracle in the U S District Court.

While occurred in 2022, while Oracle prevailed on liability for its DMCA and Lana Mac claims with no damages award Oracle Aband digits, one $4 billion of damages claim at all non affordable claims so with prejudice on the eve of a jury trial and.

Losses copyright claims for a majority of product lines that issue in the case Evs <unk> as CFO.

On the remaining product lines people soft and database Oracle prevailed on the migration process the use of certain rewrite files and the use of certain automated tools, but rimini prevailed on central cross cutting legal theories that are core to oracle's broad infringement claims spanning all oracle product.

Seth A. Ravin: But Rimini prevailed on central, cross-cutting legal theories that were core to Oracle's broad infringement claims spanning all Oracle product lines, such as confirming Rimini may write down and reuse its own know-how, and that Oracle's licenses permit a third party like Rimini to perform updates or fixes to the same extent as the licensee. Today, there are currently three Rimini 2 post-trial litigation matters. 1, Appeal of the Rimini 2 Findings and the Rimini 2 Injunction before the Court of Appeals, known as the Merits Appeal.

Life, such as confirming remaining a write down of reuse its own knowhow and that oracle's licenses permit a third party like remaining to perform updates or fixes to the same extent as the licensee.

Today. There are currently three remaining two post trial litigation matters.

One appeal of the remaining two findings and the remaining two injunction before the court of appeals known as the merits appeal.

Seth A. Ravin: 2, a motion to further state a Rimini 2 injunction pending Rimini's merits appeal also before the Court of Appeal, and 3, litigation over Oracle's requested recovery of its attorney's fees and costs related to Rimini 2 before the U.S. District Court. In July 2023, concurrent with the District Court's trial rulings for Rimini 2, the District Court issued a permanent injunction, known as the Rimini 2 injunction, which, among other things, further enjoins Rimini's activities related solely to the manner in which Rimini provides support on certain Oracle product lines, which Rimini Street is sought to reverse. As of this date, an administrative stay of the Rimini 2 injunction is in place, and the Court of Appeals has not yet issued a decision on our motion to stay the Rimini 2 injunction through the appeals process. With respect to the Rimini 2 merits appeal, the Court of Appeals will hear the appeal on an expedited basis, which will include the appeal of the Rimini 2 injunction.

To a motion to further stay the remaining two injunction pending romines merits appeal also before the court of Appeals.

And three litigation over Oracle's requested recovery of their attorneys fees and costs related to remaining two before the U S District Court.

In July 2023, concurrent with the district Court trial rulings for Romania to the district Court issued a permanent injunction known as the remaining two injunction, which among other things further and joins <unk> activities related solely to the manner in which are mainly provides support on certain oracle.

Product lines, which Rimini Street has sought to reverse.

As of this date and administrative stay of the remaining two injunction is in place and the court of Appeals has not yet issued a decision on our motion to stay the remaining two injunction through the appeals process.

With respect to the remaining two merits appeal. The court of Appeals will hear the appeal on an expedited basis, which will include the appeal of the remaining two injunction.

Seth A. Ravin: Rimini's opening brief for the Rimini Two Merits Appeal is due March 4th, 2024, and Oracle's answering brief is due April 3rd, 2024. Rimini's optional reply brief is due within 21 days after service of Oracle's answering brief. The Court of Appeals has currently set the date of June 5, 2024, to hear oral arguments.

<unk> opening brief for the remaining two merits appeal is due March four 2024 and oracles answering brief is due April 2024.

The remaining is optional reply brief is due within 21 days after service of oracles answering brief.

Court of Appeals is currently set the date is June 5th 2024 to hear oral arguments.

On November six 2023, Oracle filed a motion for attorneys' fees and taxable costs with the U S District court requesting attorneys' fees and taxable costs totaling approximately U S $76 million related to the remaining two litigation.

Seth A. Ravin: On November 6, 2023, Oracle filed a motion for attorney's fees and taxable costs with the U.S. District Court, requesting attorney's fees and taxable costs totaling approximately U.S. $70.6 million related to the Rimini 2 litigation. On February 20, 2024, Rimini filed its opposition to Oracle's November 6, 2023, motion for attorney's fees and taxable costs in the Rimini 2 litigation. In opposition, Rimini argues that the district court should deny Oracle's motion in its entirety.

On February 22024 remaining filed its opposition to Oracle's November six 2023 motion for attorneys' fees and taxable costs in the remaining two litigation.

And the opposition Rimini argues that the district court should deny oracle's motion in its entirety.

Seth A. Ravin: Rimini further argues that, should the district court award any attorney's fees to Oracle, such fees should not exceed U.S. $14.47 million. Oracle's reply to Rimini's opposition is due by March 15, 2024, after which the matter will be taken under consideration for determination by the district court. Rimini reserves all rights, including appellate rights, with respect to the Rimini 2 litigation, including any award of attorney's fees and taxable costs or a. For additional information and disclosures regarding the company's litigation with Oracle, please see our disclosures in the company's annual report on Form 10-K, filed today, February 28, 2024, with the U.S. Securities and Exchange Commission. Please also note that, at this time, we are still unable to provide material additional information beyond the disclosures and statements in our press releases, filings with the SEC, and court filings, nor provide guidance with respect to future financial results, nor are we able to provide additional commentary related to the pending Oracle litigation and potential impacts of the Rimini 2 injunction because the matters are still before various courts and the outcomes cannot be predicted. Summary.

The remaining further argues that showed the district Court award any attorney's fees to Oracle such fees should not exceed U S $14 $4 $7 million.

Oracles or applied Romines opposition is due by March 15, 2024, after which the matter will be taken under consideration for a determination by the district court.

Remaining reserves all rights, including appellate rights with respect to the remainder of two litigation, including any award of attorney's fees and taxable costs to Oracle.

For additional information and disclosures regarding the company's litigation with Oracle. Please see our disclosures in the company's annual report on Form 10-K filed today February 28, 2024, with the U S Securities and Exchange Commission.

Please also note that at this time, we are still unable to provide material additional information beyond the disclosures in our statements in our press releases filings with the SEC in court filings, nor provide guidance with respect to future financial results nor are we able to provide additional commentary really.

<unk> to the pending Oracle litigation and potential impacts of the remaining two injunction because of the matters are still before various courts and the outcomes cannot be predicted.

Summary.

Seth A. Ravin: We remain confident that we are continuing to take the right actions and make the right investments to accelerate growth, increase profitability, enhance shareholder value, and bring our litigation with Oracle to a successful conclusion. However, if Rimini Street does not ultimately prevail in the litigation matters described above and in our SEC filings, it could have a material adverse impact on our business and financial results. Now, over to you, Mike.

We remain confident that we are continuing to take the right actions and making the right investments to accelerate growth increased profitability enhance shareholder value and bringing our litigation with Oracle to a successful conclusion.

However, if rimini Street's does not ultimately prevail in the litigation matters described above and in our SEC filings. It could have a material adverse impact on our business and financial results.

Now over to you Michael.

Michael L. Perica: Thank you, Seth, and thank you for joining us, everyone. Results for Q4 and fiscal 2023. Revenue for the fourth quarter of the full year 2023 was $112.1 million and $431.5 million, respectively, a year-over-year increase of 3.2% and 5.3%, respectively. Clients within the United States represented 51%, while international clients represented 49% of total revenue for both the fourth quarter and full year 2023. Annualized recurring revenue was $432.3 million for the fourth quarter, a year-over-year increase of 2.9%.

Thank you Seth and thank you for joining US everyone Q4, and fiscal 2023 results.

Revenue for the fourth quarter and the full year 2023 was $112 1 million and $431 $5 million, respectively, a year over year increase of three 2% and five 3% respectively.

Within the United States represented 51%, while international clients represented 49% total revenue for both the fourth quarter and full year 2023.

Annualized recurring revenue was $432 3 million for the fourth quarter, a year over year increase of two 9%.

Michael L. Perica: The revenue retention rate for service subscriptions, which makes up 96.4% of our revenue, was 90%, with more than 79% of subscription revenue non-cancelable for at least 12 months. We note that, for the full year 2023, our total revenue measure on a constant currency basis was negatively impacted by 0.6% due to FX movement. The decline in our revenue retention rate for the year ended December 31, 2023, was due to attrition during the fourth quarter, as certain clients did not renew specific subscriptions, but in some cases, maintained or added subscriptions for other products. Our net billings during the fourth quarter of 2023 were flat to the comparable period of 2022 because record fourth quarter new client invoicing was able to offset fourth quarter retention losses. Billings for the fourth quarter were $160.7 million, compared to $160.4 million for the prior year fourth quarter. For the full year 2023, billings are expected to increase 2.3% to $418.5 million.

Revenue retention rate for service subscriptions, which makes up 96, 4% of our revenue was 90% with more than 79% of subscription revenue noncancelable for at least 12 months. We note that for the full year 2023, our total revenue measures on our cost.

Scent currency basis was negatively impacted by 0.6% due to FX movements.

The decline in our revenue retention rate for the year ended December 31, 2023 was due to attrition during the fourth quarter as certain clients did not renew specific subscriptions. However, in some cases maintained or added subscriptions for other products.

Our net billings during the fourth quarter of 2023 was flat to the comparable period of 2022, because record fourth quarter, new client invoicing was able to offset fourth quarter retention losses.

Billings for the fourth quarter were $160 7 million compared to $164 million for the prior year fourth quarter.

For the full year 2023, billings increased two 3% to $418 5 million.

Michael L. Perica: I Gross margin was 61% of revenue for the fourth quarter and 62.3% for full year 2023, compared to 64.5% of revenue for the prior year's fourth quarter and 62.8% for the prior year 2022, on a non-GAAP basis, which excludes stock-based compensation expense. Gross margin was 61.5% of revenue for the fourth quarter and 62.8% for full year 2023 compared to 64.9% of revenue for the prior year fourth quarter and 63.3% for prior year 2022. Gross margin declined during the back half of 2023 as a result of continued investment in and expansion of our global engineering team needed to serve new client engagements in advance of related ratable contract revenue recognition. As noted in previous earnings calls, we are expecting continued gross margin pressure as we scale to meet new client engagements. Simultaneously, we are also working to improve gross margin by driving efficiencies and leveraging the benefits of our growing global scale. Operator.

Gross margin was 61% of revenue for the fourth quarter and 62, 3% for full year 2023.

Compared to 64, 5% of revenue for the prior year fourth quarter and 62, 8% for prior year 2022.

On a non-GAAP basis, which excludes stock based compensation expense.

Most margin was 61, 5% of revenue for the fourth quarter and 62, 8% for full year 2023, compared to 64, 9% of revenue for the prior year fourth quarter and 63, 3% for prior year 2022.

Gross margin declined during the back half of 2023 as a result of continued investment in an expansion of our global engineering team needed to serve new client engagements and advanced Sip related ratable contract revenue recognition.

As noted in previous earnings calls, we are expecting continued gross margin pressure as we scale to meet new client engagements.

Honestly, we are also working to improve gross margin by driving efficiencies and leveraging the benefits of growing global scale.

Operating expenses.

Okay.

Michael L. Perica: While inflationary pressures and high costs are still persistent for skilled labor across all theaters, we continue to attract and retain key talent. Moreover, our margin performance, in light of the pressures highlighted previously, underscores the advantage of our global footprint with centers of excellence in geographies where both the talent and value remain attractive compared to higher-priced talent markets. Sales and marketing expenses as a percentage of revenue were 31.2% of revenue for the fourth quarter and 33% for the full year 2023, compared to 36.1% of revenue for the prior year fourth quarter and 34.9% for the prior year 2022. On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expenses as a percentage of revenue were 30.5% of revenue for the fourth quarter and 32.3% for full year 2023, compared to 35.4% of revenue for the prior year fourth quarter and 34.1% for full year 2022.

While inflationary pressures and high cost are still persistent for skilled labor across all theaters, we continue to attract and retain key talent.

Moreover, our margin performance in light of the pressures highlighted previously underscores the advantage of our global footprint with centers of excellence and geographies for both the talent and value remain attractive compared to higher priced markets.

Sales and marketing expenses as a percentage of revenue was 31, 2% of revenue for the fourth quarter and 33% for full year 2023.

Compared to 36, 1% of revenue for the prior year fourth quarter and 34, 9% for prior year 2022.

On a non-GAAP basis, which excludes stock based compensation expense sales and marketing expenses as a percentage of revenue was 35% of revenue for the fourth quarter and 32, 3% for full year 2023, compared to 35, 4% of revenue for the.

Prior year fourth quarter, and 34, 1% for prior year 2022.

General and administrative expenses as a percentage of revenue excluding outside litigation costs was 15, 7% of revenue for the fourth quarter and 16, 9% for full year 2023, compared to 16, 7% of revenue for the prior year fourth.

Michael L. Perica: General and Administrative Expenses as a Percentage of Revenue Excluding Outside Litigation Costs was 15.7% of revenue for the fourth quarter and 16.9% for full year 2023, compared to 16.7% of revenue for the prior year fourth quarter and 18.4% for full year 2022. On a non-GAAP basis, which excludes stock-based compensation expense and litigation costs, G&A was 13.8% of revenue for the fourth quarter and 15.1% for full year 2023, compared to 15.6% of revenue for the prior year fourth quarter and 17% for full year 2022. We are seeing a good year-over-year improvement in G&A spend due to some restructuring measures, and the initial substantial investments that were required to develop and launch our expanded portfolio of solutions have largely been completed. Howard.

<unk>, an 18, 4% from prior year of 2022.

On a non-GAAP basis, which excludes stock based compensation expense and litigation costs G&A was 13, 8% of revenue for the fourth quarter and 15, 1% for full year 2023, compared to 15, 6% of revenue for the prior year fourth quarter and 17.

Percent for prior year 2022.

We are seeing a good year over year improvement in G&A spend due to some restructuring measures and the initial substantial investments that were required to develop and launch our expanded portfolio of solutions are largely completed.

However.

Michael L. Perica: G&A expenses, as a percentage of revenue, are expected to remain elevated compared to our peers, due in large part to the ongoing need for in-house legal and compliance teams and other costs made necessary by our ongoing Oracle litigation and compliance activities. Net outside litigation expense, which includes the Oracle settlement previously referenced, was $4.3 million for the fourth quarter and was $9.8 million for the full year 2023, compared to $12.8 million for the prior year fourth quarter and $25.3 million for the prior year 2022. This year's fourth quarter included an accounting charge of $2.7 million related to the $9.7 million Oracle cash settlement that Seth discussed earlier related to the Rimini 1 injunction contempt matter. Litigation expenses will vary quarter to quarter and year to year depending on current litigation activity. They are not GAAP operating margin, which excludes outside litigation spend. Stock-based compensation was 17.2% of revenue for the fourth quarter and 15.3% for full year 2023.

G&A expenses as a percentage of revenue are expected to remain elevated compared to our peers due in large part to the ongoing cost for in house legal and compliance teams and other costs made necessary by our ongoing Oracle litigation and compliance activities.

Net outside litigation expense, which includes the Oracle settlement previously referenced was $4 3 million for the fourth quarter and was $9 8 million for the full year 2023, compared to $12 8 million for the prior year fourth quarter and $25 3 million for prior year too.

'twenty two.

Okay.

This year's fourth quarter included an accounting charge of $2 7 million related to the $9 7 million Oracle cash settlement.

Discussed earlier related to the remaining one injunction contempt matter.

Litigation expenses will vary quarter to quarter and year to year, depending on current litigation activity.

Our non-GAAP operating margin.

Which excludes outside litigation spend is stock based compensation was 17, 2% of revenue for the fourth quarter and 15, 3% for full year 2023.

Michael L. Perica: Net income attributable to shareholders for the fourth quarter was $9.4 million, or $0.10 per diluted share, and for the full year 2023 was $26.1 million, or $0.29 per diluted share. On a non-GAAP basis, net income for the fourth quarter was $17.1 million, or $0.19 per diluted share, and for the full year 2023 was $48.4 million, or $0.54 per diluted share.

Net income attributable to shareholders for the fourth quarter was $9 4 million or <unk> 10 per diluted share and for the full year 2023 was $26 1 million or <unk> 29 per diluted share.

On a non-GAAP basis net income for the fourth quarter was $17 1 million or <unk> 19 per diluted share and for the full year 2023 was $48 4 million or <unk> 54.

Per diluted share.

Michael L. Perica: Justin Dibita, defined in our press release, was $21.3 million for the fourth quarter, or 19% of revenue, and for full year 2023 was $71.9 million, or 16.7% of revenue. [inaudible] We ended the fiscal year with a cash balance of $115.4 million, plus investments of $9.8 million, consisting of short-term treasuries in U.S. government agency securities, bringing readily available cash to $125.2 million, compared to $129.1 million for the prior fiscal year. During 2023, we reduced the principal balance on our term loan from $78.3 million to $72.6 million, resulting For the fourth quarter, operating cash flow declined by $1.1 million.

Adjusted EBITDA defined in our press release was $21 3 million for the fourth quarter were 19% of revenue.

And for full year, 2023 was $71 9 million or 16, 7% of revenue.

Balance sheet.

We ended the fiscal year with a cash balance of $115 4 million plus investments of $9 8 million consisting of short term treasuries and U S Government agency securities, bringing readily available cash to $125 2 million compared to $129 1 million for the prior fiscal.

Full year.

During 2023, we have reduced the principal balance on our term loan from $78 3 million to $72 6 million, resulting in a year end net cash position of $52 6 million.

On a cash flow basis for the fourth quarter operating cash flow declined $1 1 million and for the full year 2023, we generated $12 5 million compared to a decline of $1 9 million for the prior year fourth quarter, and a positive $34 9 million to full.

Michael L. Perica: And for the full year 2023, we generated $12.5 million, compared to a decline of $1.9 million for the prior year fourth quarter and a positive $34.9 million for the full year 2022. The year-over-year variance is due primarily to large, non-recurring payments made during the first quarter to our Outside Litigation Council relating to the fourth quarter 2022 Rimini 2 trial with Oracle and overhead restructuring charges. And during the fourth quarter, as noted, we paid $9.7 million to settle the contempt matter.

Year 2022.

The year over year variance is due primarily to large nonrecurring payments made during the first quarter to our outside litigation counsel relating to the fourth quarter 2022 remaining two trial with Oracle.

And overhead restructuring charges and during the fourth quarter as noted we paid $9 7 million to settle the content matter.

Michael L. Perica: In addition, throughout 2023, we experienced lower client multi-year prepayments and related collections compared to the prior year 2022, as clients retain cash in the higher rate environment for their own short-term investment opportunities and the preservation of cash. Lastly, FX headwinds, as noted, also impact cash flow. Deferred revenue as of December 31st, 2023 was approximately $287 million compared to $300 million from the prior year fourth quarter. Backlog, which includes the sum of billed deferred revenue and non-cancellable future revenue, was approximately $607 million as of December 31, 2023, compared to $578 million for the prior year fourth quarter. Business South, the company is continuing to suspend guidance as to future financial results until there is more clarity around impacts For additional information and disclosures regarding the company's litigation with Oracle, please see our disclosures in the company's annual report on Form 10-K filed on February 28, 2024, with the U.S. Securities and Exchange Commission.

In addition throughout 2023, we experienced lower client multiyear prepayments and related collections compared to the prior year 2022 is clients retained cash in the higher rate environment for their own short term investment opportunities and the preservation of cash.

Lastly, FX headwinds as noted also impacted cash flow.

Deferred revenue as of December 31, 2023 was approximately $287 million compared to $300 million from the prior year fourth quarter backs.

Backlog, which includes the sum of billed deferred revenue and noncancelable future revenue was approximately $607 million as of December 31, 2023, compared to $578 million for the prior year fourth quarter.

Business outlook.

Company is continuing to suspend guidance as to future financial results until there is more clarity around impacts from current litigation activity before the U S federal courts, and the company's ongoing litigation with Oracle.

For additional information and disclosures regarding the company's litigation with Oracle. Please see our disclosures in the company's annual report on Form 10-K filed on February 28, 2024, with the U S Securities and Exchange Commission.

Operator: This concludes our prepared remarks. The operator will now take questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Did you have a question? Please press the star followed by the number on your touchtone phone.

This concludes our prepared remarks, operator, we will now take questions.

Thank you.

Ladies and gentlemen, we will now begin the question and answer session did you have a question. Please press the star followed by the one on you touched on filings.

Operator: You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift your handset before pressing any key.

You will hear a path that your hands have been right.

The decline from the polling process.

Press the star followed by the tail. If you are using a speakerphone. Please lift the handset before pressing eloquently.

Brian David Kinstlinger: The first question is from Brian Kinstlinger from Alliant Global Partners; please ask your question. Hey guys, thanks for taking my questions. The first one, I'm going to start on the expense side. You suspended revenue guidance for obvious reasons. So, how do you plan on managing operating expenses over the next year? Is revenue, while revenue is growing at a very modest clip, do you expect to hold off making investments that are going to add up after? Some investments that were just completed. Do you plan to cut costs? Do you think holding the line where you are right now before there's more clarity is the best option? Just like to get some more understanding of what you can control.

First question is from Brian Kingston Hanger from Allianz Global.

Global partners. Please ask your question.

Hey, guys. Thanks for taking my questions.

Sure.

The first one.

Im going to start on the expense side.

You suspended revenue guidance for the obvious reasons.

So how do you plan on managing operating expenses over the next year is revenue while revenue is growing at a very modest clip you expect to hold off making investments it's going to add opex with some investments that were just completed do you plan to cut cost.

Being aligned where you are right now before theres more clarity the option.

To get some more understanding on what you can control.

Seth A. Ravin: Sure, Brian. Great to have the call. Of course, I think you could tell from the size of the sales force where I mentioned, we've continued to expand the sales force. We're continuing to invest and lean in because of the size of the opportunity that we see. I think you're watching us relay that we are not looking to reduce costs. We are not in a hunkered down position.

Sure Brian Great to have the call.

Of course.

You could tell from the size of the sales force, where I had mentioned we've continued to expand the sales force, we're continuing to invest and lean in because of the size of the opportunity that we see.

I think you're watching us.

Relay that we are not looking to reduce costs, we are not in a hunt.

Hunkered down position, we had modest growth across 2024, while we were busy spending and building out our global infrastructure just support all of these different product lines that we've launched and including launching as I mentioned in my prepared remarks today that Rimini consult which is it.

Seth A. Ravin: We had modest growth across 2024 while we were busy spending and building out our global infrastructure to support all these different product lines that we've launched, including launching, as I mentioned in my prepared remarks today, Rimini Consult, which is a very large program on a global basis to take on and support, and provide managed services for a huge number of additional product lines, including IBM and others. I think you're definitely not seeing us take a reduction in cost. I think the reductions we've made have all been about streamlining operations where we're taking out some middle management. We're giving wider scopes of responsibility to vice presidents and above to get better leverage. That's all about making sure that we're able to support and drive higher revenues and more accelerated growth into 2024 and beyond. And then on the international business side, the year-over-year growth rates accelerated for the third consecutive quarter to about four and a half percent in the fourth quarter. What's driving the deceleration?

Very large program on a global basis to take on and support provide managed service for a huge number of additional product lines, including IBM and others. So I think you're definitely not seeing us take a reduction of cost I think we the reductions we've made have all been about.

Streamlining operations, where we're taking out some middle management, we're giving wider scopes of responsibility to vice presidents and above to get better leverage, but that's all about making sure that we're able to support and drive higher revenues and a more accelerated growth into 'twenty.

Four and beyond.

Great and then on the international business side, the year over year growth rates decelerated for the third consecutive quarter about four 5% just in the fourth quarter, what's driving the deceleration is there anything in the bookings trends that suggest a reacceleration in the first half of 'twenty four.

Seth A. Ravin: Is there anything in the bookings trends that suggest a reacceleration in this in the first half of 24? Well, again, without getting into the guidance side of things, just focused on the business. We had some issues. We had some issues down in ANZ, the Australia and New Zealand area. We had some issues in the EMEA area, which we, of course, have taken significant steps to resolve. We have a brand new GM running the EMEA region, which I'm very, very happy to announce. We brought him over from Adobe. He is a very strong player.

Well again without getting into the guidance side of things just focused on the business. We had some issues we had some issues down in the ANZ, Australia, New Zealand area, we had some issues in the EMEA area.

Which we of course have taken.

Significant steps, we have a brand new GM running the EMEA region, which I'm very very happy to announce we brought him over from Adobe a very strong player.

Seth A. Ravin: And in the ANZ market, we have new leadership there as well, where we've turned things around, I believe. So those two contributed to some of the challenges. We also have some evolution going on in Japan, where we have a very strong client base, our largest in all of Asia. As we now roll out our additional services there, and we've reconfigured the Salesforce platform to be able to handle that. I think, as you guys well understand, every time you reconfigure a Salesforce, you have a little bit of lag and disruption to the operation. We're very aware of that. But these are the kinds of changes necessary to be able to support the growth, the accelerated growth that we want in the future across all the product lines. Last question. I'll get back in the queue.

And in the ANZ market, we have new leadership, there as well.

We've turned things around I believe so those two contributed to some of the challenges. We also have some evolution going on in Japan, where we have a very strong client base, our largest in all of Asia Pac as we now roll out our additional services there and we've reconfigured the sales force.

<unk> to be able to handle that I think as you guys well understand every time you reconfigure a sales force you have a little bit of lag in disruption into the operation.

Very aware of that but these are the kinds of changes necessary to be able to support the growth the accelerated growth that we want in the future across all the product line portfolio.

Great last question I'll get back in the queue.

Seth A. Ravin: It might be related and might be some of the same answer, but... You spoke of the 90% retention versus what's traditionally been three to four points higher. Were the lost customers in these regions and was there a similar rationale for the handful or so, how many customers left, or were they, you know, all different cases? Yeah, I think of course, as you can imagine, when we have higher retention losses than normal, if you look on a normalized basis, it happens, and it's happened over the years, where you kind of go up and down. I can tell you that we had a few larger cancellations. Two of them were in the Australian market, which was pretty significant.

It might be related and might be some of the same answer.

You spoke to that 90% retention versus what's traditionally been 3% to four points higher.

We are in the loss customers in these regions and was there a.

Similar rationale for the handful or so how many customer lacked or were they.

All different cases.

Yes, I think of course as you can imagine when we when we have higher retention losses.

That normal if you look on a normalized basis. It happens that it's happened over the years, where you kind of go up and down I can tell you that we had a few larger.

Cancellations are two of them were in the Australia market, which were pretty significant.

Seth A. Ravin: But at the same time, those are existing clients. They are huge clients who rotated out of a couple products that they were running, but their natural rotations and some of those things, we just have to go back to. One of them, I think, was a loss we shouldn't have had.

But at the same time those are existing clients. There are huge clients, who rotated out on a couple of products that they were they were running but they're natural rotations in some of those things. We just have to go back one of them I think was a loss we shouldnt have had and so we've gone back to look at it the other one wasn't anything.

We could do about it it was just a business a rotation and then I saw one big one in the North American region, which came as a surprise again as part of an M&A. The biggest risk. We always have is M&A is because they change out management teams and we have to go in and resell our position window.

Seth A. Ravin: And so we've gone back to look at it. The other one, there wasn't anything we could do about it. It was just a business rotation. And then I saw one big one in the North American region, which came as a surprise again as part of an M&A. So in the world of business churn, M&As always present the biggest risk to the business in terms of ongoing contracts, but they often present new opportunities for us as well, where a management team may have been more stubborn or maybe not fully bought into the full portfolio. Then we get a change of management, and we get to come in and expand our footprint. But it does generally cause some level of churn when we have management changes. I have a few more, but I'll get back and make you let others know. Sure, thanks.

Management teams change and so it is almost like a new sale because they don't know who we are what are we doing in there and that is a process that always creates risk for us. So in the world of business churn M&A is always present, the biggest risk to the business in terms of ongoing contracts, but they offer.

And present, new opportunities for us as well, where our management team may have been more stubborn or maybe not fully bought into the full portfolio. Then we get a change of management and we get to come in and expand our footprint, but it does generally caused some level of churn when we had management change.

Great I have a few more but I'll get back in the queue, let others ask.

Sure. Thanks, Brian.

Seth A. Ravin: Thank you. Your next question is from Daniel Hipschman from Craig Holum. Please ask your question. Hey, guys. Thanks for taking my question. This is Daniel Owen from Jeff and Rhee.

Your next question is from Daniel Hudson from Craig Hallum. Please ask your question.

Hey, guys. Thanks for taking my question. This is Daniel on for Jeff Van <unk>.

Just on the employee count I saw that.

Daniel Hipschman: Just on the employee count, I saw that it was up 9% sequentially, about 10% year-over-year, but still getting the non-GAAP OPEX down, you know, sequentially and year-over-year. Just curious how you managed that. Was that, you know, in the geographies where you were hiring? Was the hiring really late in the quarter? And then just maybe double-clicking on what areas you're hiring for, I know for sales, but just anything else on the roadmap. Sure, happy to answer that. I think you've got a few different things.

That was up 9% sequentially about 10% year over year, but still getting the non-GAAP opex down sequentially and year over year. Just curious how you manage that was that in the geographies. You were hiring was the hiring really late in the quarter and then just maybe double clicking on what areas youre hiring for I know for sales, but just anything else on the road map roadmap.

That's right.

Sure happy to answer that I think you've got a few different things one I'm not a big fan of the employee count numbers.

I know a lot of people look at that and say well if that percentage is higher than your actual growth that looks like a problem, but it doesn't take into account the cost of the personnel.

Lot of those hires are in lower cost geographies, we have two big delivery centers between India, and Brazil, which presents significantly different annual comp rates than you would have for example of course in the United States or Cros in Europe. So from that point of view, yes, we have.

Seth A. Ravin: One, you know, I'm not a big fan of the employee count numbers. I know a lot of people look at that and say, well, if that percentage is higher than your actual growth, that looks like a problem, but it doesn't take into account the cost of the personnel. A lot of those hires are in lower-cost geographies.

Lower costs coming into it that's one component that allows us to have the higher number of people by account number. The second one is you are correct. We often do a lot of hiring on service delivery on the back end of the year, we are backend loaded business and as you know because we've been a bootstrap business.

Seth A. Ravin: We have two big delivery centers between India and Brazil, which have significantly different annual comp rates than you would have, for example, of course, in the United States or across Europe. So, from that point of view, yes, we have lower costs coming into it. That's one component that allows us to have a higher number of people by account number. So, that's very much what we did in the fourth quarter. As we grow our business in the fourth quarter, you're going to see a lot more hiring in the fourth quarter. And, of course, you haven't seen the ratable costs on that yet. So, that is a combination that drives us. And then on the Billings and Backwell, those both came in pretty nicely.

With literally what 27 $5 million of invested capital to drive over $400 million a year business, we have to use our own cash what that means is we're very good at hiring just in time, we don't hire generally in advance of contracts that allows us to minimize.

The burn cost of personnel not being utilized and we wait for the contract signed and then we aggressively hired to fill that and so that's very much with the fourth quarter as we grow our business in the fourth quarter Youre going to see a lot more hiring in the fourth quarter. So of course, you haven't seen the ratable costs on that yet.

So that is a combination that drives that.

And then on billings and backlog those both came in pretty nicely.

Seth A. Ravin: Just any more color on that in terms of the biggest drivers of that, in terms of what's coming down the pipeline, any particular verticals, applications, services, you know, what platform is seeing strength there? Thanks. Well, I think we're seeing, again, good strength across all platforms. And, again, as I mentioned in my prepared remarks, specifically strong in the SAP world, where you've got thousands and thousands of companies being pressured by SAP to move their systems between 2025 and 2027, with threats of desupport, no longer being supported, which, of course, is untenable for a major organization.

Any more color on that in terms of the biggest drivers of that in terms of what's coming down the pipeline any particular vertical with application services.

<unk> is seeing strength there. Thanks.

Well I think we're seeing again good strength across all platforms I think again as I mentioned in the prepared remarks.

Specifically strong in DSA World, where you've got thousands and thousands of companies being pressured by assay to move their systems between 2025, and 2027 with threats of <unk> support.

No longer being supported which of course is untenable for a major organization and so that's created again, an upward swing in demand because Rimini Street offers the only really proven global solution for large enterprises to make that move and continue to use the product.

Seth A. Ravin: And so that's created, again, an upward swing in demand because Rimini Street offers the only really proven global solution for large enterprises to make that move and continue to use the product for years to come. The other area we saw a lot of growth in was the Salesforce managed service. Again, Salesforce is a big, complex platform that requires additional work and support, just like any other enterprise platform, and Rimini Street's well-positioned to provide those services to clients, even to other big service providers like NTT, who utilize us to manage their Salesforce platform. And then maybe last for me, just on the cost structure expectations for 24, but specifically on legal, and professional services, just any thoughts on how we should be expecting that, you know, similar year in And then the 9.7 million, was that already paid out?

For years to come the other area, we saw a lot of growth and is the sales force.

Managed service again Salesforce is a big complex platform requires additional work and support just like any other enterprise platform and Rimini Street is well positioned to provide those services to clients.

Even to other big service providers like NTT, who utilize us demand as our sales force platform.

And then maybe last for me just on the you already spoke to the cost structure expectations for 'twenty, specifically on legal professional just any thoughts on how we should be expecting that similar year in 'twenty for relative to 'twenty three and then the $9 7 million was that already paid out.

Seth A. Ravin: And where would I be seeing that on the financials? Yeah, I'll let Michael answer where to see the $9.7 million on the financials. But that was a settlement of legal fees between Oracle and us. We settled that rather than continue it in court. And that was already reserved for a significant amount. I believe that was already reserved somewhere in the $6 million, and Michael can answer that.

And where would I be seen that on the financials.

Yes, I'll, let Michael answer where do you see the $9 7 million on the financials, but that was a settlement of legal fees between Oracle and US we settled that rather than continue it onto the court.

And that was already reserved to a significant amount I believe that was already reserve somewhere in the $6 million and Michael can answer that so there was an additional amount, but we had already we had already looked at that and that's where we came to a conclusion, but that ended the end of the contempt.

Seth A. Ravin: So there was an additional amount, but we had already looked at that, and that's where we came to the conclusion. But that ended the contempt component of the trial side. So at this point in time, as we always say, when we don't have a trial year, which is 2024, there is no trial, we do have the appeals that are pending that I mentioned in my prepared remarks. These will continue through the process to the district court, as well as the appellate court.

Of the of the trial side. So at this point in time as we always say when we don't have a trial year, which 2024. There is no trial. We do have the appeals that are pending that I mentioned in my prepared remarks, those will continue through the process to the district court as well as the Appel.

Courts, but that generally generally does not add up to the kind of cost that you see when we have a full blown trial. So I think when you look at the costs. We mentioned about how in Q1 'twenty four we had paid out a significant amount of legal bills relating to the Oracle trial.

Seth A. Ravin: But that generally does not add up to the kind of cost that you see when we have a full-blown trial. So I think when you look at the cost, we mentioned how, in Q124, we had paid out a significant amount of legal bills relating to the Oracle trial in late 2022. So I think, you know, take that back, and you can notice that we probably would expect more moderate fees coming into 2024 from what we've seen in that fee structure. And Michael here, just to, as Seth noted, in Q4 2023, of the $4.3 million of legal-related expenses, $2.7 million was associated with the settlement. The total settlement, as Seth noted, was $9.7 million, and that cash was also dispersed in Q4 of last year. We previously, more than 18 months ago, reserved $6.9 million of the total $9.7 million.

In late 2022, so I think.

Take that back and you can you can notice that we probably would expect more moderate fees coming into 'twenty four.

From what we've seen in that fee structure.

And Michael here just to as Seth noted in Q4 2023 of the $4 3 million of legal related expenses to <unk>.

$7 million was associated with the settlement.

Total set settlement as Seth noted was $9 7 million and that cash was also dispersed in Q4 of last year, we previously.

In excess of 18 months ago reserves $6 9 million of the totaled $9 7 million. So that's the timing.

Michael L. Perica: So that's the timing, if that helps. Okay, yeah, that's great. Thanks for the details. And that's it for me.

If that helps.

Okay, Yeah, that's great. Thanks for the details and that's it for me thanks guys.

Daniel Hipschman: Thanks. Thank you. Thank you. Once again, should you have a question, please press star 1. Your next question is from Derek Litt from TD Cowan. Please ask your question. Oh, did we lose someone? Try to open up his line again, just one second, please.

Thank you.

Thank you once again should you have a question. Please press star one.

Your next question is from Derek Glynn from Judy Cowen. Please ask your question.

Great.

Did we lose someone.

I'd like to open up the line again, just one second please.

Okay.

Operator: Okay, here he is. How's that? Sorry. Go ahead, Derek Wood.

Sorry go ahead, Jennifer Glitch there you go great. Yeah. Thanks, sorry, this is call on for Derek.

Operator: There you go. Great. Yeah. Thanks. Sorry. This is Colin talking to Derek.

Derek Litt: The total customer count was down quarter over quarter. I mean, you guys mentioned that the NRR, D-Cell, or Downtech, rather, was mostly from pressure where customers were ending kind of subscriptions on certain products but staying on others. So, kind of helped me bridge, you know, Is some, is some of the NRL pressure from customers just totally going off their mini platform, as seen in the total customer account number? Is it kind of, you know, these are smaller customers cheering on and the larger ones? that are hitting NRR are still customers at the end of the day. I think you've got a mix.

The total customer count was down quarter over quarter.

You guys mentioned that.

And our our DSL.

Or downturn rather was.

Mostly from a pressure where customers were <unk>.

Kind of subscription on on certain products, but staying on others. So.

Sort of help me bridge.

<unk>.

Or is some of the MLR pressure from customers just totally going off the remaining platform.

Our school in the total customer count number or is it kind of these.

These are smaller customers churning off and the larger ones that are hitting at RR are still customers and down the debt.

I think you've got you've got a mix you've got some customers rolling off and I think what we saw really through 'twenty four.

Seth A. Ravin: You've got some customers rolling off, and I think what we saw really through 24 is some of this is related to the pandemic. We had customers who were in the process of moving off who had extended the life of their products for a few more years. So, I think 24 was a bit of an interesting year.

Some of this is related to the pandemic, we had customers who were in the process of moving off who had extended the life of their products for a few more years. So I think 24 was a bit of a an interesting year some customers who had extended finally moving forward those projects.

Seth A. Ravin: Some customers who had extended their contracts were finally moving forward with those projects that had been delayed during the pandemic. And I think that was a little bit more of the roll-off that you saw in this was some delayed roll-off that might have been in prior years. So, I think that that is a catch-up component, and I didn't see anything during the year that was otherwise alarming or in any way indicate a trend. We didn't see that.

That had been delayed during the pandemic and I think that was a little bit more of the roll off that you saw.

And this was some delayed roll off that might have been in prior years. So I think that that is a catch up component.

And I didn't see anything during the year that was otherwise.

<unk> or in any way saw a trend we.

We didn't see that you have for example people soft JD Edwards <unk> clients.

Seth A. Ravin: You have, for example, PeopleSoft, JD Edwards, and Siebel Clients. Those three platforms have been sunsetted. There is no future product for those folks. They have to change to another product. When they move off these platforms, they will completely move to something new. And so, you are seeing some early signs of some of those people moving.

Those three platforms have been sunset. It there is no future product for those folks they have to change to another product when they move off these platforms. They will completely move to something new and so you are seeing some sunset of some of those people moving that's natural in a sunset on the product line.

Seth A. Ravin: That's natural in a sunset on a product line. And then again, you see others who are coming on board. So, I don't think there's any real trend here that differs year over year. I just think you have some ups and downs.

And then again you see others, who are coming on board. So I don't think there's any real trend here that differs year over year I. Just think you have some ups and downs and if you look at some of the bigger losses that happened as I mentioned related to management changes of M&A, where they decided to go a different direction.

Seth A. Ravin: And if you look at some of the bigger losses that happened, as I mentioned, related to management changes in M&A, where they decided to go a different direction, you have some of them where they had some internal issues that they needed to address in terms of dropping this product line, adding another. We had one large client who dropped a large component, but also added another large component in the same week.

You have some of them where they had some.

Internal issues that they needed to address in terms of dropping this product line, adding another we had one large client who dropped a large component, but also added in the same week a large component. So this is part of what you get when you when you service a customer on a wider portfolio there will be ups and <unk>.

Seth A. Ravin: So, this is part of what you get when you service a customer on a wider portfolio. There will be ups and downs in terms of what they sign up for and what they drop. They're living, breathing, moving organizations, and there's nothing frozen about what we do. And sometimes those will be bigger pieces, sometimes they'll be smaller, but we didn't see any trend in terms of what we saw in the fourth quarter versus the rest of the year.

Downs in terms of what they sign up for what they drop their living breathing moving organizations and Theres nothing frozen about what we do and sometimes those will be bigger pieces, sometimes it'll be smaller, but we didn't see any trend in terms of what we saw in the fourth quarter versus the rest of the year now in terms of total.

Seth A. Ravin: Now, in terms of total clients, part of what you're watching is that we launched so many new products that our sellers over-rotated into cross-selling existing clients rather than bringing on new logos. Not an uncommon problem when you expand out a portfolio and it's popular with your existing client base, and it's easier money. So, we are putting incentives in place in 24 to incent sellers to take the tougher road of going out and bringing in new logos. And we're working on a variety of programs to drive and rotate back to more new logo acquisition. You saw the number. There was a small increase in total new logos. That's exactly what you're watching. It's all the cross-sell activity. It's over-rotated, and we need to balance it better in 24.

Clients part of what you're watching as we launch so many new products that we had our sellers over rotated into cross selling existing clients rather than bringing on new logos not a comp not an uncommon problem when you expand out our portfolio and its popular with your existing client.

Base and its easier money. So we are putting incentives in place in 24 to Incent sellers to take the tougher road of going out and bringing in new logos and we're working on a multiple set of programs to drive and rotate back to more new logo acquisition you saw the dump.

There was a small increase in total new logos, that's exactly what you're watching its all of the cross sell activity, it's over rotated and we need to balance it better in 'twenty four.

Seth A. Ravin: Great, super helpful. And then just one more question, in terms of the sales force and reps with Rimini Custom coming online here, how are you getting reps up to speed so that they can sell into the existing customer base and go out and sell new customers on the new portfolio here? It has already been trained for the sales team. They've already received training for it.

Great Super helpful. And then just one more for me in terms of the sales force and reps with remaining costs.

Coming online here.

How are you getting reps up to speed.

So that they can sell under the existing customer base and go out and sell new customers on the new.

The new portfolio here.

It has already been trained for.

The sales team they've already received training for it we just had our sales ready S. K O kick off just literally weeks ago in early January.

Seth A. Ravin: We just had our sales ready SKO kickoff literally weeks ago in early January, where they did learn about custom. They've learned about all the different product lines. It was a fantastic week of learning and training for the global organization. Over 400 people from the global revenue organization from all around the world were together, led by our sales and revenue enablement organization. So I'm very confident in our ability to go out and position these products. Rimini Custom is unlike anything else we've ever launched.

Where they did learn about custom they've learned about all the different product lines. It was fantastic.

Fantastic week of learning and <unk>.

Training for the global organization over 400 people from the global revenue organization from all the countries around the world where it together.

Led by our sales and revenue enablement organization, so I'm very confident in our ability to go out and position. These products Rimini customers. Unlike anything else we've ever launched its basically opening the door and saying Rimini Street is the best provider of enterprise software support in the world.

Seth A. Ravin: It's basically opening the door and saying Rimini Street is the best provider of enterprise software support in the world, and we believe we are also the best provider of managed services for those products. And because we have our secret sauce of systems, processes, the technology, and the people that we're able to use, we believe we can provide services to a wide variety of products that we've never offered services for. And that is, again, an amazing offering of opening the door and saying, bring us your enterprise product. If you want to get it supported, you want to get it managed, you want us to extend its life, you want to get better service on it, we believe we can do that better than anyone else on just about every enterprise product out there. Hopeful. I'll see you on the floor.

And we believe we are also the best provider of the managed service for those products and because we have our secret sauce of systems processes. The technology. The people that we're able to use we believe we can provide service to a wide variety of products that we've never offered service for.

And that is again, an amazing offering of opening the door and think bring us your enterprise product. If you want to get it supported you want to get it managed you want us to extend the life you want to get better service on it. We believe we can do that better than anyone else on just about every enterprise product out there.

Helpful I'll cede the floor. Thank you.

Seth A. Ravin: Thank you. Thank you. Thank you. There are no further questions at this time. I will now hand the call back to Seth Ravin for the closing remarks.

Thank you.

There are no further questions at this time I will now hand, the call back to Seth Ravin for closing remarks.

Great. Thank you so much everyone again for joining us on the fourth quarter at 23 earnings call and full year earnings call want to thank all of our Rimini Street colleagues once again for their great efforts over the past quarter and the year. It was a magnificent year of change and growth for the company and.

Seth A. Ravin: Thank you so much, everyone, again, for joining us on the fourth quarter at 23 earnings call and full year earnings call. I want to thank all of our Rimini Street colleagues once again for their great efforts over the past quarter and the year. It was a magnificent year of change and growth for the company and repositioning ourselves as a much larger enterprise player. I look forward to having all of you join us on the next earnings call. We'll discuss the first quarter 2024 results, and as you know, that's coming up pretty quickly, and select second quarter 2024 performance of the day commentary as well. Until then, wishing you and yours continued good health, our thoughts, and continued charitable support for those in need and in war around the world. Just always remember we generally have it so much better and so many others are suffering in an arms way.

<unk> ourselves as a much larger enterprise player.

Look forward to having all of you joining us on the next earning call I will discuss the first quarter 2024 results and as you know that's coming up pretty quickly and select second quarter 2020 for performance to date commentary as well.

Till then wishing you and yours a continued good health.

Thoughts and continued charitable support for those in need and in war around the world just always remembering we generally have it so much better and so many others suffering and in harm's way.

Operator: So with that thought, thank you very much and have a good day. Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining us. You may all disconnect.

So with that thought thank you very much and have a good day.

Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect.

Okay.