Q2 2026 Rimini Street Inc Earnings Call

July 30, 2026

Speaker #1: Good afternoon, ladies and gentlemen, and welcome to the Rimini Street, Q2, 2026 earnings conference call. At this time, onlines are in less than only mode.

Operator: Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Q2 2026 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, 30 July 2026. I would now like to turn the conference over to Dean Pohl, VP Treasurer and Investor Relations. Please go ahead.

Speaker #1: presentation, we will conduct a Q&A session. If at any time during this call you require immediate assistance, please press star zero for the operator.

Speaker #1: This call is being recorded on Thursday, July 30, 2026, and I would now like to turn the conference over to Dean Pohl, VP Treasurer and Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal Q2. 2026 earnings conference call. Joining me today are Seth Ravin, our CEO and president, and Michael Perica, our CFO.

Dean Pohl: Thank you, operator. I'd like to welcome everyone to Rimini Street's fiscal Q2 2026 earnings conference call. Joining me today are Seth Ravin, our CEO and President, and Michael Perica, our CFO. Today, we issued our earnings press release for the second quarter ending 30 June 2026, which is available on our website under the Investor Relations section. A reconciliation of GAAP to non-GAAP financial measures are included in the tables following the financial statements in the press release. Additional explanations of these measures and why we believe they are useful can also be found in the press release and on our website under About Non-GAAP Financial Measures and Certain Key Metrics. As a reminder, today's discussion will include forward-looking statements about our operations that reflect our current outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

Speaker #2: Today we issued our earnings press release for the second quarter ending June 30, 2026, which is available on our website under the Investor Relations section.

Speaker #2: A reconciliation of GAAP to non-GAAP financial measures is included in the tables following the financial statements in the press release. Additional explanations of these measures, and why we believe they are useful, can also be found in the press release and on our website under 'About Non-GAAP Financial Measures and Certain Key Metrics.'

Dean Pohl: Additional explanations of these measures and why we believe they are useful can also be found in the press release and on our website under About Non-GAAP Financial Measures and Certain Key Metrics. As a reminder, today's discussion will include forward-looking statements about our operations that reflect our current outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

Speaker #2: As a reminder, today's discussion will include forward-looking statements about our operations that reflect our current outlook. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today.

Speaker #2: And we encourage you to review our most recent SEC filings, including the Form 10-Q filed today for a detailed discussion of the risk factors that may affect our future results or stock price.

Dean Pohl: We encourage you to review our most recent SEC filings, including the Form 10-Q filed today, for a detailed discussion of the risk factors that may affect our future results or stock price. Now, before taking questions, we will begin with prepared remarks. With that, I'd like to turn the call over to Seth.

Speaker #2: Now, before taking questions, we will begin with prepared remarks. With that, I'd like to turn the call over to Seth.

Speaker #3: Thank you, Dean, and thank you, everyone, for joining us. Q2 results: At our December 2025 investor day, we shared our vision, strategy, and plan for evolving into an innovation company and returning to growth and improved profitability.

Seth Ravin: Thank you, Dean, and thank you everyone for joining us. Second quarter results. At our December 2025 Investor Day, we shared our vision, strategy, and plan for evolving into an innovation company and returning to growth and improved profitability. We provided fiscal year 2026 guidance for achieving Rule of 20 results. We have now delivered four consecutive quarters of improved growth metrics in alignment with the vision, strategy, and plan we shared at the 2025 Investor Day, and we reiterate our Rule of 20 guidance for fiscal 2026. Q2 results demonstrate strong demand for our core Rimini Support offering, increasing adoption of our broader enterprise software service portfolio and improving sales execution. Sales transactions included household brands in many countries, and we sold across our solutions portfolio.

Speaker #3: We provided fiscal year 2026 guidance for achieving Rule of 20 results. We have now delivered four consecutive quarters of improved growth metrics in alignment with the vision, strategy, and plan we shared at the 2025 Investor Day.

Speaker #3: And we reiterate our Rule of 20 guidance for fiscal 2026. Q2 results demonstrate strong demand for our core Rimini support offering. Increasing adoption of our broader enterprise software service portfolio and improving sales execution.

Speaker #3: Sales transactions included household brands in many countries, and we sold across our solutions portfolio. During the quarter, we closed 14 new client transactions with over $1 million in TCV, totaling $30 million, and added 58 new logos.

Seth Ravin: During the quarter, we closed 14 new client transactions with over $1 million in TCV, totaling $30 million and added 58 new logos. For the H1 of 2026, we closed 25 new client transactions with over $1 million in TCV, totaling $62.9 million and added 108 new logos. Partnerships and alliances sourced or assisted with the closing of a meaningful number of sales transactions in the quarter. Also during the quarter, clients continued their adoption of Rimini Street's AI solutions that are helping them solve real business problems using innovative technology quickly and economically deployed over the top of their existing ERP software and releases without any need for ERP software upgrades, migrations, or replatforming.

Speaker #3: And for the first half of 2026, we closed 25 new client transactions with over $1 million in TCV, totaling $62.9 million and added $108 new logos.

Speaker #3: Partnerships and alliances sourced or assisted with the closing of a meaningful number of sales transactions in the quarter. Also during the quarter, clients continued their adoption of Rimini Street's AI solutions that are helping them solve real business problems using innovative technology quickly and economically, deployed over the top of their existing ERP software and releases.

Speaker #3: Without any need for ERP software upgrades, migrations, or replatforming, our clients used the collective savings from switching to Rimini Street annual maintenance on their ERP software and avoided costly, low-value ERP upgrades and migrations to fund their Rimini AI ERP solution deployments.

Seth Ravin: Our clients used the collective savings from switching to Rimini Street annual maintenance on their ERP software and avoided costly low-value ERP upgrades and migrations to fund their Rimini AI ERP solution deployments. They did not have to spend beyond their current IT budgets for the innovation, driving increased growth and profitability. Organizations today are under increasing pressure to innovate and modernize their enterprise systems while managing cost, risk, and disruption. Many are finding that large-scale ERP replacements are expensive, time-consuming, and often fail to deliver the expected business value. Real innovation is not about installing a software vendor's next dot AI release. It's about reducing total operating costs, improving profitability, and enhancing competitive advantage.

Speaker #3: And they did not have to spend beyond their current IT budgets for the innovation. Driving increased growth and profitability: Organizations today are under increasing pressure to innovate and modernize their enterprise systems while managing cost, risk, and disruption.

Speaker #3: Many are finding that large-scale ERP replacements are expensive, time-consuming, and often fail to deliver the expected business value. Real innovation is not about installing a software vendor's next .AI release.

Speaker #3: It's about reducing total operating costs, improving profitability, and enhancing competitive advantage. We help organizations achieve these goals by avoiding unnecessary ERP software upgrades, migrations, or replatforming, and instead deploying Rimini Street's innovative agentic AI ERP solutions over the top of existing ERP software to deliver faster, better, cheaper, and more agile ERP process execution.

Seth Ravin: We help organizations achieve these goals by avoiding unnecessary ERP software upgrades, migrations, or replatforming, and instead deploying Rimini Street's innovative Agentic AI ERP solutions over the top of existing ERP software to deliver faster, better, cheaper, and more agile ERP process execution funded within the current IT budget. As we continue to expand sales and cross-sales of our entire service portfolio, our focus remains on enabling clients to extract more value from their existing systems and achieving innovation and modernization that lowers total cost of operations, improves profitability, and enhances competitive advantage. Leadership in Agentic AI ERP. We are helping more and more clients set a new vision, technical, and functional path forward from their current vendor ERP software release.

Speaker #3: Funded within the current IT budget. As we continue to expand sales and cross-sales of our entire service portfolio, our focus remains on enabling clients to extract more value from their existing systems—and achieving innovation and modernization that lower total cost of operations, improve profitability, and enhance competitive advantage.

Speaker #3: Leadership and agentic AI ERP: We are helping more and more clients set a new vision: technical and functional path forward from their current vendor ERP software release.

Seth Ravin: A path that does not require any return to the vendor for a future upgrade or migration to their current ERP software release in order to achieve innovation or modernization. The client can innovate and modernize their existing ERP software and other enterprise software using Agentic AI ERP solutions deployed easily, economically, right over the top of their existing software releases. We guide clients through this path using our proprietary and proven three-step methodology called the Rimini Smart Path. Our methodology is being used by clients to self-fund and accelerate innovation, especially AI and automation, without undergoing costly, risky, or unnecessary ERP upgrades or rip-and-replace migrations, by leveraging and modernizing existing IT environments, all without operational disruption. Today, we rounded out our end-to-end AI capabilities with the launch and immediate availability of Rimini Govern for AI, our new governance as a service solution.

Speaker #3: A path that does not require any return to the vendor for a future upgrade or migration to their current ERP software release in order to achieve innovation or modernization.

Speaker #3: The client can innovate and modernize their existing ERP software and other enterprise software using agentic AI ERP solutions deployed easily and economically, right over the top of their existing software releases.

Speaker #3: We guide clients through this path using our proprietary, three-step improvement methodology called the Rimini Smart Path. Our methodology is being used by clients to self-fund and accelerate innovation.

Speaker #3: Especially AI and automation. Without undergoing costly, risky, or unnecessary ERP upgrades, or rip-and-replace migrations. By leveraging and modernizing existing IT environments all without operational disruption.

Speaker #3: Today, we rounded out our end-to-end AI capabilities with the launch and immediate availability of Rimini Govern for AI. Our new governance as a service solution.

Speaker #3: Rimini Govern for AI is the newest offering in our governance, risk, and compliance solutions. The service brings together AI governance capabilities, deep enterprise application expertise, and global managed services that enable organizations to control, secure, and scale AI agent activity with confidence.

Seth Ravin: Rimini Govern for AI is the newest offering in our governance, risk, and compliance solutions. The service brings together AI governance capabilities, deep enterprise application expertise, and global managed services that enable organizations to control, secure, and scale AI agent activity with confidence. With Rimini Govern for AI, organizations can now confidently and securely deploy AI agents and scale AI agent operations with the oversight, control, visibility, and measurement needed to accelerate adoption, measure ROI, and achieve business outcomes that include reduced total operating costs, improved profitability, and enhanced competitive advantage. As Ray Wang, CEO of Constellation Research, noted with the launch of Rimini Govern for AI, As organizations move from AI experimentation to enterprise-scale adoption, they need trusted visibility, governance, and control to deploy AI responsibly and securely.

Speaker #3: With Rimini Govern for AI, organizations can now confidently and securely deploy AI agents and scale AI agent operations with the oversight, control, visibility, and measurement needed to accelerate adoption, measure ROI, and achieve business outcomes that include reduced total operating costs, improved profitability, and enhanced competitive advantage.

Speaker #3: As Ray Wang, CEO of Constellation Research, noted, with the launch of Rimini Govern for AI: "As organizations move from AI experimentation to enterprise-scale adoption, they need trusted visibility, governance, and control to deploy AI responsibly and securely." End quote.

Speaker #3: Other Rimini AI solutions include Rimini Agentic UX, our AI-driven experience and automation layer that is deployed right over existing client ERP software and turns their ERP software from a static system of record into an autonomous system of action.

Seth Ravin: Other Rimini AI solutions include Rimini Agentic UX, our AI-driven experience and automation layer that is deployed right over existing client ERP software and turns their ERP software from a static system of record into an autonomous system of action, delivering innovation and modernization in weeks, not years, and at a fraction of the cost of a major upgrade, migration, or replatforming project. Rimini AgentWorks, our comprehensive AI agent lifecycle service that enables organizations to move from AI concepts to trusted production deployment. The service helps clients define agent strategies, design and build AI agents and workflows, validate interoperability, for functional and security, and certify operational readiness. As part of this process, Rimini AgentWorks helps assure, before any approved deployment, that AI agents operate within approved business accuracy, security, and compliance guardrails and meet stringent requirements for governance, monitoring, and production operation.

Speaker #3: Delivering innovation and modernization in weeks, not years, and at a fraction of the cost of a major upgrade, migration, or replatforming project. Rimini Agentworks: our comprehensive AI agent lifecycle service that enables organizations to move from AI concepts to trusted production deployment.

Speaker #3: The service helps clients define agent strategies, design and build AI agents and workflows, validate interoperability, perform functional and security and certify operational readiness. As part of this process, Rimini Agentworks helps assure, before any approved deployment, that AI agents operate within approved business, accuracy, security, and compliance guardrails, and meet stringent requirements for governance, monitoring, and production operation.

Speaker #3: Rimini Agentworks tests and certifies both AI agents developed by Rimini Street and those from other third parties. Together, Rimini Agentworks, Rimini Agentic UX, and Rimini Govern for AI provide organizations with an end-to-end set of services to design, deploy, govern, and optimize AI agent operations across mission-critical enterprise environments.

Seth Ravin: Rimini AgentWorks tests and certifies both AI agents developed by Rimini Street and those from other third parties. Together, Rimini AgentWorks, Rimini Agentic UX, and Rimini Govern for AI provide organizations with an end-to-end set of services to design, deploy, govern, and optimize AI agent operations across mission-critical enterprise environments. Partners, alliances, and channels. We continue strengthening and maturing our indirect sales ecosystem, including adding new partner managers for strategic technology, services, and channel relationships, and completed new partnership agreements. These partnerships extend our reach, bring complementary expertise, and help clients execute modernization strategies that combine Rimini Support with world-class platforms, cloud services, and AI tooling. The ecosystem is becoming a strategic multiplier for us, accelerating adoption, expanding influence, and enabling shared go-to-market opportunities. Client success stories.

Speaker #3: Partners, alliances, and channels. We continue strengthening and maturing our indirect sales ecosystem, including adding new partner managers for strategic technology, services, and channel relationships, and completed new partnership agreements.

Speaker #3: These partnerships extend our reach, bring complementary expertise, and help clients execute modernization strategies that combine Rimini Street support with world-class platforms, cloud services, and AI tooling.

Speaker #3: The ecosystem is becoming a strategic multiplier for us, accelerating adoption, expanding influence, and enabling shared go-to-market opportunities. Client success stories. We are helping clients across many industries geographies and software protect and optimize their core ERP systems while funding innovation and modernization.

Seth Ravin: We are helping clients across many industries, geographies, and software protect and optimize their core ERP systems while funding innovation and modernization, including fixing broken processes, automating workflows and functions, and using AI to solve specific business challenges, all without disruptive, costly, and risky ERP software upgrades, migrations, or replatforming. Here are some examples of how our solutions are reducing operating costs and enabling innovation, transformation, and improved competitive advantage for clients across different geographies and industries. Bawri Group, an Indonesian interior contractor and furniture manufacturer, selected Rimini Support for SAP ECC 6 to strengthen business continuity, avoid a costly and disruptive SAP migration, and redirect resources towards digital transformation and innovation. This win further demonstrates the ongoing demand for our proven model of reducing operating costs while creating capacity for growth and innovation. One NZ, a New Zealand telecommunications company, chose Rimini Support to optimize its Oracle environment.

Speaker #3: Including fixing broken processes, automating workflows and functions, and using AI to solve specific business challenges—all without disruptive, costly, and risky ERP software upgrades, migrations, or replatforming.

Speaker #3: Here are some examples of how our solutions are reducing operating costs and enabling innovation, transformation, and improved competitive advantage for clients across different geographies and industries.

Speaker #3: Bavari Group, an Indonesian interior contractor and furniture manufacturer, selected Rimini support for SAP ECC6 to strengthen business continuity, avoid a costly and disruptive SAP migration, and redirect resources towards digital transformation and innovation.

Speaker #3: This win further demonstrates the ongoing demand for our proven model of reducing operating costs while creating capacity for growth and innovation. OneNZ, a New Zealand telecommunications company, chose Rimini support to optimize its Oracle environment, including Siebel CRM and Oracle Database, while accelerating its AI transformation strategy.

Seth Ravin: Including Siebel CRM and Oracle Database, while accelerating its AI transformation strategy. The company describes Rimini Street as a trusted, quote, "co-innovation partner," end quote, enabling it to redirect capital and talent towards future growth and its vision of becoming a world-leading AI-enabled telecommunications provider. Medical Microinstruments, an Italian robotic microsurgery company, leveraged Rimini Consult for Salesforce to maximize ROI on its technology investment and helped eliminate unnecessary third-party software costs, implement critical training and certification workflows, and develop a long-term Salesforce roadmap to support the company's global growth and continued innovation in life-enhancing surgical technology. The client noted the strategic value Rimini Street brings to their Salesforce evolution.

Speaker #3: The company describes Rimini Street as a trusted "co-innovation partner," enabling it to redirect capital and talent toward future growth and its vision of becoming a world-leading, AI-enabled telecommunications provider.

Speaker #3: Medical Microinstruments, an Italian robotic microsurgery company, leverage Rimini Consult for salesforce to maximize ROI on its technology investment and help eliminate unnecessary third-party software costs implement critical training and certification workflows and develop a long-term salesforce roadmap to support the company's global growth and continued innovation in life-enhancing surgical technology.

Speaker #3: The client noted the strategic value Rimini Street brings to their salesforce evolution. Cochlear Limited, an Australian hearing technology leader, chose Rimini support for Oracle to gain greater control and flexibility over its ERP roadmap, avoid vendor-driven upgrade cycles, and free critical resources for digital transformation and new AI-powered customer service and analytics initiatives.

Seth Ravin: Cochlear Limited, an Australian hearing technology leader, chose Rimini Support for Oracle to gain greater control and flexibility over its ERP roadmap, avoid vendor-driven upgrade cycles, and free critical resources for digital transformation and new AI-powered customer service and analytics initiatives. The company noted, "Moving to Rimini Street gave us back control of our ERP platform. It took us out of the vendor-driven upgrade cycle." Summary. We are focused on growth acceleration, improving profitability, and shareholder return. We will continue executing against our vision, strategy, and plan laid out at the December 2025 Investor Day.

Speaker #3: The company noted moving to Rimini Street gave us back control of our ERP platform. It took us out of the vendor-driven upgrade cycle. Summary.

Speaker #3: We are focused on growth acceleration, improving profitability, and shareholder return. We will continue executing against our vision, strategy, and plan laid out that December 2025 investor day.

Speaker #3: Our vision, strategy, and plan leverage Rimini Street's proprietary and proven SmartPath methodology, along with our comprehensive service portfolio and capabilities, to help a growing number of clients regain control of their technology roadmap and spending while also achieving modernization and innovation that drive down total operating costs, improve profitability, and enhance competitive advantage—all within their current budget.

Seth Ravin: Our vision, strategy, and plan leverage Rimini Street's proprietary and proven Rimini Smart Path methodology, along with our comprehensive service portfolio and capabilities, to help a growing number of clients regain control of their technology roadmaps and spending, while also achieving modernization and innovation that drives down total operating costs, improves profitability, and enhances competitive advantage, all within their current budget. Now, over to you, Michael.

Speaker #3: Now, over to you, Michael.

Speaker #2: Thank you, Seth. And thank you for joining us, everyone. Q2 results. We delivered strong second quarter 2026 results as positive growth drivers over the past four quarters has lifted revenue and revenue retention rates on a year-over-year basis.

Michael Perica: Thank you, Seth, and thank you for joining us, everyone. Q2 results. We delivered strong Q2 2026 results as positive growth drivers over the past four quarters has lifted revenue and revenue retention rates on a year-over-year basis. We continue to invest strategically in new AI-driven innovation offerings while streamlining global operations to enhance scale and efficiency. Looking ahead, we remain focused on profitable growth, disciplined cost management, and maintaining a strong balance sheet. During the quarter, we prepaid $10 million of debt, reduced outstanding debt to $48.4 million, and we maintained a healthy total cash balance of $123.4 million as of 30 June 2026. Revenue for the Q2 was $111.1 million, up 6.7% year over year. Excluding revenue for PeopleSoft products, the adjusted revenue grew 10% year over year. Foreign exchange movements were negligible in the quarter, reducing Q2 revenue by approximately 0.2%.

Speaker #2: We continue to invest strategically in new AI-driven innovation offerings, while streamlining global operations to enhance scale and efficiency. Looking ahead, we remain focused on profitable growth, disciplined cost management, and maintaining a strong balance sheet.

Speaker #2: During the quarter, we prepaid $10 million of debt, reduced outstanding debt to $48.4 million, and maintained a healthy total cash balance of $123.4 million as of June 30, 2026.

Speaker #2: Revenue for the second quarter was $111.1 million, up 6.7% year over year. Excluding revenue for PeopleSoft products, the adjusted revenue grew 10% year over year.

Speaker #2: Foreign exchange movements were negligible in the quarter, reducing second quarter revenue by approximately 0.2%. Annualized recurring revenue excluding PeopleSoft products was $401.1 million in the second quarter, an 8.1% increase year over year.

Michael Perica: Annualized recurring revenue, excluding PeopleSoft products, was $401.1 million in Q2, an 8.1% increase year over year. Our revenue retention rate for service subscriptions, which represent 93% of total revenue, was 90%, with approximately 84% of subscription revenue non-cancellable for at least 12 months. Billings for Q2 were $100.9 million, down 8.8% year over year. Excluding billings associated with support services for PeopleSoft products, the year-over-year decline was 8%. The past two quarters included timing differences related to client renewals, so H1 results provide a more complete view, as H1 billings grew 3.2% year over year, and excluding PeopleSoft products, grew 4.7%. Gross margin for Q2 was 60.9%, compared to 60.4% in the prior year period and rose 190 basis points sequentially from Q1 to again exceed our key objective above 60%.

Michael Perica: Annualized recurring revenue, excluding PeopleSoft products, was $401.1 million in Q2, an 8.1% increase year over year. Our revenue retention rate for service subscriptions, which represent 93% of total revenue, was 90%, with approximately 84% of subscription revenue non-cancellable for at least 12 months. Billings for Q2 were $100.9 million, down 8.8% year over year. Excluding billings associated with support services for PeopleSoft products, the year-over-year decline was eight percent. The past two quarters included timing differences related to client renewals, so H1 results provide a more complete view, as H1 billings grew 3.2% year over year, and excluding PeopleSoft products, grew 4.7%. Gross margin for Q2 was 60.9%, compared to 60.4% in the prior year period and rose 190 basis points sequentially from Q1 to again exceed our key objective above 60%.

Speaker #2: Our revenue retention rate for service subscriptions, which represent 93% of total revenue, was 90%, with approximately 84% of subscription revenue non-cancellable for at least 12 months.

Speaker #2: Billings for the second quarter were $100.9 million, down 8.8% year over year. Excluding billings associated with support services for PeopleSoft products, the year-over-year decline was 8%.

Speaker #2: The past two quarters included timing differences related to client renewals, so first half results provide a more complete view. As first half billings grew 3.2% year over year and excluding PeopleSoft products grew 4.7%.

Speaker #2: Gross margin for the second quarter was 60.9% compared to 60.4% in the prior year period and rose 190 basis points sequentially from the first quarter to again exceed our key objective above 60%.

Speaker #2: On a non-gap basis, gross margin was 61.3%, up from 60.8% in the prior year second quarter. Operating expenses. Sales and marketing expense was $38.5% of revenue in the second quarter, compared to $36.5% in the prior year period.

Michael Perica: On a non-GAAP basis, gross margin was 61.3%, up from 60.8% in the prior year Q2. Operating expenses. Sales and marketing expense was 38.5% of revenue in Q2, compared to 36.5% in the prior year period. On a non-GAAP basis, sales and marketing expense was 37.6% of revenue, up from 35.5% a year ago. The increase reflects our investments in go-to-market of our expanded and new service offerings during the quarter. General and administrative expenses were 15.6% of revenue in Q2, down from 16.2% in the prior year period. On a non-GAAP basis, G&A was 14.5% of revenue, down from 14.9% in the prior year's Q2. Net income attributable to shareholders for Q2 was $2.4 million, or $0.03 per diluted share, compared to $0.32 per diluted share in the prior year period.

Speaker #2: On a non-GAAP basis, sales and marketing expense was 37.6% of revenue, up from 35.5% a year ago. The increase reflects our investments in go-to-market of our expanded and new service offerings during the quarter.

Speaker #2: General and administrative expenses were 15.6% of revenue in the second quarter, down from 16.2% in the prior year period. On a non-GAAP basis, G&A was 14.5% of revenue, down from 14.9% in the prior year second quarter.

Speaker #2: Net income attributable to shareholders for the second quarter was $2.4 million, or 3 cents per diluted share, compared to $32 cents per diluted share in the prior year period.

Speaker #2: Last year's net income benefited from a one-time pre-tax gain of $37.9 million associated with the Oracle settlement. Therefore, on a non-gap basis, net income was $5.9 million, or 6 cents per diluted share, versus 8 cents per diluted share a year ago.

Michael Perica: Last year's net income benefited from a one-time pre-tax gain of $37.9 million associated with the Oracle settlement. Therefore, on a non-GAAP basis, net income was $5.9 million, or $0.06 per diluted share, versus $0.08 per diluted share a year ago. Adjusted EBITDA, as defined in our earnings release, was $10.5 million for Q2, representing 9.5% of revenue. This compares to $14 million, or 13.4% of revenue, in the prior year's Q2. Balance sheet. We ended Q2 2026 with a cash balance of $123.4 million, up from $101.3 million in the prior year's Q2. Operating cash flow for the quarter decreased by $1.6 million, compared to a decrease of $17.8 million in the prior year period.

Speaker #2: Adjusted EBITDA as defined in our earnings release was $10.5 million for the second quarter, representing 9.5% of revenue. This compares to $14 million, or 13.4% of revenue, in the prior year second quarter.

Speaker #2: Balance sheet. We ended the second quarter of 2026 with a cash balance of $123.4 million, up from $101.3 million in the prior year’s second quarter.

Speaker #2: Operating cash flow for the quarter decreased by $1.6 million, compared to a decrease of $17.8 million in the prior year period. Year-to-date operating cash flow was $22.9 million, representing a cash flow conversion of 118%, placing us in a strong position to achieve our goal laid out at our recent investor day of 90% plus conversion on an annual basis.

Michael Perica: Year-to-date operating cash flow was $22.9 million, representing a cash flow conversion of 118%, placing us in a strong position to achieve our goal laid out at our recent Investor Day of 90%+ conversion on an annual basis. Deferred revenue as of 30 June 2026 was $267.1 million, up from $262.9 million in the prior year's Q2. Remaining performance obligations, RPO, which include billed deferred revenue, contract assets, and non-cancelable future revenue, were $636.9 million as of 30 June 2026, an increase of 8%. Excluding RPO associated with support services for PeopleSoft products, adjusted RPO increased 8.8%, reflecting our continued growth momentum in new bookings and longer duration client commitments. PeopleSoft support wind down update. We continue to execute the wind down of our PeopleSoft support services.

Speaker #2: Deferred revenue as of June 30th, 2026 was $267.1 million, up from $262.9 million in the prior year second quarter. Remaining performance obligations RPO, which include billed deferred revenue, contract assets, and non-cancellable future revenue, were $636.9 million, as of June 30th, 2026, an increase of 8%.

Speaker #2: Excluding RPO associated with support services for PeopleSoft products, adjusted RPO increased 8.8%, reflecting our continued growth momentum in new bookings and longer-duration client commitments.

Speaker #2: PeopleSoft support wind-downed update. We continue to execute the wind-down of our PeopleSoft support services. PeopleSoft revenue declined to 3% of total revenue this quarter, down from 6% a year ago, an 8% when we began the transition in 2024, reflecting steady progress toward completing the wind-down by July 2028.

Michael Perica: PeopleSoft revenue declined to 3% of total revenue this quarter, down from 6% a year ago and 8% when we began the transition in 2024, reflecting steady progress toward completing the wind down by July 2028. Business outlook. The company expects Q3 2026 revenue to be in the range of $110 to $112 million. The company also is reiterating its full year 2026 outlook, which calls for revenue growth of 4% to 6% and adjusted EBITDA margins of 12.5% to 15.5% and is consistent with the goal of achieving the Rule of 20 for fiscal year 2026. For additional information, please see the disclosures in our Form 10-Q filed today, 30 July 2026, with the U.S. Securities and Exchange Commission. This concludes our prepared remarks. Operator, we will now take questions.

Michael Perica: PeopleSoft revenue declined to 3% of total revenue this quarter, down from 6% a year ago and 8% when we began the transition in 2024, reflecting steady progress toward completing the wind down by July 2028. Business outlook. The company expects Q3 2026 revenue to be in the range of $110 to $112 million. The company also is reiterating its full year 2026 outlook, which calls for revenue growth of four percent to six percent and adjusted EBITDA margins of 12.5% to 15.5% and is consistent with the goal of achieving the Rule of 20 for fiscal year 2026. For additional information, please see the disclosures in our Form 10-Q filed today, 30 July 2026, with the US. Securities and Exchange Commission. This concludes our prepared remarks. Operator, we will now take questions.

Speaker #2: Business outlook. The company expects third quarter 2026 revenue to be in the range of $110 to $112 million. The company is also reiterating its full-year 2026 outlook, which calls for revenue growth of 4% to 6% and adjusted EBITDA margins of 12.5% to 15.5%, and is consistent with the goal of achieving the Rule of 20 for fiscal year 2026.

Speaker #2: For additional information, please see the disclosures in our Form 10-Q file today, July 30th, 2026, with the US Securities and Exchange Commission. This concludes our prepared remarks, operator will now take questions.

Speaker #1: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the 1 on your telephone keypad.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. Should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Thank you. Your first question comes on the line of Richard Baldry from ROTH Capital Partners. Please go ahead.

Speaker #1: And should you wish to cancel your request, please press star followed by 2. If you're using a speakerphone, please lift the handset before pressing any keys.

Speaker #1: One moment, please, for your first question. Thank you. And your first question comes from the line of Richard Baldry from Roth Capital Partners. Please go ahead.

Speaker #2: Thanks. Could you talk about how much to date, and how much ahead, AI should be able to impact your cost model? We're hearing from people that it's not just faster development or lower service costs, but things like virtual sales development reps or improving sales efficiencies and similar things.

Richard Baldry: Thanks. Could you talk about how much maybe to date and how much ahead AI should be able to impact your cost model? Sort of we are hearing from people it's not just faster development or lower service costs, but things like virtual sales development reps or improving sales efficiencies and things. Sort of where are we at? How much could that impact your sort of adjusted EBITDA margins over the long term? Thanks.

Speaker #2: So, sort of, where are we at? How much could that impact your adjusted EBITDA margins over the long term? Thanks.

Speaker #3: Sure, Rich. I think internally, when you talk about internal usage and deployment of AI, we like everybody else or looking for good use cases.

Michael Perica: Sure, Rich. I think internally, when you talk about internal usage and deployment of AI, we, like everybody else, are looking for good use cases. We are using it for sales. We are using it to gather broad amounts of information about prospects very quickly and present it in a way that sales reps can see what's happening at a prospect before they ever pick up the phone and call them. That's certainly a huge improvement in time and productivity. We also, of course, use tools like Clari, which are excellent in the sales side on top of Salesforce to be able to understand and predict close rates. It's very accurate, in fact, what we have seen over the last couple of years that we have used it.

Speaker #3: We're using it for sales. We're using it to gather broad amounts of information about prospects very quickly and present it in a way that sales reps can see what's happening at a prospect.

Speaker #3: Before they ever pick up the phone and call them, that's certainly a huge improvement in time and productivity. We also, of course, use tools like Clari, which are excellent on the sales side, on top of Salesforce, to be able to understand and predict close rates, and it's very accurate. In fact, what we've seen over the last couple of years that we've used it.

Speaker #3: And so we deploy tools in that part of the pipeline management, and it also allows us to aggregate very large views of what's happening when you have sellers all over the world working different types of transactions.

Michael Perica: We deploy tools in that part of the pipeline management, it also allows us to aggregate very large views of what's happening when you have sellers all over the world working different types of transactions. It makes it much easier to manage at a very large level. Of course, we're using AI in finance. We're continuing to deploy those items. I think overall, look at the more thoughtful way that we're using it, not just throwing AI all over the place.

Speaker #3: It makes it much easier to manage at a very large level. And of course, we're using AI in finance. We're continuing to deploy those items.

Speaker #3: And so, I think overall, if you look at the more thoughtful way that we're using it—not just throwing AI all over the place—I think that, yes, we will achieve a meaningful reduction in total operating cost and more leverage as we move forward in the coming years.

Seth Ravin: I think that, yes, we will achieve a meaningful reduction in total operating cost and more leverage as we move forward in the coming years.

Richard Baldry: Could you talk a little bit about any color you can give us on sort of top of the funnel prospect changes? It's been maybe 1 year now, I guess, since the big settlement with Oracle. Sort of curious how that top of the funnel growth is going, whether it's mostly driven by sales headcount increases or whether really, there's some natural growth of the addressable market or the willingly addressable market, I guess I could look at it. Thanks.

Speaker #2: And a could you talk a little bit about the any color you can give us on sort of top of the funnel prospect, you know, changes?

Speaker #2: It's been maybe a year now, I guess, since the big, you know, settlement with Oracle. Sort of curious how that top of the funnel growth is going whether it's mostly driven by sales headcount increases or whether you really, you know, there's some natural growth of the of the addressable market or the willingly addressable market, I guess I could look at it next.

Speaker #3: Well, I think you're looking at a few different things. One, there's no doubt that our change in the world of litigation, our change in the world of putting AI services, and the evolution into being an innovation company have driven a lot more customers to us.

Seth Ravin: Well, I think you're looking at a few different things. One, there's no doubt that our change in the world of litigation, our change in the world of putting AI services, and the evolution into being an innovation company have driven a lot more customers to us. I think there are other elements.

Speaker #3: I think there are other elements. Number one, Rich, the fact that we are now giving customers a path where they can leave the vendor's maintenance, forego upgrades, and go on a path that has innovation and modernization in it, where they do not have to think about a potential return to the vendor's roadmap at some point down the line, has been a game changer, I think, in terms of overall demand generation. To the point you could say there are deals that we lost years ago where customers said, "We love the support."

Seth Ravin: Number one, Rich, the fact that we are now giving customers a path where they can leave the vendor's maintenance, forego upgrades, and go on a path that has innovation and modernization in it, where they do not have to think about a potential return to the vendor's roadmap at some point down the line, has been a game changer, I think, in terms of overall demand generation, to the point you could say there are deals that we lost years ago where customers said, "We love the support, we know we're going to get better service, but we're just afraid to leave the vendor's path because we think we might have to go back someday." Now that's changing, those customers, we have several of them that have signed with us because now they're confident they don't need to make that return trip to the vendor, the boomerang effect that some refer to.

Speaker #3: We know we're going to get better service, but we're just afraid to leave the vendor's path because we think we might have to go back someday. Now that's changing, and those customers—we have several of them that have signed with us—because now they're confident they don't need to make that return trip to the vendor.

Speaker #3: The boomerang effect that some refer to. And I think that that is the single biggest driver of up up the top of the funnel.

Seth Ravin: I think that that is the single biggest driver of the top of the funnel. I think there's some other macro issues. With SAP setting deadlines, we have all sorts of release deadlines happening in the software world, and those deadlines are driving customers to seek other alternatives to extend the life of their products because they're not ready to make a change. They don't see the value, and they feel like they're being pressured from every angle. Those things combined, I think, are creating a much higher top of the funnel experience.

Speaker #3: And I think there are some other macro issues. I mean, with SAP setting deadlines—we have all sorts of release deadlines happening in the software world—and those deadlines are driving customers to seek other alternatives to extend the life of their products because they're not ready to make a change.

Speaker #3: They don't see the value, and they feel like they're being pressured from every angle. Those things combined, I think, are creating a much higher top-of-the-funnel experience.

Speaker #2: And last, maybe on the balance sheet—you know, you knocked out $10 million in debt ahead of schedule. You’ve been pretty steadily kind of taking that number down.

Richard Baldry: Last for me beyond the balance sheet. You knocked out $10 million in debt ahead of schedule. You've been pretty steadily kind of taking that number down. How do you think about the flexibility on your balance sheet and where best to allocate capital? You've got a good amount of cash. You could take out the debt overnight if you wanted to. Arguably, the shares are undervalued. You could do buybacks or is M&A interesting? How do you view the best use of the balance sheet flexibility you have now?

Speaker #2: How do you think about the flexibility on your balance sheet and where best to allocate capital? You've got a good amount of cash—you could take out the debt overnight if you wanted to.

Speaker #2: You know, arguably the shares are undervalued. You could do buybacks or, you know, as M&A, interesting. How do you view the best use of the balance sheet flexibility you have now?

Speaker #4: Yeah, Rich, Michael here. As you noted, right, we've been heavily concentrated on one of our two levers we've identified on capital return: the debt repayment.

Michael Perica: Yeah, Rich, Michael here. As you noted, we've been heavily concentrated on one of our two levers we've identified on capital return, the debt repayment so far this year. Last two quarters of last year, the lower amount share repurchases. We continue to evaluate, looking forward, we may see a shift in how we allocate sitting here today. Still the two levers, but may see a shift moving forward.

Speaker #4: So far this year and for the last two quarters of last year, the lower amounts of share repurchases, we continue to evaluate. But looking forward, we may see a shift in how we allocate, sitting here today.

Speaker #4: So, still the two levers, but we may see a shift moving forward.

Speaker #2: Thanks. Congrats on a good quarter.

Richard Baldry: Thanks. Congrats on a good quarter.

Speaker #4: Thank you.

Michael Perica: Thank you.

Speaker #1: Thank you.

Seth Ravin: Thank you.

Speaker #5: Thank you. And your next question comes on the line of Andrew Sherman from TD Cowen. Please go ahead.

Operator: Thank you. Your next question comes from the line of Andrew Sherman from TD Cowen. Please go ahead.

Speaker #6: Oh, great. Hey, guys, thanks. And nice quarter. Seth, I wasn't sure if I heard a whole lot on the go-to-market side in the prepared remarks.

Andrew Sherman: Great. Hey, guys. Thanks. Nice quarter. Seth, I wasn't sure if I heard a whole lot on the go-to-market side in the prepared remarks. How's the sales hiring? Where do you stand versus plan on that? How are some of the newer reps ramping to productivity?

Speaker #6: How's the sales hiring? Where do you stand versus plan on that? And how are some of the newer reps ramping to productivity?

Speaker #3: Thanks, Andrew. I think we're doing okay. I think we've had a little bit more turnover than I'd like in some of the sales reps, and I think part of that was we've been readjusting the skill sets that we're looking for.

Seth Ravin: Thanks, Andrew. I think we're doing okay. I think we've had a little bit more turnover than I'd like in some of the sales reps. I think part of that was we've been readjusting the skill sets that we're looking for. I think like everybody else, our folks now have to talk about AI. They have to talk about innovation in different ways with a lot more technology than they did even two, three years ago. I do think some of the reps aren't going to make that turn, and I think that's not just true for us. I think you're going to see that across technology. We're making some changes in the force, and I think some people who are more aptitude towards being able to discuss technology in ways that business people can understand are doing better.

Speaker #3: I think, like everybody else, our folks now have to talk about AI. They have to talk about innovation in different ways, with a lot more technology than they did even two or three years ago.

Speaker #3: And I do think some of the reps aren't going to make that turn. And I think that's not just true for us. I think you're going to see that across technology.

Speaker #3: But we're making some changes in the force, and I think some people are who are more aptitude towards being able to discuss technology in ways that business people can understand are doing better.

Speaker #3: Those who could not make that turn were not doing as well. And so our sales numbers, the total number of sellers, is increasing.

Seth Ravin: Those who could not make that turn were not doing as well. Our sales numbers, the total number of sellers is increasing. We are committed to, again, growing our sales force. We talked about that on the last couple of calls, where we were feeling optimistic enough and bullish enough about the business to begin the aggressive hiring of sellers, but not just sellers. A lot of different sales support. We had to build out a new AI support team. We had to build out new capabilities as we talked about the new service launches. Those had to come in, and we had to retrain sellers as well. Overall, I think the go-to-market is working for the sellers. I think the go-to-market in the alliances and channels is another very big part.

Speaker #3: We are committed to, again, growing our sales force. We talked about that on the last couple calls. Where we were feeling optimistic enough and and bullish enough about the business to begin the aggressive hiring of sellers, but not just sellers.

Speaker #3: A lot of different sales support. We had to build out a new AI support team. We had to build out new capabilities, as we talked about the new service launches.

Speaker #3: Those had to come in, and we had to retrain sellers as well. So overall, I think the go-to-market is working. For the sellers, I think the go-to-market in the alliances and channels is another very big part.

Speaker #3: As you know, we expect a substantial amount of our pipe to come from the indirect channel. So we continue to work with our friends at ServiceNow and many other partners to build out more pipeline into that operation to reduce our total cost of sale and increase our leverage on sales.

Seth Ravin: As you know, we expect a substantial amount of our pipe to come from indirect channel. We continue to work with our friends at ServiceNow, and many other of our partners to build out more pipeline into that operation to reduce our total cost of sale and increase our leverage on sales.

Speaker #6: That's great. Thanks. And then, Michael, just on the the the 3Q guide and the the implied Q4, just what what help us get a little bit more confident in the the acceleration there.

Andrew Sherman: That's great. Thanks. Michael, just on the Q3 guide and the implied Q4, just help us get a little bit more confident in the acceleration there. I know some of it is easier comps. The RPO ex PeopleSoft did slow down a little bit, but anything you can give us on the confidence or the pipeline heading into the H2 that'll help us with the H2 numbers? That'd be great. Thanks.

Speaker #6: I know some of it is easier comps the RPOX people saw did slow down a little bit, but anything you can give us on the the confidence or the pipeline heading into the second half that that that'll help us with the second half numbers that'd be great.

Speaker #6: Thanks.

Speaker #4: Sure, Andrew. And highlighting as Seth noted, and we outlined that the building of our positive year-of-year metrics and four quarters in a row are retention rate a key area that has the 9 in front of it.

Michael Perica: Sure, Andrew. Highlighting, as Seth noted and we outlined, that the building of our positive year-over-year metrics in four quarters in a row, our retention rate, a key area that has the nine in front of it. We also highlighted, relative to billings, renewals timing has impacted a quarter-over-quarter. Putting all of this together, we are still seeing healthy, meaning double digits plus, new bookings growth year-over-year puts us in a strong position where, again, we've reiterated guidance, and we feel we're in a very good position to achieve what we've laid out for the H2 of the year.

Speaker #4: We also highlighted relative to buildings renewals timing has impacted the quarter-over-quarter, but putting all of this together we are still seeing healthy meaning double digits plus.

Speaker #4: New bookings growth year-over-year puts us in a strong position, where again, we've reiterated guidance and we feel we're in a very good position to achieve what we've laid out for the second half of the year.

Speaker #6: Great. Thanks, guys.

Andrew Sherman: Great. Thanks, guys.

Speaker #3: Thank you.

Seth Ravin: Thank you.

Speaker #4: Thank you.

Michael Perica: Thank you.

Speaker #5: Thank you. And your next question comes on the line of Jeff Van Ree from Great Column. Please go ahead.

Operator: Thank you. Your next question comes from the line of Jeff Van Rhee from Craig-Hallum. Please go ahead.

Speaker #3: Great, yeah, thanks for taking the question. So Seth, on the European Commission decision about SAP's anti-competitive practices, it seems dead spot on in terms of forcing SAP to stop the punitive measures they were imposing on customers and allow them to choose third-party support.

Jeff Van Rhee: Great. Yeah, thanks for taking the question. Seth, on the European Commission decision about SAP's anti-competitive practices seems dead spot on in terms of forcing SAP to stop the punitive measures they were imposing on customers and allow them to choose third-party support. Would seem to have some pretty direct ramifications for you and possibly even be a kind of a shot across the bow for Oracle's behavior. Just any thoughts on that? Seen any impact? Obviously, it's very recent, but just love a little feedback there.

Speaker #3: That would seem to have some pretty direct ramifications for you, and possibly even be kind of a shot across the bow for Oracle's behavior.

Speaker #3: Just any thoughts on that? Seeing any impact—obviously, it's very recent—but I'd love a little feedback there.

Speaker #2: Sure, Jeff. I I think that when you look at at the decision, the agreement in Europe, with SAP, I think this is really bigger than SAP.

Seth Ravin: Sure, Jeff. I think that when you look at the decision, the agreement in Europe with SAP, I think this is really bigger than SAP. I think this is more along the lines that software licensing is getting extremely complex. We're connecting systems all over the place. All of us are. This is the new world. It's an integrated environment. How we integrate, what we're allowed to move, data moving between places. Licenses get brought together, they get separated, companies are merged, companies are separated. A lot of the points that were raised and agreed upon between SAP and the European Union really were around some of these challenges that companies have with their licenses and what we might consider to be fair or unfair practices. They're not uncommon. It's just that these challenges are really impacting people's ability to run their business. I think that they're good.

Speaker #2: I think this is more along the lines that software licensing is getting extremely complex. We're connecting systems all over the place—all of us are.

Speaker #2: This is the new world. It's an integrated environment. How we integrate, what we're allowed to move, data moving between places, licenses get brought together.

Speaker #2: They get separated. Companies are merged. Companies are separated. And a lot of the points that were raised in the agreed-upon between SAP and the European Union really were around some of these challenges that companies have with their licenses and what we might consider to be fair or unfair practices.

Speaker #2: They're not uncommon. It's just that these challenges are really impacting people's ability to run their business. And I think that they're good. I think that the decisions, of course, they're not everything.

Seth Ravin: I think that the decisions, of course, they're not everything we all would want, but I do think that there's positives in there. For example, what I was just saying about the ability, if a company splits apart and has to split its licenses or has to merge and comes together with another company, there are provisions about not being able to overcharge for the cost of that merger, not being able to hold people hostage around taking things apart and moving them back together. Yes, that does have downward downstream impact on people like Rimini Street and other third-party providers, and other IT providers who will see this as a big benefit because it increases the overall competitive environment and allows customers much more choice.

Speaker #2: We'd all would want, but I do think that there's positives in there. For example, what I was just saying about the ability if a company splits apart and has to split its licenses or has to merge and and comes together with another company, there are provisions about not being able to overcharge for the cost of that merger, not being able to hold people hostage.

Speaker #2: ...around taking things apart and moving them back together. And yes, that does have downstream impact on people like Rimini Street and other third-party providers.

Speaker #2: Other IT providers will see this as a big benefit because it increases the overall competitive environment and allows customers much more choice.

Speaker #3: Mm-hmm. Yeah, I would think it would be obviously very positive. The and let me revisit the billings for just real quickly. I understand the lumpiness, but sort of back to overall momentum in the pipeline.

Jeff Van Rhee: Mm-hmm. Yeah, I would think it'd be obviously very positive. Let me revisit the billings just real quickly. I understand the lumpiness, but sort of back to overall momentum in the pipeline. I mean, obviously, you've had very steady build in that overall momentum last handful of quarters. Just any more quantification you'd give on the scope, size growth in the pipeline around, again, getting that conviction in H2 billings?

Speaker #3: I mean, obviously, you've had very steady build in that overall overall momentum last handful of quarters. Just any more quantification you give on the scope size, you know, growth in the pipeline around, again, getting that conviction in second half billings?

Speaker #2: Yeah, I I think, again, that's that's why we we felt that, you know, reiterating guidance that we put out there at the end of 2025 was important.

Seth Ravin: Yeah, I think again, that's why we felt that reiterating guidance that we put out there at the end of 2025 was important. We feel good about it. I think as Michael mentioned in his prepared remarks, we have pulled forward a bit of cost. We said that at the end of Q1 as well. That's why you saw sales cost be a bit higher than last year. We decided to forward load some of those costs, but we wanted to reiterate the guidance because it's important for people to understand that we're committed to the top line and bottom line. This is not an easy time, Jeff, as you know. There's a lot of investment being made in AI, in bringing new people in, tools, technologies, launching new products. That drives up sales and marketing costs as you get those launched. It's also driving up the COGS.

Speaker #2: We feel good about it. I think, as Michael mentioned in his prepared remarks, we have pulled forward a bit of cost. We said that at the end of Q1 as well.

Speaker #2: That's why you saw sales costs be a bit higher than last year. We decided to forward-load some of those costs, but we wanted to reiterate the guidance because it's important for people to understand that we're committed to the top line and bottom line.

Speaker #2: Now, this is not an easy time, Jeff, as you know. There's a lot of investment being made in AI, in bringing new people in, tools, technologies, launching new products.

Speaker #2: That drives up sales and marketing costs as you get those launches. It's also driving up the COGS. That's why, even though we moved up to a 60, we said we just wanted to make sure there was a 6 in front of the gross margin, because we're having to increase costs on the back end to support all these new products.

Seth Ravin: That's why even though we moved up to 60, we said we just wanted to make sure there was a six in front of the gross margin, because we're having to increase costs on the back end to support all these new products. It's a balancing act when you're in growth mode and you're trying to deliver top line and bottom line number growth. I think we're balancing it well. I feel good about where we are. The top line, we keep seeing that pipeline grow. We've seen double-digit growth in the pipeline year-over-year. We're feeling good about what we're seeing. We're feeling optimistic about the numbers that are flowing through. The close rate, for example. We're hitting 30% of pipe close rates.

Speaker #2: It's a balancing act when you're in growth mode and you're trying to deliver top-line and bottom-line number growth. So I think we're balancing it well.

Speaker #2: I feel good about where we are. And the top line, we keep seeing that pipeline grow. We've seen double digit growth in the pipeline.

Speaker #2: Year over year. So we're feeling good about what we're seeing. We're feeling optimistic about the numbers that are flowing through. The close rate, for example—we're hitting 30% of pipe close rates.

Speaker #2: Those are very, very good numbers. And that means we have a solid pipe. It's a clean pipe, and we have good visibility as to what's coming down the pipe.

Seth Ravin: Those are very, very good numbers, that means we have a solid pipe, it's a clean pipe, and we have good visibility as to what's coming down the pipe. I feel that we are really in a good place as we give our reiterated guidance.

Speaker #2: So, I feel that we are really in a good place as we give our reiterated guidance.

Speaker #3: Yeah, you kind of preempted a little bit of my follow-on there. I just want to clarify: on the sales and marketing expenses, it's ticked up—34, 35, 37.

Jeff Van Rhee: Yeah. You kind of preempted a little bit of my follow-on there. I just want to clarify. On the sales and marketing expenses, it's ticked up 34%, 35%, 37%, I think we're 37.5% this quarter on non-GAAP. Is this the peak in non-GAAP as a percent of revenue, or do we still see that tick higher through the remainder of this year and then it comes down in 2027?

Speaker #3: I think we're 37 and a half this quarter on non-GAAP. Is this the peak in non-GAAP as a percent of revenue, or do we still see that tick higher through the remainder of this year and then and then comes down in '27?

Speaker #2: I think we're at around the peak. You know, there are still some pieces we're putting in place, but we launched a brand new service.

Seth Ravin: I think we're at around the peak. There's still some pieces we're putting in place, we launched a brand-new service, our Rimini Govern for AI today, which is a big service. There will still be a little bit of marketing push that goes with all those new products and services. As a percentage of revenue, the revenue, as you know, on a ratable basis, revenue will always follow the expense when you're in a growth mode. For most people who don't know, our average first-year contract is essentially a 15-month contract, 3 months of onboarding. You're amortized over 15 months, and you sign a contract. We start delivering service the next day, usually, which means we have to hire the resources, take the expense immediately, long before the revenue starts to add in on the ratable scale.

Speaker #2: Our Remini governed 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.

Speaker #2: But as a percentage of revenue—as you know, on a ratable basis—revenue will always follow the expense when you're in a growth mode.

Speaker #2: For most people who don't know, our average first-year contract is essentially a 15-month contract: three months of onboarding. So, you're amortized over 15 months. You sign a contract, and we start delivering service the next day, usually—which means we have to hire the resources and take the expense immediately, long before the revenue starts to add in on the ratable scale.

Speaker #2: That is the challenge in the growth model that we're balancing right now.

Seth Ravin: That is the challenge in the growth model that we're balancing right now.

Speaker #3: Got it. Maybe one last quick one, if I could. On the partner front, I guess this is for either of you. You talked about the momentum with the partners.

Jeff Van Rhee: Got it. Maybe one last quick one, if I could. On the partner front, I guess this is for either of you. You talked about the momentum with the partners. Can you just give any quantification there? What % of the pipeline at this point, or what % of new bookings are being driven through those partner relationships maybe versus what it was, say, a year ago?

Speaker #3: Can you just give any quantification there? Like, what percent of the pipeline at this point, or what kind of percent of of new bookings are being driven through those partner relationships?

Speaker #3: Maybe versus what it was, say, a year ago?

Speaker #2: Well, I definitely think we're seeing increases. We're doing million-dollar deals with partners, which is great. We are not—if I were to use the old walk-jog-run approach, I would say we're in the jog approach.

Seth Ravin: Well, I definitely think we're seeing increases. We're doing million-dollar deals with partners, which is great. If I were to use the old walk, jog, run approach, I would say we're in the jog approach. We're getting off and running. As everyone knows, we are a little more immature in our partner program, based on age, than a lot of other companies, because we started later in the partner world. We are making progress. We are absolutely working with dozens of partners on a global basis, we're really solidifying around our top global strategic partners, and we'll have more announcements around that very soon.

Speaker #2: We're getting off and running. But, as everyone knows, we're a little more immature in our partner program, based on age, than a lot of other companies because we started later in the partner world.

Speaker #2: But we are making progress. We are absolutely working with dozens of partners on a global basis, and we're really solidifying around our top global strategic partners.

Speaker #2: And we'll have more announcements around that very soon.

Speaker #3: Sounds good. Congrats on the ARR growth and revenue growth—there is a lot of work in here, so congrats, guys.

Jeff Van Rhee: Sounds good. Congrats on the ARR growth and revenue growth. There's a lot working here, congrats, guys.

Speaker #2: Thank you.

Seth Ravin: Thank you.

Speaker #1: Thank you.

Michael Perica: Thank you.

Operator: Thank you. Your next question comes from the line of Alex Fuhrman from Lucid Capital Markets. Please go ahead.

Speaker #4: Thanks. Thank you. And your next question comes from the line of Alex Furman from Lucid Capital Markets. Please go ahead.

Speaker #5: Hey guys, thanks very much for taking my question. It looked like the last couple of years you lost about 30 clients or so in the second quarter before, you know, getting back to net client acquisition in the back half of the year. This year, you actually gained a few in the second quarter.

Alex Fuhrman: Hey, guys. Thanks very much for taking my question. It looks like the last couple of years, you lost about 30 clients or so in Q2 before getting back to net client acquisition in H2. This year, you actually gained a few in Q2. Can you talk a little bit about what's driving that? Has that been some of the sales pipeline and just moving some of those customers through the funnel that you mentioned, or is that maybe some of the little sequential uptick in retention starting to show in the numbers a little bit more?

Speaker #5: Can you talk a little bit about what's driving that? Has that been you know, some of the the sales pipeline and just moving some of those customers through the funnel that you mentioned, or is that you know, maybe some of the the little sequential uptick in retention starting to to show in the numbers a little bit more?

Speaker #2: I think it's actually a combination of all. First, you've got the retention component. The second one is we've been very focused on new logo acquisition.

Seth Ravin: I think it's actually a combination of all. First, you got the retention component. The second one is we've been very focused on new logo acquisition. As you noted, back in the last couple of years, we were losing clients, net loss, in the end of Q2 usually. We turned that around by focusing in exclusively on new logo acquisition. We put programs in place. Interestingly enough, in the Americas, we went to a separated model where we have hunters and farmers, and the hunters are only focused on new logo acquisition, while the farmers manage all the existing clients and focus on the cross-sell and the retention of the account on the renewal front. That has yielded, especially in North America, significant growth in new logo acquisition. Of course, we all know there's no perfect sales model.

Speaker #2: As you noted, back in the last couple of years, we were losing clients. Net loss was in the second and at the end of the second quarter, usually.

Speaker #2: We turned that around by focusing in exclusively on new logo acquisition. So we put programs in place. And interestingly enough, in the Americas, we went to a separated model, where we have hunters and farmers.

Speaker #2: And the hunters are only focused on new logo acquisition, while the farmers manage all the existing clients and focus on the cross-sell and the retention of the account on the renewal front.

Speaker #2: And that has yielded, especially in North America, significant growth in new logo acquisition. Of course, as we all know, there's no perfect sales model.

Speaker #2: That's why we've all changed them around as we evolve our businesses. But this model has worked very well for Rimini over the last couple of years.

Seth Ravin: That's why we all change them around as we evolve our businesses. This model has worked very well for Rimini over the last couple of years, and we can see the results.

Speaker #2: We can see the results.

Speaker #5: Okay, that's really good to hear. Thank you for that, Seth.

Alex Fuhrman: Okay. That's really good to hear. Thank you for that, Seth.

Speaker #2: Certainly.

Seth Ravin: Certainly.

Operator: Thank you. Our next question comes from the line of Brian Kinstlinger from Alliance Global Partners. Please go ahead.

Speaker #4: Thank you. And our next question comes from the line of Frank Kintzlinger from Alliance Global Partner. Please go ahead.

[Analyst] (Alliance Global Partners): Hi, this is Trey. I'm in for Brian. During your last analyst day, you highlighted that there were 26 customers testing out your Agentic AI ERP solution with ServiceNow. Can you provide an update with a count of how many customers have moved into production with this new solution, and how many are currently still in the test phase?

Trey Winstead: Hi, this is Trey. I'm in for Brian. During your last analyst day, you highlighted that there were 26 customers testing out your Agentic AI ERP solution with ServiceNow. Can you provide an update with a count of how many customers have moved into production with this new solution, and how many are currently still in the test phase?

Speaker #6: Hi, this is Shrey. I'm in for Brian. During your last earnings day, you highlighted that there were 26 customers testing out your agentic AI ERP solution with ServiceNow.

Speaker #6: Can you provide an update with an account of how many customers have moved into production with this new solution, and how many are currently still in the test phase?

Speaker #2: Oh, great. Well, we have several of them that have moved into production. And in fact, there's a Remini catalog you can get on our website and a lot of those customers are in there with case studies and quotes and so it's been a very very interesting progress as we've rolled these solutions out.

Seth Ravin: Well, we have several of them that have moved into production, and in fact, there's a Rimini catalog you can get on our website, and a lot of those customers are in there with case studies and quotes. It's been a very, very interesting progress as we've rolled these solutions out. We've learned a lot about the technology. We've learned a lot about how to solve very specific business issues, and I think this has really allowed us to move into position to be the best at the Agentic AI ERP solutions in the world. I feel very strongly about that, and I think that we're watching a good number of them already in production. I think a good number of them are already working to expand. Some of them are already working on multiple next projects.

Speaker #2: We've learned a lot about the technology. We've learned a lot about how to solve very specific business issues. And I think this has really allowed us to move into position to be the best at agentic AI ERP solutions in the world.

Speaker #2: I feel very strongly about that. And I think that we're watching a good number of them already in production. I think a good number of them are already working to expand.

Speaker #2: Some of them are already working on next projects—multiple next projects. So I think we could declare it a very big success. And we're now expanding that project out even more, because we have the new solutions and the new Rimini governance solutions that we have clients who have been waiting to deploy.

Seth Ravin: I think we could declare it a very big success, and we're now expanding that project out even more because we have the new solutions and the new Rimini governance solutions that we have clients who have been waiting to deploy.

Speaker #6: Thank you. That's helpful. And then, as a quick follow-up, are you able to quantify the pipeline for your ServiceNow partnership, and how much of it is existing customers versus brand-new customers?

[Analyst] (Alliance Global Partners): Thank you. That's helpful. As a quick follow-up, are you able to quantify the pipeline for your ServiceNow partnership and how much of it is existing customers versus brand-new customers?

Trey Winstead: Thank you. That's helpful. As a quick follow-up, are you able to quantify the pipeline for your ServiceNow partnership and how much of it is existing customers versus brand-new customers?

Speaker #2: Well, the pipeline has certainly been a combination from both of us, which is what we wanted. Of course, ServiceNow would love access to our customers.

Seth Ravin: Well, the pipeline has certainly been a combination from both of us, which is what we wanted. Of course, ServiceNow would love access to our customers. We would love access to theirs. We actually share, I believe, over 1,000 customers together, that have both our services already. It's already very much a situation where we can both come in and work to expand our footprints together. We're very, very pleased about where we can go on that side of the house, and I think you're going to see a lot of that with our other partners out there, such as T-Systems and many others.

Speaker #2: We would love access to theirs. We actually share, I believe, over 1,000 customers together that have both our services already. So it's already very much a situation where we can both come in and work to expand our footprints together.

Speaker #2: So we're very, very pleased about where we can go on that side of the house. And I think you're going to see a lot of that with our other partners out there, such as T-Systems and many others.

Speaker #6: Got it. Thank you.

[Analyst] (Alliance Global Partners): Got it. Thank you.

Trey Winstead: Got it. Thank you.

Speaker #2: Certainly.

Seth Ravin: Certainly.

Speaker #4: Thank you. There are no further questions at this time. I will now hand the call back to Mr. Seth Ravin for any closing remarks.

Operator: Thank you. There are no further questions at this time. I want to hand the call back to Mr. Seth Ravin for any closing remarks.

Seth Ravin: Great. Well, thank you everyone. Appreciate you joining us. I want to thank our clients for all their trust and their business and allowing us to be part of their innovation story. Of course, to all of our colleagues for the work that they did in the quarter and delivering some great results. Thanks everybody, and we look forward to talking to you at our Q3 call. Thank you very much.

Speaker #2: Great. Well, thank you, everyone. Appreciate you joining us. And I want to thank our clients for all their trust and their business and and allowing us to be part of their innovation story.

Speaker #2: And of course, to all of our colleagues for the work that they did in the quarter and delivering some great results. So, thanks, everybody.

Speaker #2: And we look forward to talking to you at our third quarter call. Thank you very much.

Operator: Thank you, and this concludes today's call. Thank you for participating. You may all disconnect.

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