10-Q: Rimini Street Reports Q2 2026 Financial Results

Rimini Street, Inc. announced its financial results for the second quarter ended June 30, 2026, reporting a 7% increase in revenue to $111.1 million, alongside a net income of $2.4 million.

Summary

• Rimini Street reported revenue of $111.1 million for the second quarter of 2026, a 7% increase compared to $104.1 million in the same period last year.
• Net income for the quarter was $2.4 million, a significant decrease from $30.3 million in Q2 2025.
• The company's gross profit margin improved slightly to 60.9% from 60.4% year-over-year.
• Operating expenses increased substantially by 183.2% to $61.3 million, largely due to a significant year-over-year decrease in litigation costs and related recoveries.
• Sales and marketing expenses rose by 12.4% to $42.7 million.
• As of June 30, 2026, the company had $123.4 million in cash and cash equivalents.
• The company is continuing its wind-down of Oracle PeopleSoft services, which represented 3% of revenue in Q2 2026.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this filing as neutral, with solid revenue growth offset by a significant decrease in net income and increased operating expenses, alongside the ongoing strategic wind-down of a service line.

Positives

• Revenue increased by 7% to $111.1 million for the second quarter of 2026.
• Gross profit margin improved to 60.9% from 60.4% year-over-year.
• Annualized recurring revenue reached $413 million as of June 30, 2026.
• Active client count increased to 3,132 as of June 30, 2026, up from 3,060 in the prior year.
• The company has $123.4 million in cash and cash equivalents, indicating a solid liquidity position.
• Interest expense decreased due to lower borrowings on the revolving line of credit and voluntary prepayments on the term loan.

Negatives

• Net income decreased significantly to $2.4 million from $30.3 million in the prior year's quarter.
• Operating expenses surged by 183.2% to $61.3 million, primarily due to a large decrease in litigation settlement income recognized in the prior year.
• Sales and marketing expenses increased by 12.4% to $42.7 million.
• The company reported a working capital deficit of $50.0 million as of June 30, 2026.
• Revenue from the United States declined by 2% year-over-year.

Risks

• The ongoing wind-down of Oracle PeopleSoft services is expected to lead to significant revenue reductions.
• The company faces intense competition from enterprise software vendors and other third-party support providers.
• The company's business is susceptible to risks associated with global operations, including currency fluctuations and differing regulations.
• Cybersecurity threats and data security breaches pose a significant risk to the company's operations and reputation.
• The company's substantial debt level and associated covenants could limit operational and financing flexibility.
• The company's stock price may continue to be volatile due to market conditions and potential sales by large stockholders.
• The company's reliance on key employees and the ability to attract and retain qualified personnel are critical to its success.
• The settlement agreement with Oracle requires the completion of the PeopleSoft wind-down by July 31, 2028, with uncertain outcomes and costs.

Future Outlook

The company expects to continue investing in new products and services, including AI solutions, and to manage its cost structure. The wind-down of Oracle PeopleSoft services is expected to lead to significant revenue reductions over the next few years, with the process to be completed by July 31, 2028. The company believes its current cash, cash equivalents, restricted cash, and future cash flow from operating activities will be sufficient to meet its anticipated cash needs for at least 12 months, assuming no significant adverse impact from macroeconomic conditions or litigation.

Management Comments

• "Our mission is to enable our clients to better control their IT roadmap by offering a comprehensive portfolio of unified software support services and related ERP solutions - designed to be funded within existing budgets - to accelerate the vision of Transformation without Disruption, empowering clients to put technology to work to produce more efficient business outcomes to provide a competitive advantage and facilitate growth."
• "We believe that our current and prospective clients often seek to reduce the number of IT vendors to allow more manageable governance, with a desire to select vendors who can provide a wider scope of IT services and become true trusted partners."
• "We believe that by following the Rimini Smart Path, IT and business leaders can transform how they support and optimize their enterprise software portfolio to maximize return on their software investments, save on software support costs and improve operational performance."
• "We expect to incur higher sales and marketing expenses associated with supporting the growth of our business as we continue to bring to market our new solutions and partnerships."

Industry Context

StockSavvy.ai notes that Rimini Street's Q2 2026 results reflect ongoing industry trends of clients seeking cost efficiencies in enterprise software support while also demanding innovation, particularly in areas like AI. The company's strategic shift and wind-down of certain services highlight the dynamic nature of the third-party software support market, where vendor-led initiatives and evolving technology landscapes necessitate strategic adaptation.

Comparison to Industry Standards

• Rimini Street's gross profit margin of 60.9% for Q2 2026 is generally in line with or slightly above the typical gross margins seen in the enterprise software and IT services sector, which can range from 50% to 70% depending on the specific services offered.
• The company's revenue growth of 7% for the quarter is moderate compared to high-growth software companies but is a reasonable performance given the mature nature of its core third-party support market and the ongoing wind-down of specific services.
• The significant increase in operating expenses, largely due to the absence of a large litigation settlement benefit recognized in the prior year, makes direct comparison difficult without normalizing for one-time items. However, the increase in sales and marketing expenses (12.4%) reflects a common strategy in the industry to invest in growth despite economic uncertainties.

Legal Proceedings

• The company is involved in ongoing litigation with Oracle, related to the Rimini II case, which has been stayed and administratively closed following a settlement agreement.
• The settlement agreement requires the wind-down of Oracle PeopleSoft services by July 31, 2028.
• The company may face future contempt proceedings from Oracle related to injunctions from prior litigation.
• The company is subject to other litigation and claims incident to the ordinary course of business, which management believes will not have a material adverse effect.

Related Party Transactions

• An affiliate of Adams Street Partners, which owns approximately 25.2% of the company's common stock, has a member on the company's Board of Directors.

Stakeholder Impact

• Shareholders may see continued stock price volatility and potential dilution from equity-based compensation.
• Clients may benefit from continued cost savings and innovative solutions, but face potential disruption from the Oracle PeopleSoft wind-down.
• Employees may be impacted by ongoing restructuring and the need for new skill sets related to AI technologies.
• Creditors are subject to the company's debt covenants and financial performance.

Next Steps

• Continue the wind-down of Oracle PeopleSoft support and services by July 31, 2028.
• Invest in research and development for existing and new products, including Agentic AI solutions.
• Continue to expand sales and marketing capabilities to drive future revenue growth.
• Monitor and manage gross margins as the company invests in a broader mix of products and services.
• Evaluate opportunities for future acquisitions or investments in complementary businesses.

Key Dates

Recommendation

The company shows steady revenue growth and maintains a strong liquidity position, but the significant decrease in net income, increased operating expenses, and the strategic wind-down of a key service line present considerable headwinds. While the focus on AI and new solutions is positive, the near-term financial performance and execution risk associated with the PeopleSoft wind-down warrant a cautious approach.

Keywords

Enterprise Software Support, Third-Party Support, Rimini Street, Oracle Support, SAP Support, Managed Services, Agentic AI ERP, Software Maintenance