Rimini Street Inc Class A Stock

Thank you. Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Q2 2026 Earnings Conference Call. [Operator Instructions] 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. Please go ahead.

Thank you, operator. I'd like to welcome everyone to Rimini Street's fiscal second quarter 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 June 30, 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.

We encourage you to review our most recent SEC filings, including the Form 10-Q filed today, a detailed discussion of the risk factors that may affect their 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.

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 4 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. Second quarter 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.

During the quarter, we closed 14 new client transactions with over $1 million in TCV, totaling $30 million and added 58 new logos. 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. 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.

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, 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. 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. 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 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. 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 3-step methodology called the Rimini SmartPath.

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. 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, quote, 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.

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, 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. 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 Street 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. 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 problems, 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.

VIVERE 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. 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, 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 help eliminate unnecessary third-party software costs, implement critical training and communication 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. Cochlear Limited, an Australian hearing technology leader, used 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 December 2025 Investor Day. 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 drives down total operating costs, improves profitability, and enhances competitive advantage all within their current budget. Now, over to you, Michael.

Thank you, Seth, and thank you for joining us, everyone. Here are the results. We delivered strong second quarter 2026 results as positive growth drivers over the past 4 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 June 30, 2026. 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. 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. 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 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%. The past 2 quarters included timing differences related to client renewals, so first-half results provide a more complete view. First half billings grew 3.2% year-over-year, and excluding PeopleSoft products grew 4.7%. The 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%. On a non-GAAP 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. 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 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's second quarter. 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 the second quarter, representing 9.5% of revenue. This compares to $14 million, or 13.4% of revenue, in the prior year's second quarter. 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. Operating cash flow for the [indiscernible] 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.

Deferred revenue as of June 30, 2026, was $267.1 million, up from $262.9 million in the prior year's 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 30, 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. 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 third quarter 2026 revenue to be in the range of $110 million 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, July 30, 2026, with the U.S. Securities and Exchange Commission. This concludes our prepared remarks. Operator will now take questions. Thank you.

[Operator Instructions] Your first question comes from the line of Richard Baldry from ROTH Capital Partners. Please go ahead.

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

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'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 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. And it's very accurate, in fact, what we've seen over the last couple of years that we've used it. 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. 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. And so I think overall, look at the more 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 costs and more leverage as we move forward in the coming years.

Can you talk a little bit about any color you can give us on top of the funnel, prospect 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, there's some natural growth of the addressable market as a willingly addressable market. And I guess we could look at it.

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. Number 1, 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, 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. The boomerang effect that some refer to as the boomerang effect. And I think that that is the single biggest driver of up to the top of the funnel. And I think there's 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. 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.

Last for me, on the balance sheet, you knocked out $10 million in debt ahead of schedule. You've been pretty steadily 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?

Yes, Rich, Michael here. As you noted, right, we've been heavily concentrated on one of our 2 levers we've identified in capital return, the debt repayment so far this year. Last 2 quarters of last year, the lower amount share repurchases. We continue to evaluate, but looking forward, we may see a shift in how we allocate sitting here today. So still the 2 levers, but may see a shift moving forward.

Congrats on a good quarter.

Thank you. And your next question comes from the line of Andrew Sherman from TD Cowen.

Seth, I wasn't sure if I heard a whole lot on the go-to-market side of the prepared remarks. How's the sales hiring? Where do you stand versus plan on that? And how are some of the newer reps ramping to productivity?

Thanks, Andrew. I think we're doing okay. I think we have, 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. 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 2, 3 years ago. I do think some of the reps aren't going to make that turn. I think that's not just true for us.

I think you're going to see that across technology, but 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. Those who could not make that turn were not doing as well. And so our sales numbers, the total number of salespeople, is increasing. 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 bullish enough about the business to begin the aggressive hiring of sellers, but not just sellers. A lot of different sales. 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. 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, very big part. As you know, we expect a substantial amount of our pipe to come from indirect channel, so 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 sale.

That's great. And then Michael, just on the Q3 guide and the implied Q4, just would 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 second half that'll help us with the second half numbers. That'd be great.

Andrew, in highlighting as Seth noted, we outlined that the building of our positive year-over-year metrics in 4 quarters in a row, our retention rate, a key area that has the 9 in front of it. We also highlighted relative to billings, renewals timing has impacted the quarter-over-quarter ratio. But 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 second half of the year.

Thank you. And your next question comes from the line of Jeff Van Rhee from Craig-Hallum Capital Group. Please go ahead.

So, 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 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.

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. And 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.

And I think that they're good. I think that the decisions, of course, they're not everything we all would have wanted, 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. And yes, that does have 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.

Yes, I would think it would 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. Obviously, you've had very steady build in that 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?

Yes, 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 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. Now, this is not an easy time, Jeff, as you know. There's a lot of investment being made in AI and 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. 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. 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. 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 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. 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. So I feel that we are really in a good place as we give our reiterated guidance.

Yes, 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 comes down in '27?

I think we're at around the peak. There's still some pieces we're putting in place, but we launched a brand new service, our Rimini 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. But as a percent, 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. So 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. That is the challenge in the growth model that we're balancing right now.

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

Well, I definitely think we're seeing increases. We're doing $1 million 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, 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. But we are making progress. We are absolutely working with dozens of partners on a global basis, and then we're really solidifying around our top global strategic partners, and we'll have more announcements around that very soon.

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

Thank you. And your next question comes from the line of [ Alex Furman ] from [ Lissette Capital Markets ]. Please go ahead.

It looks like the last couple of years you lost about 30 clients or so in the second quarter before getting back to net client acquisition in the back half of the year. This year you actually gained a few in the second quarter. Can you talk a little bit about that? What's driving that? Has that been, you know, some of 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 little sequential uptick in retention starting to show in the numbers a little bit more?

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 the second quarter usually. 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.

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. And that has yielded, especially in North America, significant growth in new logo acquisitions. Of course, we all know there's no perfect sales model. That's why we all change them around as we evolve our businesses. But this model has worked very well for Rimini over the last couple of years. We can see the results.

Okay, that's really good to hear. Thank you for that, Seth.

Thank you. And our next question comes from the line of [ Frank Slinger ] from Alliance Global Partners. Please go ahead.

Hi, this is [ Shrey ]. I'm in for Brian. During your last Investor 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?

Oh, great. 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, and so 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 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 Govern solutions that we have clients who have been waiting to deploy.

Thank you. That's helpful. 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?

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. So it's already very much a situation where we can both come in and work to expand our footprints together. 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.

Got it. Thank you.

Thank you. And there are no further questions at this time. I will now hand the call back to Mr. Seth Ravin for any closing remarks.

Great. Well, thank you, everyone. Appreciate you joining us. And I want to thank our clients for all their trust in their business and allowing us to be part of their innovation story. 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. We look forward to talking to you at our third quarter call. Thank you very much.

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

Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Q1 2026 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, April 30, 2026. I'll now turn the call over to Dean Pohl, Vice President, Treasurer and Head of Investor Relations. Please go ahead.

Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal First Quarter 2026 Earnings Conference Call. On the call with me today is Seth Ravin, our CEO and President; and Michael Perica, our CFO. Today, we issued our earnings press release for the first quarter ending March 31, 2026, a copy of which can be found on our website under the Investor Relations section. 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 is also included in the press release and our website under the heading 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 forward-looking statements are subject to risks and uncertainties that may cause results to differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-Q filed today for a discussion of risks 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.

Thank you, Dean, and thank you, everyone, for joining us. First quarter results. Our first quarter results reflect continued growth and accelerating momentum. A growing number of organizations are leveraging Rimini support and our proven Rimini Smart Path to execute their global ERP and operational transaction processes faster, better and cheaper with more agility and speed to value, all within existing budgets. Rimini Street can help just about any organization lower its total operating costs and improve competitive advantage or improve return for government constituents using technology.

We delivered strong growth in adjusted calculated billings and adjusted ARR and expanded remaining performance obligations year-over-year, adjusted for the Oracle PeopleSoft support and services wind down and which includes new logo and renewal subscription sales. We also continue to make additional strategic investments in our next-generation Rimini Agentic AI ERP solutions that can be quickly deployed over existing ERP software without the cost and risk of unnecessary upgrades, migrations or re-platforming.

During the quarter, we closed 11 new client transactions with over $1 million in TCV and totaling $33 million compared to 5 transactions totaling $5.6 million during the same period last year. We added 50 new logos that included household global and regional brand wins. The combined strength of the second half of 2025 and first quarter 2026 results give us continued confidence in delivering growth in fiscal 2026, positioning the company for increased growth and profitability. We are continuing our evolution beyond our position as the premier third-party enterprise software support provider to a leader in also helping clients modernize their existing business transaction systems in the AI era.

We are now the software support and Agentic AI ERP company. Today, more than 1,900 Rimini Street employees in 22 countries are helping organizations avoid unnecessary, costly and risky ERP and other enterprise software upgrades, migrations and re-platformings that often deliver low ROI and offer little competitive advantage. Instead, Organizations can invest in modernization of their existing systems, leveraging next-generation Rimini Agentic AI ERP solutions that can be quickly and economically deployed over their current ERP and other enterprise software and deliver real competitive advantage. We believe we can help organizations achieve significant IT operating cost savings, improve profitability, enhance competitive advantage and accelerate growth.

Our clients have already realized over $10 billion in operational savings. Rimini Street leads an Agentic AI ERP. We are helping clients set a new vision, technical and functional path forward from their current vendor ERP software release. A path 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 and 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. The Rimini Smart Path is our proprietary proven 3-step methodology that clients can use 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.

Rimini Agentic UX is 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 re-platforming project.

Client success stories. Rimini Street is 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 without disruptive, costly or risky ERP software upgrade migrations or re-platforming. Here are a few examples of how Rimini Street solutions for SAP, Oracle and VMware software are enabling innovation, transforming an improved competitive advantage for clients. Cubic Corporation, a U.S. defense and transportation technology company, so that partnering with Rimini Street allowed them to gain full control of their SAP road map, avoid a costly S/4HANA upgrade and reallocate savings and internal capacity towards automation, AI and broader modernization initiatives.

Flexitech, a French automotive products company, said that they chose Rimini Support to help reduce risk and operational disruption in its SAP environment, strengthening cybersecurity posture and accelerating compliance readiness while enabling the reallocation of savings towards R&D and modernization programs. Cleanera, a South Korean paper and hygiene products company, said they were able to cut SAP and Oracle vendor maintenance costs by approximately 50% with Rimini Street, stabilizing their core ERP environment and freeing budget and talent to accelerate AI, analytics, cloud expansion and IoT-driven operational improvements. Elmort, a Brazilian industrial company, said that unifying support across VMware and SAP with Rimini Street created the opportunity to increase operational stability and security while redirecting budget internal resources from maintenance to sustainability and growth initiatives.

Partners, alliances and channels. We continued strengthening and maturing our indirect sales ecosystem, including adding new partner managers for strategic technology, services and channel relationships. During the quarter, we closed accretive sales transactions globally that we do not believe we would have otherwise closed without partners. 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. The ecosystem is becoming a strategic multiplier for us, accelerating adoption, expanding influence and enabling shared go-to-market opportunities.

Summary. We are focused on accelerating growth, improving profitability and delivering shareholder return. We plan to leverage Rimini Street's proprietary unique and proven Smart Path methodology, service portfolio and capabilities to help a growing list of clients take back control of their technology road map and spending and successfully navigate business and technical complexity in the age of AI.

Now over to you, Michael.

Thank you, Seth, and thank you for joining us, everyone. Q1 results. Our first quarter results reflect solid execution and continued sign of momentum, highlighted by remaining performance obligations, RPO, and billings growth, along with a return to top line growth despite the headwinds from the wind-down of support and services for Oracle's PeopleSoft software. Our strong operating cash flow and cash position enabled us to comfortably make $10 million of additional voluntary principal prepayments that reduced our debt balance to $58.4 million and increased our net cash position to $73.8 million at the end of the quarter. Revenue for the first quarter was $105.5 million, a year-over-year increase of 1.2%. Excluding support services for PeopleSoft products, revenue increased by 5.2% year-over-year.

FX movements impacted first quarter revenue negatively by 0.5%. Annualized recurring revenue was $400.8 million for the first quarter, a year-over-year increase of 1.2%. Our revenue retention rate for service subscriptions, which makes up 95% of our revenue, was 88%, with approximately 81% of subscription revenue noncancelable for at least 12 months. Billings for the first quarter were $95.3 million, an increase of 19.9% year-over-year. When excluding billings associated with support services for PeopleSoft products, the year-over-year increase was 22.9%. Gross margin was 59.0% of revenue for the first quarter compared to 61.0% of revenue for the prior year first quarter.

On a non-GAAP basis, which excludes stock-based compensation expense, gross margin was 59.5% of revenue for the first quarter compared to 61.5% of revenue for the prior year first quarter. Our gross margin in the period was negatively impacted by investments pulled forward in the year to take advantage of market opportunities and select non-subscription engagements that had large, front-loaded start-up costs. Nonetheless, as noted during our Investor Day presentation last December, our use of innovation and other analytics deployed on top of our existing systems of record provides us with confidence in our ability to build from this current gross margin level and achieve the targets we outlined.

Operating expenses. Reorganization charges associated with optimization costs for the first quarter were $407,000. Also, we have carved out our R&D expenditures of $571,000 in the quarter in a separate line item that reflects our ongoing and increasing research and development activity for our proprietary historical offerings as well as our burgeoning Agentic AI ERP and UX solutions. Sales and marketing expense as a percentage of revenue was 36.6% for the first quarter compared to 32.9% of revenue for the prior year first quarter. On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expense as a percentage of revenue was 35.8% for the first quarter compared to 32% of revenue for the prior year first quarter.

Our sales and marketing costs in the period was negatively impacted by investments pulled forward in the year to take advantage of market opportunities. General and administrative expenses as a percentage of revenue was 16.9% of revenue for the first quarter compared to 16.8% of revenue for the prior year first quarter. On a non-GAAP basis, which excludes stock-based compensation expense, G&A was 15.7% of revenue for the first quarter compared to 15.6% of revenue for the prior year first quarter. As we stated in our most recent earnings call, we do not expect litigation expenses to be material on a going-forward basis and are now including any residual legal costs in the G&A line item in our income statement.

Net income attributable to shareholders for the first quarter was $1.4 million or $0.01 per diluted share compared to the prior year first quarter of $0.04 per diluted share. On a non-GAAP basis, net income for the first quarter was $4 million or $0.04 per diluted share compared to the first quarter of the prior year of $0.10 per diluted share. Adjusted EBITDA, as defined in our earnings release and now excludes unrealized FX translation adjustments was $8.9 million for the first quarter or 8.4% of revenue compared to the prior year's first quarter of $15.7 million or 15.1% of revenue.

Balance sheet. We ended the first quarter of 2026 with a cash balance of $132.2 million compared to $122.6 million of cash for the prior year first quarter. On a cash flow basis, first quarter operating cash flow increased $24.5 million compared to the prior year's first quarter increase of $33.7 million. Deferred revenue as of March 31, 2026, was $277.3 million compared to deferred revenue of $256.4 million for the prior year first quarter. Remaining performance obligations, RPO, which includes the sum of billed deferred revenue, contract assets and noncancelable future revenue was $643.6 million as of March 31, 2026, compared to $553.1 million for the prior year first quarter, an increase of 16.4%. When excluding RPO relating to support services for PeopleSoft products, the year-end balance increased 18.2%, reflecting our building momentum with both new bookings growth and longer duration commitments.

PeopleSoft support wind-down update. As we discussed during previous quarter's earnings conference calls, our July 2025 settlement agreement with Oracle provides amongst other obligations and terms between the parties that the company will complete its previously announced wind-down of its support and services for Oracle's PeopleSoft software no later than July 31, 2028. We have made progress in reducing both the number of PeopleSoft's software support clients and related revenues since announcing the wind down. Revenue from PeopleSoft software support services was 3% of revenue for the first quarter compared to approximately 7% for the previous year first quarter and down from 8% of revenue when we began the wind-down process during the second half of 2024.

Business outlook. The company is providing second quarter 2026 revenue guidance to be in the range of $106 million to $108 million and reiterating the full year 2026 guidance provided at our Investor Day in December 2025 of revenue growth in the 4% to 6% range and adjusted EBITDA margins in the 12.5% to 15.5% range, combined to achieve Rule of 20. For additional information, please see the disclosures in our Form 10-Q filed today, April 30, 2026, with the U.S. Securities and Exchange Commission.

This concludes our prepared remarks. Operator, we'll now take questions.

[Operator Instructions] Our first question comes from the line of Brian Kinstlinger from Alliance Global Partners.

You talked about stronger bookings trends that have started since the second half of '25. Can you provide any quantifiable context maybe year-over-year comparisons? Are there booking totals you can provide or a book-to-bill? And then lastly, maybe from a qualitative standpoint, discuss domestic versus international.

Sure, Brian. Seth here. As we said starting mid-last year, we started to see an uptick, and we've shown it, of course, in the billings and bookings numbers. The compares, I think, have already been in each of the releases. So, the team will be happy to get you those at a later date. But I think we're seeing continued growing demand. We're seeing continued growing pipelines. And those are now converting as you're seeing into larger contracts. We're seeing longer-term contracts. Just look at the number of deals with TCV over $1 million, even in North America, where we had 0 of those deals in Q1 of last year, 60% of those deals were in North America this year. So, we're seeing all different indicators of continued growing demand and our ability to execute continues to get better and better. So, we're pleased with what we saw happening in Q1 and how it sets us up even for the full year.

And then a follow-up on that. You mentioned in your prepared remarks and just now as well about the longer duration. I think traditionally, you've had 1-year contracts, correct me if I'm wrong, whereas the renewable for every year. What's happening now? What are you seeing in terms of duration? Or maybe dig a little deeper into what you're describing as longer duration?

Well, I think our average contract length before used to be something short of 3 years, about 2.5, 2.6 years for a new contract. And we're seeing longer-term contracts being signed. And I think the indication of that is we're watching customers think about a much longer term for this next phase of technology transition. And they're looking at their existing systems. They're looking at the amount of change that's coming their way or being pushed their way, realizing a lot of it isn't going to generate the kind of return on investment or the competitive advantage they need. And they're looking to us for longer-term solutions. And I think that's what you're seeing play out in the contracts.

Okay. My last question is, last quarter, you highlighted 26 customers that were testing their Argentic AI solutions. Maybe you can update us on that number, share what feedback you're getting from them and timelines to production? And then lastly, how would you want to be measured over the next 18 months on your progress of that new solution? Is it improving organic growth rates? Are you going to discuss the revenue contribution? Just how should investors think about that?

Well, I think how we should think about it is exactly based on the guidance. It's about growth. The fact that we're returning to growth against the headwinds of the PeopleSoft wind down is certainly a nice indicator. And I think the fact that we would return to growth with a mid-single digit this year, as we said, a Rule of 20 is what we're aiming for between the top line and a bottom line, want to give ourselves a little range and flexibility between the top line and bottom line. And then look to us to get to that Rule of 40 that we want to get to, which, of course, requires us to see a double-digit growth on the top line and a double-digit return on the bottom. So, I think those are very, very key. The other part is, obviously, we have investors who want to see shareholder return. We believe that we sit on surplus cash. We believe that, that should be returned to shareholders in one way or another. Whether that's through stock buybacks, whether that's through paying down debt, but increasing shareholder value is a key component. So, I think those are the measures that we're looking at in terms of growing the business.

Now when it comes to the world of Agentic AI and Agentic AI ERP, there's 2 things you need to remember. There's one, there's the fact that we create a path and we create a vision that customers can follow that doesn't require any future return to the vendor. That's very, very key. That is a big change from prior years where customers often thought of us as more of a temporary detour for some number of years and then a return to the vendor to get their next level of innovation. That's no longer the case. And that's why you're watching us win bigger and bigger contracts because customers are liking what we put on the table as a path and a strategy that does not lead them back to the software vendor in a future year. And that is changing the game dramatically for us on the ground.

Your next question comes from the line of Jeff Van Rhee from Craig-Hallum.

Some great underlying metrics here. It looks like some good momentum and good to see some ARR growth year-over-year. Seth, you were just touching on leverage, and I want to revisit that. Gross margins, this is on the lower end of anything I've seen in quite a while. And Michael, I think you referenced there were some pull forwards for some, I guess, what I would characterize as sounds like unexpected business opportunities. I think you -- S&M is up from 34% to 37% year-over-year, but revenue is generally flat. And so, given that, I'm just trying to understand around the -- number one, what is this near-term opportunity that you're seeing that you've got to invest in right now, given that you're not raising the overall outlook? Maybe we could just start there and understand those.

Sure, Jeff. So, first, yes, we made a decision to pull forward some expense from future quarters. But we, of course, reiterated guidance being on target with what we provided in the Investor Day in December. And the things we're seeing, for example, we're investing in our U.S. federal team, brand-new team. We see a lot of opportunity in the federal government space with our new GSA contract, our partners that we're putting in place. And so, there's a lot going on in that part of the world. But there's also a significant amount of work for us to do with PE firms. And we've got our first Vice President of PE sales on board because today, we service accounts that have over 20 different major PE firms represented, and we're going to go in and try and work with these firms to work on their bigger portfolios in general.

So that, again, is another expansion area for us to build on. And so those investments were being made. We also, of course, are investing in our Agentic AI ERP solutions. And you saw the first time we have an R&D line item because we're making some investments at the product level. So those are also taking place. We also expanded our sales team. We're over 80 sellers now. And so, we've moved our numbers back up from the mid-70s when we last had our last call for end of year. And so, we're continuing to expand and invest in sales and marketing as well. So, you saw temporarily the expenses went up as a percent of revenue, but we expect those will normalize throughout the year.

And so then just to follow on to that, given all of those incremental revenue opportunities and in light of the revenue outperformance in the quarter relative to the guide, you didn't flow it through to the annual guide. So just help me understand what was in play there.

Well, I think we want to just take it very carefully. As you know, we didn't grow for a while there, and we're back and feeling very positive and very confident in our growth for the year and hence, the mid-single-digit growth targets that we set out there. But we want to just get another quarter under the belt and think about that before we talk about any kind of raise in the guidance.

Okay. And then maybe just last, Seth, on customer retention. I know it's a focus and the Agentic UX and some other things probably have some opportunities to help there. But how should we think about churn over the next several quarters? This retention number has been at 88% here for at least a few quarters. Just any big churn events coming up here? And how do you think about retention next several quarters?

Well, the 88%, remember, is a TTM, rearview view of the total number. We feel very good. And as I noted in the prepared remarks, we beat our internal numbers on the retention number. It's just going to take a while to show up in the TTM number. I think when you look at the RPO, some of those are even related to renewals. So, we're seeing good, strong renewals out of the first quarter and feeling good about where we're looking to the year. Our goal is, of course, to see that TTM return to over a 90% number. And we feel that we should start to see it show up in the metrics starting in the next quarter or so.

Your next question comes from the line of Alex Fuhrman from Lucid Capital Markets.

Congratulations on the return to growth here in Q1. It looks like here in the first quarter, you added about 30 active clients relative to where you ended 2025. The last 3 years, give or take, Q1 has been about flat in terms of customer acquisition. Is this just more of the same what we've been kind of talking about, increased demand for your AI solutions? Or are we maybe starting to see more of a year-round sales and adoption process as your clients are starting to implement more AI?

Sure. And thanks. We absolutely are seeing improvements in everything from the number of leads coming in to lead conversion to opportunity, opportunity to closes. So higher quality pipeline, higher quality execution, but the demand environment is absolutely growing as well. There is no doubt that the world of AI has changed the dynamics from a technological standpoint. You're also watching, as Rimini Street had predicted many years ago, the breakup of these big ERP monolithic systems into smaller pieces, we call it composable ERP, those pieces are breaking down further. And what this means is that businesses and government organizations are now able to buy pieces, a la carte, let's say, versus having to buy them all in one big package. And we're well positioned, maybe the best position to help customers through all these technological transitions, including the thoughtful implementation of AI where it's appropriate.

And because our #1 objective is driving down the total cost of operations and improving profitability or improving share return for government organizations, we think we are well-positioned to help customers for the long term, and we're talking 5, 10, 15, 20 years through this next phase of transition. So, I think all of that coming together is what we're watching it showing up in the numbers.

Okay. That's really helpful. Thanks for all that color. And then I see you have a new line item here, research and development. It sounds like that's going to be more of a focus for the company going forward. How much should we expect to see there -- going forward there this year and in the future?

Well, I think this -- I'm sorry. No, go ahead.

I was just going to say that we expect to continue to make investments in this space because we've been a services company. We've always had products, but the opportunity for us to develop more in the product and the licensing arena for subscription licenses has increased. And so, we're going to make those investments. But keep in mind, we're staying within our guidance limits. We're not talking about changing guidance even with the R&D line item. And I'm sorry, Michael, you want to add there?

Yes. I just want to augment the point that Seth made, Alex, at the end that this was incorporated overall in our guidance. We do expect it to creep up throughout the year and can exit the year about 1% or so. That's how we're looking at it to augment these key technological investments, both with what we have existing and these new offerings that we're talking about.

Your next question comes from the line of Brian Kinstlinger from Alliance Global Partners.

I just wanted to confirm that today, the revenue from the Agentic AI solution is quite modest, but that we'll begin to see that contribution pick up maybe in the second half of the year into next year? And then my second part of my question is, will there eventually be a report or some kind of metric that helps investors frame how much revenue is coming from that new solution?

Sure, Brian. Of course, it's not what we call a material amount yet from the Agentic AI ERP solutions themselves. But 2 ways to think about this, there is the actual revenue that's accretive that comes from solutions and sales and licensing and subscriptions in the Agentic bucket. That's a new set of products and services. There's a second more important one, which is already at work here. And that is the fact that we have created a vision and we have a path and we have a solution going forward for customers that leads them away from having to do vendor upgrades and migrations in the future and allows them to drive their existing systems with modernization on that platform, that alone is what's driving, we believe, underneath a lot of the extra demand we're seeing because that is creating new demand that we did not have before, and it's bringing customers back to the table who have now come back to us to join Rimini Street who before had turned us down, proposals that they didn't move forward with.

We're now able to show them a path forward with an Agentic capability that says, okay, we'll go ahead and move forward at this time. So don't underestimate the very fact that we have this path and this vision and technology, that alone is driving increased sales.

There are no further questions at this time. I will now turn the call over to Seth Ravin, CEO. Please continue.

Great. Well, thank you very much, and thanks, everyone, for joining us, and we will see you on the next earnings call. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, February 19, 2026.

I would now like to turn the conference over to Dean Pohl, VP, Treasurer and Investor Relations. Please go ahead.

Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal Fourth Quarter 2025 Earnings Conference Call. On the call with me today is Seth Ravin, our CEO and President; and Michael Perica, our CFO. Today, we issued our earnings press release for the fourth quarter and fiscal year ending December 31, 2025, a copy of which can be found on our website under the Investor Relations section. 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 is also included in the press release and our website under the heading 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 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 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. Fourth quarter and full year results. Our fourth quarter results reflect solid execution and continued accelerating sales growth adjusted for the Oracle PeopleSoft support and services wind down. We grew our core Rimini Support subscription billings and launched our next-generation Agentic AI ERP solutions.

Overall sales bookings and billings continue to improve, and we delivered strong ARR subscription renewals as well. We closed 19 new client transactions over $1 million in TCV and totaling $58.1 million compared to 22 transactions totaling $51.9 million last year. We added 73 new logos that included household global and regional brand wins. We saw accelerating momentum in bookings, pipeline and RPO throughout the second half of 2025, reinforcing our confidence in delivering growth in 2026.

ERP software is dead, the rise of Agentic AI ERP. ERP software is peaking technically, and we will deliver new ERP capabilities and ERP process execution faster, better and cheaper with more agility and speed to market, leveraging Rimini Street's Agentic AI ERP solutions. Meanwhile, we will keep existing ERP software releases delivering value for many years to come at significant savings.

Our Agentic AI ERP solutions can be easily and quickly deployed over the top of existing ERP software without the cost or risk of unnecessary ERP software upgrades, migrations or replatforming. Rimini Street can reduce operating costs by up to 90% for existing ERP software landscapes, allowing clients to bank the savings or reinvest the savings into Rimini Street's Agentic AI solutions to modernize rather than replace their current ERP infrastructure.

We're positioning Rimini Street as the bridge between existing traditional ERP software infrastructure and the capability and benefits of modern AI innovation, and we expect growing subscriptions for both Rimini Support as our core service offering and our new AI for the real-world service offerings to fuel top and bottom line growth in 2026.

Key benefits of Rimini Street's Smart Path vision, model and offerings include funded innovation model. Rimini Street's support model frees up capital that organizations previously spent on mandatory software vendor upgrades, allowing them to reinvest in AI-driven high ROI projects, layering over existing ERP systems. Instead of migrating to new software products, releases or platforms, Rimini Street promotes layering AI and automation on top of existing, customized and stable enterprise ERP software.

Strategic partnerships and alliances. Collaborations with AI platform companies such as ServiceNow allow Rimini Street to offer advanced AI-powered agentic solutions that automate business processes without requiring any upgrades, migrations or replatforming such as having to buy and implement a new SaaS subscription. Innovative support services. Rimini Street uses its own proprietary AI applications, including reductions of more than 23% in case resolution time.

Risk and cost avoidance. Clients can avoid the risks and cost of unnecessary ERP upgrades, migrations and SaaS implementations while receiving support for existing, stable and highly customized code that ERP software vendors often refuse to include in their standard support contracts.

Introducing Rimini Agentic UX solutions powered by ServiceNow. Also during the fourth quarter, we announced the release of our first 20 Rimini Agentic UX solutions developed through our partnership with ServiceNow and designed to deliver Agentic AI ERP capabilities over existing Oracle, SAP and other ERP systems without requiring upgrades or migrations.

These solutions are already in production and are helping clients achieve significant operational gains, including 50% to 60% faster approvals, 70% to 80% reduction in order cycle times, improved audit readiness and greater than 95% data accuracy. Each solution targets a specific ERP process challenge, spanning sales, procurement, logistics, faster data, finance, maintenance and compliance and delivers ROI in days or weeks compared to the months or years required for traditional ERP upgrade or migration projects.

For example, our client Molida Group reported meaningful streamlining of SKU master data creation using Rimini's AI-assisted workflows, validating the platform's ability to simplify historical manual processes. Rimini Street positioned Agentic AI ERP as the next evolution of enterprise systems, arguing traditional ERP software is peaked in value and lacks the agility organizations need. Instead of costly vendor-mandated upgrades, the company's Rimini Smart Path enables clients to redirect existing budgets towards rapid automation and innovation.

Agentic AI ERP transforms ERP from a system of record into a system of action, enabling exponential efficiency gains and empowering organizations to modernize processes, reduce costs and accelerate growth, all without disruption.

Partner and alliance ecosystem progress. We continue strengthening our ecosystem of global partners and alliances, including technology, service and channel relationships. 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. This ecosystem is becoming a strategic multiplier for us, accelerating adoption, expanding influence and enabling shared go-to-market opportunities.

Summary, we will build on our 2025 investments, success and momentum and help clients navigate business and technical complexity in the age of AI, reduce costs, reduce labor requirements and improve operational performance across ERP and enterprise software landscapes, establishing and protecting competitive advantage without software vendor-driven cost, risks or constraints.

Now over to you, Michael.

Thank you, Seth, and thank you for joining us, everyone. Q4 and fiscal 2025 results. Our fourth quarter results reflect solid execution and early signs of momentum, highlighted by record remaining performance obligations, RPO, growing 11.1% year-over-year.

Full year 2026 billings, excluding support services for Oracle PeopleSoft software products, increasing 4.2% and annualized recurring revenue, ARR, increasing 3.1% year-over-year, excluding support services for PeopleSoft products. We ended the year with a strong cash position and a stronger balance sheet. Our capital allocation actions included ongoing share repurchases.

Regarding client retention, as our full suite of support becomes increasingly integrated with our Agentic AI solutions, we are enhancing client retention while providing clients with what we believe is a clear lower risk path to innovation and modernization of their existing ERP environments.

Revenue for the fourth quarter and the full year 2025 was $109.8 million and $421.5 million, respectively, a year-over-year decrease of 3.9% for the quarter and a decrease of 1.7% for the full year. Excluding support services for PeopleSoft products, revenue decreased by 0.4% for the quarter and increased 1% for full year 2025.

Fourth quarter 2025 included a onetime $2.1 million revenue recognition, while fourth quarter 2024 included a onetime revenue recognition of $5.4 million. Excluding all the aforementioned items, Q4 revenue grew 2.6% for the quarter.

Annualized recurring revenue was $411.4 million for the fourth quarter, a year-over-year decrease of 0.8%. Our revenue retention rate for service subscriptions, which makes up 96% of our revenue, was approximately 88%, with approximately 86% of subscription revenue noncancelable for at least 12 months. We note that for the full year 2025, FX movements negatively impacted our total revenue by 0.01% compared to a negative impact of 1.3% for 2024.

Billings for our fourth quarter were $171.3 million, relatively flat year-over-year and full year 2025 billings were $427.9 million, an increase of 1.2%. Full year billings, excluding billings associated with support services for PeopleSoft products, increased by 4.2% on a year-over-year basis. Gross margin was 60.4% of revenue for both the fourth quarter and the full year 2025 compared to 63.7% of revenue for the prior fourth quarter and 60.9% for full year 2024.

On a non-GAAP basis, which excludes stock-based compensation expense, gross margin was 60.8% of revenue for the fourth quarter and 60.9% for full year 2025 compared to 64.0% of revenue for the prior year fourth quarter and 61.3% for full year 2024. As previously mentioned, both the current and prior year fourth quarters included onetime revenue recognition of $2.1 million and $5.4 million, respectively, which positively impacted revenue, gross margin and earnings.

As noted during our Investor Day presentations last December, our use of innovation and other analytics deployed on top of our existing systems of record provides us with confidence in our ability to build from this current gross margin level. Operating expenses. Reorganization charges associated with optimization costs for the fourth quarter were $2.6 million and for full year 2025 were $4.5 million.

Sales and marketing expense as a percentage of revenue was 37.7% for the fourth quarter and 36% for full year 2025 compared to 32.8% of revenue for the prior year fourth quarter and 34.9% for full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expense as a percentage of revenue was 36.8% for the fourth quarter and 35% for full year 2025 compared to 32.2% of revenue for the prior year fourth quarter and 34.4% for full year 2024.

General and administrative expenses as a percentage of revenue, excluding outside litigation costs, was 15.8% of revenue for the fourth quarter and 16.6% for full year 2025 compared to 16.3% of revenue for the prior year fourth quarter and 17% for the full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense and litigation costs, G&A was 14.7% of revenue for the fourth quarter and 15.4% for full year 2025 compared to 15.1% of revenue for the prior year fourth quarter and 15.7% for full year 2024.

Outside litigation cost was $21,000 for the fourth quarter and for full year 2025 was $4.8 million compared to $675,000 for the prior year fourth quarter and $6.1 million for full year 2024. During 2025, as part of the Oracle litigation settlement, we received $37.9 million of the $58.7 million in legal fees we previously paid to Oracle during 2024. Going forward, we do not expect litigation expenses to be material and will be included in the G&A line item moving forward, obviating the need to disclose these expenses separately in our income statement.

Net income attributable to shareholders for the fourth quarter was $724,000 or $0.01 per diluted share compared to the prior year fourth quarter of $0.07 per diluted share. Full year 2025 net income was $0.39 per diluted share compared to a net loss of $0.40 per diluted share for full year 2024. On a non-GAAP basis, net income for the fourth quarter was $6 million or $0.06 per diluted share compared to the prior year fourth quarter of $0.12 per diluted share.

Full year 2025 non-GAAP net income was $0.23 per diluted share compared to net income of $0.48 per diluted share for full year 2024. Our non-GAAP operating margin, which excludes outside litigation spend, reorganization costs and stock-based compensation, was 9.3% of revenue for the fourth quarter and 10.5% for full year 2025 compared to 16.7% for the prior year fourth quarter and 11.1% for full year 2024.

Adjusted EBITDA, as defined in our earnings release, was $11.5 million for the fourth quarter or 10.4% of revenue compared to the prior year fourth quarter of $20 million or 17.5% of revenue. Full year 2025 adjusted EBITDA was $49.8 million or 11.8% of revenue compared to adjusted EBITDA of $53.1 million or 12.4% of revenue for full year 2024. Balance sheet. We ended the fourth quarter of 2025 with a cash balance of $120 million compared to $88.8 million of cash for the prior year fourth quarter.

On a cash flow basis, for full year 2025, operating cash flow increased $60.2 million compared to the prior year 2024 decrease of $38.8 million. The results include litigation settlement proceeds of $37.9 million during 2025 and litigation-related expenses of $58.7 million during 2024. Additionally, the effect of foreign currency translation was favorable by $2.8 million and unfavorable by $8.2 million for full year 2025 and 2024, respectively.

Deferred revenue as of December 31, 2025, was $288 million compared to deferred revenue of $281 million for prior year 2024. Remaining performance obligations, RPO, which includes the sum of billed deferred revenue, contract assets and noncancelable future revenue was $653 million as of December 31, 2025, compared to $588 million for prior year 2024, an increase of 11%. When excluding RPO related to support services for PeopleSoft products, the year-end balance increased 12%, reflecting our building momentum with both new bookings growth and longer duration commitments.

PeopleSoft support wind-down update. As we discussed during last quarter's earnings conference call, our settlement agreement with Oracle provides, amongst other obligations and terms between the parties that the company will complete its previously announced wind down of its support and services for Oracle's PeopleSoft software no later than July 31, 2028.

We have made progress in reducing both the number of PeopleSoft support clients and related revenues since announcing the wind down. Revenue from PeopleSoft Support services was 4% of revenue for the fourth quarter and 5% for full year 2025, down from 8% of revenue when we began the wind down during the second half of 2024.

Business outlook. The company is providing first quarter 2026 revenue guidance to be in the range of $101.5 million to $103.5 million and reiterating full year 2026 guidance as communicated at our Investor Day for revenue growth in the 4% to 6% range with adjusted EBITDA margins in the 12.5% to 15.5% range.

For additional information, please see the disclosures in our annual report on Form 10-K filed today, February 19, 2026, with the U.S. Securities and Exchange Commission.

This concludes our prepared remarks. Operator, we'll now take questions.

[Operator Instructions] Your first question comes from the line of Brian Kinstlinger from AGP.

The implied revenue change in the first quarter of '26 is about a 1.5% year-over-year decline, plus or minus. the obvious math is that the year-over-year comparisons are going to have to grow more than 4% to 6% for the remaining 3 quarters in 2026. So I'm curious as to the visibility of this, not only return to growth, but exiting the year close to 6%. Is it supported by expected new business wins or already signed business wins? And then remind us, once a contract has been awarded to Rimini, whether it's traditional maintenance or your new Agentic AI offering, how quickly does it begin and then ramp?

Sure, Brian. Good to hear from you. We expect that the Q1 numbers will obviously be a component of what was signed in Q4 because these are subscription contracts rolling into Q1 and of course, business that we would expect is already closed. So given that and where we report versus Q1, we do expect that these numbers are very solid. That's why the range is pretty tight. I'll let Michael go ahead and add on top of that.

Yes, Brian. would keep in mind, of course, that there is the PeopleSoft component in that guidance. This is on a GAAP perspective, right? So when excluding into Q1, the PeopleSoft component, which will be down year-over-year and expected down sequentially as we run off we would -- we do expect it to be a growth period. Now for the remainder of the year, the answer is certainly, we do expect an acceleration. And we have, I would say, improved visibility relative to entering the year in the last couple of years. So certainly a higher confidence factor in our top line guidance.

What gives you that visibility? Is it a backlog? You've already won contracts? Is it you're excited about the new product and new salespeople? What gives you that improved visibility, particularly?

No, go ahead, Michael.

Certainly highlighting, as we noted, the momentum. We've had a few quarters in a row here with our growing TCV, obviously laying down the foundation, giving us a higher base. The sales momentum that has been built by Mr. Hershkowitz, and with Seth as well. That, as well as our expanded suite of offerings, the conversations that we're having with our clients with regard to alternate road maps are giving us the combined increased confidence in this year.

On top of that, Brian, was the -- if you look at the close rates in the fourth quarter, we actually increased our close rates to over 30% of pipeline. So I think we saw, again, a better visibility, as Michael was saying, not only around the pipeline, but a better confidence in the future ability of the close rates based on growing win rates against those pipes.

Okay. Just the last part of the question. Suppose you win one of these Agentic AI projects, if you will, or contracts, how quickly does that contract start? And how quickly does it ramp? And are these very sizable contracts that will move the needle? Or are they going to start small?

Well, I think they're going to be all different sizes, Brian. I mean we've been doing projects already on Agentic AI. We've already been doing them for several months. Those projects have bringing -- they're bringing in both professional service revenue, which you get right away because we're delivering the service, being able to take that revenue. And then there are subscription components, which could then take a little longer to ramp in terms of the revenue. So I think you're going to get a mix of services that come in with each of these projects. And that means we should see accretive capabilities faster than you normally would just under the subscription agreements.

Your next question comes from the line of Richard Baldry from ROTH Capital Partners.

We look at both the COGS line and the sales and marketing lines, the absolute dollar spending came in pretty well above recent trending levels. Are there any onetime items in there? Or do you view this as sort of a new level to hit ahead? And then maybe more specifically in the sales and marketing, how much of that is maybe new heads being brought on or as a result of better billings?

Sure, Rich. I think you're seeing an investment in both points. I think you're seeing us ramp up a little bit in the sales and marketing because we have new products and services to bring to market. So you're definitely going to see that. And when you look at 2026, we're looking at going from roughly mid-70s in terms of number of sellers at the company in 2025. We're in the process of hiring roughly 20 new sellers to get us into the early 90s so that we can be in a position to meet the demands that we see coming down in the pipeline.

We also took a step of raising quotas for our sellers around the world, averaging 12% to 15% increases across the board. So we're doing several things to increase quota-carrying capacity. We also increased our marketing spend a bit just because we're launching the whole Agentic line. that, of course, takes some money to go out there and get the customer base moving to get the pipelines built. Those are not new levels that we're expecting to keep.

We have always said that we expect eventually at scale, which we've described in the past as being somewhere around $1 billion of annualized sales that we're going to be in a position to see somewhere around the mid-30s, 33% to 35%, somewhere in that range. As far as G&A, we're going to continue to drive down costs. The litigation costs have come down substantially. We've even reduced the size of our internal litigation team, but there are still costs of compliance and wind downs of PeopleSoft, et cetera, that will continue on for at least the next couple of years.

And then when you look at any preliminary evaluation of the sales pipelines or win rates in the early stages of litigation being behind you, are there any changes or like top of funnel new logo trending that is you think you can sort of tie to the exit from the litigation past?

I definitely do, Rich. I think, again, it's more anecdotal. It's very hard to statistically tie it. But I think if you look at the fact that we reached a settlement in July of 2025, and you look at the increase in pipes, you look at the increase in win rates, the fact that we're making these additional moves and making investments in growing the sales team, I think that we're seeing win rates that are some of the highest we've ever seen. We expect those to continue to rise based on our analysis.

And I think you're seeing us win deals that I truly don't believe we would have won on the support side, for example, even a year ago. I think we're bringing in some brand names, and we're seeing those cycle times of getting the deals done much faster because we're not having to answer and go through the normal diligence cycles around the litigation. And we're seeing that meaningfully reduce the cycle time to get a deal closed.

Last for me, if your typical seasonality of collections holds, you could end next quarter with well over $1.50 in cash per share. But contrast that to the severe valuation pressure small-cap tech seen due to the emergence of generative AI. Can you talk about how aggressive you'd be willing to be on the buyback side of the table? Because it seems like you're gaining momentum on the market valuations across the board, not just you specifically, but have seen some pretty severe pressure. It seems like you're in an unusual opportunity where you could get pretty aggressive on that front.

Sure, Rich. I think that as we've said before, I think everybody knows we're very focused on shareholder value, shareholder return. Post litigation settlement, we've been in a position to rethink what surplus cash looks like. And I think we're continually looking for opportunities that we believe will drive that shareholder return. But as you know, when it comes to stock buyback, it's a little bit complicated. You're limited by the share volumes. You've got calculations, you've got covenants from lenders, et cetera. All those things weigh in, including MMPI and if we have any restrictions.

So it is not as simple as saying we would love to put as much money in cash as we have in surplus towards buying stock if it's truly an undervalued asset. We have to look at multiple ways to define shareholder value. And I think, Michael, you probably want to talk a little bit more on that on some of the recent moves we've made.

Yes. We're certainly -- we do share that sentiment, right, that there is value here, as Seth noted, with regard to our surplus, we do evaluate all of the factors around capital return, which you do very well know we have done the last couple of open windows. We did recently earlier this month, pay down another avenue that we assess deployment of our surplus our term debt by $5 million earlier this month. So we look at all these opportunities to utilize our surplus. But of course, we are highlighting our confidence entering this year. We also do feel comfortable and are looking at reinvesting in the business to continue our momentum and really drive the growth.

Your next question comes from the line of Derrick Wood from TD Cowen.

It's Andrew on for Derek. On your -- Michael, RPO was a strong 12% ex PeopleSoft that accelerated from 9% last quarter. Any specific drivers of that? And this is well above your revenue growth guide? Is this just conservatism? Or is there any reason why it would take longer to translate into a higher revenue number?

No particular trend that altered from last quarter with regard to the constitution on the duration of our RPO. We believe, again, this is giving us increased confidence, right, in being able to at least achieve and potentially beat on the top line our expectations. But again, 2 quarters doesn't make a long-term trend, but we are encouraged by the momentum.

Yes, that's great. And then, Seth, on the go-to-market front, it would be great to hear how you're feeling about sales productivity. You talked about adding a lot of sales capacity. And how is the hunter farmer model progressing in North America? And do you think you can get the North American business back to stronger growth this year?

Sure. We definitely saw increasing sales across North America in Q1 and Q2, Q3 and topping it in Q4, setting the stage again for a much stronger '26. I think as we all discussed on the Analyst Day, the bigger challenge has not been the new client invoicing growth. It has been the retention. We had higher retention losses in '25 than we expected. And of course, that flowed through the revenue numbers as well. So from our point of view, we're watching, we believe, a stabilization in North America.

I don't think we would have raised quotas across the board on the sales team, all the way up through sales leadership, all the way up through Steve Hershkowitz number himself and that we have to deliver. So we're definitely feeling bullish enough to raise quotas. We're feeling confident enough to add another 20 sellers into the mix so that we have the capacity coming into the back half of the year, which, as you know, is our strongest sales quarters. So I think we're doing the things and making the investments based on that confidence that we will drive higher numbers all through the year, but of course, especially in the back half of the year.

Your next question comes from the line of Alex Fuhrman from Lucid Capital Markets.

Curious, do you expect the return to growth this year to be driven more so by increasing acceleration growth of new clients or better retention? Or is it really more about higher spend per customer as more clients adopt the new Agentic AI offering?

Alex, I think we have a combination of them. We expect to see, as we already talked about for the fourth quarter, we have growing support sales. And the reason for that is the software vendors are creating environments that are really pushing customers to do new versions, to go to new releases, to switch over to SaaS and subscription licenses when they've already paid for their perpetual license.

You have a lot of things going on in the mix. And our ability to come in and stabilize that environment and guarantee support through 2040 and beyond for existing software and then to be able to show them the path forward with the Agentic AI on top, this is a combination that's giving them a road map and a visibility to go decades into the future and that is creating a lot of comfort from the customers to be able to move forward with our total vision and solution.

And so yes, I do think it's going to be a combination of those services. But as you saw in the Investor Day, we're about 87% of revenue comes from support, about 13% from our optimized services. And now we have the entirely new accretive innovation services. And I think we're going to start putting those numbers on the board, of course, in '26, and you're going to see those numbers start to grow in all categories.

I think this is a fact that customers are coming to us for all different services, even including our security services, which are well known as well as our interoperability, all these things that are coming in and are required in order to connect big ERP systems and core transactions to the rest of what's going on in AI, and we intend to be the leaders in AI for the ERP systems.

Great. That's really helpful, Seth. So as revenue growth accelerates after Q1, do we expect to see that growth in active customers also accelerate at a similar pace throughout the year?

I would expect to see, again, growth both on the new customer line where you're going to see more logos, new logos coming on. I do think that the hunter farmer model in North America is generating results. It took a little while. I think we all know every time you switch customers around with new sellers, you reorganize your sales operation, those operations always, always have some lag time, always are slightly disruptive. And I think we're seeing the disruption end.

I think we're seeing the results start to improve. And we're confident that we're going to see good results from that model, not only across North America, we're using that model now in Latin America as well. So all of the Americas is using the Hunter Farmer model, and we're looking at other deployments in different countries around the world.

Your next question comes from the line of Daniel Hibshman from Craig-Hallum.

This is Daniel on for Jeff. Seth, maybe just starting off on the adoption to date on Rimini Agentic UX. I know that came out in December, and then we had the GA here in January of the 20 additional solutions. You talked on this call about a few specific adopters. If you could help us understand the scale of that adoption. Are we talking about a handful of early adopters? Are we talking dozens? Just what stage those are at as well, whether we're talking pilots or full-scale production?

Sure. I think you start off with the walk before you jog before you run. I think customers, as you well know, are so overwhelmed with the pace of change between whether there's an anthropic release or something is going on at ServiceNow or there's an acquisition, they can't keep up. This is why we've been focusing on this concept of AI for the real world. These are tools that we use when they're appropriate.

The highlighting of our 21st solutions of our Agentic UX solutions really was about saying we are focused on solving business issues. We are not focused on trying to get customers to adopt a particular platform for AI. There's a lot of confusion within customers and competing platforms. So we're focused on here's the solution to a particular business problem. And oh, by the way, you can choose your platform. Of course, our preferred platform is ServiceNow. We have a close partnership with Bill McDermott and the team over there.

And so I think you're watching customers very interested, very interested in the path I think they're still learning and they're getting their heads around what are we doing here. This is a different architecture. And if you look at even SAP is advocating the same architecture as we are, which is don't make changes to the software code itself, do your changes above the software code in the new Agentic layer. So we're in alignment with that architecture. The customers have never seen this before.

And so this is going to take a little bit of while for everyone to really understand how these technologies work together, look at the architecture. They have their people on the ground, their technical people, try to review them. But from a business perspective, the fact that we are able to solve these problems faster, better, cheaper, get the cost of operations for an ERP system covering the world down by reducing the amount of labor required, increasing the speed to market, increasing agility in a world that's very, very disruptive right now. Those things can make a real difference in competitive advantage. So they're very interested in what we're bringing to the table.

We just got to give them a little bit of time to digest them. We'll start getting these projects installed. You'll start building a reference-able customer base as we're already doing. And then that will, again, allow you to get more into that hockey stick mode, which I think is more towards -- starts more towards the back half of this year. But I think everyone needs to understand AI is such an overwhelming component of change for the business world that it's going to take a while for all this to get adopted.

And then, Michael, on the model, just the $5 million beat very nice. I know -- I think you called out that was $2.1 million, if I heard correct, that was onetime. Just anything else to call out in terms of the sources of strength on the quarter? And then also your thoughts on why that didn't flow into the -- I believe EBITDA was around the midpoint. Just your thoughts on the flow-through.

So no other elements up and down the P&L that I would call out or worth noting that would be onetime-ish nonrecurring in nature of any size. The drop-through to the bottom line, both this year, the $2.1 million and the last year from a revenue was fairly significant as these were longer-term commitments where we performed on our end and were released on our ability our need to perform in the future. So that revenue got pulled into this period versus 1 to 2 years out. So yes, there was contribution to the bottom line.

There are no further questions at this time. I'll go ahead and turn the call back over to Seth Ravin for closing comments. Sir, please go ahead.

Great. Thank you very much, and thanks, everyone, for joining us. We will be back and talking to you about Q1 earnings pretty fast and look forward to having you all join then. Thank you very much, everybody, and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.

All right. We're going to start now. And first off, good morning. I'm Dean Pohl, Rimini Street's Vice President, Treasurer, Investor Relations. It's my pleasure to welcome all of you to our Investor Day 2025. I know I worked the phones pretty hard with some of you, and I'm just pleased that [indiscernible] actually followed through and showed up. We have a really great event today and the speakers and the clients. Thank you for being here. The team is thrilled that all of you joined us here and on the webcast.

Just moving on. Forward-looking statements. You're going to be thrilled that I don't have to read all of these. Instead, I'll refer to the Investor Relations section of our website, or most [ any ] of our press releases. And it's -- this is also on the actual presentation itself that you can find on our website.

The main goal of today's event is to introduce the broader executive leadership team, provide a deeper understanding of the company's vision strategy, sales and execution model, including details about new growth drivers, such as Agentic AI ERP, powered by ServiceNow. Thereafter, there will be a 10-minute break around 10:30 a.m. After the break, clients from around the world will participate in a panel discussion to share their experiences working with Rimini Street.

The agenda. Prior -- this is picking up from the senior management team, where strategy, vision, our secret sauce on service delivery, the Agentic AI and the direct and indirect partner channel initiatives, getting us to where we quantify it into our financial model, outlook, guidance and our capital return parameters, or decisions that are going to drive actions we take to increase shareholder value.

We will close with a Q&A session. All questions will be answered either during the event, as time allows, or as a follow-up. For in-person guests following the presentation, the lunch will be provided. Please take that time to meet the management and clients. And I'll introduce [ anyone ], just find me. The agenda biographies of the speakers and clients, the slide deck, and after today's event will be available on Rimini's website.

It is now my pleasure to introduce Seth Ravin, Rimini Street's Founder, Chief Executive Officer and Chairman of the Board. Welcome, Seth.

Thank you. Thank you, Dean. Okay, everybody. A lot of good faces I'm used to seeing around here. 20 years since we launched this business. I came to New York to try and raise capital. I was thrown out of probably most of your offices and 100 others. Told that the business could never be something that would be viable. Nobody at [ Gartner ] thought we could ever do it.

Dean actually was one of the first investors we ever had. I -- when I came to New York and I said I just need a few hundred thousand dollars to get the business started. And he said, okay. He was working at [ Kellogg Capital ] at the time. He said, all right, you got a few hundred thousand to get [ seed ] started here, and has been along for the ride ever since. So thank you, Dean, for making that early commitment.

We only have about $30 million we've ever put in this business, and we've generated billions of dollars of sales. We went through 19 years of war with our friends at Oracle. And we settled out back in July. So we have cleared the [ decks ] of litigation. We are very closely held. For those of you who understand the [ cat ] table. There's Adam Street Partners owns this 26%, they're the largest single provider of -- in terms of investor. I'm #2 still in terms of holders. And then we have a bunch of folks even in this room who are 5% to 7% holders. So we're pretty closely held.

And the reason we're holding this event is we want to start broadening out our shareholder base, it's time. So it's time to start getting a higher velocity of sales transactions. It's time to get a broader base of investors into the company, now that we're past litigation and we're beginning to move forward in the next chapter. So let's take a look here.

I'm just going to send a couple of slides here talking about what we're calling Act 1, the first 20 years. We've managed to get to a recurring revenue business over $400 million and generating over 60% gross margins. We're attempting to now focus on driving profitability, which Michael will talk about in the financial component going up at the end of the presentations. But we've built the business that's very broad. We cover across all the world. We're in many different countries with operations. We've built unique structures that serve clients with 2-minute response times, or less, anywhere in the world, 24/7. For very serious mission-critical work, including some of the military work that we do around the world where people's lives depend on the fact that we are able to respond reliably in those kinds of time frames, and can be relied upon for mission-critical work.

We also have a very diverse customer group. Manufacturing being our largest, but we're in just about any industry you can imagine. So we're broad-based in that regard as well. So we're very diversified geographically. Over 50% of our revenue comes from outside the U.S. So we've built a truly global company in the first 20 years. We went public in 2017. At the time, we were, of course, very heavy into our war with our friends at Oracle. And it was almost impossible to get anyone who is willing to take us public.

So we did something unnatural. We did a [ SPAC ] transaction and a double reverse merger, and domestication from a [ Cayman Islands ] company to surprise everyone at becoming public the next day. And it took us years to get through that transaction. The [indiscernible] was a mess. All of that because of litigation and other challenges that we weren't able to go out in the normal course. So we never got a chance to have a real IPO, with real road shows, and real marketing, and we never got a chance to get out there.

So you're going to watch a Rimini Street now moving past those 20 years into a new chapter where we're going to be out there and doing the things that companies are able to do as public companies, that we were not able to do because we had so many challenges and restrictions of being involved in litigation for such a long period of time. But still managed to build hundreds of millions of dollars in sales every year and thousands of customers.

So now we talk about the second act. And I want to bring together sort of 8 points that have converged in the world today that we believe form the basis of Rimini's Second Act as we come into 2026 in these next 5 years. Many of you, of course, I mean, if you -- if I hear the word in video one more time, I'm going to be [indiscernible], okay? But the reality is we're in another time. Those of us who are old enough to remember [ dotcom ], and we remember the cloud, cloud, cloud and everyone put cloud on their name. And I thought that would increase their valuation tenfold with the same product they were selling the day before. And now we've got everyone adding [ dot AI ] to their name, and everyone's trying to sort out what's real and what's fiction.

And we are in an interesting place. We are the people who are making AI actually work in companies. And you're going to hear that from some of our customers that are here today, and you're going to get to see a glimpse of what it is we're doing for customers. So think of us as AI for the real world. We're the guys who are actually helping to drive down cost. We're helping to automate processes, streamline businesses and drive #1 problem of every single company we work with.

Profits, costs are up. Extremely competitive market. Just to ask anyone in telco. How do you sell for more when everything is cheaper by the day, but your costs keep going up. And they have on their whiteboard, how do we make money in 5 years? This is the world that we help customers navigate. Because the truth of the matter is, we believe the winner is that person with a good product, who can drop their total cost to serve below what everyone else is, and still can add a profit and no one else can match it. That's what success looks like for many different companies and different organizations around the world.

So the first thing we're dealing with. I travel the world working with CIOs and CFOs, and now COOs on the issues, deglobalization. This is not just a Donald Trump thing. This has been going on for the last decade. I actually had the good fortune to be a part of helping the Clinton administration when we put the [ GAT ] agreement in place, which was supposed to eliminate trade tariffs and boundaries across countries. And now we're taking it apart piece by piece. And we're doing this in a way that is changing supply chain of the next -- of the past 50 years going forward.

We used to build things in the cheapest place. Capital could go anywhere. We'll build it in the cheapest place. We'll ship it somewhere else, we'll package it and then we'll bring it into the market. We use labor arbitrage as a key component of how we manufacture in the world. And now you've got [indiscernible] and changes in deglobalization that says, well, if you're in Indonesia, you can't sell an iPhone here unless you build 30% of it here. So all these unnatural barriers now prevent us from running the most efficient supply chain that we built all these past decades and we learned how to do.

Now we got to completely redo it. If I have to build 30% in Indonesia, I need to build 30% in every country, my supply chain is completely different than anything we've ever done before. That is a massive disruption to the world of manufacturing. Labor costs have gone up quite a bit. Labor costs are the #1 cost in most companies. And don't forget labor shortage. If you're in Japan, you've got a declining population. It's even worse in Korea. China has got one. The U.S. So you've got declining workforce. You've got a huge aging population that's ready to retire, and you don't have people to replace them.

In some of these countries, if they do not automate and reduce the need for labor, they will not have enough workers. Or the price of those workers that they're able to get will be sky high because of labor costs and competition. That has huge implications on cost. And what does all of this do? Raises up the cost and we can't raise the price very high because we have fierce global competition. And AI is changing everything, and we're going to talk about that today, not just in the theoretical way.

Now let's talk about boards. We work with a lot of boards. A lot of boards sign off on our deals. Boards run around. They said we are doing digital transformation. We've got a $1 billion contract with Accenture. Oh, and we're a cloud-first company. And by the way, we're doing AI. And you ask any one of those Board members, can you explain what you mean by that? What it means to the business? Like no, I don't know what it means. We just throw around the words, right?

But they throw around the word. And then you know the next thing that comes out of their mouth to the CIO is, and by the way, we got to drop your budget. Profits are tight. Costs are up. Got to cut you 20%, 30%. And the CIOs wander out [ punch drunk ] from this meeting, wait a minute. They just told me they want me to do all these things in innovation and they just cut my budget. How do I do that? How do I make those ends meet? So that is the reality that we see. And that's global. That's not just in the U.S., that is a global phenomenon going on. And if you're in government, it's equally bad.

Now we got this other thing going on, which is we got all these great systems now. The problem is they really don't work together. And I know you've probably heard, oh, they're all integrated and there's all these integration tools. It's just not the case. In most organizations, these systems are still very separate. Which means if you wanted to do a task, let's say you were doing inventory management, you're ordering for 3 factories. You may have to go into 3 or 4 different systems to do specific tasks in order to do your job. This is very real today. And this is very sobering for most.

When we look at the way that IT budgets are spent. The majority of the budget is still spent just keeping the lights on the day-to-day operations. And you know what's included in that? Upgrades, migrations. Lord knows, I just got Windows 11 on my laptop with all the Copilot stuff, it's -- and there's so much stuff going on. It's hard to even figure out what the hell is going on in the screen.

But all these upgrades, migrations, do you realize that every single company you're talking about has a new specific release, they want that customer to upgrade to. [ Mark Benioff ] wants you to get on the latest version of Salesforce. Our friends at ServiceNow wants you to be on their latest version. Oracle, wants you to upgrade theirs, SAP is demanding you upgrade to theirs. And by the way, you need to roll out Windows 11, to 27,000 workstations.

So you got all this going on. For the first time, CIOs literally cannot do it all. Even if they wanted to follow the road map of every one of their software vendors, there's literally not enough people, time or money to do it all. And so the CIO, along with the CFO and the company, you're going to have to figure out, which items do I do and which ones do I don't do? It's not an easy question because a lot of times, this is like a puzzle. If you don't do some pieces and you do others, how does that all come to work? You got to figure that out. It's complicated. It's complicated just making them work together even when you follow everybody's road map because they're all going their own direction.

But this leaves us 9% of the average budget for innovation. And the truth is 9% is not enough to do what needs to be done to stay competitive. Let alone leapfrog over your competition. This is a formula for disaster in the long term.

Now this one, you may have seen some articles where I declared publicly that ERP software is dead. Customers fall out of their chair. What do you mean dead? I just spent $1 billion on this thing. What do you mean it's dead? It's dead. AI technology is the next paradigm. Now remember, in the world of ERP processes, we've been doing these things since the beginning of commerce. When we had stones we would trade, okay? We pay people in stones, we pay them in [ bushels ] hey, whatever. You had to pay people who did things for you. You had to build things. You had to ship things. You had to move things.

The world of the ERP, enterprise processes, things that run a business, those processes have been around forever. But we moved it. We went from stones to paper and writing everything down to spreadsheets. And then we went from spreadsheets to this amazing thing called computers. And we use this new thing called ERP software as the latest tool to run those processes.

What you need to understand is AI is like an industrial revolution. And I know it's hard to put all of the AI running around everywhere and everybody [indiscernible] about it. It's hard to understand what's going on out there. But the reality is it truly is a new paradigm. We are going to take those processes and we can move them into AI. It is different than the ERP software they're running today. And I'm going to show you that in a minute.

But recognize. We believe that ERP software, for a number of reasons will say, is reaching its technical limitation. Now we'll be able to use it for years and decades longer and we'll support that. But the transition to a new paradigm is coming, and we're already doing it. So we believe Agentic AI is going to be the downfall of what software we see in the world today. And it's happening, and it's happening fast.

Now a lot of customers don't understand this yet because this is complicated stuff. They're running their businesses on this. They're running government agencies around the world. So help us understand how this thing is going to translate? But we got a problem. You guys saw this with cloud. Geez, we saw this in the dot-com area, right, when the [ froth ] started to come down.

You know what? Most AI projects are failing. This is a fact, and you'll find more and more articles coming. Some of these guys who said, oh, we're going to lay off 10,000 workers because AI is going to do their jobs. You know what? Articles in the last few days talking about how those companies are quietly hiring back half the people they cut. Because the promise was well ahead of the reality of what they could achieve. So we got problems out there. This stuff does not just happen. We don't just wake up one morning and say, hey, we're doing AI, and all the world is good, and we cut half our workforce, and it just happens.

It doesn't work that way. This process is going to take time. There's a lot of things that have to be done in an orderly way. And you will have all sorts of challenges too. By the way, most of us who are here in the U.S., we know we have the ability, for example, to cut workforces. We can do it. You can wake up 1 day and you can announce you're laying off 17,000 people at a company like Amazon, but that's not true in most of the world. Most of the world doesn't have the ability to adjust labor. So they have to look at it differently. They have to look at it as labor productivity. I can take people that are doing certain jobs today. I can automate those jobs, but I am then going to have to find something else for them to do in the company. So I don't get to just slash it off my labor cost the way the U.S. has flexibility of doing. They have to find productivity. They have to find other uses for that labor, whether it's retraining them, or finding ways to grow their businesses without hiring additional people. So you have to remember those different paradigms on a global basis.

Now this one, I'm extremely proud of. We truly believe that we are the best ERP and enterprise software support provider in the world. We've been doing this for 20 years. Our level of achievement and the work that we do for clients, and thank you for the many of the ones that are here today that you'll hear from. This doesn't just happen. This is not just one item, and you're going to hear a little bit about all the pieces that come together to make this from our presentations after me.

But all of this comes together to create, what I'm calling, the second act and the market opportunity. I talked about ERP processes earlier. Rimini Street can help enterprises run their ERP processes, not the ERP software, ERP processes faster, better, cheaper with more reliability, agility and speed. We believe we could take 40% of the labor cost out of running the processes that run a business or government agency. That is monumental in terms of driving bottom line profits, streamlining operations and leapfrogging over the competitors with technology. This is what AI can do in the real world, in ERP and transactions.

So lots to unpack and I know, but this is an amazing set of points that comes along. And again, we go down the museum, I can probably go down there with all of you guys. We'll see all the computers we used over the years. [indiscernible] probably in the museum somewhere, as antiques. But this truly is -- if you have not seen this yet as an industrial revolution, that's the way you should be thinking about the impact of the technology. Even though it's very early days, there will be lots of failures. There will be lots of starts. There will be lots of people trying to do things easily that will not work.

We learned in the cloud [ word ]. People said, oh, you can't go into the cloud. We'll never be able to secure it. The security risk is too high. Today, we've come up with security that's better than if it was sitting in your basement. There are still a lot of things unanswered around AI. We're working on protocols for agents to talk to each other. We're still trying to figure out how to make sure an agent doesn't go off and do something. Well, hey, we have employees that go off and do things. Now we're going to have electronic agents that may go off the reservation a little bit. So we have to figure out how we're going to manage all that.

ServiceNow has products like control tower. So you can watch over 7,000 agents at once. It's like watching over 7,000 employees. How do we know that everyone there is doing what they're supposed to do? There's a lot of questions. We still have a lot of things to do. This is not all baked yet, guys. So you have to recognize we're in the middle part of this inning, as we'd say, in getting this technology figured out, and then deployed in the real world.

So think about 10 primary processes that run an enterprise. That's why we keep focusing on process, not the software, because we are going to change the paradigm under which these processes are done. But why would we want to do that? How does this thing really change the game? What's changing the game is, remember, I talked to you about all of those tariffs and changing supply chain. Any of you who have ever been in the tech side and worked on an SAP system, and said, oh, let's change the way we're doing supplying from -- in 100 different countries and building product.

The systems are so complicated, they're so big, so heavy it would take years to change that all around. We don't have years to change. The necessity here is speed and agility. So what we do is we get to put AI over the top of these existing systems. And we're going to do all those changes that are needed for supply chain and all of the things that are happening and deglobalization, we're going to do it all in this new layer right over the top of your existing system. You don't have to rip and replace it we're going to go right over the top of it. Icing on the cake. But you have to recognize these 10 processes are going to move forward in a new way.

So this is an ERP software. These are the types of processes we're talking about, right? Paying people, inventory management, moving things around inside your operation. And of course, retailers, we have all of the special things every different industry has certain components. But this is all going to change in the paradigm. This is what it looks like in the world of agentic AI. More flexible more intelligent, more automated. We require less labor to do the same tasks. But this is process reengineering. This isn't just change of software, we're changing to a new technology.

And the way I like to explain it is, if you think about ServiceNow, for example, they have an AI platform, Palantir, which you hear a lot about because of their government connections and obviously, they've got a multiple, we should all strive to achieve 1 day in our history. Doing very well. And then you have Microsoft coming in. They are all what we call AI platforms. Now those AI platforms could be interchangeable. The way I like to explain it is if you walked into an operating room, they lay out all the tools they're going to use to do the surgery. Well, Microsoft's got their tools. Everyone's got their tool set. Palantir, right, our friends at ServiceNow, all have the same -- they've got tools.

But you know what? The tools are worthless if you don't know how to use them. And we're living in the real world where we take those tools, we're going to go back to where I showed you those processes. We are going to extract like a surgery. These processes out of the ERP software and move them up into the Agentic AI ERP. And eventually, eventually, there won't be a need for the underlying software anymore. Because we will have moved piece by piece over time, from one paradigm of technology to another.

But this is what Rimini Street specializes in. We're the surgeons. We know the ERP software. We understand the complexity of how to go in there. Remember that game operation we used to play? Go in to take a bone here and a bone here and hope not to hit the side. We're the guys who know how the bones work. So we're the people who can go in and extract this process and move it to this new paradigm called the Agentic AI ERP.

And this is why Bill McDermott and I first talked about the ServiceNow partnership. He said, Seth, you were my nightmare when I led SAP for 16 years. Every morning I get up, so and so customers looking to move to Rimini Street. But the reason we were on the phone is because he has a great tool set. He has an AI platform but he's got no body over there. He doesn't have a big enough team that knows how to apply that tool set to an SAP system, or an Oracle system, or an [ in-force ] system. And that's what we do. So the combination of any one of those tool sets, coupled with us, allows us to do what we're talking about. Move these processes forward.

It was pretty exciting a year ago when we announced the partnership with ServiceNow. The 1 plus 1 equals 5 arrangement. Their tools, our know-how, our knowledge, our ability to go to market with credibility because we know these processes. So a lot of good excitement in the analyst community because we changed the game. Everyone else is saying you must upgrade and migrate your software. SAP is telling customers, some of them to spend billions. And we're coming in saying, not necessary.

We'll just put the new technology right over the top. We won't take the risk of ripping and replacing your massive global system. We, then, will move pieces one at a time. And that is a strategy that we call our [ Smart Path ] methodology. I loved it when Bill said this. The guy who is running SAP is telling customers, you'd be crazy to spend money to upgrade your SAP system. Told them I don't think I could take them out to a lot of those clients, he'd probably jump over the table. You're the guy who told me I had to spend all that money, right? Now you're telling me I shouldn't do it.

But this is the reality that the paradigm is changing. We don't need to spend money on the things that they're trying to get people to spend money on. It's quite a change. Look what we can do. We believe we can take customers with a 9% innovation budget. And through automation, the change of technology, this next paradigm shift to Agentic AI ERP, we could drop 40 points into that program, all within the existing budget. No having to hold your head down and go into the Board and pray when you go in and ask for that $1 billion Accenture contract. That's going to take 5 years to do an upgrade or a migration. Because our customers actually have real businesses to run. They actually have to deliver a profit.

The fact that we have a plan and a strategy to do this through the [ SmartPath ] methodology is what's changing the game. So guys, we have a lot of speakers up here today. And the reason for that was a lot of you told me, hey, Seth, I see you. I see Michael Perica, our CFO. You guys are always out. You're in New York, you're all over the world. We'd love to meet more of the rest of the management team. So we have a parade of our senior executives here today.

Just to give you a little feel for who they are, give you a chance to talk to them, a little bit during Q&A. But for those of you who are here in person, to meet up with them at lunch, just get a chance to meet them, to understand that we have a very strong and deep bench of executives that come out of -- not only enterprise software, the maintenance world. So we know this business. And we think this Agentic AI ERP is so big, we even changed the tagline for the business, so that we are the enterprise software support and Agentic AI ERP people. We will keep the existing systems running for decades, and we will put the new technology over the top, and we will pay for it all within your existing budget. By lowering your cost for not having to do upgrades and migrations that aren't necessarily, dropping the annual maintenance cost, and being able to move all of that money to streamline operations and pay for that innovation. So this is not above the budget line item. This is all then within the budget.

So with that, let me turn it over. I'm going to turn it over to Craig Mackereth who is heading up all of our support managed services. So Craig, come on up.

Thanks, guys. Thanks Seth. All right. It's great to see everyone out there. Let the parade of leaders begin. I'm honored to be straight after Seth, and I'm here to talk about the first 2 parts of the Rimini [ SmartPath ]. Today, I'm going to be talking about support and optimize. All of their customers come to us for the support. You've seen examples, hopefully, in some of the beautiful quotes that we shared at the beginning of today, where customers are using us for the support of their production enterprise. Whether it's telecommunications companies, manufacturing, pharmaceutical, aerospace and defense. Today, we're providing 24/7 support for all of the enterprise production systems that run these clients' organizations.

In addition to that, we've also moved on to start to run and optimize the systems end-to-end. We're providing a one-stop shop with our managed services so that when clients want us to run their ERP systems for them, monitor their ERP systems, secure their ERP systems, we can do those things as well. This provides a very stable platform so that customers can then take that and innovate. And after I finish speaking, you'll hear from Vijay, who will talk about the Innovate part of this path.

So when clients come to us for that first pillar, for support, they're looking for a number of things. And I've been with the company now for 13 years. I've had the opportunity to travel far and wide to meet many of our customers, some of whom are here today, representing their organizations. They're all looking for a very similar type of service from Rimini Street. One that they can rely upon every single day of the year, because issues don't happen at convenient times. They happen in the middle of the night. They happen when something is broken and your CFO wants to get numbers out to the street, or you need to ship products. It's never at a convenient time. So what do clients expect from us?

So the first thing is experience. When they pick up the phone that I want to talk to someone in a call center who've never spoken to them before, they'll never talk to again. They want to talk to someone with experience. And Rimini Street brings that experience, the first in every call to our [ Level 4 team ] is to someone with 10 years or more of real-world experience in the ERP. So they can talk to someone with that experience to provide personalized tailored service on the customized system that they're running to run their business.

They also expect proper service. They don't want to try and not understand someone that they're talking to. They want someone who is trained on what we call first-class support. To lean in, to take control of the situation. Sometimes clients are in tears. Sometimes clients are in a panic. The smartest people in the room are stuck and they can't manufacture their products. They can't ship their products. Or no one can log in, in the company. That's a scary time for clients, and they want someone who will be on the phone, who will take control, who will steer them through and prove that it was the network guy. Ultimately, it's always the network guy.

They also care about location. This is not an outsourced business. We're not taking this and shifting it to the lowest cost location. Because when you try and find someone who's got 10 or more years of experience, hands-on practical work, working in the enterprise, they're not interested in work in the night shift in every location. Also, language matters. If you're in that panic situation and things are broken, and your CFO is right there on your back saying, hey, I've got to get this report out. You don't want to be trying to explain yourself to someone who doesn't understand your language. So we provide our 24/7 support in 7 languages today. We allow clients to interact with our team in their local language, and that's very important.

One of our strongest regions, and we have Japan represented here today is Japan. And they want to speak in Japanese, and we honor that on a 24/7 basis, providing that key language support when the chips are down each and every day. Compliance matters. So we also provide tax and regulatory updates so that clients can continue to leverage their existing enterprise system, whatever version that is, even though tax and regulatory changes are constantly happening. Right at the moment, I've got a team working in Brazil who are providing the net new functionality for the sweeping changes that are happening in that country, not for the first time. We're building out net new functionality that didn't exist when these clients bought that enterprise application.

We've also invested in capability centers around the world. Our global capability centers in Sao Paulo in Brazil, in Hyderabad in India, and [indiscernible] in Malaysia give us the talent engines that we need to continue building our capability, and gives us access to a world-class group of talent in those locations. We run command centers that I'll talk about when we hit [indiscernible] a little later from there as well.

And then finally, connection matters. This is very much a people business, but that connection, I get the opportunity to hear and see the feedback from our clients every day. They love what our engineers are doing. They love that personal connection. They love the fact they've got their cell phone to their primary support engineer, if they want to reach out and have a conversation, they love that personal interaction.

Process matters. So I mentioned that I joined this business 13 years ago. We have built a lot of processes in that time to provide true global 24/7 capability, to make sure that we can take the model that we've had scale that out across industries, across countries, across languages and across many different products. Today, we are not the SAP support company, the Oracle support company, the Microsoft support company, the IBM support company. We support all of those different software packages. But we provide the service across all of those different software packages to enable this in a scalable way. And that consistent delivery means that many clients of ours can take one service and then come back a year later, 2 years, 3 years later, and continue to buy more and more services from us and get that wonderful consistent experience.

They expect that we're going to be available 24/7. They expect that we've got continuity. We do follow the [ sun ] support. We're very good at this. We transitioned from region to region to region to make sure that we're providing consistent service across a 24-hour basis. So that we're not asking questions that we should already know the answer to. And we provide that each and every day across all those different products. We get great feedback from our customers. We have built a continuous feedback loop. On average, about 29% survey responses come back to all the cases that we work Level 4, which is amazing, fantastic. We get that feedback from our customer. And we're getting 4.9 out of 5 client satisfaction. And this is not walking through TSA, press the green button. I was happy with my [ frisk ] today. This is professionalism, communication the effectiveness of the solution and timeliness of the solution. So we are measured very carefully. In fact, I'd say this, we track everything like a baseball game here. We track things very closely. It means that I've got that continuous feedback loop, which keeps the quality extremely high.

Speaking of quality, of course, we're [ ISO 9001 ] certified. We have very stringent processes, which allow us again to take that standard and roll it out as we add in new product lines and new services. We're also very focused on security. Today, as you heard already mentioned on stage, we're providing support for a lot of very sensitive industries from the nuclear power sector to defense. Very important that we maintain our security. And so we're [ ISO-27001 ] certified from a security perspective, and we've partnered with some of the best in the world. And if you get the opportunity, I see [ Gabe ] here who runs our Protect organization, we've been providing security to many of the world's leading companies. And so certainly encouraged to have that conversation with him.

On suitability. So custom code is standard for us. Some clients say to us, you could have just come to us just with a custom code support. That alone was enough of an impact for us. Custom code is not supported by the vendors at all. If you've got custom code and you open up a ticket with Oracle or SAP, they'll say, well, back out that code. And if the problem is gone away, the case is closed. But that's unacceptable because the reason the custom code is there is to run your business the way you need it to run. It's key to the business. You've got to make sure that you deliver that support. So we've included that as standard.

We measure everything that we do, as I mentioned, down to a baseball game. We are held accountable. We get a lot of praise for our SLAs, and I think it was still in the slides, we've got -- won a lot of awards for our approach from industry, leaning in to those SLAs and delivering fast response times, but most importantly, constant updates on the cases and moving things forward. We replay that in a transparent way to our clients. We're very trustworthy. We provide that on a transparent basis so they can see it.

So let's talk a little bit more behind the scenes, how we've made some of these work. This is obviously a people business. So I've got engineers now in 18 countries around the world, providing that service, and an incredible team who are delivering each and every day that frontline service to our customers. We've intentionally distributed the team around the world. Yes, we have our global capability centers, which are fantastic. But again, we've distributed around the world, split the world into different regions so that we're working with autonomous control in each of those different geographies. So they don't need to wait to come back to the U.S. for an executive decision maker to make that call, the local regions then run and work in that regional model to allow us to operate in that 24/7 basis.

We continue to expand our language coverage. So I talked about the 7 that we're delivering today. We're adding Arabic into that list as well. We're adding Spanish and we're adding [ Indonesian ]. And when I say that we're adding that in, it means that we're looking for that talent in each of those different 5 regions so that we can be there as a frontline language exchange with the clients.

We focus on reward and recognition for our teams because it's important to have the tenure with our teams that experience matters. And when you find someone who is a Japanese speaker located in London, who's got 10 years of SAP experience, you want to hang on to that talent because that talent is very important, and it's not out there growing on trees. We're going into some markets and hiring a lot of the top talent. We always target the top 5% of talent in every geography.

So we've taken this at scale. It's worked very successfully. Behind the scenes, we've got some key systems that help make that happen. So there'll be a lot of talk about Agentic AI ERP up here on stage today. For our back-end systems that we're using, I'm proud to say that we've been leveraging AI long before it was a twinkle in the eye of every news reader talking about the latest chat GPT versions. We've been using AI since 2019. We hold patents in this space. And the AI that we've been using is to match the right engineer with the right case.

If you imagine, across all those geographies and languages and skills and backgrounds, to get the right engineer at the right time to connect with the right case, makes a huge amount of difference. We've been running this since 2019. It works very well for us. We also monitor the sentiment of every exchange between our engineer and the client's engineer because not everything is perfect, right? Sometimes you get a disagreement between engineers. This gives us insight, is something is going sideways before we wait for a case, comments come back at the end from a survey. So it gives us very timely insight.

We built out a multilingual multichannel portal with interactive bidirectional chat, which is another innovative offering and again, allows us to have a chat channel where modern generations are less likely to pick up the phone. They're more likely to want to have a chat. And so that's been very helpful as well.

And then we've been leveraging the commercial cloud scale. So ServiceNow as a partner, Salesforce as a partner, and Workday as a partner. We're using those partnerships where it makes sense to scale for our business for the performance of our services.

We took all that we've learned over the years. And in recent times, we've started to apply this to a new service called Rimini Custom. For Rimini Custom, we can take those services that I've described, those same [ ISO 9001 ] certified processes, the same focus on quality, on communications, the same level of control and security, and we can apply that to net new products. Some examples here.

[ Blue Yonder ], for example, where we're providing support for a globally recognized defense and aerospace organization, because they wanted to be able to run that software and take away the burden of trying to work with that vendor. They wanted to long-term support that Rimini Street could provide. In the telecommunications space, Microsoft [ Nuance ] products. For example, we're working with a large telecommunications organization and providing support for that product, which was end of life for Microsoft. And then finally, as we are very proud to support the launch to explore a galaxy around us. We're providing support to [ VMware ] for many large organizations. And again, this has been -- we stepped into the breach where people are trying to flee from raised prices in that product as well. So we can take what we've learned over these many years and deploy this to Rimini Custom. This scales very well, and this now opens up a lot of opportunity in that support space.

The final piece that I want to talk to you today is come into the middle of that journey. Our Managed -- Rimini Manage product fits well within that optimized section that you saw from the smart path. With Manage, clients can come to Rimini Street. And this is really appealing to clients that have used us in that Level 4 support space. They can come to Rimini Street, and we can run and operate their ERP enterprise applications as well.

A couple of key differentiators there that you should be aware of. The first one is that we provide that true one-stop shop. If you look at that [ ITL ] model from where they start, they do their help desk Level 1, but then from Level 2 all the way through, we're providing that end-to-end service. The monitor run, change, enhance support and protect. We've integrated ITSM systems so that we can see in a single central place, everything that's happening for that customer in partnership with ServiceNow. And the global capability centers certainly encourage you to take a chance to take a look at those because it's been a very important part of that delivery where we can run command centers to monitor those clients' environments as well.

So thank you for the opportunity to share and look forward to catching up with some of those in person here a little later in the day. I'm going to hand over to Vijay now, our Chief Information Officer, to talk to you about the last part of the [ Smart Path ].

Thank you. Good morning. We have a vision to lead the world in delivering Agentic AI ERP. So when we started thinking about Agentic AI ERP, we wanted to make the solution relevant for the whole world. So we said about 3 operating principles, or 3 guiding principles on building out Agentic AI ERP.

Number one, we wanted to make sure Agentic AI ERP helped customers, help our clients help businesses drive operational performance. So this is not a science project. We're looking at Agentic AI ERP driving -- having an impact on revenue. Being able to drive cost down. Being able to improve profitability. Those were really, really important when we designed the solution. So that was principle #1.

Principle #2, when we talk to our clients, most clients that had SAP or Oracle, we're looking at AI 3, 4, 5 years out. It was terrible to hear some of the road map on AI. So principle #2 was, could we build an agentic AI solution that we could deploy not in 4 years, but in 4 weeks. So we were looking at accelerating our deployment from years and months down to weeks and days. So that was kind of principle #2 was quick time to value, quick time to market. This was absolutely critical for our solution.

The third step on building Agentic AI ERP was giving customers a road map to deploy. How do you consume AI? How do you consume AI on complex ERP solutions? So essentially, what we were doing was building a path, [ or Smart Path ], if you will. So that was a foundation piece for Agentic AI ERP. So we were very thoughtful about the process. We moved fast, but these were the 3 guiding principles. So with that, let me dive into the Rimini [ Smart Path ].

You just heard Craig talk about the first 2 pillars Support and Optimize. We looked at the Innovate pillar and we said we're in a perfect opportunity. Let's leverage AI for the Innovate pillar. So in our mind, [ SmartPath Innovate ] is probably the fastest, safest, most cost-effective way to leverage AI and AI automation into complex ERP environments. It is not easy to hook up Agentic AI into ERP. We've learned this, and I'll share some of our examples here. So it's absolutely critical that customers have a good road map, and we're using [ Smart Path ] for that.

So what does Agentic AI ERP look like? Now this is a little complicated, but I'll simplify it. Take any of your existing ERP systems, whether you're on an on-premise SAP ECC system or a cloud-based SAP S/4 system, you could be on [ EBS ], you could be on [indiscernible]. You could be on more modern SaaS products like Workday, or [ SuccessFactors ]. It's really the same concept. Treat these systems as systems of [ brackets ]. What are they good at? They're good at data. And then layer in a framework on top of it, which is Agentic UX. And by the way, late-breaking news, we just launched a press release about 15 minutes ago announcing the [ AgenticUX ] platform that we just launched. So stay tuned when you check your phones, you should be able to see the press release out there.

But back to the [ Agentic UX ], so this is what we call a headless architecture. We're going to keep the SAP systems the way they are. We're going to preserve the data. We're going to preserve the customizations. We're going to preserve a lot of the work that customers have done. What we're doing is really modernizing the front end of it, adding AI agents, which is absolutely critical, improving the UX, and finally being able to automate. So we're looking at complex workflow. We're looking at customers that have complex workflows, manual workflows, things that are absolutely hard to [indiscernible] into AI. So this -- we can get into a much deeper dive into this architecture.

But this picture can be delivered in 30 days for a customer in a pilot. And that's what's amazing about this. And it's a very flexible architecture as well. We can meet customers where they want to be met. So if a customer has a point of view on this architecture, there are different components that they want to swap out. We can absolutely work with customers as well. We're very proud with -- about what we have built, but we know it's early days in the AI game. We expect this architecture to evolve. We expect it to get simplified as well. And we expect to listen to our clients. They're really a guiding lamp when we started this journey. Our clients taught us a lot about the kind of problems that they had and the kind of solutions they wanted. So thank you for being a good sounding board for us, and we've continued to improve the Agentic AI experience here.

So we're in an interesting market, and we want to compete in all the markets, but I'll simplify the slide. When you look at Agenetic AI today, you can see vendors building Agentic AI solutions on SaaS systems, on more modern applications. We want to be there. We think we have the technology to compete in these markets. We also see a lot of AI -- Agentic AI vendors in the out-of-the-box market, selling agents. You see ServiceNow there. You see Salesforce there. Microsoft has several agents, Oracle and SAP are doing the same thing. But we believe that the sweeter spot for us is in the market of on-premise software.

There are thousands, hundreds of thousands of customers that we expect will be on ERP solutions for decades to come. That is a market that we believe will be transformed with AI. And that's the market that we think we can be a leader. It is a fast-growing market. It is an uncontested sector. No one's building AI solutions for this market. We're the #1 here, and it's a significantly underserved market as well. So we're trying to get first mover advantage and growing this. So the upper right quadrant is where we're going to be spending a lot of energy and growing the business, but we're also going to be focusing on all the other 4 quadrants.

So we've got a number of differentiators on why we think we are going to be extremely relevant for the Agentic AI business. And -- there's about 8 differentiators here, but let me focus on 4 that I think are absolutely relevant. And Seth covered this at the start of the introduction. We know ERP processes rather than anyone else in the planet. We've been doing this for 20 years. We understand these 10 critical processes. We understand the subprocesses. We understand the types of customizations that customers have been dealing with. We understand the friction that they've been going through. So we understand ERP processes really well. And that is absolutely critical to train AI agents. The agents that we're going to be building have to be trained on customers' processes. Have to be trained on customers, customization. That's absolutely critical. So that's really one of the biggest differentiators we have.

The second is you just heard from Craig, we have an incredibly strong support experience. We cover L4 support for so many different platforms. And when you bring that experience into the domain experience of ERP, just a wonderful combination.

The third is, we're still early days in the Agentic AI ERP journey, but our real-life experience with pilots, and I'll share a little bit about what we're doing there, has given us tremendous real-world experience on what Agent AI ERP looks like. It is not easy to connect to these systems. We're finding it out every day. Some of these systems are really old. Some of these systems have never connected to the outside world. So it is an amazing opportunity to go in and unlock these customers. One of the customers said, look, we -- it feels like we've been in a dark room for the last 20 years, and you've just turned on the light, and you've opened the doors, and you've opened the windows, and we're now beginning to see our data being consumed by AI applications. So it is an incredibly exciting time for some of our customers.

And then the last one that I would consider as a huge differentiator is really the size of the market. Again, so many customers, so many businesses still running ERP, supply chain, CRMs, MRPs. These systems are still around. They need to be modernized. This is a market that no vendor is really focused on because they are hard problems to solve. It is hard to get AI to connect to old systems, and we do that really, really well. So it's an amazing opportunity right now. And we believe that with these real-world results and with these -- with such a large addressable market, we're going to dominate the space.

So when we started the journey, and this is really the power of smart path and it's maybe a little complicated chart to look at. But when we started talking to customers about their journey to AI, you can look at the line on the red here. It's about 2 to 4 years for an average SAP customer to get AI. I mean that is baffling. Can you think 2 to 4 years? 4 years -- 3 years back was when ChatGPT unlocked their vision. So can you imagine for a customer waiting another 3 to 4 years before they can get AI running on their ERP system? So this was the problem that we wanted to solve. You can imagine the amount of lost innovation.

So we looked at the script and said, look, how do we change it? How do we take 2 to 4 years, make it 2 to 4 weeks? And we started off with 3 basic steps. Step one, which is part of Rimini [ SmartPath ] is start with support savings. That's how the whole thing starts. Start with the savings from support, use that investment to start with an Agentic AI ERP pilot. And we have launched 26 pilots across the globe working on really high friction areas. We're looking at critical business problems to go solve that. Once you get that savings, you go into the enterprise rollout. And in 3 months to 6 months to a year, you've got AI running on a substantial piece of your enterprise architecture. Don't wait for 2 to 4 years, get it done in 2 to 4 weeks.

So this is really, really compelling. We've been talking to a lot of customers looking at how do we accelerate their road maps, how do we get time to value? I'll get into this in a bit. But when we looked at starting with AI, there's a tendency to boil the ocean. There's a tendency to overengineer things. There's a tendency to build very large models. We said, let's start with something basic.

Again, we wanted to get back to a real-life example of AI. So we looked at 4 basic things. We looked at manual, repetitive, hard-to-solve workflows. So that was step # 1. We looked at customers that have been trying to automate a piece of their workflow that's just been incredibly hard to automate. And for those of you who have done -- used automation technology, you can imagine automation has limitations. AI does not have those limitations. So that was step 1 to look at high friction areas with customers and solve real problems.

So we were looking at customers that had maybe 10 to 15 steps in a workflow, or a customer that has hundreds of thousands of invoices, but they want to match it to purchase orders. No human can do that. It is an impossible task to be able to do it. Or a customer that has thousands and thousands of vendor data that is a problem with data, and they want the data cleaned up. Again, no human can do that, only AI can. So we looked at some really interesting use cases in 4 areas. One was high-friction workflow, manual workflow.

Two was data. Can we help customers fix their data problem? Every SAP customer has a data problem. Every Oracle customer has a data problem. Master data management was a big piece of it. Can we fix that? Again, real world problems. Number 3, can we get better reporting? Can we get better decision-making? Can AI agents listen, have intelligence on what's going on with the system? That was amazing, right? So for a retailer to be able to figure out what's going on with distribution and getting real-time alerts from an agent is a very compelling use case that we've been able to deploy.

And then the fourth piece was what about customers with multiple ERP solutions? Is there a possibility? I know there's some folks in the back of the room that have this, but is there a possibility of spanning a workflow across multiple ERPs and bringing it together. So a lot of interesting use cases, but we picked a few narrow ones. We started a pilot. The biggest goal was to get ROI and results coming out of this. This builds confidence, this builds things in small steps. It gets us to the next level.

So this is the part that gets our sales teams quite excited. So what is the growth? How do we expect to monetize Agenetic AI ERP? So we're going to start with these pilots. We have 26 right now. And we're going to grow them to multiple use cases. So we can go across multiple processes. It could be -- some of these could be on the supply chain side. Some of it could be on financial services. Some of it could be manufacturing. But the idea is start with one use case, show value, and then expand to multiple use cases. And once we get past to a few use cases, what we want to do is build out Agentic AI ERP apps. That could be a vendor management app that could be a customer onboarding app. That could be an invoicing app, could be a purchase order app. So we're building -- we're starting to build a framework for a lot of these Agentic AI ERP apps based on some of the examples of the use cases that we've built.

And finally, for customers that want to transform the entire enterprise once we start building some credibility app by app, use case by use case, we're going to layer Agentic AI across the enterprise. So we're really excited to dive into these multiple use cases, and it is fascinating to hear some of the problems that, some of the challenges that our customers are running into things that have held them back for years and years, that can now be solved with AI. So the timing for this is absolutely exciting. And what's exciting for us as a company is we get to grow with our customers. We get to deepen our relationships. We get to take our problem solving from just support all the way to innovation, and that is truly exciting for all of us.

So this slide is -- we're all very proud of this. I'm especially very proud of this. 90 days ago, the slide was blank. We had nothing. We were just starting. We had built out the framework. We've build out the concept. And then we started talking to customers. And we got a lot of great input. And since then, we've got dozens of clients on these Agentic AI ERP pilots. And we've solved a number of very, very interesting use cases.

You'll hear -- you've heard things that we've done on vendor onboarding. We've been able to optimize sales creation processes. Very interesting that customers have come back and said, look, we have a [ coding ] system. We don't like it. We've been struggling with it for 20 years. Can you use AI to help us generate [ quotes ]? Absolutely. It sounds like a unique problem. We have got a customer out in Malaysia that has our tender management system. Is highly complicated. They've asked you to automate that with AI. We've got a partner onboarding application that we're building as well. We've got a lot of client onboarding examples. So the use cases are incredibly large. And in November, just a few months back, McKinsey released the state of AI report. It is a must read. I think it came out in November 5, and it lists out 3 things. The next phase of AI would be Agenetic AI running on apps. The second phase of AI will be business use cases. And the third phase is really driving business value. And when we looked at the report, it just came out 30 days ago. It is a complete, complete validation of everything that we're setting to do with our clients.

So a really, really exciting time. And I think I do have a video of one of our case studies that we put together. So let me go ahead and see if we can play the video.

[Presentation]

And we have the CIO of [ Epay ] in the room with us. Geraldo, please come on stage. Congratulations. Amazing work.

Thank you. Thank you.

So how long did it take us to deliver this for you?

I think the project took less than 1 month.

Less than 1 month. That's amazing. That's amazing. Yes, I'm sure there's a lot of folks with a lot of questions, but let me ask you a few things. What kind of operational problems were you thinking about when you started this program?

Great. [ Epay ] has [ 22,000 ] B2B customers and 400 products. And the products are in 95% of Brazilian homes, more than Coke there. And the challenge was a lot of friction in the order to cash process.

Yes. Order to cash. That's a very, very interesting use case friction. Yes. And based on an early view of the solution we've built, what kind of -- is it -- are you seeing value in the solution that we've provided?

So [indiscernible], we tried solve these frictions in another way, but we couldn't finish and deliver a big experience to our employers to our customers. And right now, we have a good product.

Awesome. That is great to hear. What are the big metrics that you're tracking out of this?

So when we think about AI [indiscernible] we're looking forward to solve for work strengths. Increased sales, of course, control our costs and SG&A at ESG, and the total experience, especially for our employees and for our customers. And this project address [indiscernible]

Awesome. Well, so real AI for real metrics, really happy to see that we're driving all this value. Yes. What are your thoughts on Agentic AI ERP sitting on top of ERP systems? What would you tell the room here in terms of our direction?

Yes. In my opinion, AI and Agentic AI, or generative AI is changing everything. I think we don't have a differential advantage from ERP. But when we use ERP plus AI you have.

Yes. Awesome. Thank you so much.

Welcome.

All right. Let me...

[Presentation]

Awesome. Let me welcome on stage, Dave.

All right. Thank you, Vijay. Awesome. So my name is Dave Rowe. I'm our Chief Marketing and Product Officer here at Rimini Street. I'll try to catch us up a little bit on time. But I've been here 19 plus years, and I've never been more excited about the products and services that we have in our bag now. So I want to give you a sense for how we're going to market these capabilities that Seth and Vijay and Craig talked about. And create leads in pipeline that Steve Hershkowitz, our COO and his team, will take the market and close.

Okay. All right. So this is a summary of our go-to-market strategy. And we've got to execute on each component here to achieve, I think, the full potential of Rimini Street. Starts at the top with our Agentic AI ERP vision. And this is actually a very big deal because we now have a North Star, a way to help organizations deliver the innovation they need. 10 years ago, we didn't have this. It was like, here's your savings, let us know how it goes, right? Now we have the ability to help people achieve this. It's very important.

The second part of the go-to-market is the [ Smart Path ]. We [ didn't go ] into detail on it. But this is the how. This is how we get organizations to the Agentic AI ERP and how we pay for it, how they fund it within their existing budget. So this is an important part of our go-to-market strategy. In the middle, we have the software ecosystems that our clients are in, that we participate in. We have to meet them where they are. So we have to talk to them and understand their strategies around these applications and all the software that they run. So it's very important, a dimension of our go-to-market strategy.

And then on the bottom, we have some of the basic elements of the go-to-market strategy. We got first land and expand, right? So we -- 95% or higher, we land with Support. That's where we start, right? It's the most powerful part of our solution. And then we expand with the Optimize and the Innovate capabilities that we have. That's the basic sales and marketing motion at Rimini Street. And we support that through some elemental kind of channels and motions on the bottom. Our direct sales force primarily historically selling new logos, but now going to clients. We have our client cross-sell motion, which is very important. I'll talk about that in a second. And then we have a newer partner motion at Rimini Street, which is very exciting for us.

Okay. All right. So I'm going to talk about kind of 3 main marketing priorities. The first is building awareness, okay? Very important that we get the word out on what Rimini Street is capable of today and how we can help customers achieve these objectives that Vijay and Seth and everybody talked about. The primary strategies, we're doing massive launches around Agentic AI ERP to get the word out. This morning, as Vijay mentioned, the press release went out on Rimini [ AgenticUX ], very exciting. And there's going to be a rolling thunder of launch activities around this set of capabilities, okay.

We've got thought leadership throughout the company. We have experts in our solutions engineering group, CTOs, industry experts. We've got folks that have written books about the technologies we support, right? We're getting them out to blog, to do interviews, to participate at Gartner symposiums and other places, right? Very important part of our strategy. And then lastly, we have a huge public relations and analyst relations and comms game plan. And if you keep track of Rimini Street, you've seen a huge influx in the number of case studies we're getting out, the interviews that we're doing. You see Seth plastered all over all kinds of different media interviews. It's important that we communicate the value we can now achieve for customers, okay? So this is a very part of building awareness and softening the beachhead as a part of our strategy.

Now I want to talk about the second piece, which is the expansion levers, the growth levers that we're focused on from a sales and marketing standpoint. First, we support more software than ever before. Craig talked to you about Rimini Custom. If you look back at the traditional Oracle SAP markets, it was roughly $15 billion of support target addressable market for us with Oracle and SAP. With Rimini Custom, we can essentially support any software that is supportable. That opens up about $65 billion of additional support TAM for us. And we have programs in place to get out there and get our clients to understand this and expand the level of work we do from a support standpoint, very important vector of growth for us.

Clients, as I mentioned, this cross-sell motion, very important. Traditionally, Rimini Street had one service for the first 10, 12 years of the company was support. And once we took support for the major ERP platform, we didn't have a lot of cross-sell motions historically. Now we do have a lot more products and services and capabilities, plus a lot more software to support. So this motion is very important. We have teams in place, client marketing expansion happening. And Eric will talk a little bit about that as we work on this later.

Partner motions. We now have partners. In the early days of Rimini Street, we were competitive with so much of the software market ecosystem, we didn't have strong partnerships with a variety of the players. Now we do. The dynamics of power and the market have changed. And so we have joint solutions with these organizations like ServiceNow and others, and we're taking them to market with joint marketing capabilities, joint events. And the good news is both for clients and for partners, this is more qualified pipeline. The leads in the pipeline move easier through the funnel. They close at a higher rate. So it's very important to our continued growth to be successful, okay.

And then lastly, on the solutions side, we're doing solution bundling. We're combining some of our great products and services to create more value for customers and get them to their outcomes that they want. And I'll give you an example. We have an advanced security product for [ Hypervisor Security ]. We bundle that with our support for VMware and other Hypervisor products. It creates a differentiated solution. We can get a higher overall ASP. And over time, we'll improve retention for these services. So these are really important processes for us as we grow up now with more products and services to take to market.

And then just to expand on the TAM a little bit. As many of you are familiar with the TAM target addressable market numbers we've shared in the past, right, $352 billion of opportunity, represented by the support and optimized pillars primarily in those calculations. I want to highlight the $65 billion of additional support TAM that is represented by the Rimini Custom expansion and as we add more software products, very important under support.

And then you look at Optimize, this is the rest of the $352 billion. This is the project management, the managed services, professional services, security, all the other related application products and services. Some of the prior estimates you've seen from an investor standpoint, right? So I think the cross-sell optimized opportunity is about $1.1 billion or so with more products and services, now that's over $2 billion. And that's our focus for Optimize and Innovate for now is the clients, right? Where better to sell these products and services is with existing support clients that love their service with Rimini Street, very important. We will, over time, compete more broadly. But right now, that's the sweet spot for us.

Okay. All right. The third point I wanted to cover today was marketing leverage. It's very important that like all organizations Seth talked about, we do more with less. And a marketing standpoint, there's -- it's very important we get more output for every marketing dollar, and there's all kinds of technology today to help us do that. So I just want to give you a sense of some of the initiatives that we have in place to do just that.

Like many organizations, we're using generative AI and other related tools to generate content, to deploy it globally, to localize it, to translate it, to move more quickly. We're also using technology in the campaign area, in particular. Campaigns are complex. There's a lot of moving parts. The buying groups are expanded. It's very important we move faster. To test new digital ad copy to test new content and get the results quickly, see what's working and then iterate for our campaigns around the world. So we've deployed parts of our tech stack to address that, and we're continuing to do that into 2026.

From a business development standpoint, one important part of our go-to-market is our sales development reps, the tip of the spear, if you will, in terms of engaging and talking with prospects and clients. There's technology today that makes them more productive. We're not looking to replace them and eliminate them. We're looking to make them more productive. So that we can do -- what took 3 STRs in the past, we can do that with 1 or 2 as we expand and scale and grow.

And then lastly, many of you have heard about these 3 studies where organizations or individuals do 40%, 50% or 60% of their own research before they ever engaged with a vendor like Rimini Street. They do the buying cycle, you do all of it like on the web, searching around becoming an expert, we all do this every day, right? We have been revamping our website to do just that, to make it more engaging, to give organizations the content they're looking for in different forms, with different tools, with different how-to guides. And there's just a continued effort here to make this more accessible and more engaging. And the good news is it's working.

So if I look at the results that we're seeing just as a kind of starter set, if you will, we're seeing year-over-year results, more active users engaging on the website, going deeper on the website with more page views, significantly more engaged sessions. Chatting us up on -- on our chat tool online at a much higher rate. And this is resulting in from marketing programs, more pipeline being created year-over-year. And importantly, in North America, our biggest market, right, over 50% growth in marketing generated pipeline. So this is working. We're making great progress, and this is going to form a lot of the foundation of our strategy going into 2026.

So with that, that's the pipeline that my good friend, Steve Hershkowitz and his team are going to drive the close. Thank you very much.

Good morning, everybody. So I'm Steve Hershkowitz, Chief Revenue Officer of Rimini Street. I've been with the company for just over 1.5 years. And boy, never a better time to be with this company because I feel like it's on a rocket ship with a huge growth opportunity, an exponential opportunity for us to succeed together as we move forward.

I've spent the last 18 months working with the sales force, changing the skills, traveling the world, meeting with customers and really listening to customers about the problems that they're trying to solve. And what I've learned from that is that, number one, our customers are very, very satisfied. My background is for some of the largest tech companies in the world. I spent many years at Cisco early in my career, HP, HPE, Avaya, other kind of companies, never in my life have I seen the level of customer satisfaction that our customers portray to me when I'm in the field with them.

The other thing that I've observed is that we have become a business relevant technology [indiscernible]. Customers really need the services that we're providing because they're trying to solve real business problems, making our people more productive. Making their processes more intelligent. Growing their profits, reducing their cost, improving their revenue. And so customers around the world have communicated to me that this is why we are differentiated as a company because we actually solve real problems. And with this advent of Agentic AI, you heard a lot about this morning, it's really validating that because customers need our help in this particular area.

So in terms of our go-to-market, we are in the process of transforming this company from, as Dave just mentioned, a one product selling support only company to a company that sells to continuou products across a broad portfolio, essentially becoming solution sellers. Make no mistake about it, in our go-to-market selling support is our core business. But we have tightly aligned our sales organizations, the way they're organized, the way they call on customers in a very, very simplistic way to expand the maximum amount of our opportunity.

We've structured our people especially in our client base here in North America in a vertical way. We've got industry specialists to support them on the back end. And then we've also empowered our salespeople to be able to cross-sell across the portfolio as we continue to enable them from one product sort of a sales team to a sales team that can sell across the continuum of solutions.

We've also upgraded and refreshed the leadership where we needed to across the company. And I feel like we've got the right leadership in place today to continue to grow this company and take it to the next level following Act 2. And one of the other things that we've done in the last 1.5 years is we've instituted a very, very specific and disciplined sales culture. We call it a commit culture. Essentially a process that drives accountability that drives sales discipline and that drives focus on results. And it's reflected in our consistent quarterly improvement in the key sales execution metrics.

And then lastly, Dave mentioned this a little bit, but we've developed a partnership strategy and a partnership organization, which is really going to help us scale. I think most people, especially investors realize that you just simply don't have enough capacity. Eventually, you run out of capacity to scale your business to that next level. And so we've embraced channel partners to help us get that scale. But at the same time, not taking on the sales and marketing expense to gain that scale.

So we've built some very, very specific partnerships on the OEM side, with hosting providers, providers that host large Oracle and SAP workloads, with government channels and government partners, as well as Dave mentioned and Seth had mentioned, ServiceNow, of course, a great partner. We're aligned with them because they want to sell licensing. They understand our ERP experience enables them to sell more ERP-like licensing. And oh, by the way, if they open the doors for us as they have to their installed base, and we hope their installed base solve critical ERP problems and save them money, it frees up capital for partners like ServiceNow to be able to sell more projects and sell more licensing. So we're completely aligned, okay?

And then we drive co-sell motions, resell motions and then sell with and sell-through opportunities with all of these partners in a different way. But some of these big OEMs, if you think about it, right, that manufacture the compute infrastructure that a lot of these workloads run on today, they want to keep them on-premise. We're aligned just like we do. Because we believe that there's a lot of innovation that could happen on these apps if you keep them on-premise. The issue is that every time one of these large software vendors moves a customer from on-premise into the cloud to follow their road map, it decreases their TAM. So these particular partners, especially the OEM partners are very, very aligned with us to try and deliver infrastructure and platform as a service, and leverage Rimini Street is a layer on top of it to support the ERP apps, and then, of course, help those customers with the savings we provide innovate to the Agentic AI like we've talked about.

So you've seen the [ SmartPath ] slide a couple of times today. In terms of sales capability, SmartPath really gives our sales organization, and our customers, the ability to understand what it is that we do in a simplified way. You see it says it's easy as 1, 2, 3. Our main message to customers today is that we support their infrastructure better than the current OEMs can do it at a substantial and significant savings to what they're paying for that support today. And Craig walked you through just how we do that today.

However, as we've developed with those customers, many of them have asked us to run these systems for them end to end. So it provides an opportunity for us to go in and sell to the managed services opportunities and a lot of professional services opportunities because these customers have very complex environments, and they need a lot of work done on these systems because they're legacy, and we provide that value through our optimized pillar.

And then lastly, with the savings that we provide, we can help customers satisfy their innovation agenda through the innovation pillar that you heard Vijay talk about before. And this is really about extracting much more value out of these existing systems than the customers are getting today, and they're at a crossroads, right? Either they're going to extract more value out of these systems and do the AI, Agentic AI ERP on top, where they're going to follow the vendor's road map to their products in the cloud and get locked in for another 20 years. And I'll tell you, customers really see the value of what we're doing, and it's been validated time and time again as I get into the market across the world and have these discussions.

So we do have some sales motion changes, right, as a result of this innovation, right, because it gives us an opportunity as we become much more business relevant to call on new buying centers. And in fact, we're having meetings today with CEOs, with COOs, with line of business leaders that run factory floors that run supply chains. It gives us multiple points of insertion into these customers instead of the same place that we would go 2, 3, 4 years ago to the middle levels of IT, to the team that took care of the databases, or the ERP systems, and calling in that middle level.

Now we're at a point where we're adding so much value that customers have us a seat at what I like to call the adult stable. And it helps us develop more disciplined pipeline creation, with a land and expand strategy allows us to collaborate a lot more with marketing and with presales engineering to do different solutions and figure out what kind of events we want to run and what kind of products we want to market to. And then it also allows us hugely to focus on the white space, especially with these new partners. We're closing deals right now in this quarter, for example, that partners have brought to us from their installed base where these customers needed help. And we didn't have a presence with those customers and they weren't even in our funnel. So it's incremental to everything else that we're doing as a company.

And then lastly, I'll say, one of the other changes is that it allows for us to build and develop more long-term contracts, right? Because if customers actually understand that we have a strategy that goes just beyond supporting their existing ERP system at a lower cost. They're more inclined to want to stay with us longer and to take advantage of that innovation road map. And I also would say that this is helping with our client retention, which you're going to hear a little bit about in a few minutes on the speaker following me because it's the same thing. Our competitors, the monopolistic software vendors go into these accounts and tell them that if you don't move with us and don't follow our road map to the cloud, you're not going to get any innovation. And a lot of times, customers get fearful and they get scared and they decide, hey, I've had a good experience with Rimini Street, but my board, my execs, my CEO want for me to do innovation. So I have no choice but to follow that software vendor to the cloud, to get the innovation that I need to run my business.

And that's simply not true. When we engage them during a renewal process, we talk a lot about Agentic AI, Agentic AI ERP, and how they can get much faster with more velocity level of innovation on top of the current system without the disruption, without the risk. And this, by the way, this is not an upgrade. When these customers are being asked to move, it's a reimplementation, right? So they've got a hire a consulting company, back up a school bus of consultants to stay on site for a couple of years, and it creates a huge amount of risk and cost to the business. So this is helping with our retention as well.

And so in terms of the growth areas for us in 2026, we're focused on a couple of areas. I mentioned channels and alliances. I think you have a good flare for what that's all about. We are also instituting a private equity sales team. We are calling on a lot of companies today that are owned by investors in private equity, and in specific industries like manufacturing, automotive parts and things like that. And we're closing these deals one at a time, and we made a decision as a business that we need to stand up a team to specifically call on private equity companies that own these portfolio companies to get scale. So we're in the process of doing that. We're going to work with them to sign MSAs to push down across their entire portfolios. And we also work with the turnaround players, the folks like [ Alvarez and Marcell ], for example, who would bring us in where they're doing a turnaround for whatever the reason is, and look for our help to create an immediate impact.

And then also -- we have recently been awarded, or got on to, the federal government GSA contract, which has been about a year long, or more, piece of work that our company has done. And this has opened up huge doors for us to sell into the U.S. federal government. And we've always had some state, local and education business, but this adds incremental value there as well. So we're working on huge opportunities now with the federal government. These agencies do not have the budget, as everybody knows, to spend on large, unnecessary unneeded upgrades. And so they're coming to us and looking for alternatives. And we've had some success there. We're going to build the team out there completely and we'll continue to grow that.

And additionally, it's important that we keep our sales teams current on all that's going on, right? So as we've hired into a new solution selling mindset, and we've introduced some of this Agentic AI ERP, we know that we've got to continue to evolve the sales team. So we have certified almost 100% of our sales organization on this ERP messaging and how we're doing it. They've been deeply involved the sales organization in the pilots that we're running that Vijay put up before. We've also moved because we want to make sure that we're spending our sales time on the most qualified opportunities that have the highest potential. We've instituted something called the [indiscernible] process, which has largely been used in the SaaS business for many, many years, but it's a way for our managers, our sales leaders to identify gaps in the sales process and in the pipeline, so that we understand and know that what we're working on are really legitimate qualified opportunities that have budget, that are with the right people that have authority, and that we really understand the sales situation. So we're going to continue to drive that. It's become a regular part of our cadence. We've qualified our sales team on that.

And then we use a lot of AI inside the business as well, tools like [indiscernible] for example, and other run the business, I'll call it, learning tools to provide real-time insights, enable targeted interventions where we need to do them, and also to increase our participation rate. So we're measuring, of course, who's participating, how much they're selling, what kind of margin they're driving, what kind of projects they're involved in and make sure across the sales team that we have the right balance between near-term, short-term opportunities that are needed against the larger, more strategic complex opportunities that are the ones that are going to help us increase our growth and our profitability.

And so I just wanted to touch for a minute before I wind down on North America, our largest market, for sure. We've made some big changes in this market over the last 1.5 years. to get us ready for the time that we're in now with this Agentic AI ERP offer that we have. And so if some of you remember as investors that about a year ago, we went to a [ hunter farmer ] model. where we took North America, we took our current sales team. We made -- we morphed them into a group of hunters that were only doing one thing and that was calling on net new logos, and that's working very, very successfully. We also, at the same time, took a group of our CSM team, who were outside of the number, we're not quota-carrying salespeople, and we repurposed those head count and hired engagement managers, about 18 of them, and we've got them mostly all on board and most of them ramp today. And I will tell you that we're seeing huge benefits from this change that we made. And by the way, this did not increase our cost. We did this all within the existing budget envelope, right?

But we're seeing, for example, on cross-sell contracts, and Dave talked about how cross-sell this year is going to be a huge growth area for us. We've improved the cross-sell contracts year-on-year through Q3 by 12%, just with this team alone. And they're all still in this ramping mode, but you can see them selling more. They're still doing the account management role. And of course, they have some other responsibilities as well. But this is a huge benefit to our company. And we're looking at the possibility of expanding this beyond the Americas.

And then in terms of progress in [indiscernible] alone, or North America [indiscernible] is what we call it, we've driven win rates of an increase year-to-date of 14%. Our average selling prices increased year-to-date by 17%. And in terms of the number of big deals, I'll call them, greater than $800,000 on a year-to-date basis, that has increased by 11% as well. So we're seeing really good results here. You can see a snap of some of the notable wins that we had here in Q3. And then, of course, as we talk about the priorities for this year, we're going to deliver the plan. We're going to accelerate our growth in the channel, and with the federal team and this private equity team that we stand up, we're going to make sure that this Agentic AI messaging is crisp and clear across every salesperson in the organization. And then we're also going to ensure readiness for FY '26 with a strong start, great pipeline metrics and strong client engagement.

So I'll end on this slide. We are on track to do great things in this company. And the opportunity for us is incredible, okay? We've got a high-performing global sales team, 7 regions around the world with general managers that know how to execute and execute correctly. We've got disciplined execution and predictable growth across the business that we're seeing quarter-on-quarter. We've got a very, very strong expansion engine with this Agentic AI ERP messaging that's relevant now. Customers need it, okay? And then we've got all of the scalable growth levers in motion today. We'll continue to add them as we move forward. And our goal is to continue to grow this business and develop and make sure that everybody in the organization has a growth mindset.

So thank you for listening. And I look forward to interacting with some of you throughout the day. With that, let me introduce Nancy.

Good morning, everyone. I'm Nancy Lyskawa. It's great to be with you today. I've actually been with Rimini Street 16 years, and I have to tell you, it's been a thrilling ride the entire time I've been here. What excitement to be able to bring choice to the industry and to allow our IT executives to own how they're going to deploy those scarce IT budget. So it's really been just a great experience.

As the Chief Client Officer, I traveled the world meeting with many of our clients, and I have to tell you, it's really the customer experience that makes a huge difference for us at Rimini Street. Let me go to my next slide. I'm a little off here. So again, at Rimini Street, we know that the customer-centric operating model is key for us to be able to retain and to grow our clients.

So our client experience is really a key differentiator for us. We know that if we're doing a great [indiscernible] clients, it's only natural for them to ask what else can we do for them? So again, an exceptional client experience really leads to client growth. [indiscernible] this growth model, we've actually had the experience of having an 11% CAGR and cross-sell revenue over the last 3 years. And again, we have extensive room for growth, and this is really dependent upon our Rimini [ Smart Path ]. It allows us to provide support, optimize and innovate solutions. And of course, this provides us in a great cross-sell opportunity of billions of dollars within our client base.

So let's take a deeper look at [ our ] client profile. So we support some of the largest, most complex clients in the world with over 200 of the Fortune 500 and Global 100. In fact, [ 53% ] of our clients have annual revenues of over $1 billion, and about 50% are more mid-market-sized clients. We have signed over 6,300 contracts, and we currently manage 1,590 clients globally. This is really across 5 primary industries with manufacturing really being our sweet spot, followed by services and then technology, media and telecom. Nearly 50% of our client base is in the United States, and then that's followed by APAC with 29%, EMEA 17%, and then LATAM, 7%.

So the 3 pillars of our customer success strategy are grounding the customer experience. So our client engagement methodology, it's really focused on an intentional distinctive client journey. So our client success managers, they really own the post-sales client relationship. They're responsible for retention, expansion, utilization and client advocacy. The success of this model is really evidenced by our [ 4.9 ] customer satisfaction score, and this is across onboarding as well as all of our support delivery.

Then our goal is to expand our client growth through the cross-sell of new offerings and services. It's key that almost 70% of our clients today have more than one offering that's provided by Rimini Street. And with utilizing AI and the propensity to buy signals, we are primed to capture significant additional market share with the opportunity within our client base.

We also have another pillar where we're focused on protecting and retaining the client revenue from our client base. And [ Kevin Madock ] is going to come up next, and he's actually going to be able to talk to you about this in more detail.

So next, I'm going to dive deeper into our approach to client engagement strategy. So our client engagement strategy is really simple, and it's regionally driven. -- our CSMs are aligned by industry as well as existing and potential client revenue. Our engagement model is also hybrid. Of course, we have a high-touch human element and also a digital client engagement motion, and that really helps us to drive awareness and interest in our new support and services offerings. We also have a strategic accounts program, and this is really focused to protect and nurture those clients again, with the greatest existing and potential revenue opportunities across Rimini Street.

Most are really excited. I'm going to spend some time about some of the new technologies that we've introduced to really further our retention, our cross-sell utilization and client satisfaction across our client base. A lot of our technologies are also helping our client success managers to really release some of the administrative burden of their role and to really be focused more on the client experience.

So when I look at our strategic account program, it's really focused again on our high-potential, high-value clients. So these clients are most complex clients across the world. We see a lot of M&A activity. We see a lot of dynamic technology strategies across this segment as well. Nearly 60% of these strategic clients have had a change in the C-level executive over the past 18 months. We all know that the C-suite is constantly changing on a regular basis. And so really continuing to maintain these executive relationships is a key component of this program. We actually assign executive sponsors from our senior executive team to peers within the client accounts, to create a sense of community and to really provide unbiased guidance and to really, again, support the client's long- and near-term technology strategies. The more we understand about our clients' technology strategies, the more we can offer different areas of expertise and services where Rimini Street might be able to provide additional value.

So these clients across Rimini Street, not only in the strategic accounts program, but all of our clients, they really look to Rimini Street for technology expertise for industry insights, and also how they can leverage Rimini Street to drive additional immediate cost savings, and then really fund their innovation into other more competitive areas for the company.

So I'd like to talk a bit about how we're actually using AI to transform the customer success management role at Rimini Street as well, again, to really free up their time to be more focused on the client experience. So I'd say that industry-wide, the role of the customer -- the role of the customer success manager has never been more critical or complex. There really has to be strategic advisers, relationship managers, as well as quota-carrying sales reps and renewal captains. So I'd like to believe that we're leading in the CSM evolution with the adoption of AI. And again, we're really there to support the customer success manager role, not to replace success managers on that human element. So we're really trying to allow them to transition from being a task administrator to really a strategic adviser to our clients because that's really their critical and most high-valued role.

So we're doing this through the automation of client intelligence as one area. And again, this is really critical to allow us to predict insights to drive where we should be having executive touch points, and we can really be assisting our clients to drive additional value from the Rimini Street investment. Also with the integration of platforms and tools, again, this really helps us to ensure that we're leveraging AI again to free up their administrative burden so they can really be focused on the client experience.

So here are some examples of AI-generated client intelligence that we're actually producing today. So again, we now have up-to-the-minute account plans, power maps, white space analysis and intent buying signals. We're actually using commercially available tools and LLM models such as [ Pink Fish ], which is an Agentic automation platform, Open AI chat ChatGPT 5 deep research, Cloud [ Sonit4.5 ] and Microsoft CoPilot, all of these within Azure private tenancy. So the leadership profiles that we have for new executives, they really help us to understand their past playbook and what they're likely to care about most as they move into this new position. In this new role, what are their technology plays from their past that they might look to implement in this new role?

And then, of course, the white space analysis. This really gives us a comprehensive look at the picture of our clients' technology footprint so we can proactively work with them to understand their technology strategy plays, and what other support and services from Rimini Street could be deployed there. Further, the commercial AI tools that we use, along with our home built LLM models, provide really a complete 360-degree view of the clients' environment. And again, we're really honing in on things like intent buying signals, things like chat, have they been visiting our website? Are they out searching to look at third-party support or perhaps managed services. Are there conversations in our support cases where they're actually working with our engineers that might lead us to understand they have an area of need in another area where they might benefit from a new Rimini Street support or service?

And then once we do have a cross-sell opportunity, we actually have a proprietary forecasting model that we've built. This gives insight into the likelihood to close for an opportunity, and it also provides the recommended next steps to actually increase the velocity of that opportunity to close. So all of these insights and tools remove the manual work again and provide key expansion and details available to our CSMs. Again, so they're really focused on the client experience, which, again, we know is a differentiator for Rimini Street.

So I'd like to end today with a quick update on our long-running client Hyundai. This is a great success story. So Hyundai came to Rimini Street back in 2019 because they simply weren't satisfied with the value of support they were receiving from their current vendor. So since 2019, Rimini Street has supported Hyundai's global IT environment. We've really been a strategic partner starting with Hyundai Automotive Group and also IT subsidiary, Hyundai Auto ever. And again, we've been providing support for both Oracle and SAP systems, the full application, as well as the technology stacks. So this partnership now has expanded to 37 subsidiaries across 7 of Hyundai's industries, and into regions, including North America, Brazil, Mexico, Europe and India. And it's actually resulted in tens of millions of dollars of savings, which Hyundai has been able to drive innovation and reinvestment with.

It was actually a natural fit for Hyundai to partner with Rimini Street as really one of their secret sauce items in the industry as they strive to develop and build a car for thousands less than their nearest competitor. These tens of millions in cost savings has actually allowed Hyundai now to fund key innovation such as autonomous vehicles, hydrogen-powered vehicles, and also a very ambitious program where they're trying to aggressively roll out 27 new EV models in 2027.

I also want to note that this partnership with Hyundai has been unique in that we also have a master services agreement kind of like our GSA agreement in the U.S. And this is where their suppliers as well as supply chain partners are able to buy off those MSAs, again, looking to drive value and cost reduction from Rimini Street services. That is encouraging their own suppliers to work with Rimini Street so that the savings they incur, they can then pass along to Hyundai. So again, I find this to be one of our great client success stories. But of course, you're going to hear from some of our clients in just a bit. So I'm really excited for you to hear from some of those clients today as well.

So thank you for your time. It's great to have you here. Next up I am going to introduce Kevin Maddock.

Thanks Nancy. Good morning. My name is Kevin Maddock. I'm our Chief Recurring Revenue Officer. And then that function I'm responsible for managing and optimizing our very important subscription annual recurring revenue base. And today, I'm going to be speaking about the strategies and approaches that we employ to ensure that our customers are continually receiving value from us throughout their life cycle. And ensuring that we're delivering that value to put us in a position that we continue to protect and grow this very, very important revenue stream, a revenue stream that today, in fact, comprises about 95% of our total revenue.

So you've seen the Rimini [ Smart Path ] presented in a couple of the other presentations this morning. And our subscription revenue really encompasses and crosses through all 3 of these pillars. So in our Support pillar, we have customers replace their vendor support at a much lower cost. In our Optimize pillar, our customers can utilize our professional services or managed service solutions to gain further efficiencies and drive further ROI out of their software applications. And then they can use the savings that they achieve in pillars 1 and 2 in our third pillar, while they look to drive innovation and AI strategies, including our newly launched Rimini [ Agentic UX ] solution that we just announced today. So you can see here that our [ SmartPath ] methodology really provides a clear road map for our customers to be able to utilize all of our services, which should make them stickier, which we expect should increasingly drive our retention rates and our long-term client value. of their subscription contracts.

So in terms of retention, from a retention perspective, if customers feel like they're receiving value from us, they're going to renew. And we start our retention process on day 1 in the sales cycle. We have our salespeople and then our customer success managers work with our customers to align on the value that they're expecting to receive from our services. And then we work with them to review what their expected outcomes are and then equate them to measurable ROIs. And then we work with them throughout the client life cycle to ensure that they actually achieve these goals. Then from a client engagement perspective, I think you'll see in our client panels later today, that many of our clients view us not just as their support provider, but also as a strategic adviser. And they'll often invite us into their technology discussions where they're addressing what upcoming technology needs they have, which are often competing with increasingly tightened or constrained budgets. So we'll bring in our experts into these discussions that can offer them technologies roadmap strategies or license advice. And as Seth mentioned in his presentation, more and more, we're being brought in at the Board level where we can discuss with the Board members that they actually have alternatives and options other than having to go back to the very expensive vendor road maps.

And then in terms of renewal with about a $400 million annual subscription revenue stream, we process multiple millions of dollars of renewals every single working day. So we take this function very seriously. We don't treat it as a back office administrative function like many other IT companies do. So we've built out a very robust and detailed sales process. So we have a dedicated team of renewal sales professionals, who proactively work with our customers, and they collaborate with our regional GMs and our regional customer success managers throughout the customer life cycle, not just at the time when their support contract is due, which is what many IT companies that I've worked for have done. And then through this process, we've also developed an AI predictive risk model, which after 20 years in business, we've been able to determine what types of factors can drive potential risk and renewals.

So more specifically, some examples would be if there is a CIO change or maybe if a customer has been reducing the volume of cases that they call in, this model can alert our renewals team, and then we alert our CSMs to immediately engage with the customer so that we can address these issues and rectify them prior to their renewal time.

So there's a number of factors that influenced why our customer -- or what drives our retention with our customers. And first and foremost, without a doubt, is the exceptional level of customer support that we provide. And it's this level of support -- really, our whole company's work culture, all our compensation plans are all focused around delivering a world-class level of support. And it's this world-class level of support that we consistently deliver that really enhances and expands our relationships with our customers from being not just their support provider, but becoming their trusted partner. And by becoming their trusted partner, it paves the path for us to be invited into their innovation technology discussions, which we're then able to influence.

So for example, it's very common for us to be in these discussions where we can recommend our connectivity or our security solutions, both of which -- [ will ] expand the lifespan of our customers' ERP software applications, further reducing their costs and, in turn, lengthening their relationships with us.

So as we continue to grow our customer base, it's imperative that we scale our customer success organization so they can successfully and effectively manage our increasing number of customers. So we've leveraged technology, develop multiple tools and dashboards to enable our success managers to better manage the customers. And I've already talked about the predictive retention model that we use during our renewal process. And just in the interest of time, as I'm trying to get us back on schedule, I won't walk through each of these dashboards. But suffice it to say, that these dashboards prevent -- or present a 360-degree view to our client engagement managers so that they can easily, at a glance, look at all their customers see what renewals may be coming up, see what cross-sell opportunities that they have and more importantly, see where there may be a potential issue or risk in the account. So these dashboards allow our success managers to be able to focus and prioritize which accounts, and which potential issues they need to be focusing on and prioritizing, and solving these issues or potential issues before they become big problems. And all of this is done with the intent of increasing our subscription renewal rates.

Thanks very much. I'm now going to introduce Eric Helmer, our Chief Technology Officer.

Hello everybody. All over the world. I do a lot of keynote sessions at things like Gartner and IDC interact with the media and things a lot. And I got to tell you, it's so super exciting to see an audience of CIOs, the light bulbs going off, the slap in the face that happens. When people come to the realization that they can get better and faster advanced AI outcomes on their existing systems today, as opposed and getting them freed up that they don't have to do a very expensive migrations and reimplementations of their ERP. It's liberating. And it's just a really fantastic conversation. The messaging is working just so well.

And -- but we can't just talk about that in this room. We can't just talk about that at the -- with the executives. We have to execute on the ground. We have to enable our sellers and support our sellers to be able to have the tough conversations, to be able to get that light bulb to go off with our prospects and with our existing customers, so that we can take them to the next layer.

So this year, I was tasked to build a world-class technical presales organization to do exactly that. We need to transform our presales capabilities to go beyond just the basic objection handling that we do every day, and the deal progression activities that we do day to day, and really start bringing in thought leadership, and customer education, and showing that the prospect is not just having a transaction with us today that we are taking them on a journey through our support, optimize and innovate pillars to enable end states in the most cost-effective way in only the way Rimini Street can deliver. And by doing it by engineering solutions that solve real business problems using Level 4 support as the funding mechanisms to get those outcomes done.

So we created a consolidated optimized single presales organization. This -- there was a lot of different teams before this happened, reporting up into different chains within the within our organization. They all had different pieces and responsibility of the sales process and supporting our sales along the way. What we wanted to do is consolidate that into a single entity, a single hand to shake for our sellers to reach out for anything that they needed to help them support that technical sales motion. So it's really in 3 different pillars within the team.

The first one is the executive engagement team. You've already heard a little bit about this today. These are [ ex-CIOs ] that we have hired over the course of the last year that bring in thought leadership capabilities to bring in credibility and get higher access level into our customers and prospects. It has a group of Chief Technology Officers. So I'm the Global Chief Technology Officer. I have 9 regional CTOs all over the world attached to regional sellers and GMs that can go into a sales cycle with our sellers and help them with the real issues of the day. What do I do about my data centers, my operations, [indiscernible] move to the cloud, my [indiscernible] problem, my data warehousing problem, my data integration problem, how to [indiscernible] AI, how do I get better analytics? These are real conversations that have to happen today because those are the outcomes we are going to help our customers do starting with step 1 of L4 support.

Also in this team are industry principles. We have all the major key industries covered from [ ex-CIOs ] from a very long tenure companies specializing in particular industries that know the business problems that they are facing today. These are the guys that are talking about laws and sovereignty, and getting more customers in the door and improving margins, and streamlining supply chain operations and doing predictive maintenance on the manufacturing floor. These are the ones that are really doing industry-based things. So between these two, they can sit at the table with the CEO, with a CIO, and talk about the real problems, whether it's a technical focused conversation, a business-focused conversation or both and have that credibility to show this is how Rimini Street partners with you to get these outcomes done in the most unique way that you're not going to be able to get from anyone else.

The second group here is our presales engineers. There's the traditional presales engineers. These folks know the products inside and out. You need to have someone that have a conversation about HR and EBS. Got it. You need to have someone to have a conversation about how to do payroll in SAP? No problem, how to do cybersecurity at an Oracle database? Got them. So these are the folks that are walking in hand-to-hand doing the technical objections, but also doing the pricing, the [ scoping ], the discovery, really understanding the landscape here so that we can deliver the best possible proposal to that organization.

And then finally, speaking of proposals is our proposals and references team. As you can imagine, a lot of people, when they're making this decision to go to third-party support, they want to talk to some other people about that first. Sure, no problem. Happy to do that. And we deliver world-class professional proposals that make, what I call, the final compelling argument to get that over the line Here's what we heard, it's customized for them. Here's your problem statement. Here's your business aspirations. And this is proof beyond a reasonable doubt how Rimini Street is the most logical and best-suited partner for you to achieve those objectives in the most cost effective way.

And by putting this team together, we have one single entity that takes care that is involved in every piece of the sales cycle, all the way from identifying the opportunity all the way to contract execution and anywhere in between. So we have different areas of all these individual sub teams through one selling motion, to make smooth transition all the way through the proposals and execution of it.

And this is how we're going to really change going into Act 2, and that is really having more of a solution selling presence. Using strategic alignment, using that executive engagement folks that are running that relationship at that executive level, right, while we're doing the technical enablement of having the solution architects with inside the presales engineers doing the day-to-day objection handling, working with the people, maybe even DBAs, the managers that are trying to really understand how this is all going to work under the cover.

We have got -- we are starting to build road maps, calculators, ROI calculators, tech debt assessments, risk assessments, value engineering, business case templates. So now we're really bringing real thought leadership into this to show that, that CIO can go into that board and say, I have done my due diligence, Here's the risk. Here's the business case, here's the ROI. And this is the compelling argument that shows that Rimini Street is the best option for you.

We must deliver real-world use cases and demos. We have to do demos now. We didn't have to do demos before, but now we're creating solutions. We're creating POCs. We now have to get up there and show people live demos. We've got to show them what we have done for customers, and POCs, and case studies and things like this. So we're doing so much more of that. So we've got to build a world-class presales organization that is continuously being educated. Continuously getting better. We're getting more and more products, more and more services and more and more -- very, very advanced technology that we are leading the way with in many cases, that we have to comp the speed globally all over the world, we have to be up to speed.

This team also is very important because they really are the tip of the spear for thought leadership in the company. So you could see a lot of the blogs that come out, the things you might see on LinkedIn really comes from this team. One thing that we did mention [indiscernible] quickly a couple of times is this rise of Agentic AI ERP. We have some copies for you here today. I would definitely suggest you take a look at this. This is a look into the future for the next 5 or 10 years, on what will happen with the ERP. How the Agentic AI ERP era will significantly affect the ERP, as you all know it today. While that ERP slowly decomposes and eventually becomes invisible. And we're going to show you exactly how that's going to happen. We're going to show you the reference architecture, and you'll be able to see a lot of that within that paper.

I also want to focus here a little bit on our industry team and how important they are when we're looking at these particular challenges because we're looking at the challenges of these companies. We can see that some people have problems with accelerating innovation and profitability. Really needing to free resources up to do things like AI and machine learning and us being there right along the way with them, helping them with that enablement and then bringing the funding along in order to make that happen at [indiscernible] was maximize and modernize the applications. They really had to modernize what they needed, but they didn't have the time, money and resources to do these huge migrations. Plus they had vulnerabilities in their system that need to be mitigated.

So we see all of these topics that -- and this is just a sample of the manufacturing pillar, right? There's -- we have all the different ones that we have. But on the manufacturing here, these are those types of things that manufacturers are talking about today, investing in workforce training. Again, in the predictive analytics on the floors. Cyber security measures because they have really old manufacturing systems. These are the things that people really want to talk about. And when we can sit down at the table and have peer-to-peer level conversations with [indiscernible] this is where we break down the walls of you're just to help desk guy call [indiscernible] to a trusted adviser that's going to take them on a modernization journey, okay?

And we have a bunch of other different [indiscernible] as well from financial services, how we've helped these particular companies. Here are some trends over here in the financial services that we're seeing that are just constantly coming up, digital currency being a huge one, cybersecurity, improving the customer experience are all really at the top of that list.

So trying to get us caught up here on time, and I think we're doing somewhat okay. But what we have now here today is a little bit of a break that you all well deserve. Just 10 minutes though, okay, we've got lots to do. So let's get back here. Let's see, we'll come back here maybe at the top of the hour, at top of the hour. And when we come back, we'll have a client panel discussion. We'll talk about financials, and we'll have a great Q&A session, okay? Thank you very much.

[Break]

My name is Joe Locandro. I'm the global CIO for the Rimini Street. And I was very privileged today to be able to host and facilitate the client panel. What I'll do is I'll invite them up one by one and we'll start the day going. But first of all, I thought it's really good you see the breadth and depth of the people we serve and the people we support very regularly.

And you can see here that we've got clients from all around the world, and we support everything even Mongo databases. So -- and you can see there that as the previous speakers have alluded to that we've got quite a large variety of customers globally.

So I will start inviting some of our panelists. And if I could start off with Nobuo-san from Auto in Japan, in Tokyo. Nobuo-san, if you can come on stage. Thank you. Autobacs is something like a Pep Boys equivalent here in the U.S.A. Thank you, Nobuo-san, take a seat. Michael Butler from Fletcher Building in New Zealand. Hi, Mike. Ziv Cohen, who is representing the Ministry of Defense for Israel. Thank you. Gauri Kapur from Hitachi Vantara. Erik Looi from Malaysia from ACM. Jaap van Riel from KnitWell. And finally, Todd Treonze from Catalyst Brands.

Now that was going to be my seat. So if you can just move up one, Mike, everyone just move over there and I'll -- there we go. It's fine. It's fine. You got to get it right at the start.

Okay. So today, you've heard a lot about the Rimini Street Smart Path and the 3 pillars, the optimize -- support, optimize and innovate. And you've also heard a lot about the agentic AI on ERP. And today's discussion, I thought would be really good to reinforce some of those points from a customer perspective and get some real-world examples of how some of our customers are adopting the Rimini Smart Path and how they're also considering and using agentic AI on their ERP systems in their own corporations.

And so I thought I'd kick off firstly with Mike Butler and Fletcher Building. And really, you've been using Rimini Street for a while. And I thought maybe if you could talk a bit about the support components that we've been doing with you and where the value is and how it's been able to facilitate some of your business objectives.

Yes. Thanks, Joe. Our relationship with Rimini Street started early 2023. We were looking to start a transformation program, and we wanted to make sure that our Oracle JDE environment continued to be supported as we went through that transformation program.

And about June 2023, we signed with Rimini Street and got 50% saving automatically for our support. So that was absolutely fantastic. From a relationship perspective, it's grown. We're looking at a Rimini custom solution. We have aged ERP within our environment that are still strategic assets for us that are people wanting to retire that support those environments. So the breadth of skill that Rimini Street had, they were able to bring that to the table. And we're now looking at a support service around that to be able to make sure we keep using those strategic assets.

Yes. Thanks, Mike. I mean those manufacturing assets, aged workforce, the systems keep going, but the people maybe not so much. And it's a real issue in the manufacturing sector.

And speaking of critical systems, et cetera, Gauri, Hitachi Vantara manage a lot of critical platforms. And probably if you could give us a bit of a view of the value that Rimini is providing with you and maybe a couple of examples.

Yes, sure. Thank you for the question. I can talk about it for more than 2 minutes. But our journey with Rimini did not start with a digital transformation story like Michael. It was more around optimization. Truly, that was the fact. And we were looking at what we currently had with the software vendor. We are on Oracle, and we looked at the value that we have. So that's where we started.

So today, Rimini is just not, I'd say, a trusted partner for stable operations and reliable operations, but they have kind of, in the past 2 years, transitioned into an adviser. And I can say that. And we work with them on a daily basis. We started with a smaller footprint with Hitachi Vantara. We are a company that's multiple legal entities and multiple ERP instances. And very quickly, I think in about a year, Joe, we expanded to other legal entities.

And we get -- we -- this is the age where security and compliance is the first question. Business continuity is another big question. I know Gabe is laughing. But that's the biggest question I got asked when I was building the business case, and that's the question I still get. And until recently, 2 weeks ago, any of you are aware of the vulnerability, zero-day vulnerability that EBS had, we were getting questions left, right and center all the way up from our mothership at Hitachi Limited from Japan.

And I had to reach out to my trusted partners again. And I said, "Hey, I know what the answer is, but can we give more strategic advice to our leadership so that they understand the value of this relationship?" So as you can see, the Rimini support actually opened new doors for us into going into more optimization, more opportunities. And we talked about the savings, and I think you truly delivered that.

Well, thanks. That's really good news. And -- and probably just to expand upon it, Ziv, the Israeli Ministry of Defense, you can't get more mission-critical support on some of those systems. And I probably -- it'd probably be good to just expand a little bit on how you see Rimini Street has helped you not only support but save your operating costs. And then when you did it, what did you do with the money?

We got it back home. Thank you for the question. We have a lot of systems that we didn't need or wanted to upgrade. And yet, we had to pay a lot of money to our vendors to keep and holding the systems up and going. So by partnering with Rimini Street, we gained 70% of the price that we needed to pay. And you can be sure that the systems are up and running and everything is functional correctly and precisely.

What we did with the money? So the money went to investments in innovations of our core systems. The armies around the world have the core systems and systems that on the side, and we had to invest on AI functions or even innovations for systems to run on the cloud or on cloud platforms. And when we paid to our vendors to hold the Oracle systems, for example, we didn't have more money to invest on the things that we had to invest. So the partnership did well.

It's good to see it work. I probably just want to switch gear a little bit because we had also the third pillar of if you support and optimize and it frees up money to innovate. But if you heard Ziv's opening remarks, the world is a really tough place at the moment with tariffs with a lot of competitors coming out of China and everything else. And I've got 2 retailers here at the end, and there's a real -- that's a real tough market.

And I thought, well, maybe starting off with you, Todd, because you've got the Brooks brands and all the other brands. What are your thoughts about keeping the core as it is and then innovating on the top? And if -- because it is a tough market, and how is that helping you become competitive?

It's a great question. So just for folks, Catalyst Brands is a $9 billion start-up. So it's JCPenney, it's Aéropostale, Nautica, Lucky, Brooks Brothers and Eddie Bauer. So brands that everybody knows, but no one would know that they're all together under this new umbrella that just started back in January of this year.

And when I became a part of that company, former CIO of Brooks Brothers and Reebok, it was very interesting because I always wanted to work with Rimini Street, but never had the opportunity in the past and inherited a renewal when I first came into the role. And that was one of the first deals that I did because I knew that the savings that had already been put in place there, and I saw opportunities to extend that relationship into some of the new brands that we were just bringing into the Catalyst portfolio.

Eddie Bauer is a great example, running older Oracle technology, paying high support for it. So that was a no-brainer. The second we did the new deal, we merged that right in there. What we're doing with those savings is using those to build on top of what we have. We have a number of agent ERP platforms that we're going to be using as the systems of record, if you will, for transactions going forward.

But really, excited to hear about the new agentic AI ERP and where that's going to take us because we have a lot of major shared service centers where we've got people. We have a lot of tasks that happen across 70,000 associates in 1,600 stores that require another level of automation. And without having that type of capability, you're going to continue to pay for those people. And I think that there's a real big future opportunity for us here to reinvest some of the savings we're seeing at that support level into the innovation side of the business in the coming periods.

Yes. That's a very good insight and probably yes to build upon it. I mean a lot of companies face that dilemma of, well, will I get my innovation through the ERP upgrade or will I just build on top of it? And new contemporary thinking, as you've seen here today, suggests that we should build on top of it. But how do you go to boards and others and convince them that this way is a better way than the traditional way? And what's the value of an upgrade?

Yes. Thanks, Joe. A little bit of a similar story as Todd. So for everyone that doesn't know KnitWell, KnitWell was a private equity-owned portfolio company with 8 apparel retail brands, brands like Taylor, Loft, Talbots, Chico's, so all women apparel that came together over the last 5 years or so through a number of acquisitions. So I have 4 or 5 of everything. I have 4 ERP systems.

And part of our playbook when we acquire brands is to actually move to Rimini Street as soon as possible. It saves us money from an operating point of view. It extends the life of the ERP system, and it frees up kind of our capital to do innovation elsewhere. And honestly, that's where from an innovation point of view and an AI point of view, right now, we're more focused on other parts of the business than ERP. I'll get back to ERP in a second.

But really, the opportunity around AI in a retail business is on the digital side of the business or the store experience for customers. That is where our initial focus on AI innovation has been. But I'm a big, big believer in what has been shared this morning around agentic AI for ERP.

The time of ERP is over, right? And I was talking about it earlier in the morning with some of the Rimini folks that in my mind, from a technology lens, an ERP platform is almost the perfect platform to put agentic AI on top of it. It is well structured. The data underneath it is in place. It is also well structured. And it's all around kind of business rules. There is no easier use case to automate with agentic AI. So I'm a big believer. And I really hope I never have to upgrade an ERP in my life again. It's not good for my sleep, but it's not good for kind of the P&L either.

Yes. Most of us have scars on our backs with ERPs, and I've done a few in my lifetime as well. But how do you go about convincing the Board? Because a lot of them think that, that was the Panacea to all Eagles that, that was the only path available.

Yes. So I mean in my experience working with the Boards is that, I mean, they're thinking about it from a risk reward kind of point of view, right? And there is a lot of risk with upgrading ERPs. We all know the horror stories of spending millions -- hundreds of millions of dollars and then disrupting the business for a number of quarters, that is a risky proposition, right? And the reward of not having to do that yet or delaying that and spending your capital elsewhere on growth and innovation is a really compelling kind of conversation with Board members.

In my mind or -- and the way I've worked with Boards is also you can start into this for a couple of years, right? You can build the Rimini kind of relationships, and you can extend the life of your ERP for 3 years. And you can always go back. If then you figure out that it's not your -- you can always go back and do that upgrade. I think you won't go back, to be honest. But I think that is a good conversation to have with your Board.

It's not something that -- it's not a decision that is irreversible. It will become irreversible by once you learn how successful it is and the support you get from your Rimini partners. But I think it's good for Boards to understand that this is not a kind of you throw it all over board kind of strategy. You can start slowly and build from there.

I suppose that builds a bit upon the point with you, Mike, when they started looking at the journey of SAP and then stopped. And now you've got options that you probably didn't have 2, 3 years ago. Does that fit similar to what Jaap saying?

Yes, definitely. Our business, Fletcher Building, it's a business like a PE. It's about 28-plus different businesses within it, and we've got about 18 different flavors of ERP. And we've got about 50 instances running. So it's quite diverse. And each one of those has a little ecosystem around it.

So as you talk about the ability to be able to not have to upgrade to be able to get more life out of that asset. And now with agentic being able to have different options on the table to be able to solve business problems, it's definitely a great way to go.

Yes. And then similarly, Nobuo-san, you've got a great franchise and you're trying to modernize and you're trying to get more competitive and profitability. You've got an internal team with ServiceNow people, and you've been experimenting with agentic AI with ServiceNow. Can you give us a bit of an insight into what advantages and what you've been doing?

I'm not good at English, yes. Okay? I translate. First, I speak English. I interested doing AI agent for ERP after your press release, yes. And it's not only reduce the cost but also the value of our company. It's very nice solutions, yes. Okay? And can I speak Japanese? please translate. [Foreign Language]

[Interpreted] Optimize our architecture ERP, we're on SAP 6.0. And on top of that, we put in Rimini Street and we use the digital workflow to achieve quite an increase in quality. Our service quality went up, and we also were able to change our monthly processing down to weekly.

Wow. So that was monthly to weekly.

Monthly to weekly.

And you optimized some of the business processes for allocations.

[Foreign Language]

[Foreign Language]

[Interpreted] We're still in the process of achieving the full optimization, but that's -- we know we'll get there, and that's where we're in the midpoint of that now.

Wow, that's great. Because I mean, I think, it's a bit of a crawl, walk, run. People start going through it, learning and then start getting more confidence and then they just expand it more and more.

Eric, you've been very advanced in the way you've been freeing yourself from the shackles of the ERP over the last couple of years. In fact, you're a bit of a vanguard to get into low code, no code and then expanding into some of the agentic ERPs, AI for the ERPs. Can you give us a bit of an insight on your journey so far and how you found it to meet your objectives?

I'm Erik. I'm actually from Malaysia. We are an OEM factory manufacturer for semiconductor back-end machines and also medical. We have reaches over the Asia Pacific and also Europe plants.

So we have started SAP 20 years ago, and we have done several upgrades. And on 2017, we actually upgraded to S/4 on [indiscernible]. And we started to think is that the direction we want to go. And in the year where we were hit with COVID, that's where everybody start to think of their strategy. And that's when Rimini Street actually approaches us and told us that we have an option. And that comes at the right time.

So we actually have a very robust system running for 20 years. And there hasn't been much changes. But what we are looking at is not changing the ERP itself but changing on top of it. So the innovation layer have to be very agile and with minimum resources, and we can generate application with very short time to value.

So during that time, what we did was we stopped SAP maintenance. We go on board and that is on Rimini support. and that's the first pillar. The second pillar, we actually optimized the systems with Rimini Consult that we actually brought our system to be e-invoice enabled that was the military for Malaysia last year. So we did that. And with the innovation layer in place early a few years ago, about 3 years ago, we started to develop a lot of apps on top of it, right?

It has streamlined the way we do things, like what ServiceNow is doing. But what we are doing is we are able to create our own applications. We service different industries. We service different customers. We are able to create bespoke solutions for our customers. Just imagine the system where I've not been writing programs for 20 years. I'm able to create solutions. That's how easy it is and how quick it is.

Now after that, it is very natural that with that platform or with any other platform of this, we can actually add on the agentic side of it, where we used to have deterministic programming. Now we have probabilistic and dynamic kind of decision-making. So I think that changes a lot. Today, the last few days, I've learned that this process as a name will be the Rimini Smart Path.

Yes. No, that's good. And in fact, the evolution of AI and you think about ChatGPT only came out about 18 months, 2 years ago, and people were still wondering what to do with it apart from asking questions. Where do you see it heading? Because the rate of change that this is going is far, far greater than other changes in the technology industry. And so if you had to look out another year, where do you see your company going and investing in this? And this is for most of the panel, just not just Erik, where do you see it going? And are companies going to invest further in there, which is question number one. And if they don't, what happens? If they take the alternative path?

Can I?

Yes, sure, Erik. And then I'll move to...

I'm always very excited talking about agent. So when ChatGPT came out about 3 years ago, everybody gets to experience it. But for organization, that is on the very surface. So what we have now is actually machine cognitive, which you can actually apply to your existing application. Now that saves a lot. And what we are looking forward is to automate processes, which are quite incredible because -- to automate because it's very dynamic in nature, the decision-making. So we are able to orchestrate different agents to do specific tasks at this point. And I don't think this is a hype. It is going to continue. And we are working on the supply chain agentic flow, and it's creating value for us at this moment.

Wow.

Yes. It's actually nice to build on this because I agree there's a tremendous opportunity to automate anywhere in the business. But I think the real opportunity is going to be to really transform entire business models, right? And I think we're all trying to still figure that's still out. Most of the effort on the moment is automating or augmenting kind of our current workflows and processes, kind of the way we're working today. But it's going to change. We're going to work entirely different.

And similar to the dot-com kind of change, right, entirely new business models, engagement models, businesses will kind of grow out of this. We are -- I mean it's early days, but we are kind of starting to use AI literally in every part of the business. So from product design where designers used to kind of use an application to kind of have the inspiration from the runway and from competitors and draw new products, we're using AI for that.

In marketing and customer outreach, generating marketing, AI can do it much more efficiently than our manual teams. In the inventory space, if it is around allocation or there's real opportunities. In store and store engagement, we have a lot of clienteling capabilities and outreach to customers. We can do that now in a much more personalized and high-volume way. So literally, every part of the business will be impacted.

And Joe, to get back to your original question, if you're not, it's -- you become irrelevant, right? For me, that's not a question.

Yes. Well, there was a slide that Vijay put up, which was about time to market, time to value. And so you probably could argue that you would get those functionality and innovations at the end of an ERP, but you'd have to wait longer than what you're doing now is the alternative path. Do you subscribe to that view? Gauri?

I do. And it's happening so fast that it's happening like as I speak. So we just kicked -- for the past many years, Hitachi as a company and Hitachi Vantara has been trying to make a decision to consolidate ERPs, like we're in a similar situation in multiple instances.

We've had companies, consulting companies like Deloitte come in, do and spend $1 million, do an evaluation and all that stays in slide decks because we can't convince our Board that we need that $50 million to do that upgrade and that consolidation.

Here we are again. I just kicked off the same evaluation yesterday, yesterday. But with the caveat and having those conversations so fast with our CFO saying, we can do this assessment. It's fine. It's still going to stay in slide decks. But what do you think about? And I'm going to bring this message home to what Rimini brings to the table is that white paper. So I read that white paper. I shared it with the enterprise architects on my team. And I said, I need to guys read this. We're going to have a discussion.

And 2 days later, I'm having a discussion with our CFO, and he's nodding his head, and we're talking about MCP servers and how can we build it? And I'm like, I'm going to have Rimini come in, come January, and we're going to do a brainstorming session, and that's the advisory, and that's the experience that you bring. I'm trying to bring the message to Rimini here. But from one part where I've kicked off hundreds of thousands of dollars of project, I am going to spend that money, but I know where it's actually headed.

Yes, you were going to build on that or Todd, I mean, you've got an enviable task that most CIOs have had, including myself, and that is you get multiple ERPs. You do mergers and acquisitions, you've got to consolidate. You've got to bring it all together. and that costs money. And at the same time, you've got to get that competitive advantage probably to compete against Jaap in the same market in stores. So how does this strategy really play out for you? Because you're the man in the hot seat that's got to deliver this.

Yes. So it's an interesting dialogue that we've been having because we have a lot of sunk costs in these ERP systems, right? You paid for these licenses 10 years ago, 15 years ago. And we found that way from a support perspective, partnered with Rimini to get the current cost structure down, but you mentioned the tariffs before.

It's been a whirlwind this year. We've been trying to stay ahead of that because a lot of our cost is in our product, and the inventory that we buy that we end up selling to the customers. So from an IT perspective, we've been asked to find synergies wherever we can, right? We had 5 brands come together with one really big brand. And we've been going through a lot of our portfolios. We were going to do an ERP evaluation. We paused it. We think we're good with what we have. But what goes on top of that is how can we leverage what we have and get the automation and get more benefits, get the next level of benefits. So that's where we are really excited about AI and what that can do for us in that space while we're making the investments that Jaap spoke about, right?

I mean we're putting all of the money that we save into customer experience into additional acquisitions into those areas, right, the digital marketplaces and things of that nature. We do a lot of wholesale as well. We sell our product into other department stores for the specialty brands that we own. So we're focused in that space. We're focused on growing our business in areas like -- it's public knowledge.

Brooks Brothers did a huge deal with United Airlines, where we are uniforming all of their flight attendants, their services and their pilots. So like we're looking for growth avenues to get into new spaces, and we're funding those by the savings we're getting out of our contextual ERP systems that you need to have something there to run your ledger and to run those things that you need to close your books and everything. But we're really looking to stay with what we have and build on top of that with additional automation.

Yes. It's an interesting point because if you logically take the discussion we've been having today about you're building more and more outside of the ERP, you're keeping it, you're sweating the asset, you're keeping all the customizations. It's supported until 2040. So therefore, the opportunity cost of capital now is towards those things to be more competitive and take cost out. There is a school of thought though that says that if you keep going along this path, then the ERP shrinks and it gets smaller and smaller because you're building more of these processes outside. And over 5 years, it becomes like a transactional database. I'd just like to ask the panel, what are your thoughts on that? Because that's one of the headliners about ERP is slowly diminishing and decomposing. So who would like to comment a bit on that? I'll go Mike first, and then I'll go to you, Jaap.

Yes. There's a couple of points in there. I think -- and I'll build a bit on what Jaap said before and also Ziv has mentioned. I think the future business models and what's going to be there is going to you really got a question what are you in the business of and where do you need to differentiate that's not differentiate.

So the ERP and what you want to actually differentiate from an ERP perspective, the processes are tried and true. They've been running for more than 30 years. Do you really need to differentiate in that. So your actual investment needs to go into new areas that are there that are your differentiator as a business, and that will change business by business on what you're going into.

I think some of the challenges we're going to have around that is the resources not being there to be able to sustain the models. So how do we automate a lot more to be able to do that. Also the control frameworks, I think, are going to hold us back. And what I mean by that is that there are certain ways in certain roles that need to do certain things to be able to get your risk and assurance, et cetera, done.

I think they'll get challenged because we'll be able to do things differently. So we're going to have to work out ways to be able to solve for those control frameworks. But I certainly do believe that we will put the ERP into a certain bucket and do that differentiation between what is your business trying to achieve versus the processes and systems you need to be able to support that.

Yes. On your question on what is left of ERP over time, conceptually, if you think about the ERP platforms, in my mind, it's data, it's business rules and then it's transactions or user experience on top of that. The experience and the business rules will be AI, will be agentic AI. So you're left with the data. And it needs a place, and it will continue to run that data very well for many years to come. But in my vision, I think what you guys share as well from a Rimini Street point of view, which you totally buy into is that, yes, you're left with kind of the data component of an ERP. The other components will eventually be moved elsewhere.

Joe, can I add to this? So one of the challenges as IT executives we have is the time it takes to deliver on all these IT projects, right? You start with requirements and by the time you deliver, it's stale.

With AI, we've kind of broken that mold. Now things can be built quickly, we can deliver fast. which means that these Uber applications like ERPs, which are money suck, they really need to go away because they kill the agility, they kill the speed. I mean, you talk about an upgrade, it takes at least 2 to 3 years depending on the scope and scale. But if transformation is the new norm and AI is going to drive new and fast delivery, systems like ERP are going to die a natural death.

They will become a database. And on top of this, you will make a lot of AI extractions, and this is how it's going to work.

It really begs the question that you've broken the shackles and now you're independent to achieve your own strategy without having the anchor of the old traditional forced upgrades. And Erik, you're a vanguard. And what's your view? Because you've got a fairly specific strategy in mind where you're heading.

I can tell you now that I think of it, I've actually forgotten that I have an ERP at the back. Because the first thing is, yes, I've got peace of worry that is going to be maintained for the next decade or so. That's one thing. And then it has been functioning well. I've been concentrating most of my thinking or my strategy on how to improve the business. I think that is the most important thing.

So Gauri talked about time to the delivery, and we are able to actually deliver solutions, which -- and how we want to do it because it's done in-house and it's done in a very fast way. And we are very excited over the agentic side of it because it's going to -- as you know it, it's going to change how RPA works. It becomes more intelligent. It's going to change how OCR is done, invoice matching and all those things. That's all going to change. I see a lot of potential in that.

Yes. And it's probably -- there's a bit of in-house expertise that you've generated in this to try and work through it. How is that working? Because you do need a bit of both.

Okay. you guys have heard about coding where you can just describe something and then the application magically comes out. That, I think, is still a hype for now because you need to have very specific things, decisions being made or rules for application.

Now what the platform that you can get is you are no longer focusing on the language programming language that you want to use, your database. There are a lot of security, that is being automated, yes. That is being automated. And what we are doing now is we are focusing on the things that matters to the company. Yes. So I told you that I've not been writing programs for 20 years. I will start to develop. So we are focusing more on the flow of the program, the logic, how we handle connectivities and all that. So that's the new way of concentration for us.

And it's probably a good one to build on with Nobuo-san in that you have had your ServiceNow team working on this. And how quick and fast were your developments that you did?

[Foreign Language]

[Interpreted ] We didn't think that the ERP system was bad. That was not our thought process.

[Foreign Language]

[Interpreted] We're going through ERP created issues for us.

[Foreign Language]

[Interpreted] We knew we're going to modernize And the way we work.

[Foreign Language]

[Interpreted] So we worked using ERP and SAP and we improved our efficiencies and workforce.

[Foreign Language]

[Interpreted] And we have ServiceNow staff and expertise in-house, so we're able to leverage them.

[indiscernible]

[Foreign Language]

[Foreign Language]

[Interpreted] So with ServiceNow, we were able to do it with 3 weeks -- 3 days to about a week. We saw the results -- and then the next step was how do we interface with the ERP based on that.

[Foreign Language]

[Interpreted] But the quality increased dramatically by working with you guys. We were able to get -- to cut down that interface with the ERP tremendously and leverage your AI products to be able to change the process time from weeks to days.

Wow, it sounds like very quick at the front end, but then you've got to do a bit of work at the back end at the ERP. And the knowledge of the ERP, and I think it was Ziv and a couple of the previous speakers said, you've got to know ERP just as well. And that probably builds me to you, Ziv, because we've been supporting IMOD for a while and really critical. And we've obviously gained a lot of knowledge on your systems. So does that put Rimini Street in a better position to then do the innovations on top of the support that we've been providing for years?

Well, as you said, we have a long journey since we started. And Rimini personnel are integrated in the organization. They are part of the organization people. And they know everything from the information side of view and from the technology side of view. And that bring us the capability to upgrade the systems as we want and also to put AI factors above all the information and the systems that we have already. So from that point of view, I would say that we are sure that we can make this change that we need to do with the Rimini Street and the people.

It seems like the Rimini Street Smart Path that you've all been following, whether it's been called Smart Path or not is you've started from the support, the optimize and now you're going into the innovation stage and that the pedigree of understanding the ERP support has lent itself well to move to the optimize and innovation.

The $64 question though is, is this just a hype? Or do you think that corporations are going to continue to spend money in this area in this agentic AI ERP? Or is it just a fad?

It's not a fad.

It's not a fad?

It's going to come. Yes. It's already here, it is going to stay.

And more and more of your budgets, will they start being put into this?

Definitely.

We have to.

Absolutely -- we're significantly increasing budgets for '26 around innovation.

And we're creating new roles, right, because it's a different skill set that understands this and understands how to deploy it. So there's also the people side of it that we're investing in as well.

Yes. I think there's still just a little bit of caution in there. It is a journey, though. It's not going to happen overnight. I think we are learning as we go through and do this, how do the operating models need to work, what happens when the model changes and how do we test for that and make sure we're getting good results out. So there's still an operating model element that we're working through, but it's very exciting, the opportunity that is there, and it's real. We are seeing it.

Yes. It seems like the acceleration of change -- it gets better and better. And then obviously, Boards, management are all expecting us to keep innovating outside and speed to market is critical. So it seems like your experience is reiterating that.

Joe, one more thing. I think Rimini Smart plus Rimini Protect for us, security compliance is really -- for all of us is really important. I think the value that you add is a combination of in my experience. And I think we'll have to encash on that. And as we are all learning, I don't think we can do it by ourselves. The skill set, the capabilities, there's going to be a lot of co-creation with partners like Rimini Street and ServiceNow and Workday. And it's not going to be just one partnership, but it's going to be a multi partnership. But I think the value is Rimini Street and Rimini Protect -- Rimini Smart and Rimini Protect together.

Yes. Well, look, we've hit the time. And I know we could go on for a little bit longer and get a bit more in depth. But in respect of the timetable and the other guests, I'd like to thank you all for giving up your time, giving us frank, open conversations and examples and wish you all the best on the journeys that we are both going to embark on in the future. Thank you very much for your attendance.

Thank you, Joe.

All right. Welcome, everybody. Thank you for coming, both those of you folks in the room, those of you folks online. We really appreciate your attendance today. And I'm the one that gets to bring it all together and wrap a bow on this. And I do need a clicker, which I don't think I have. And I haven't completely memorized the presentation. Could I get a clicker anyone?

Thank you, sir. All right. Act 1. As Seth outlined earlier, over the last 20 years, and it dawned on me when we put together Act 1, I've been around for 25% of the First Act and had the most fun in the last 5 years, but that lays the foundation on Act 2, which obviously, you heard today through all my cohorts and our clients. Thank you so much for joining us and you folks joining us to hear about this. It's a really exciting time for us, and it's going to be different.

Just for the uninitiated, right, this is who we are. This is what has happened, our CAGR over that last 5-year period, some of the metrics, what we do. Also on the right, our distribution, which I think some folks have spoken to by industry, our revenue split. And then also, we are a larger business rest of world than in the United States, but stay tuned on that one.

Staying on, these are the GAAP numbers, what Act 1, some metrics, some key metrics. We have that CAGR again last 5 years for revenue on the top left, on the top right, billings, what the CAGR has been.

Bottom left, our ARR, bottom right, RPO. One item I'd like to call out from our last quarter, we did have an all-time record. This is overall combined at $611 million. Now also of note, those of you that follow us closely, we usually have our highest point on our RPO in Q4. This record did occur and record in history at the end of Q3.

Now getting to some metrics that are critical with excluding PeopleSoft that we have given more and more as we've been reporting since we announced we are exiting PeopleSoft Q2, Q3-ish of 2024. We had a subsequent event of a confidential settlement as well. However, taking a look at the revenue growth, Q3 was 2.5% versus the previous year, excluding the revenue from PeopleSoft. I want to note that Q4 '24 last year, we adjusted on that onetime $5.4 million out. So you're going to have your forthcoming comparison soon as we report there.

Billings in the last quarter, the $64 million quarter-over-quarter, excluding PeopleSoft, 6.7% growth there. Now as you can see the trend, the large Q4 of 2024, as you folks know, following our cash flow as well, we have our largest invoicing in the fourth quarter of the year.

ARR on the bottom corner, bottom left and on the right, that RPO number yet again. This is excluding the PeopleSoft. That was up Q3, 9.3%, also a record, again, our backlog, highest trending is our highest number is at the end of the year, but we achieved that record Q3.

The Rimini Smart Path, we've been talking about this a lot. We're really excited about this. But we have not shared with you previously our Optimize that we unveiled right about 5 years ago. That's 13% of our business. As you know, Core Support, and this is on a trailing 12-month basis as of Q3. Core Support is our core offering on supporting the ERP systems, the foundation of Act 1. The optimize includes the managed services and the professional services. That is 13% combined of our business. Not one of those components, managed services or professional services is yet over 10% itself. Now this is laying the foundation for the innovation pillar that we're really excited about, and the market is excited about.

Here are our key finance priorities operationally, product service mix optimization. You'll see more about this in the forthcoming slides, growing our RPO. I highlighted that. That's a very important figure, obviously, for our -- the large annuity for our business, expanding the client base and the value of lower churn, higher retention. Cost rationalization, I think Mr. Hershkowitz earlier has said that we're going to attack these markets in the innovation pillar, and it's not needed incrementally from what we're going to be discussing about in our 2026 outlook. Our financial priorities, our resource cost allocation, focusing on bottom line leverage.

Cash flow and capital return, if that's of interest to anybody in the room here, and our lower cost of capital/borrowing, et cetera, and optimizing our tax structure.

Our outlook. Obligatory to lay the foundation as we talk about 2026 and beyond. Here's what we see for the fourth quarter, $104 million to $106 million in revs. Adjusted EBITDA in the $10 million to $13 million range. You folks will do the math putting that together where we're likely to end up in 2025.

Looking at 2026, we see -- and this is a GAAP profile, including PeopleSoft. Revenue growth in the mid-single digits, the low 60% on the gross margin, mid-30s on sales and marketing, mid-teens on the G&A. Again, this is GAAP with PeopleSoft also without adjustments. When the adjustments are taken out, and you'll see that in a moment, -- we see the mid-teens bottom line adjusted EBITDA, confirming that, and this is our focus, key finance priority, key corporate objective of 90% operating cash flow conversion on this. And that gets us halfway. We're talking about 2026 to the Rule of 40 with a bottom line weighting. Now laying out our trailing 12 months, how we have performed. These are excluding the adjustments, mainly stock-based compensation to get us to the adjusted EBITDA. Here is breaking out how that guide works and our outlook for 2026.

Now looking to the far right column, where do we see the model at scale? And before the question is we get the question, this is well before $1 billion in revenue. We can achieve this scale well before that with executing on the strategy that we've outlined today. This is how we see ourselves getting to the Rule of 40. The $10 billion to the 15% on the top line, 20% to 25% on the bottom line. And again, this is at scale, well before $1 billion in revenue. Now one item I'd like to call out, that litigation spend trailing 12 months. You don't see it in '26, we're talking on the outlook. That is going to be in the G&A guidance. There's not going to be a litigation line. As we know, that was rather long but onetime nonrecurring. And we're not in litigation anymore. You're not going to see us talking about litigation. This is something we and I am very proud of. I'm going to tie it back to where we disclosed 13% of our revenue trailing 12 months coming from the optimized pillar, managed services and professional services, our diversification.

Trailing 12 months on a non-GAAP basis. Gross margin, 61.7%, largely unchanged where we were predominantly a support, very high margin, 61.4% in 2020. During that period, the Optimize pillar has grown, compounded 45%. We do know that those are lower margin offerings than our core sport by a long shot. Moreover, when you enter into a new business unit or a line of business, you historically have lower margins. However, 5 years later, with this diversification due to our operational excellence, what's been happening behind the scenes that we don't talk a whole lot about to you folks or externally, a lot of work behind the scenes.

What are we doing? We're practicing what we preach. We didn't have to put in a brand-new system. We have aging systems, but they work well. What's the value? The value is the data. I want to have a call out. I told them Mr. Mackereth, there he is. The individual with the interesting accent and the beard that you saw earlier running delivery. He and I with our team and with our data team as well 2 times a week are looking at our clients, are looking at our resources, looking how to optimize so we perform to maintain our client satisfaction as well as we're allocating resources to look at our margin on a client, a line of business perspective.

Then we have the data folks who we're continually trying to get more data for our unit economics so we can understand and what do we have? We have a database of our pricing discovery, our delivery and can help us price appropriately and win the right business going forward. I couldn't be more proud of what we have done here. Now what is this? Why is this relevant? This is laying the foundation where I'm telling you, as we see our mix continuing, there's the 87%, 13% in the trailing 12 months. How we see this mix in the future at scale or so in the next several years, where we see ourselves having 1/4 to 1/3 of the business with the other value-added services, which includes the optimize and the innovation pillar. And we're going to continue our operational excellence. And the innovation pillar I see is a higher margin than the optimized pillar, but we're going to apply our success that we have had in maintaining our gross margin with those lower margin new lines of business and offerings. And we're going to apply this on the innovation to a higher margin, and that's why we're setting a target in the mid-60s for our overall gross margin. What I'm saying is the foundation that we have proven that we can deliver the operational excellence in those difficult areas, and we're going to translate that to the innovate pillar.

The Rimini Smart Path. We've been talking a lot about that today. And what you folks have been aware of when we've been speaking to the financial community on the indirect model, where there is leading with our partners on putting innovation on the top. And we have the engagement we put it in. We know ERP better than anybody else. We manage that innovation layer. And then it's paid for, you have to get on the Rimini support. Why? Because the economics are compelling, you will pay for it, you can do it quicker. And also through this strategy, you're going to leapfrog SaaS. And you're not going to need that upgrade, and we heard it from the panelists, right? This is how you -- faster you invest and you actually achieve the innovation.

But what's new today? And you heard Vijay speaking earlier, and we had the announcement of our Agentic UX platform. We can do it ourselves, and we're going to do it ourselves as well because not one size fits all. And we have a direct selling opportunity to where we land first with our core support, highest margin, we optimize, and then we deliver the innovation. And you can do it in pieces, not one size fits all, but we can do this directly. We have the capabilities.

You heard earlier, did it in 30 days for a client of ours that they couldn't do for who knows how long. And it's a different economics. It's an entity in a different stage, both itself, its industry, et cetera. Not one size fits all, but we're going to attack it from both. That's what's new today. That's the opportunity. There's a whole ecosystem being built out there. But as you heard and Seth has said, nobody knows the ERP stuff, nobody can make it work better than us. That's what we're going to be leveraging.

And what is the ultimate economic benefit of this to all of us in the room and the shareholders, the arrow on the far right. If you're skipping the SaaS layer, you're going to have increased retention. And we're going to have a greater base each and every year as we penetrate further to grow and increase our growth rate. That is the key of the -- in the core of the value creation.

A word on capital allocation. This is what we -- top line. This is what we've repaid and borrowing since I've been here. That was a refinance of the pref fundamentally as a debt instrument and what we've repaid. Again, those uninitiated to Rimini Street and/or new to the story.

We're not a heavy CapEx business. as you see here. However, as you see the innovation pillar, we may have some more of that as we're focusing on building our software offerings and/or apps that will be coming up, driven by our innovation efforts and our solutions and our apps that we're creating around these excellent models that are out there that are truly changing things.

Share repurchases. This is trailing 12 months in the far right column, the $3.8 million is what we did in the calendar third quarter. We had the announcement of the incremental in the calendar fourth quarter. We'll be able to do the metrics once we come out with our fourth quarter.

Then obviously, comparing this to our operating cash flow, and that's a key area that we're looking at for our approach as we're talking around -- talking about here on the bottom right, utilize our cash in excess of liquidity needs for share repurchases. We extended our program recently. You folks know the parameters tied to our credit facility, but this is an area that we are obviously continually evaluating.

Obviously, subject to market conditions, MNPI probably should spell that out material nonpublic information, and it's common acronym in this room, of course. And really how are we looking at this at a core at this time, offset the dilution from the SBC, stock-based compensation, stabilize the share count.

We get a lot of questions. I'd like to take the opportunity to having folks in the room at this full day. We do have net operating loss carryforwards in the U.S. as of our last tax return of the $150 million. A lot of folks think, okay, why do you have your tax provision when you're pretax, you can just offset? Well, this is U.S.-based.

As you folks know, we talked about previously, over half of our business is internationally, it's profitable operations, et cetera, et cetera. We also, because of the U.S. tax loss structure, we do have transaction taxes, and we're looking on improving this through new strategies moving to multinational from our historical export operating model, where we're not able to use those credits until we expire the NOLs. And also, in the U.S. from a profitability standpoint is where it's a U.S., the litigation compliance costs are housed there. Nonetheless, putting all that together, we're targeting a long-term effective tax rate of the 25% as I indicated, restructuring and looking at becoming a multinational operating behind the scene structure versus an export structure.

FX. The message here, we do transact even though we have 47% trailing 12 months rest of the world, we do transact 52% in the U.S. dollars. We do have 2 fully integrated international operating subsidiaries in Brazil and Japan. We don't have much FX exposure there, but that gives us to our top line exposure just there. That's why we don't have tremendous fluctuations. But we do have natural hedge with the rest of our operations. Bottom line, the message, we don't have significant material FX exposure if we do have currency fluctuations moving forward. And we also have an arbitrage fellow as our Treasurer there that can do some creative things now with forwards and such. So just put them on notice.

To summarize our day and something that you didn't hear a lot about today, and that's just about the best news. We have an undistracted focus on the business because that long, drawn out, very expensive dispute with Oracle is behind us. And I can tell you folks, as I said previously, 1/4 of the Rimini Street Act 1 I've spent here. And there are a lot of business decisions that we had to think of and in some unfortunate cases, think of litigation first versus creating value and doing it right for our clients and ultimately, our shareholders. That's behind us. I can't even tell you how liberating that is. That's a key element. That's what's different in no uncertain terms. And what is exciting where we get up every day, and we don't even talk about this.

We're going to have a continued disciplined capital allocation, as I described previously. And this operational excellence behind the scenes that we have done on the optimized pillar. We're going to continue it. It's exciting on the innovation pillar where I think is going to be -- give us even better returns and also value creation.

Ultimately, what's that going to lead to? Expanding margins and increasing growth. We couldn't be more excited about it. It's such an interesting time in Act 2, the market opportunity. We're doing it ourselves internally. We're conveying this to the shareholders -- I'm sorry, clients either directly or indirectly through our partnerships. It couldn't be a more exciting time.

That's all I have. Thank you very much, and we'll transition to Q&A.

All right, guys. Some Q&A now. For those of you who haven't had a chance to ask anything, why don't we go ahead and open it up? Rich?

Kind of an obvious question, but with the litigation behind, what changes are you seeing either market perceptions, client conversations. It's a headwind. We don't know how to evaluate. Just sort of curious your own early input for that.

Well, we were never really able to evaluate it over all the years that we had the headwinds and we built the business against it. We always suspected we would have grown a lot faster, and we would have had a lot bigger global footprint had we not had the litigation.

My sense is that we're seeing real points of fact that are coming in a post-litigation world. We have partnerships that are happening would not have happened a year ago. That's going to provide additional leverage beyond our own sales team, beyond our own marketing without costing us money. We have signed deals with customers that I am convinced would never have happened a year ago.

So there are proof points that there is activity that is picking up across all of it. You saw Dave Rowe talk about the increased positioning on the website, the volumes that we're seeing, the pipelines, all of it moving in a direction that I think has been moving in a positive direction even under litigation but now is accelerating because we don't have those restrictions.

And as Michael said, we had to make some decisions even on the -- for the shareholder perspective, we couldn't do shareholder return. We couldn't really buy back stock because we were always having to focus on what we would need for the litigation. So I think every part of our business is going to be affected by the changes of the reality that we're under. And you add that to the agentic world and all the points that I laid out earlier in my presentation. And I think you've got a combination for acceleration.

Brian?

Brian Kinstlinger from Alliance Global Partners. A lot of great information. You laid out the client revenue road map for the ServiceNow partnership starting with '26 pilots. How should investors think about the time to completion for these, the time to get them into production? And then are any customers in production? And then I have one follow-up.

Yes, customers are in production. We've got a case study out on the website, if you wanted to follow it with Apsen Farmacêutica, where, again, we took the pharmaceutical assembly line, the manufacturing, and we've automated over 70% of it. So that's been out live for a long time. We have other customers that are just getting implemented of the '26. We expect to complete the '26 by the end of the year and have those at least through the POC. And many of them, I expect will move into production early into Q1. So this does move very fast. That's what we said. We're measuring now in weeks and a couple of months versus the kind of production schedules that used to take years. So we are going to be on a faster cycle. That will, of course, be in a position. The plan is we and ServiceNow will go out with the '26 proof points because now we'll have real examples, and we'll put that into a book. It will go out to their 7,000 sellers around the world. And as you heard, when we go out with ServiceNow or any of our other partners, we create budget so that they can sell licenses and they can sell their services. It's symbiotic all the way across. So yes, the leverage we expect to have, and we expect it to be accretive in '26. It will be material, we believe.

Great. The follow-up about that would be the opportunity with existing customers, I don't know, maybe it's 20% to 25% upsell on your price. That's my estimate, not yours. What does ServiceNow need to see to go introduce you to the largest of their customers? That's A.

And then the other question I was going to ask was when is a reasonable sales cycle and expectation for those to start to revenue? Are we 18 months away? Are we 12 months away? Just maybe if you could frame that, that would be helpful.

Well, I think the way that we've laid this out where you want to, of course, whenever we roll out a new product, you got to get customers who are using it. You have proof points, then you're able to take that out and start growing. 1 becomes 2, 2 becomes 4.

I think we're going to have an explosive level of growth even starting in the first quarter. Because once you show people exactly what it is and as you heard from the clients today, we are not seeing resistance to the vision at all. Interestingly enough, even from people who are die hard software vendor folks where they're out there wearing the shirts with the logos of the software vendor and yet they're stumped because they can't sell the value. They can't sell the cost of going down the vendor's path when there's a better path for the organization or the government agency. So yes, I think you're going to see it be accretive as early as Q1.

I don't think this is -- we took a year with ServiceNow to figure out how do you make this technology work and how do we implement it? How do you build a model around it? And we took -- and it's really -- we did it in a year on a global basis. Look at the customers we have. And across that '26, it is all global. So we took this out globally, and we built the infrastructure to support it. So yes, we are prepared to move very quickly in Q1.

Alex?

I'm Alex Fuhrman with Lucid Capital Markets. I wanted to ask about some of the initial projections you put on the screen there for '26 and longer term. Obviously, really impressive projection that you're going to be getting back to GAAP revenue growth in 2026. How do you kind of get to the next step of that double-digit longer-term growth? Are there additional investments or processes that you need to develop here? Or is that kind of just the natural evolution of your sales cycle playing itself out based on what's currently in the funnel?

I think it's playing itself out. We all know revenue is slow to go down and slow to go back up because we're on a ratable basis on our subscriptions. So it's going to take us a while to get the revenue. This is why we're so focused on bookings. You saw us focusing on the commitments that customers are making and the fact that we have record backlogs that are fully committed, noncancelable. These are the indicators that will transition eventually, obviously, to revenue. So I think that's where we're focused on.

Revenue will sort of take care of itself. That's why you see the sort of the mid-single digits, but that's a return to growth in '26. And then we would expect to see acceleration as that revenue gets generated over time.

Front table here.

Seth, Mike, first, thanks for having us all out here. Great hearing from the team. I just want to dig into the 10% to 15% future revenue growth guidance. Can you talk about some of the assumptions underlying that? And then maybe comment on the ServiceNow partnership, VMware and maybe go into some of the federal government opportunity.

You laid it all out. And what -- again, I can't stress it enough, the opportunity, why we're excited about, why we're building our confidence to get there and the momentum is our direct selling efforts to empower -- not empower but provide to our sales force to get to the innovation pillar and start to drive that revenue.

You saw where we gave you a future look at how we see the mix playing out. Certainly, the innovation piece will be a driver. However, the core foundation is the increased retention. As folks are just leapfrogging the SaaS layer to get to quicker innovation, that's going to be a key driver to get.

If we didn't have our retention where it is today, we probably would be in the double digits already next year. So that's going to be a key core foundation. So we get the retention right. We're having reasonable success can get you to the lower end of that growth range. As we execute on all of these initiatives, right, we heard from Steve talking about building the practice with the financial sponsors, right? Talking about the government as you were asking the question about, that's what gets us to the 15%.

And then, of course, where we're focused was the -- is the bias on the bottom line to get a different path on this Rule of 40.

Yes. But then we get to the partners, we've signed so many new partner agreements over the last year. Now it's really important to recognize that even though we're a $400 million company, you would have expected we'd have a much more mature partner and alliances program and channels at this size. But you have to look at the unusual situation we were in with litigation for all these years.

People didn't want to sign partners with us publicly. We'd meet them in back rooms to do deals for customers, but they didn't want to put their logo and ours next to each other on a website because we were a company that was in litigation. That has changed dramatically now. And because of that change, we are able to get the kind of leverage that you would expect at this size. So we're building out a partner program years behind where you would expect at our size.

So we're maturing it very quickly, but we're adding partners. We're building out the infrastructure on a global basis to really drive leverage. We recognize we've got 70 to 80 sellers. That's great. But if you look at the cost and what we're spending on it, we have to get more leverage out of the spend. And that's where we're going to be doing it through the partners, and there are thousands of sellers out there.

Jeff?

Hopefully, you can hear me. Congrats on Oracle. It's great not to spend half the day on Oracle and complete darn near complete vindication. So fantastic.

Thank you.

I want to spend a second on the core third-party support business. If you look at that business, retention has declined over the last 2 years, and Michael, you just talked about it. Maybe expand on what it is going on in that core business that's delivered the declining retention. I get why it's going to improve going forward. But just talk a bit about what's going on there in terms of retention.

And then in the '26 guide in terms of what's implicit there for the third-party support, again, the base business, are you assuming it grows in there? And if so, how much?

Yes. So two things. One, the downward trend we had over the last couple of years relative to the retention a lot of churn in the customer base, a lot of churn with technology. And because the technology was churning and we didn't have the agentic opportunities at that point, a lot of the customers that did churn out were thinking they need to go do something else. And so that was an area where we didn't have an answer to stay with Rimini as they were making and going through those changes.

As you heard from the customers today, we have a vision, a path. Now we have a technical path that allows customers to stay where they are, get all this new technology without having to do these changes. So I think that the agentic AI is going to play more than a role in just new accretive sales.

This is why we kept talking about the retention aspect of it is I don't need to go do something else because I can stay where I'm at and I can put these new layers on top, and Rimini is going to do it all. And this is what's going to drive more of what our core business, the support business. This is -- guys, this is a roughly 70% margin business that we're able to drive. You've got professional services, as you know, tends to be in the 40%, 50%. The world of managed service tends to be in the 20% to 30% type numbers. So as Michael was laying out, we have different groups of products that have different margins.

Collectively, they come together to create a much longer lifespan with the customer because it's one thing to do their support. It's another thing if you're running the systems for them. And also, you're doing all their security. You're doing all these components. You are going to have a much longer-term relationship because you are much deeper with that guy. And so that's where we still believe we're looking at a blended margin rate.

We believe we can deliver into the mid-60s, as Michael noted, at scale, even with all those different components because we said 75% is what we would expect the mix to be at scale that we're going to have in the support side because everything we do in Smart Path, you want to -- if you come to me and you say, love what you do in the agentic AI, but you know what, I can't get there yet. I'm bleeding cash right now. And the only thing I need to do is stop the bleeding. I need to get my cost down and I need to return to profitability. Great.

You buy our support. You save the money. It's the first step in our Smart Path. You want to move immediately to agentic AI, great. You start with support. Everything starts with support. And we expect with our -- we talked about the custom, our ability to support a huge amount of product is now bigger than ever. So all those reasons, that's where we get to bigger.

And Jeff, for your other question, right, for the core support business for 2026, I'll answer it from the vantage point of when we take off the PeopleSoft impact, right, which is going to decline next year. I do see our core support business growing. Rather than give you a number and start talking parsing out the lines of business, et cetera. But from an overall perspective, yes, we see it as an up year, a growth year for our core support offering, excluding PeopleSoft.

Very helpful. One last, just Seth, if you talk about innovate and we look forward 2 years, what would be a fail in terms of percent of revenue?

That one is a hard one. I don't think we're there yet. And I think that's why we put -- we don't -- no one really even understands what a TAM number. Anyone who puts a TAM number up there is absolutely guessing. So I think there's still numbers we don't understand yet.

We know, for example, that if we're doing managed service, it could be 2 to 3x whatever the support is. We have some of those formulas we understand. We don't yet understand the full ratio in terms of the new Innovate pillar. But I do think, again, as I said, I expect it to be material into our numbers accretively in '26 because it is moving as fast as we can keep up with it. So as long as we continue to make the investments, and you noticed we didn't talk about we're not going out and raising capital or doing anything like that. We sit on plenty of cash. We're sitting here saying, look, we're going to reduce internal costs. We are shifting cost into that bucket. And we're probably going to spend $10 million to $20 million in the next few years just on people dedicated to that pillar. So we are making internal moves, but we don't plan to raise the overall cost of the business. Our goal is to hold the cost fairly steady while raising the revenue and improving profitability.

Great. I think we're out of time.

Okay. We are out of time. Thank you, everyone, who joined us on the webcast remotely. Those of you who are here in the room, it's lunch time. Thank you so much for coming.

And I want to thank all of our clients for coming all over the world. That is just an amazing humbling thing for us to have you here to talk and to share your experience. Obviously, extremely valued to us and of course, to our friends in the Israeli government, one of our largest clients. It has been a difficult couple of years, and we are glad to be there to help. That's a key part of what we do, whether it's with governments or our other clients. So thank you very much, everybody. Appreciate everyone coming. Thank you.

Good afternoon, ladies and gentlemen, and welcome to the Rimini Street, Inc. Q3 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, October 30, 2025.

I would now like to turn the conference over to Dean Pohl, VP, Treasurer and Investor Relations. Please go ahead.

Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal Third Quarter 2025 Earnings Conference Call.

On the call with me today is Seth Ravin, our CEO and President; and Michael Perica, our CFO. Today, we issued our earnings press release for the third quarter ended September 30, 2025, a copy of which can be found on our website under the Investor Relations section. 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 is also included in the press release and our website under the heading 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 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-Q 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, I'd like to turn the call over to Seth.

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

In the third quarter, we continued to simplify and refine our go-to-market strategy and messaging around Rimini Street's 3 core service pillars: support, optimize and innovate and our SmartPath methodology that allows clients to capture cost savings with their existing ERP software, enabling them to invest in and leverage the benefits of AI innovation without spending above the current IT budget. To this end, Rimini Street has staked out its position as the software support and agentic AI ERP company, a specialized partner in ERP that can extend the useful life of current ERP system assets while also delivering the latest next generation of ERP technology to clients. We also continued our focus on methodical, predictable sales execution in both new logo acquisition and cross-sales to existing clients.

Third quarter results. Overall, sales bookings and billings continued to improve, and we delivered strong ARR subscription renewals as well. We closed 17 new client sales transactions in the quarter with TCV of over $1 million each for an aggregate TCV of $63.1 million compared year-over-year to 19 new client sales transactions for an aggregate TCV of $48.7 million. We also added 79 new logos and achieved a record RPO backlog of $611.2 million, up 6.4% year-over-year.

New logo sales include major global and regional brands. Sales to new clients and cross-sales to existing clients span the mix of our products, services and solutions and a broad set of industries and geographies. Achievements included record third quarter SAP support sales, surpassing the key milestone of more than 100 VMware support contracts signed to date and closing more than 2 dozen client engagements around our new agentic AI ERP innovation solution powered by the ServiceNow AI platform. We plan to provide more insight and information on our agentic AI ERP solutions at our upcoming Analyst and Investor Day on December 3, 2025.

While the majority of our sales in the quarter were completed by our direct sales force, we also achieved sales transactions through our maturing indirect channel. As the indirect channel matures globally, we see building sales opportunity pipelines. Billings growth was driven by a mix of new ARR subscriptions and project-based professional services and the combined ASP for Oracle support services, SAP support services and all managed services grew year-over-year.

In the third quarter, we had more global quota-carrying sellers, a greater number of sellers participating in the total quarterly sales attainment and a greater number of sellers achieving or exceeding quota when compared to the first half of 2025. Exiting the quarter, we had 82 quota-carrying sellers globally compared to 73 during the prior-year third quarter. Also during the third quarter, we continued upgrading sales leadership talent with new leaders in EMEA and Southeast Asia and Greater China and materially expanded sales opportunity pipelines for future quarters, along with broad progression of many pipeline opportunities.

Growth drivers. We continue to pursue growth drivers that leverage direct and indirect sales channels. We continue to hone the skills and capabilities of our direct seller team, continuing to build our partnerships that provide expanded sales reach and sales cost leverage. Additionally, we continue to build our go-to-market execution by industry, which will give us the opportunity to sell more deeply into clients with industry-based knowledge, insights and Rimini solutions that solve specific industry challenges.

Two notable achievements were announced in the third quarter. First, we were added to the United States GSA Multiple Award Schedule as an approved supplier of support and security services for Oracle, SAP and VMware software. United States federal, state, local and tribal government agencies can now procure Rimini Street services directly from the GSA schedule without a need for competitive procurement. To leverage the GSA contract opportunity as well as our new management sales partnership with Merlin Cyber, Rimini Street has launched a U.S. federal and state local education sales team.

Second, we entered into a strategic partnership with American Digital, a leading IT solutions provider specializing in custom data center solutions based on HPE infrastructure to provide a full stack solution with Rimini Street providing the enterprise software support and managed services. The partnership includes working together to help clients fund modernization with AI solutions and implement workflow and task automation on top of their current SAP and Oracle applications without any pressured, expensive or low ROI vendor upgrades or necessary migrations.

Oracle litigation update. On July 7, 2025, the company and I entered into a confidential settlement agreement with Oracle. The parties entered into the settlement agreement to provide a full final complete and global settlement, the U.S. federal case known as Oracle International Corporation and Oracle America, Inc. versus Rimini Street, Inc. and Seth Ravin filed in 2014. As reflected in the settlement agreement, the company intends to complete its previously announced wind down of its support and services for Oracle's PeopleSoft software no later than July 31, 2028. The company has continued to make progress towards achieving this requirement.

As the Oracle litigation noted above has now been settled, this is the last Oracle litigation update we plan to provide during earnings calls. We will, however, continue to provide financial disclosures around the Oracle PeopleSoft wind down until the wind down is complete. For additional information and disclosures regarding the company's settled litigation with Oracle, please see our disclosures in our Form 8-K filed on July 9, 2025, our second quarter Form 10-Q filed July 31, 2025, and our third quarter Form 10-Q filed today, October 30, 2025, with the U.S. Securities and Exchange Commission.

Summary. We continue to focus on our support, optimize and innovate solutions, including our new agentic AI ERP solutions powered by ServiceNow's AI platform, executing the right go-to-market strategy to fuel sales growth, increase profitability and enhance shareholder value.

Now over to you, Michael.

Thank you, Seth, and thank you for joining us, everyone.

Q3 2025 results. Revenue for the third quarter was $103.4 million, a year-over-year decrease of 1.2%, with the United States representing 45% and international representing 55% of total revenue for the quarter. Excluding revenue derived from support and services provided solely for Oracle PeopleSoft products, revenue increased 2.5% versus the previous year. Annualized recurring revenue was $391 million for the third quarter, a year-over-year decrease of 2.6%. Revenue retention rate for service subscriptions, which makes up 95% of our revenue, was 89%, with approximately 85% of subscription revenue noncancelable for at least 12 months. FX movements for the quarter were minor, impacting total revenues positively by 0.2% during the quarter compared to a negative impact of 1% for the prior-year third quarter.

Billings, as defined in our press release, for the third quarter were $66.5 million, up 2% year-over-year. Adjusted billings, which exclude the PeopleSoft associated billings, were $63.9 million, an increase of 6.7% on a year-over-year basis.

Gross margin for the third quarter was 59.9% of revenue compared to 60.7% of revenue for the prior-year third quarter. On a non-GAAP basis, which excludes stock-based compensation expense, gross margin was 60.4% of revenue for the third quarter compared to 61.1% of revenue for the prior-year third quarter. The year-over-year reduction was largely the result of decline in revenue, primarily revenue associated with PeopleSoft services. Excluding PeopleSoft associated revenue and related cost of goods sold, gross margin was also 60.4%. We continue to focus on driving operational leverage through improved systems, analytics, processes and global staffing models across all of our offerings with the focus of continuous improvement of our best-in-class support.

Operating expenses. Reorganization charges associated with our continuous cost optimization plan for the third quarter was $752,000 and totaled $7.7 million since we instituted this plan. Our focus moving forward will be to continue the momentum we are building in our core business and allocating our investments to fund incremental skill sets that will help drive growth across our 3 pillars. Nonetheless, we do expect to incur additional reorganization costs during the remainder of 2025 as we optimize our model to capitalize on the existing opportunities ahead.

Sales and marketing expenses as a percentage of revenue were 36.7% of revenue for the third quarter compared to 34.2% of revenue for the prior-year third quarter. On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expenses as a percentage of revenue was 35.7% of revenue for the third quarter compared to 33.6% of revenue for the prior-year third quarter.

General and administrative expenses as a percentage of revenue, excluding outside litigation costs, was 17.6% of revenue for the third quarter compared to 15.8% of revenue for the prior-year third quarter. On a non-GAAP basis, which excludes stock-based compensation expense, G&A was 16.5% of revenue for the third quarter compared to 14.6% of revenue for the prior-year third quarter. G&A expenses in the quarter were negatively impacted by slightly over $1 million due to nonrecurring international transaction tax associated costs. Professional fees and other costs of litigation were $621,000 for the third quarter compared to $879,000 for the prior-year third quarter.

The net income attributable to shareholders for the third quarter was $2.8 million or $0.03 per diluted share compared to the prior-year third quarter net loss of $0.47 per diluted share. On a non-GAAP basis, we had a net income for the third quarter of $6.9 million or $0.07 per diluted share compared to the prior-year third quarter of $0.22 per diluted share.

Our non-GAAP operating income, which excludes outside litigation income and spend, stock-based compensation, reorganization expense and litigation settlement expense was $8.5 million or 8.3% of revenue for the third quarter compared to 12.8% for the prior-year third quarter. Adjusted EBITDA, as defined in our press release, was $10.1 million for the third quarter or 9.8% of revenue compared to the prior-year third quarter of 13.1% of revenue.

Balance sheet. We ended the third quarter September 30, 2025, with a cash balance and short-term investments of $108.7 million compared to $119.5 million for the prior-year third quarter. On a cash flow basis, for the third quarter, operating cash flow increased $24.7 million compared to the prior-year third quarter decrease of $18.5 million. The operating cash flow was positively impacted by the receipt of the litigation settlement proceeds during the quarter of $37.9 million. When excluding this payment, cash used during the period was approximately $13 million. In the quarter, operating cash flow was negatively impacted by the effect of foreign currency, which was unfavorable by $1.3 million.

Deferred revenue as of September 30, 2025, was $226 million compared to deferred revenue of $223 million for prior-year third quarter. Backlog also referred to as remaining performance obligation, RPO, which includes the sum of billed deferred revenue and noncancelable future revenue, was a record $611 million as of September 30, 2025, compared to $575 million for prior-year third quarter, a year-over-year increase of 6.4%. When excluding the PeopleSoft associated backlog, RPO expanded 9.3%, underscoring the momentum we are building in our core underlying business.

PeopleSoft update. In 2024, we announced the wind down of our services for Oracle's PeopleSoft products and have now agreed as part of the Oracle settlement that we will wind down all PeopleSoft service revenue by July 31, 2028. We have made progress in reducing both the number of PeopleSoft clients and related revenue since announcing the wind down. PeopleSoft revenue was approximately 5% of revenue for the 3 months ended September 30, 2025, compared to approximately 8% of revenue for the prior-year third quarter. PeopleSoft calculated billings were $2.5 million during the quarter compared to $5.3 million for the prior-year third quarter and year-to-date Q3 2025 billings were $9.7 million compared to $19.7 million for the same prior-year period.

Business outlook. The company plans to provide forward-looking guidance at its Analyst and Investor Day to be held on December 3, 2025, where the executive team plans to outline the company's market opportunity, solutions, go-to-market strategy and financial goals. This event will be open to attendance by the public via online registration and a live webcast link available on our website.

This concludes our prepared remarks. Operator, we'll now take questions.

[Operator Instructions] Your first question comes from the line of Jeff Van Rhee from Craig-Hallum.

Can you hear me all right, Seth?

Yes. Got it.

Okay. Good stuff, having some phone difficulties here. So a couple. I heard -- I believe I heard the mention of 24 agentic AI wins with ServiceNow. I think I might have missed some of the context there, but expand on that. I mean it's been relatively quiet since you announced that relationship a year ago, and this is a notable call out. I mean what are these wins? What's an average deal size on these wins? How many of these you have prior quarter versus this quarter? And then kind of what does the pipeline look like? It sounds like maybe you're really starting to see some traction here.

Yes, Jeff, it's a great first start for us. As you know, we announced the partnership with ServiceNow when Bill McDermott launched that in his earnings call a year ago. And it's taken about a year just to get the organizations aligned to work on a full global rollout. As you know, they've got over 6,000 sellers that we're going to leverage to move the Rimini Street and ServiceNow combo. And what we've accomplished, as we said, it's taken a while. We've got 26 customers on their way with a ServiceNow component, and we're building agentic AI ERP first transactions over those systems. So more to come.

Our goal is that by the end of this year, we will have 26 great use cases, all different types of ERP transactions, different customers around the world and different industries. And as you know, the whole challenge with AI isn't the technology. It's everybody trying to figure out use cases that are really leverageable, and that's what we're going to deliver to the market.

And so how does that impact the P&L in terms of deal size?

I think right now, it's negligible to P&L in terms of materiality. I think we always said '26 was going to be the time that we really start to monetize because we needed to get these use cases done first so that the sales teams for ServiceNow and Rimini Street can take these out into the marketplace and show other customers how AI in this agentic ERP model is going to be deployed, the value and the creation that we're able to bring to the market with it. So really look for this to be a '26 number.

Got it. And then I guess, again, maybe a very high-level question, but coming into the really difficult initial decisions from the court as it related to the Oracle case, the company was a solid double-digit grower. It's been a tough couple of years. You certainly seem to be putting in a bottom and showing some acceleration on a bunch of metrics. What do you think it takes to get this company back to double-digit top line growth? How do we get there? What are the components that get us there?

Well, I think, again, we'll go over this nicely in the Investor Day coming up on December 3. But generally, we're looking at 2 components. I mean we're becoming the support and agentic AI ERP company because we're uniquely positioned to extend the life of the existing systems, driving a huge amount of our higher-margin support business. And at the same time, we're building the next generation of technology over it and helping customers avoid these big upgrades. So we expect this to be an acceleration to our core business, and we expect to see that grow nicely because whether a company is looking to save money or immediately leverage the AI technology, and we hope they will.

The combination starts off with them moving to Rimini Street on a wider variety of their platforms for support in order to save that money and reinvest it in technology. So I think, again, we're on the right track. I think all of the things we've been putting in place in terms of the products we built out over the last few years are all coming to play now in this new agentic AI ERP model and the combination of what we're able to do to continue support on a wider variety of platforms.

Okay. And maybe 2 last quick ones, if I could. Just indirect and channel, I love it. I think there's so many potential ways to increase sales efficiency in terms of what you're working on there. Where is it now as a percent of revenues? Where do you think it's going? And then my last one is also a numbers question. Just thoughts on retention rates over the next few quarters.

Sure. The first one, in terms of where we think this is going to go, again, I think we're going to follow the plan that we've laid out. We'll get the numbers to you in the Investor Day. So I think we want to just be careful about getting to any kind of numbers in this particular call.

But the other side of this, I just think, again, we're going to lay out exactly the model that's going forward. The retention, I think, becomes extremely sticky, especially when you're taking systems and now you're able to put the agentic AI ERP over the top of the existing system, no upgrades required, no reason to switch to other ERP systems. We've declared ERP software is officially dead. It will be usable for the next 20, 30 years as a core transaction system. We're going to do that for customers, but all future changes we believe, as you'll see with the software vendors, all believe will be done outside the system, and we're going to use AI to deliver it.

Your next question comes from the line of Brian Kinstlinger from AGP.

If you could just help remind us your role in that partnership with ServiceNow. Are you providing support services on top of the technology that ServiceNow is bringing? Is there an application development piece? Just remind us broadly what you're bringing to the table in this partnership.

Sure, Brian. They are producing a tool. And we are using that tool to create solutions, and we're calling them the agentic AI ERP solutions that we then layer on top of the existing ERP system. So what they get out of it is they get the licenses for the tool, the AI platform, and Rimini Street does all the work. So we have all the consulting labor to install the system, to design these agentic AI ERP components and install them, then we will run the system underneath the ERP component. We will also run the ServiceNow piece. So we pick up most of the revenue in that entire picture.

Now are these 24 to customers or POCs, whatever they are, are they with your existing client base? Are they generally new customers?

They are, I believe, most of them, if not all of them, are existing customers who were very excited about the offering, and we engaged with them to deploy this first set for them.

Great. And then you spoke of a higher number of new client wins in TCV year-over-year. What was the split between the U.S. and international?

That's a good question. I don't have the answer on the exact split. I don't believe we published that particular number. But if you look at the...

How about a high level with -- I guess the key question for the last several years, obviously, is U.S. versus international. So is U.S. beginning to make any material impact on the bookings side to replace what is usually 10% attrition? I'm just trying to understand the bookings in the U.S. mostly.

Sure. Well, the bookings in the U.S., I can tell you, if you look for the first 3 quarters of 2025, bookings are up 6%, and it's actually up higher if you take out the PeopleSoft component. But we are absolutely seeing a bookings growth in the U.S. and you saw that the bookings growth was strong outside of the U.S. on the international. So yes, I do think what we're seeing is a turn in the ship. I do believe when we look at the logos, we look at the size of the transactions, the ASP, we even had on top of a record SAP quarter across the world, we had a record bookings for Oracle in the quarter as well, which was, again, another important piece of business that moved forward, and we, of course, want to highlight that as well.

Now if bookings are up 6% in the first 3 quarters, year-over-year ex PeopleSoft U.S. is down about 4.4% you highlighted. And while that number wasn't given last quarter, I'm sure it was a stronger comp. It was -- it declined less than 4.4% based on what you did provide. So what's behind the accelerated decline in the U.S. unless I'm wrong?

Well, remember, you've got accumulation of some prior quarters where we did have some losses and those have carried forward. But the new bookings aren't going to be reflected, obviously, in revenue on a ratable basis for a while. So we're saying -- what we're seeing is current. We're seeing the bookings coming up, which, of course, is a great precursor to understand where we're going. We're watching the RPO come up. All these numbers are coming in, again, sort of in this mid-single digits. And then you look, if you take out the PeopleSoft, your revenue growth was actually positive over 2%, 2.5%. And so I think when you look at those numbers, Brian, you're really looking at metrics that are all supporting the idea that the business is turning around. We're starting to return to growth on the top line. And I think that's the key indicator for this quarter.

Great. On the international side, we've seen an acceleration of growth. Can you just kind of point to where that is? Is there a specific solution like SAP, Oracle or VMware? Is it a new service? Is it geographic specific? Maybe you can point to 1 or 2 things that are driving that accelerated pace of growth.

Sure. Internationally, as you know, SAP is a bigger product than Oracle, except on the technology side for database. And so this represents a significant amount of SAP business done on the international side.

Your next question comes from the line of Richard Baldry from ROTH Capital.

I know it's kind of early, but when you look at the very top of the funnel sort of prospects at the highest end, has there been any change in the engagement levels with those people you've been willing -- who've been willing to return calls, whatever, post the Oracle settlement? Or do you think it's too soon to really gauge that?

No. I think we're roughly, what, 90 days or so after the settlement announcement. So from that point of view, do we see a change in the business relative to that? I would say, Rich, that we definitely have real cases where prospects came back to us that were off the table before because they were concerned about litigation for the company. So I think that's a great measure that we're seeing. We've also had partners come back. Some rather large tech companies have come back to us who didn't want to do formal partnerships before because of the litigation where they cited it specifically. And now they've come back to us because the litigation has been settled and they're anxious to have conversations to move forward. So I think there's evidence building that as we suspected, there would be customers, there would be partners, people who didn't want to do business with a company that was involved in litigation, and now we're seeing that clear.

Got it. One sort of small one and then one a little bit bigger. Will litigation costs pretty much trend towards 0 near term? And would there be any in 2026? And then more importantly, can generative AI materially lower your cost of service delivery? I'm sort of curious where it could fit inside of your dealing with customers, if there's headcount that either would go steady or you could pull out, how do you think about using that in terms of your own business?

Sure. So question number one, we will continue to have some litigation costs because we associate that with the wind down of PeopleSoft and there's compliance components related to litigation, things like that. So there will be some continuing costs. But as we've said, we used to talk about $10 million a year in litigation costs. We would expect to see substantial reductions, and we already are in terms of the wind down of the litigation process. So that will absolutely inure to the benefit of shareholders and the financials in the years ahead.

Second question, we are absolutely focused on deploying AI across our entire company. We are looking at ways to reduce cost. We already use AI to improve service to customers, and we've been doing that for several years. We have an internal team dedicated just to looking at ways to improve systems and processes, using technology for leverage and reducing the amount of labor that we require as a business. We brought in a new global CIO, Joe Locandro, who has previously been the global CIO for Cathay Pacific Airlines, Emirates Airlines, China Light & Power and has deployed a significant amount of AI in those businesses and including being a Rimini Street customer as part of this portfolio. And we intend to aggressively pursue reducing internal costs with AI.

Your next question comes from the line of Derrick Wood from TD Cowen.

This is Jared on for Derrick. For the new GSA schedule, how do you expect this to impact your ability to do business with the U.S. government? Have you seen any initial proof points along these lines, of course, understanding the current circumstances?

Sure. We, of course, have sought GSA for a long time. It's a complicated agreement to get through with all of Rimini Street's different products, and we got approved for Oracle, SAP, VMware support as well as security products. So obviously, a great win for us. We see this as a very important purchase vehicle, not only for the federal government, but for the local and state government and education institutions that look to the GSA. And if you're on the GSA, just like our framework agreements with many governments around the world, you're able to buy off that agreement without a procurement process. So that is a big one for us, considering public sector is our second to third largest group of customers globally. So that's number one.

Number two, on the federal side, we are engaged with different federal agencies. Again, this is a new team. This is a new motion for us. But in addition to the work we're doing directly, we are partners with Merlin Cyber, who is a well-known player in the federal space and also some local government, and we've done deals together already. And so we're going to be working together both through with Merlin's capabilities and experience in the federal government and along with our direct work under the GSA.

Awesome. Appreciate all that color. And then just a follow-up on the government topic. Should we be expecting any impact in your next quarter's results from the current shutdown?

No, I don't think we would expect to see any impact based on the shutdown.

Appreciate that. Last one from me, 100-plus organizations on VMware, great to hear. Similar to the prior ServiceNow question, could you break out sort of the mix of net new customers, new clients landing on the solution versus your cross-sell motion into your existing base?

Yes. We haven't broken that out as far as I'm aware. I'll have to go back and take a look, and we can certainly follow up with you on a couple of these questions with the other breakouts. I think that from what I can tell you in looking at the deals, there are a good number that are in the existing client base. But I will tell you, I believe the majority of those customers are net new logos.

Your last question comes from the line of Alex Fuhrman from Lucid Capital Markets.

I was wondering if you can talk a little bit more about the partnership with American Digital. Is the goal here to be able to leverage the full stack solution in order to be able to go after more customers? Or is this something your existing clients have been asking for in order to better leverage cost-effective AI tools? Any color there would be very helpful.

Sure. And welcome, and thanks for picking up coverage of Rimini Street. One of the things that we've been looking at is there has been a big change in the way that VMware and other software suppliers have been working with various partners. And these are companies, especially in the hosting space, as you saw with our T-Systems announcement in North America as well as American Digital, these are hosting providers.

And what's happened is, for example, if you were to upgrade your systems with SAP and you went with their -- what was formerly known as RISE, you would have to be moved over to Azure, which, of course, means that the customer would no longer be their customer. So you have a lot of these providers who are in a pickle because their customers don't want to upgrade and Rimini Street provides a great solution. But if the customer does upgrade, they could wind up leaving and having to go to a different provider for hosting service. So that's the kind of situation that's happening. And so this is one where we can come in, in a big win-win and help them with their customers who don't want to move forward, don't want to upgrade, provide a great solution and keep them on their platform, which, again, is a win-win for us in American Digital and HPE.

We don't have any other questions at this time. I will now turn the call over back to Mr. Seth Ravin, CEO. Please continue.

Thank you very much, and thanks, everyone, for joining us. We hope you join us for our Analyst Day 2025 on December 3. You can get registration right off our website on the Investor Relations page. And again, looking for a good health for everyone, and thank you for attending, and we look forward to seeing you at the Analyst Day and future calls. Thank you very much, everybody.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.