Rimini Street (RMNI -13.65%), a provider of independent enterprise software support and managed services, reported earnings for Q2 FY2025 on July 31, 2025. The main headline was a significant earnings outperformance: diluted GAAP earnings per share reached $0.32, far exceeding the $0.08 analyst estimate, while GAAP revenue was $104.1 million, above the analyst estimate of $103.08 million. The earnings swing was heavily driven by a litigation settlement, but Underlying metrics showed margin improvement and international growth, even as total revenue growth remained modest. The overall quarter demonstrated stabilization and some renewed growth, but with questions about future momentum due to U.S. revenue contraction and the ongoing PeopleSoft support wind-down.

MetricQ2 2025Q2 2025 EstimateQ2 2024Y/Y Change
EPS (GAAP, Diluted)$0.32$0.08$(0.01)$0.33
Revenue (GAAP)$104.1 millionN/A$103.1 million1.0 %
Gross Margin60.4 %59.1 %1.3 pp
Adjusted EBITDA$13.0 million$8.8 million47.7 %
Adjusted Calculated Billings$107.9 million$103.8 million3.9 %

Source: Analyst estimates for the quarter provided by FactSet.

About Rimini Street and Its Business Model

Rimini Street provides support and managed services primarily for large-scale enterprise software platforms. Its core business is to offer cost-effective, independent support for applications such as Oracle and SAP--where it claims to save clients up to 50% compared to traditional vendor support. Its main products include Rimini Support (third-party software support), Rimini Manage (managed services), and Rimini Protect (security solutions).

Its recent business strategy centers on moving beyond classic break/fix software support toward managed services, consulting, and security. Expansion of the portfolio and global reach is a priority, as the company seeks to build a more resilient, diversified revenue base while navigating legacy headwinds such as the ongoing PeopleSoft service wind-down.

Quarterly Developments: Financial and Operational Performance

The quarter delivered diluted GAAP EPS of $0.32 for Q2 FY2025, beating estimates by a sizeable margin. However, This profit was largely due to the $36.2 million litigation settlement with Oracle, recognized in Q2 FY2025. Excluding legal items, non-GAAP net income was breakeven, highlighting that core profitability remains a work in progress. Adjusted EBITDA, an indicator of operational cash flow performance, improved 47.7% to $13.0 million compared to the same period last year.

Total GAAP revenue increased just 1.0% year over year, crossing the $104 million mark and modestly exceeding expectations. This limited improvement was mainly driven by 6.4% international revenue growth, which reached $55.0 million, while U.S. revenue contracted 4.5% to $49.2 million. The international segment is now the main source of revenue growth, with international revenue increasing 6.4% year-over-year to $55.0 million, helping offset domestic declines.

GAAP gross margin advanced by 1.3 percentage points to 60.4%. Reported operating income saw an extraordinary jump, but this mostly came from the Oracle settlement rather than a fundamental shift in profitability. Cost reduction measures continued, such as a $10 million repayment on its revolving credit line and further streamlining of operational expenses.

With subscription revenue at $98.5 million, representing 94.6% of total revenue. Annualized recurring revenue fell 1.3% to $394.1 million, while active clients grew 1.8% to 3,060 and the revenue retention rate improved to 90% for the trailing twelve months.

Calculated billings was down 0.9%, but adjusted calculated billings (excluding PeopleSoft services) rose 3.9%. The ongoing wind-down of PeopleSoft continues to weigh on growth rates, with PeopleSoft revenue representing approximately 7% of total revenue in Q1 FY2025, down from approximately 8% in Q1 FY2024, but newer service lines like Rimini Manage and Rimini Consult (consulting for platforms like Salesforce and Dayforce HR/payroll) point to gradual shifts toward newer, more sustainable sources of revenue.

On the product and customer side, several client wins and extensions showcased the breadth of Rimini Street’s portfolio. For example, OSG Corporation extended its Oracle EBS support, achieving an 8% reduction in IT operating costs. The University of Melbourne’s Mobile Learning Unit signed on for managed services and consulting, emphasizing international demand. Partnership activity was robust, with new alliances with Merlin Cyber (to target U.S. government agencies) and Dayforce. Product support was also extended for SAP ECC 6.0 and S/4HANA products (enterprise resource planning systems), promising maintenance to 2040. High client satisfaction was reported, with an average rating of 4.9 out of 5 across more than 6,800 closed service cases during Q2 FY2025.

A material one-time event this quarter was the partial recovery of litigation costs from Oracle, affecting both cash and profit metrics. Cash and cash equivalents were $101.3 million at June 30, 2025, compared to $134.2 million at June 30, 2024, but with litigation settlement proceeds bolstering the post-quarter position. Long-term debt dropped by $6.6 million from December 31, 2024, to June 30, 2025.

Leadership changes also featured in the quarter, including new executive hires to support the managed services business and go-to-market initiatives.

Looking Ahead: Guidance and Outlook

Management did not provide specific quarterly or annual financial guidance for revenue, earnings, or other key metrics. The company stated it plans to reinitiate formal outlooks later in the fiscal year during an Analyst Day event.

For investors, the main upcoming issues will be the pace of core revenue growth after the completion of the PeopleSoft wind-down (as measured by Adjusted Calculated Billings, which excludes PeopleSoft calculated billings and increased 3.9% year-over-year in Q2 FY2025), continued margin improvement, and the reduction in cash reserves and flat non-GAAP profitability are areas that warrant continued focus.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.