Rimini Street (RMNI) Q1 Results: Revenue Inches Past Estimates, But Profitability and Outlook Disappoint
Shares of Rimini Street (NASDAQ:RMNI) slipped in after-hours trading on Wednesday after the company reported fiscal first-quarter earnings that beat revenue expectations but missed significantly on profitability. The market reaction settled at roughly -1.4%, reflecting a cautious interpretation of the numbers.
The enterprise software support provider reported revenue of $105.5 million for the quarter ended March 31, 2026, which came in slightly ahead of the analyst consensus estimate of $104.77 million. However, the bottom line told a different story. Non-GAAP earnings per share (EPS) came in at $0.03, missing the analyst estimate of $0.06 by a wide margin.
This disconnect between top-line and bottom-line performance—combined with soft guidance for the current quarter—appears to be weighing on investor sentiment.
Revenue and Profitability: A Mixed Picture
Total revenue grew 1.2% year-over-year, a modest pace that masks stronger underlying trends. When excluding the wind-down of support services for Oracle’s PeopleSoft software, core revenue increased by 5.2%, signaling that the company’s primary business is still gaining traction.
International revenue was a bright spot, rising 8.3% to $58.6 million, while U.S. revenue declined 6.4% to $46.9 million. Subscription revenue remained the dominant model, accounting for 95% of total revenue.
The profitability miss was driven by higher operating expenses, which ate into margins. Gross margin contracted to 59.0% from 61.0% in the prior year. Operating income fell sharply to $4.8 million from $9.4 million, and non-GAAP net income dropped to $4.0 million ($0.03 per diluted share) from $9.5 million ($0.09 per diluted share) a year earlier. Adjusted EBITDA came in at $8.9 million, down from $15.7 million.
Management attributed the margin compression to increased strategic investments in new AI and innovation offerings, as well as ongoing global operational streamlining.
Key Operational Metrics and Client Wins
Beyond the headline numbers, several operational metrics paint a picture of a company that is building momentum for future growth:
- Calculated Billings surged 19.9% to $95.3 million, suggesting strong new business sales activity.
- Remaining Performance Obligations (RPO)—a key forward-looking indicator—rose 16.4% to $643.6 million.
- Active Clients grew 1.2% to 3,130, and the company resolved over 6,800 support cases with a client satisfaction score of 4.9 out of 5.0.
New client wins included notable names such as South Korea’s LF, Cubic Corporation, KleanNara, Lotte Rental, and Flexitech. These clients are largely signing on for Rimini’s third-party support for SAP and Oracle systems, freeing up budget for digital transformation and AI investments.
Guidance: Cautious Near-Term Outlook
Management provided second-quarter 2026 revenue guidance in the range of $106 million to $108 million. The midpoint of $107 million sits below the analyst consensus of $108.74 million, which likely contributed to the bearish after-market reaction.
For the full year, the company reiterated its Investor Day guidance of revenue growth in the 4% to 6% range and Adjusted EBITDA margins between 12.5% and 15.5%. These targets imply full-year revenue roughly in line with the current analyst estimate of $446.9 million.
Balance Sheet and Capital Allocation
The company ended the quarter with $132.2 million in cash and cash equivalents, up from $122.6 million a year earlier. It also made a voluntary $10.0 million debt prepayment during the quarter, reducing its outstanding term loan to $58.4 million and increasing net cash to $73.8 million.
This improved financial flexibility provides a buffer as the company continues to invest in its Agentic AI ERP solutions and other growth initiatives.
Analyst Views
The earnings miss on profitability is likely to prompt analysts to reassess their near-term margin expectations. While the revenue beat and strong billings growth are encouraging, the lower-than-expected EPS and cautious Q2 guidance may keep the stock under pressure until there is clearer evidence of operating leverage.
For a closer look at historical earnings trends and future projections, view the full earnings history and consensus estimates for Rimini Street at the links below.
View Earnings History and Future Estimates | See Analyst Ratings and Forecasts
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research before making investment decisions.