Rimini Street (RMNI) Q2 2026 earnings review
Top-Line Accelerates, But Billings Contraction Raises a Red Flag
Rimini Street delivered its highest revenue growth in recent quarters, with top-line accelerating to 6.7% YoY ($111.1M). Excluding the planned PeopleSoft wind-down, adjusted revenue jumped a healthy 10.0%. Management heavily promoted their 'Agentic AI ERP' pivot, claiming improving sales execution. However, a glaring contradiction exists beneath the surface: Calculated Billings suddenly reversed, dropping 8.8% YoY to $100.9M. While the optical 92% plunge in Net Income is merely noise (lapping a massive $34M litigation settlement in 25Q2), the billings contraction combined with lagging U.S. revenue growth presents a mixed picture that demands investor scrutiny.
🐂 Bull Case
Adjusted Revenue (ex-PeopleSoft) accelerated to 10.0% YoY. International revenue is booming (+14.1% YoY), proving the foundational value proposition of cost-saving third-party support remains highly relevant in a constrained IT budget environment.
Despite weak quarterly billings, Remaining Performance Obligations (RPO) grew a solid 8.0% to $636.9M, providing a stable buffer for future revenue recognition.
🐻 Bear Case
Calculated Billings fell 8.8% YoY, and Adjusted Calculated Billings fell 8.0%. This contradicts management's claim of 'improving sales execution' and casts doubt on the near-term pipeline conversion.
U.S. revenue actually shrank 1.6% YoY. Even excluding PeopleSoft, it grew a meager 3.1%, drastically underperforming the International segment and indicating potential structural or competitive headwinds domestically.
⚖️ Verdict: ⚪
Neutral. The transition to an 'Agentic AI ERP' company is generating impressive adjusted revenue growth and masking the PeopleSoft runoff well. However, the sudden contraction in billings and stagnant U.S. growth prevent a more bullish outlook.
Key Themes
International Segment Driving the Growth Engine
International revenue continues to be Rimini's strongest pillar, accelerating to a 14.1% YoY increase ($62.7M). Excluding PeopleSoft, this jumps to a robust 15.8% growth. The company is clearly finding better traction for its 'Smart Path' methodology in overseas markets, successfully winning deals like One NZ in New Zealand and Medical Microinstruments in Italy.
Agentic AI Portfolio Expansion
Rimini Street is aggressively layering new AI services 'over the top' of existing ERPs. The company launched 'Rimini Govern for AI' this quarter, offering AI agent governance as a service. This fits directly into their macro narrative: helping organizations fund AI innovation without blowing up current IT budgets on forced vendor upgrades.
Aggressive Debt Reduction and Balance Sheet Discipline
Management continues to de-risk the balance sheet, prepaying another $10M of debt in 26Q2. Total outstanding debt is now down to $48.4M against a growing cash pile of $123.4M. This growing net cash position provides flexibility for future M&A or expanded shareholder returns.
Billings Contradict the Growth Narrative
Management's press release highlights 'improving sales execution,' yet Calculated Billings—a primary leading indicator of sales—reversed sharply, declining 8.8% YoY to $100.9M. Even adjusting for the PeopleSoft wind-down, billings were down 8.0%. This specific data point directly contradicts the positive top-line narrative and requires immediate explanation.
U.S. Market Lagging Significantly
The U.S. market, historically a stronghold, continues to decelerate. Reported U.S. revenue fell 1.6% YoY to $48.4M. While the PeopleSoft wind-down disproportionately impacts North America, the adjusted U.S. growth of just 3.1% shows that domestic pipeline generation and close rates are lagging far behind the rest of the world.
PeopleSoft Drag Shrinking but Persistent
The court-mandated wind-down of the PeopleSoft business (to be completed by July 2028) continues to obscure true core performance. PeopleSoft revenue fell from $5.9M in 25Q2 to $3.1M in 26Q2, creating roughly a 300 basis point drag on total reported revenue growth.
Margin Pressure from AI Investments
While Non-GAAP Operating Income was technically positive at $9.2M, it declined from $10.9M a year ago. Management cited ongoing investments in sales capacity and new AI service offerings. This indicates that the pivot to 'Agentic AI' is currently a drag on operating leverage, testing investor patience for the eventual ROI.
Other KPIs
Accelerating. Up 8.0% YoY (and up 8.8% excluding PeopleSoft). Despite the quarterly billings miss, the overall contracted backlog remains extremely healthy, reflecting longer contract durations and successful renewals.
Stable. Grew 2.4% YoY from 3,060 in 25Q2. The company continues to add logos, though the rate of net new client additions remains in the low single digits, indicating revenue growth is primarily driven by cross-selling and price realization.
Stable. Held steady at 90% for the trailing 12 months, identical to the 90% reported in 25Q2. This shows that core churn has stabilized after prior quarters of slight weakness in North America.
Guidance
Accelerating slightly on a YoY basis. The $111.0M midpoint implies a 7.3% YoY growth rate over the $103.4M reported in 25Q3. However, it represents essentially flat sequential growth compared to 26Q2's $111.1M.
Stable. Management reiterated their full-year guidance. Given the 6.7% growth in Q2 and the ~7.3% implied growth for Q3, hitting the upper end of this 4-6% target appears highly achievable, barring a sudden collapse in Q4.
Stable. Reiterated guidance, tracking toward management's 'Rule of 20' target for FY26 (Revenue Growth + Adj EBITDA Margin). Achieving the midpoint (14.0%) requires careful cost control in H2 given the elevated S&M and R&D spending seen recently.
Key Questions
Billings vs. RPO Disconnect
Calculated Billings fell nearly 9% this quarter, yet RPO grew 8%. Was this billings contraction driven by a change in invoicing duration (e.g., shifting from annual upfront to quarterly billing), or did deal slippage occur late in the quarter?
U.S. Market Turnaround
With U.S. revenue continuing to lag International significantly, what specific changes to the go-to-market motion or sales leadership are being implemented to reignite domestic growth?
Monetizing Agentic AI
With the launch of 'Rimini Govern for AI,' when will the company begin breaking out direct revenue contributions from the AI portfolio, and how much margin drag should we expect in H2 to support these launches?