Rimini Street (RMNI) Q3 2026 earnings review
Rimini Street billings and margins rebound, but Q4 targets stay steep
Rimini Street, which provides third-party support for corporate Oracle and SAP software, accelerated its sales growth and expanded profit margins. Revenue excluding the winding-down PeopleSoft product line rose 11% from a year ago, while calculated billings rebounded 21% and U.S. sales returned to growth. Chief executive Seth Ravin kept the full-year Rule of 20 plan—where revenue growth and Adjusted EBITDA margin add up to 20%—as lower marketing and overhead costs lifted the third-quarter margin.
| Revenue excluding PeopleSoft | $109.3M +10.7% from a year ago (reported: +8.3%) |
|---|---|
| Calculated billings | $80.5M +21.0% from a year ago (-8.8% last quarter) |
| Adjusted EBITDA margin | 13.5% 9.6% a year ago and 9.5% last quarter |
| Q4 revenue outlook | $117–119M middle of the range: +7.5% growth |
⚖️ Verdict: 🟢 Bullish
The story got better because the two main drags from the first half—falling U.S. sales and shrinking profit margins—both reversed. Marketing costs dropped by nearly four percentage points of revenue from last quarter, and the fourth-quarter sales plan puts full-year revenue at the top of the 4% to 6% target range. One caution: total contract backlog grew 7%, slowing for a second straight quarter, and the company still reports no revenue from its new artificial intelligence services.
The question now is whether fourth-quarter profitability can climb high enough to meet the full-year Rule of 20 target. By our math, hitting that goal requires a fourth-quarter Adjusted EBITDA margin near 24%, which bulls expect from lower sales costs and bears doubt given the 14% third-quarter level. Fourth-quarter results will settle the debate.
🐂 Bull Case
Billings Rebound and U.S. Sales Turn Positive
Rimini Street provides third-party support for business software made by Oracle, SAP and VMware. Last quarter, calculated billings—revenue plus the change in billed contract balances—fell 8.8% from a year ago, and U.S. sales shrank. In the third quarter, both measures turned positive as chief executive Seth Ravin "achieved record third-quarter sales of services for SAP software" and signed a partnership with Australasian technology provider Datacom.
- Calculated billings: $80.5 million, up 21.0% from a year ago (up 21.9% excluding the winding-down PeopleSoft line)
- Total revenue: $112.1 million, up 8.3% from a year ago, or 10.7% excluding PeopleSoft
- U.S. revenue: $48.3 million, up 4.3% as reported and 7.1% excluding PeopleSoft
- International revenue: $63.8 million, up 11.6% as reported and 13.5% excluding PeopleSoft
The rebound matters because it supports management's earlier claim that second-quarter billings weakness came from renewal timing rather than lost demand. Meanwhile, the wind-down of support for Oracle's PeopleSoft software under a 2025 legal settlement is shrinking as a drag: PeopleSoft revenue fell to $2.7 million, or 2.4% of total sales, down from 3.0% last quarter.
What to watch: fourth-quarter calculated billings. Because the fourth quarter carries the largest share of annual contract renewals, another double-digit gain would confirm that underlying demand has accelerated.
Lower Sales and Overhead Costs Lift Margins
For four straight quarters, Rimini Street's profit margins had fallen from a year earlier as the software support provider spent heavily on marketing. Finance chief Michael Perica said third-quarter results "demonstrated increasing operating leverage in our business model." Adjusted EBITDA—earnings before interest, taxes, depreciation, and one-off items—rose 52.0% from a year ago to $15.1 million, lifting the margin by 3.9 percentage points to 13.5%.
Both gross profit and operating overhead drove the improvement. Gross margin—revenue left after the direct cost of engineers supporting clients—rose 1.5 percentage points from a year ago to 61.4%. By our math, sales and marketing expenses dropped 1.8 percentage points of revenue from a year ago (and 3.6 points from last quarter) to 34.8%, while general and administrative overhead fell 2.7 points from a year ago to 15.0%.
What to watch: whether sales and marketing expenses stay near 34% of revenue in the fourth quarter. Holding that level would meet the company's full-year target range of 33.5% to 34.5%.
Share Buybacks Resume Alongside Debt Paydown
During the first half of fiscal 2026, Rimini Street bought back no stock and put all excess cash toward paying down its bank loan. In the third quarter, Perica restarted buybacks, spending $5.0 million to repurchase common shares while prepaying another $5.0 million of debt.
Those payments brought total debt reduction and capital return for the first nine months of the year to $30.9 million and lowered principal debt on the term loan to $43.4 million. Cash and cash equivalents ended the quarter at $93.3 million, leaving $51.6 million of net cash against carrying debt by our math.
What to watch: fourth-quarter share repurchases and the diluted share count. Even with the buyback, diluted shares rose 0.9% from a year ago, so larger repurchases are needed to shrink the share base.
🐻 Bear Case
Full-Year Profit Target Still Needs a Q4 Jump
Ravin is "reiterating our fiscal 2026 ‘Rule of 20’ guidance," which requires full-year revenue growth and Adjusted EBITDA margin to add up to at least 20%. Even after the third-quarter profit rebound, the math for the fourth quarter remains steep.
Combining nine-month revenue of $328.6 million with the middle of the fourth-quarter outlook ($118.0 million) points to full-year revenue of $446.6 million, or 6.0% growth by our math. Reaching the Rule of 20 then requires a full-year Adjusted EBITDA margin of 14.1%. Because the margin over the first nine months was only 10.5% ($34.6 million), the fourth quarter must deliver about $28.2 million, or a 23.9% margin by our math.
Even the bottom of the company's previously stated 12.5% to 15.5% full-year Adjusted EBITDA margin target requires an 18.0% fourth-quarter margin by our math, well above the 10.4% earned in the fourth quarter of last year.
What to watch: fourth-quarter Adjusted EBITDA margin. A reading below 18% would miss both the Rule of 20 and the full-year margin range.
AI Products Still Lack Revenue Disclosure
Rimini Street describes itself as a provider of artificial intelligence (AI) enterprise software solutions and has made these tools the center of its growth pitch. This quarter, the company launched Rimini Govern for AI, a service that "provides enterprise-wide governance, security, compliance, operational control and performance measurement for AI agents and workflows."
Despite the product launch and $1.2 million of research and development spending in the quarter ($2.9 million over nine months, up from zero a year ago), the release gave no revenue, bookings, or customer counts for its AI products. Meanwhile, all three named customer case studies in the release highlighted traditional SAP and Oracle software support rather than new AI contracts.
What to watch: any standalone revenue or contract-value figure for AI services in the annual filing. Without disclosed sales, investors cannot tell whether R&D spending is creating a new revenue stream.
Order Backlog Growth Slows and Retention Plateaus
While quarterly billings jumped, the company's total contract backlog grew more slowly. Remaining performance obligations (RPO)—total future revenue under signed contracts, which bulls view as the main support for future growth—rose 6.8% from a year ago to $652.9 million (7.4% excluding PeopleSoft), slowing from 8.0% growth in the second quarter and 16.4% in the first.
- Sequential RPO addition: $16.0 million by our math, down from $21.3 million in the third quarter of last year
- Revenue retention rate: 90% over the trailing 12 months, unchanged from last quarter
- Active clients: 3,214, up 1.9% from a year ago (slower than 2.4% growth in the second quarter)
- PeopleSoft RPO remaining: $9.4 million, which must be wound down by July 2028 under the Oracle settlement
With revenue retention—the share of subscription revenue kept from existing clients over a year—holding at 90%, roughly a tenth of recurring revenue leaves each year as software vendors push clients toward cloud upgrades. Replacing that lost tenth before growing requires steady new client wins.
What to watch: year-end RPO growth and the revenue retention rate in the fourth quarter. A retention reading above 90% would show that client losses are finally shrinking.
👓 Other Themes
New Operations Chiefs and VMware Cost Survey
Rimini Street hired Keith Costello as chief operating officer and Alexander Guasch as chief delivery officer "to help scale global operations and support the Company’s growth and profitability objectives." Separately, the company published a global survey of VMware software users showing that 90% are considering alternatives because of higher licensing costs and 66% use or are considering third-party support, though the release gave no updated VMware sales pipeline numbers.
💲 Other KPIs
Annualized recurring revenue (ARR)—quarterly subscription revenue multiplied by four—grew 7.7% from a year ago, speeding up from 4.8% growth in the second quarter. Excluding the winding-down PeopleSoft line, ARR rose 9.8% to $410.4 million, up from 8.1% growth last quarter. Subscriptions made up 93.9% of total revenue.
Total deferred revenue—cash billed to customers for support services not yet delivered—rose 4.2% from a year ago by our math ($210.8 million current and $24.8 million long-term), up from 1.6% growth in the second quarter. Because most annual renewals are billed in the fourth quarter, deferred revenue normally dips in the third quarter before rebuilding at year-end.
The weighted average diluted share count rose 0.9% from a year ago (95.3 million) and 1.3% from last quarter (94.8 million). Even though the firm resumed stock buybacks with $5.0 million in the third quarter, employee stock-based compensation ($2.2 million in the quarter) kept the total share count rising.
🔮 Guidance
Consistent with the prior full-year plan. The new fourth-quarter range sits inside the $109.9 million to $120.3 million window implied last quarter by the full-year outlook. At the $118.0 million middle of the range, fourth-quarter revenue would grow 7.5% from a year ago (versus 8.3% in the third quarter) and bring full-year growth to 6.0% by our math, at the top of the 4% to 6% annual target.
Unchanged. Management kept its target for full-year revenue growth and Adjusted EBITDA margin to sum to 20%. With the fourth-quarter revenue plan pointing to 6.0% full-year sales growth by our math, the full-year Adjusted EBITDA margin needs to reach 14.1%. After a 10.5% margin across the first nine months, that leaves a 23.9% margin required in the fourth quarter by our math.
❓ Key Questions
How will Adjusted EBITDA margin reach 24% in Q4?
Hitting the full-year Rule of 20 target requires fourth-quarter Adjusted EBITDA margin to reach about 23.9% by our math, up from 13.5% in the third quarter. Which cost lines will drop enough in one quarter to bridge that 10-point gap?
What revenue or bookings come from Agentic AI products?
Rimini Street spent $2.9 million on R&D over the first nine months and launched Rimini Govern for AI, yet has disclosed no AI revenue, bookings, or active production customer counts for four quarters.
What was operating cash flow in the third quarter?
The earnings release did not include a cash flow statement. After generating $22.9 million of operating cash flow in the first half, how much cash did operations produce in the third quarter toward the 90% annual conversion goal?
How much did currency rates help international sales growth?
International revenue grew 11.6% from a year ago and accounts for 57% of total sales, and the release noted a $0.9 million unrealized foreign-exchange gain. How much of the international growth came from local-currency demand versus exchange rates?