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What changed in Rimini Street, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Rimini Street, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+462 added−436 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in Rimini Street, Inc.'s 2024 10-K

462 paragraphs added · 436 removed · 354 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

95 edited+28 added−8 removed110 unchanged
Biggest changeFinally, through the Rimini Street Foundation, which is an initiative funded by the Company, we encourage our employees to “support humankind” and share our Company’s success by investing back into the communities we serve through in-kind donations, employee time, Company financial support and funded volunteer activities around the world.
Biggest changeAs of the date of this Report, we have earned multiple employee satisfaction awards and certifications, including Great Place to Work ® (a recognized global authority on workplace culture and employee satisfaction) certifications in Australia, France, the United Kingdom and the United States; a top 20 ranking from India’s Best Workplaces™ in both the “for Millennials” and “Great Mid-Size Workplaces” categories; a top 10 ranking from Korea’s Best Workplaces™ (as well as additional honors in Korea of Best Workplaces™ for Parents, “Proud Working Mother,” the Great Place to Work ® “ Pioneer Award,” a Great Place to Work ® “Innovation Leader” and “Most Respected CEO” in Korea); Stevie ® Gold Globee Awards for “Customer Service Executive of the Year”; and Stevie ® Silver Globee Awards for “Customer Service Department of the Year.” Finally, through the Rimini Street Foundation, which is an initiative funded and managed internally by the Company, we encourage our employees to “support humankind” and share our Company’s success by investing back into the communities we serve through in-kind donations, employee time, Company financial support and funded volunteer activities around the world.
To meet this need, we believe that IT service providers must be able to expand their offerings and thereby limit the disruption that can occur when multiple vendors and partners are involved in operating, managing, and supporting the technology portfolio. Scaling digital solutions successfully, for example, depends on the ability to make seamless service and support handoffs between services.
To meet this need, we believe that IT service providers must be able to expand their offerings and thereby limit the disruption that can occur when multiple vendors and partners are involved in operating, managing, and supporting the technology portfolio. Scaling digital solutions successfully, for example, depends on the ability to make seamless service and -3- support handoffs between services.
Trial-and-error self-support and open-source community support are generally insufficient to allow IT organizations to meet service-level requirements of business applications or to bring non-production workloads under -3- their administration. We further believe enterprises seek help in navigating how to migrate parts of their enterprise software portfolio to open-source software and in supporting the resulting hybrid environment.
Trial-and-error self-support and open-source community support are generally insufficient to allow IT organizations to meet service-level requirements of business applications or to bring non-production workloads under their administration. We further believe enterprises seek help in navigating how to migrate parts of their enterprise software portfolio to open-source software and in supporting the resulting hybrid environment.
In a composable ERP strategy, we believe that businesses can take advantage of a modular functionality approach by selecting a mix of best-of-breed vendors, products and technologies to achieve their strategic, financial and operational goals - instead of being confined to the architecture, technology, products and capabilities of a single ERP software vendor like SAP or Oracle.
In a composable ERP strategy, we believe that businesses can take advantage of a modular functionality approach by selecting a mix of best-of-breed vendors, products and technologies to achieve their strategic, operational and financial goals - instead of being confined to the conventional architecture, technology, products and capabilities of a single ERP software vendor like SAP or Oracle.
To ensure alignment with our short- and long-term objectives, our compensation programs for all employees include base pay, short-term incentives and opportunities for long-term incentives. Furthermore, we believe our remote delivery model provides an attractive employment option for our highly experienced PSEs compared to consulting roles that can require significant travel, and also reduces our carbon footprint.
To ensure alignment with our short- and long-term objectives, our compensation programs for all employees include base pay, short-term incentives and opportunities for long-term incentives. Furthermore, we believe our remote delivery model provides -13- an attractive employment option for our highly experienced PSEs compared to consulting roles that can require significant travel, and also reduces our carbon footprint.
We control access to our office space where confidential and security-controlled information is located or may be visible while in use, have deployed advanced security software and hardware, and utilize advanced security measures. In addition, we have responsibility to comply with certain client-specific security contractual requirements and government security laws and regulations for some of our clients.
We control access to our office space where confidential and security-controlled information is located or may be visible while in use, have deployed advanced security software and hardware, and -14- utilize advanced security measures. In addition, we have responsibility to comply with certain client-specific security contractual requirements and government security laws and regulations for some of our clients.
The key elements of our growth strategy include: Add new clients We believe that the market for independent enterprise software support products and services is large, growing and underserved. We expect significant growth opportunities in our market as organizations increasingly look to achieve more value from their technology budgets.
The key elements of our growth strategy include: -11- Add new clients We believe that the market for independent enterprise software support products and services is large, growing and underserved. We expect significant growth opportunities in our market as organizations increasingly look to achieve more value from their technology budgets.
For all these reasons and others, we believe the software products and services historically offered by software vendors, such as IBM, Microsoft, Oracle and SAP, do not meet the full and evolving needs of their customers across perpetual, subscription and open-source software, and are often more costly than alternatives.
For all these reasons and others, we believe the software products and services historically offered by software vendors, such as Oracle, SAP, IBM, Microsoft and Broadcom, do not meet the full and evolving needs of their customers across perpetual, subscription and open-source software, and are often more costly than alternatives.
We believe our primary competitors for our Rimini Support solutions are the enterprise software vendors whose products we service and support, including, but not limited to, IBM, Microsoft, Oracle and SAP. We expect that continued growth in our market could lead to significantly increased competition resulting from new entrants.
We believe our primary competitors for our Rimini Support solutions are the enterprise software vendors whose products we service and support, including, but not limited to, Oracle, SAP, IBM, Microsoft and Broadcom. We expect that continued growth in our market could lead to significantly increased competition resulting from new entrants.
Independent assessments of our conformity to the ISO 27001 standard includes evaluating security risks, designing and implementing comprehensive security controls and adopting an information security management process to meet security needs on an ongoing basis. Our current ISO 27001:2013 certification is effective April 2022 through -13- March 2025.
Independent assessments of our conformity to the ISO 27001 standard includes evaluating security risks, designing and implementing comprehensive security controls and adopting an information security management process to meet security needs on an ongoing basis. Our current ISO 27001:2013 certification is effective April 2022 through March 2025.
A key element of our support delivery model is the assignment of one or more named Primary -6- Support Engineers (“PSE”), who serve as the primary product support contact for our clients. PSEs provide technical advice, functional expertise and general support to ensure the resolution of all support issues.
A key element of our support delivery model is the assignment of one or more named Primary Support Engineers (“PSE”), who serve as the primary product support contact for our clients. PSEs provide technical advice, functional expertise and general support to ensure the resolution of all support issues.
We define an active client as a distinct entity, such as a company, an educational or government institution, or a business unit of a company that purchases our support, products or services. For example, we count as two separate active client instances in circumstances where we provide support for two -11- different products to the same entity.
We define an active client as a distinct entity, such as a company, an educational or government institution, or a business unit of a company that purchases our support, products or services. For example, we count as two separate active client instances in circumstances where we provide support for two different products to the same entity.
The desire for business-control in IT roadmaps Enterprise software vendors have historically been the primary providers of software support services for their products, enabling such vendors to dictate which products and releases are supported and for how long, the scope of support services offered, service levels, terms and pricing.
The desire for business control of IT roadmaps Enterprise software vendors have historically been the primary providers of software support services for their products, enabling such vendors to dictate which products and releases are supported and for how long, the scope of support services offered, service levels, terms and pricing.
In addition to new support, products and service sales to prospective and existing clients, we have a dedicated sales team focused on renewals of existing client subscription contracts. We generate global prospect leads, accelerate sales opportunities and build brand awareness through our marketing programs.
In addition to new support, products and service sales to prospective and existing clients, we have a dedicated sales team focused on renewals of existing client subscription contracts. -9- We generate global prospect leads, accelerate sales opportunities and build brand awareness through our marketing programs.
We also believe that Rimini Manage can deliver these same benefits to clients who require database management services for a wide array of databases. In addition, we are a Salesforce partner and offer Rimini Manage for their Salesforce Sales Cloud, Salesforce Service Cloud, and other Salesforce products.
We also believe that Rimini Manage can deliver these same benefits to clients who require database management services for a wide array of databases. In addition, we are a Salesforce partner and offer Rimini Manage for their Salesforce Sales Cloud, Salesforce Service Cloud, and other -12- Salesforce products.
In the meantime, our success and growth will depend to a substantial extent on the willingness of companies to engage an independent service vendor such as us to provide software maintenance and support services for their enterprise software.
In the meantime, -15- our success and growth will depend to a substantial extent on the willingness of companies to engage an independent service vendor such as us to provide software maintenance and support services for their enterprise software.
We have increased our ability to scale by investing in support-related infrastructure and by developing patented and patent-pending artificial intelligence support applications that further optimize our support processes and ensure service -9- delivery outcomes at scale for our clients.
We have increased our ability to scale by investing in support-related infrastructure and by developing patented and patent-pending artificial intelligence support applications that further optimize our support processes and ensure service delivery outcomes at scale for our clients.
We believe our primary competitors for our Rimini Protect solutions are manufacturers of other enterprise software security solutions, including, but not limited to, Oracle, SAP and IBM. We believe our primary competitors for our Rimini Connect solutions are manufacturers of other enterprise interoperability and connectivity products, including, but not limited to Citrix, Dell, Salesforce, Oracle and IBM.
We believe our primary competitors for our Rimini Protect solutions are manufacturers of other enterprise software security solutions, including, but not limited to, Oracle, SAP, IBM and Broadcom. We believe our primary competitors for our Rimini Connect solutions are manufacturers of other enterprise interoperability and connectivity products, including, but not limited to Citrix, Dell, Salesforce, Oracle and IBM.
Clear leadership position We are the global leader of independent enterprise software support services for Oracle and SAP products, based on both number of active clients and recognition by industry analyst firms.
Clear leadership position We are the global leader of independent enterprise software support services for Oracle, SAP and VMware products, based on both number of active clients and recognition by industry analyst firms.
In a newer subscription-based licensing model, such as software as a service (“SaaS”), the customer generally pays as it goes for the usage of the software on a monthly or annual basis (“subscription license”).
In a newer subscription-based licensing model, such as software as a service (“SaaS”), the customer generally pays as it goes for the usage of the software on -4- a monthly or annual basis (“subscription license”).
Technical and software development professionals are product-focused and have relevant domain expertise. Testing and delivery professionals are responsible for the implementation of any changes and support all product groups. Engineers support all aspects of analysis, development and testing for the Product Delivery team.
Technical and software development professionals are product-focused and have relevant domain expertise. -8- Testing and delivery professionals are responsible for the implementation of any changes and support all product groups. Engineers support all aspects of analysis, development and testing for the Product Delivery team.
In addition, traditional AMS offerings are often disparate and separate from software vendor support, with inherent inefficiencies and gaps that further limit responsiveness, root cause analysis and business value. We believe that businesses are pursuing and adopting new, next-generation enterprise resource planning (“ERP”) system strategies, architectures and technologies referred to collectively as “composable ERP” by leading industry analysts.
In addition, traditional AMS offerings are often disparate and separate from software vendor support, with inherent inefficiencies and gaps that further limit responsiveness, root cause analysis and business value. We believe that businesses are pursuing and adopting new, next-generation enterprise resource planning (ERP) system strategies, architectures and technologies referred to collectively as “composable ERP” by leading industry analysts.
We further believe that disparate AMS offerings from other managed service providers are disconnected from the needs of enterprises and promote incremental costs -4- and inefficiencies.
We further believe that disparate AMS offerings from other managed service providers are disconnected from the needs of enterprises and promote incremental costs and inefficiencies.
These AI applications were developed by Rimini Street’s Global Service Delivery Innovation Team, whose mission is to invent innovative solutions that further enhance a client’s overall service experience. Built using open-source technologies, the AI applications can be integrated into support processes along with other new AI applications when they become available.
These AI applications are developed by Rimini Street’s Global Service Delivery Innovation Team, whose mission is to invent innovative solutions that further enhance a client’s overall service experience. Built using open-source technologies, the AI applications can be integrated into support processes along with other new AI applications when they become available.
Enterprise software customers typically need to renew their vendor support contracts on an annual basis so there usually is already a budget for our Rimini Support solutions, and that budget is usually larger than our fees since most of our prospective clients are enterprise software vendor customers paying higher annual fees for their current support services than we charge for our Rimini Support solution.
Enterprise software customers typically need to renew their vendor support contracts on an annual basis so there usually is already a budget for our Rimini Support solutions, and that budget may be larger than our fees since most of our prospective clients are enterprise software vendor customers paying higher annual fees for their current support services than we charge for our Rimini Support solution.
Highly experienced management team Our senior management team has over 150 years of combined experience in the enterprise software and services industry with companies such as Accenture, EDS, Hewlett-Packard, JD Edwards, Oracle, PeopleSoft, ServiceSource, and SAP and with a significant amount of time and experience focused on building, managing and delivering support products and services.
Highly experienced management team Our senior management team has over 200 years of combined experience in the enterprise software and services industry with companies such as Accenture, EDS, Hewlett-Packard, JD Edwards, Oracle, PeopleSoft, ServiceSource, and SAP and with a significant amount of time and experience focused on building, managing and delivering support products and services.
We generated approximately 51%, 53% and 53% of our revenue in the United States and approximately 49%, 47% and 47% of our revenue from our international business for the years ended December 31, 2023, 2022 and 2021, respectively. Our Industry We compete in the global IT services market for enterprise software support, products and services.
We generated approximately 49%, 51% and 53% of our revenue in the United States and approximately 51%, 49% and 47% of our revenue from our international business for the years ended December 31, 2024, 2023 and 2022, respectively. Our Industry We compete in the global IT services market for enterprise software support, products and services.
Maddock served as Executive Vice President of Worldwide Inside Sales and Operations for ServiceSource, a recurring revenue management company, from October 2004 to March 2008. From May 1998 to September 2004, Mr. Maddock served as Vice President of Worldwide Support Service Sales at PeopleSoft, Inc. (acquired by Oracle). From September 1995 to May 1998, Mr.
Prior to joining us, Mr. Maddock served as Executive Vice President of Worldwide Inside Sales and Operations for ServiceSource, a recurring revenue management company, from October 2004 to March 2008. From May 1998 to September 2004, Mr. Maddock served as Vice President of Worldwide Support Service Sales at PeopleSoft, Inc. (acquired by Oracle). From September 1995 to May 1998, Mr.
Rimini Manage permits us to “run” our clients’ systems for them day-to-day with an integrated application management and support services solution provided by a single trusted vendor. Rimini Protect™ is our suite of proactive, fast, cost-effective, and personalized software security services and solutions.
Rimini Manage permits us to “run” our clients’ systems for them day-to-day with an integrated support and managed services solution provided by a single trusted vendor. Rimini Protect™ is our suite of proactive, fast, cost-effective, and personalized software security services and solutions.
We believe that there is a large opportunity to grow our global business by increasing our direct sales force and by selective use of strategic marketing and sales partnerships around the world. We attribute revenue to individual countries based on the location of the contracting entity. For the year ended December 31, 2023, Japan represented 10% of total revenue.
We believe that there is a large opportunity to grow our global business by increasing our direct sales force and by selective use of strategic marketing and sales partnerships around the world. We attribute revenue to individual countries based on the location of the contracting entity. For the year ended December 31, 2024, Japan represented 11% of total revenue.
We believe that application management services (AMS) for enterprise software is a large market with significant unmet needs in client satisfaction and value.
We believe that application managed services (AMS) for enterprise software is a large market with significant unmet needs in client satisfaction and value.
We offer more than 20 Rimini Street solutions across six suites of products and services: Rimini Support, Rimini Manage, Rimini Protect, Rimini Connect, Rimini Watch and Rimini Consult. These products and services cover over 40,000 SKUs of software and technologies from primarily five software vendors, Oracle, SAP, Salesforce, Microsoft and IBM, as well as for open-source software.
We offer more than 20 Rimini Street solutions across six suites of products and services: Rimini Support, Rimini Manage, Rimini Protect, Rimini Connect, Rimini Watch and Rimini Consult. These products and services cover over 40,000 SKUs of software and technologies from primarily seven software vendors, Oracle, SAP, Salesforce, IBM, Microsoft, ServiceNow and VMware, as well as for open-source software.
Our key competitive strengths include: Unique end-to-end software support, products and services model Our enterprise software support, products and services model differentiates us from traditional enterprise software vendors.
Our key competitive strengths include: Unique end-to-end software support, products and services model Our enterprise software support, products and services model differentiates us from traditional enterprise software vendors and systems integrators.
A growing number of our clients then expand their service contracts with us, utilizing our application management services, database management services, security solutions, integration and interoperability capabilities, advanced strategic technology advisory services, and project-based professional services.
A growing number of our clients then expand their service contracts with us, utilizing our managed services, database managed services, security solutions, integration and interoperability capabilities, advanced strategic technology advisory services, and project-based professional services.
Previously, he served as our Executive Vice President, Global Transformation from September 2021 until March 2023, our Executive Vice President and Chief Marketing Officer from March 2020 to September 2021, our Senior Vice President and Chief Marketing Officer from April 2012 to March 2020, our Senior Vice President of Global Marketing and Alliances from December 2008 to April 2012 and our Vice President Marketing and Alliances from September 2006 to December 2008.
Prior to that, he served as our Executive Vice President, Global Transformation from September 2021 until March 2023, our Executive Vice President and Chief Marketing Officer from March 2020 to September 2021, our Senior Vice President and Chief Marketing Officer from April 2012 to March 2020, our Senior Vice President of Global Marketing and Alliances from December 2008 to April 2012 and our Vice President Marketing and Alliances from September 2006 to December 2008.
Such registered trademarks will expire unless renewed at various times in the future. Policing unauthorized use of our processes and software tools and intellectual property rights is difficult. As of the date of this Report, we are not aware of any material breaches of our intellectual property rights. Information about our Executive Officers.
Such registered trademarks will expire unless renewed at various times in the future. Policing unauthorized use of our processes and software tools and intellectual property rights is difficult. As of the date of this Report, we are not aware of any material breaches of our intellectual property rights.
Rimini Watch™ is our suite of observability solutions that include monitoring and system health check solutions designed to monitor the performance and execution of thousands of processes continuously 24x7x365 and identify potential issues before they happen so system downtime and impacts can be avoided.
Rimini Watch™ is our suite of observability solutions that include monitoring and system health check solutions designed to monitor the performance and execution of thousands of processes continuously 24/7/365 and identify potential issues before they happen so system downtime and impacts can be avoided.
To this end, we believe that recruiting, retaining and developing high-performing talent is important to our success. We view all employees as partners and are committed to providing an exciting, participatory and team-oriented work environment. This commitment starts with our Core Values, known as our “4 C’s” – Company, Clients, Colleagues and Community – each with equal weight of importance.
To this end, we believe that recruiting, retaining and developing high-performing talent is important to our success. We view all employees as partners and are committed to providing an exciting, participatory and team-oriented work environment. This commitment starts with our Core Values, known as our “4 C’s” – Company, Clients, Colleagues and Community.
We are continuing to make significant investments in sales and marketing and will continue our strong focus on acquiring new clients. Continue global expansion For the year ended December 31, 2023, we generated approximately 49% of our revenue outside of the United States.
We are continuing to make significant investments in sales and marketing and will continue our strong focus on acquiring new clients. Continue global expansion For the year ended December 31, 2024, we generated approximately 51% of our revenue outside of the United States.
For the year ended December 31, 2023, we delivered an average support call response time of less than two minutes for an experienced engineer to engage with a client to address critical (P1) and serious (P2) issues, which is significantly shorter than the 10-minute guaranteed response time that is standard in our client support agreements.
For the year ended December 31, 2024, we generally delivered an average support call response time of less than two minutes for an experienced engineer to engage with a client to address critical (P1) and serious (P2) issues, shorter than the 10-minute guaranteed response time that is standard in our client support agreements.
Perica holds a Bachelor of Business Administration in Accounting from Central Michigan University and a Master’s Degree in Business Administration from the University of Southern California, Marshall School of Business. David Rowe has served as our Executive Vice President, Global Transformation & Chief Product Officer since March 2023.
Perica holds a Bachelor of Business Administration in Accounting from Central Michigan University and a Master’s Degree in Business Administration from the University of Southern California, Marshall School of Business. David Rowe has served as our Chief Product Officer, Chief Marketing Officer and Executive Vice President, Global Transformation, since August 2024.
Rimini Manage™ is our suite of managed services for application and database software (known in the industry as application management services “AMS”) delivered by highly-skilled engineers, featuring unlimited service ticket requests and industry-leading SLAs that we believe can resolve IT staffing/skill shortages and provide smoother system operations at optimized cost.
Rimini Manage™ is our suite of managed services for application and database software delivered by highly skilled engineers, featuring unlimited service ticket requests and industry-leading SLAs that we believe can resolve IT staffing/skill shortages and provide smoother system operations at optimized cost.
Since our inception over 18 years ago, we have invested significant resources in developing our proprietary knowledge, software tools and processes to meet the growing needs of our clients. During the year ended December 31, 2023, we delivered more than 51,000 tax, legal and regulatory updates to our global client base.
Since our inception over 19 years ago, we have invested significant resources in developing our proprietary knowledge, software tools and processes to meet the growing needs of our clients. During the year ended December 31, 2024, we delivered more than 46,000 tax, legal and regulatory updates to our global client base.
Each PSE works as part of our global network of engineers and provides deep expertise for a vendor, product family and product line. Support engineers across the company are able to leverage their collective knowledge and experience to meet the complex support needs of our clients. In 2020, we brought to market our artificial intelligence (“AI”) support applications.
Each PSE works as part of our global network of engineers and provides deep expertise for a vendor, product family and product line. Support engineers across the company are able to leverage their collective knowledge and experience to meet the complex support needs of our clients. We have and continue to bring to market our artificial intelligence (“AI”) support applications.
Growth in hybrid IT environments Today, we believe many organizations are defining business-driven roadmaps that better enable competitive advantage and growth by combining different software under perpetual, subscription and open-source licenses into an integrated business platform that is deployed across their own systems and cloud providers, commonly referred to as “hybrid IT” environments.
Growth in hybrid IT environments Today, we believe many organizations are defining business-driven roadmaps that better enable competitive advantage and growth by combining software from multiple vendors under perpetual, subscription and open-source licenses plus in-house solutions into an integrated business platform that is deployed across their own systems and cloud providers, commonly referred to as “hybrid IT” environments.
Our model includes unlimited support cases, requests, and tasks, and we offer industry-leading SLAs for response time and case update communications. Our team of over 1,280 support engineers, developers, and other experts span the globe, providing 24/7/365 “follow-the-sun” support to clients with operations in over 130 countries.
Our model includes unlimited support cases, requests, and tasks, and we offer industry-leading SLAs for response time and case update communications. Our team of over 1,220 support engineers, developers, and other experts span the globe, providing 24/7/365 support to clients with operations in over 160 countries.
Large global client base As of December 31, 2023, we provided support, products and services for over 3,030 active clients globally, including 73 Fortune 500 companies and 20 Fortune Global 100 companies.
Large global client base As of December 31, 2024, we provided support, products and services for over 3,080 active clients globally, including 73 Fortune 500 companies and 20 Fortune Global 100 companies.
The following table summarizes and compares the software support features of our Rimini Support solution to what management believes in its experience are the typical features of competing support offerings from enterprise software vendors: Base Software Support Feature Rimini Street Typical Enterprise Software Vendor Annual Cost and Resource Savings Compared to the Software Vendor • Guaranteed 10-Minute Response Time 24x7 For Critical (Priority 1) Issues • Guaranteed Cadence of Case Update Communications for Open Cases • Named Primary Support Engineer (PSE) for Each Client • Issue Resolution and Software Bug Fixes • • Support for Application Customizations • Operational, Installation, Configuration and Upgrade Support • • Performance, Interoperability and Integration Support • Security Support (RSI - Security Advisory Services only) • • Localization Support • Tax, Legal and Regulatory Updates • • Our current Rimini Support solution provides services for a broad range of enterprise software vendors, product families and product lines.
The following table summarizes and compares the software support features of our Rimini Support solution to what management believes in its experience are the typical features of competing support offerings from enterprise software vendors: -5- Base Software Support Feature Rimini Street Typical Enterprise Software Vendor Annual Cost and Resource Savings Compared to the Software Vendor • Guaranteed 10-Minute Response Time 24x7 For Critical (Priority 1) Issues • Guaranteed Cadence of Case Update Communications for Open Cases • Named Regional Primary Support Engineer (PSE) for Each Client • Issue Resolution and Software Bug Fixes • • Support for Application Customizations • Operational, Installation, Configuration and Upgrade Support • • Performance, Interoperability and Integration Support • Security Support • • Localization Support • Tax, Legal and Regulatory Updates • • Full Support of Current Release for at Least 15 Years from Contract Date • Our current Rimini Support solution provides services for a broad range of enterprise software vendors, product families and product lines.
As of December 31, 2023, approximately 65% of our over 1,530 unique clients have selected us to provide services, products and solutions for more than one of their software product lines, and we believe there is additional opportunity for growth within our existing client base.
As of December 31, 2024, approximately 64% of our over 1,570 unique clients have selected us to provide services, products and solutions for more than one of their software product lines, and we believe there is additional opportunity for growth within our existing client base.
As a key aspect of our success, we believe our culture enables us to recruit and retain high quality talent. In addition, we strive to offer compensation, bonus and benefit programs appropriate for proven top-performing professionals.
As a key aspect of our success, we believe our culture helps enable our efforts to recruit and retain high quality talent. In addition, we strive to offer compensation, bonus and benefit programs appropriate for proven top-performing professionals.
We believe we are helping clients achieve the business benefits of composable ERP with a unique Rimini Street Smart Path™ solution that leverages their current ERP system investment as the foundation for a modern composable ERP architecture that is designed to enable the seamless integration of new software components and capabilities from a variety of software vendors.
Further, we believe we are helping clients achieve the business benefits of a new operating model for enterprise software with a unique Rimini Smart Path™ solution that leverages their existing ERP system investment as the foundation for a modern composable ERP architecture that is designed to enable the seamless integration of new software components and capabilities from a variety of software vendors.
Lyskawa holds a Bachelor of Business Administration in Accounting and Finance from the University of North Dakota and a Master’s Certificate in Marketing from the Cox School of Business at Southern Methodist University. Kevin Maddock has served as our Executive Vice President and Chief Recurring Revenue Officer since March 2021.
Lyskawa holds a Bachelor of Business Administration in Accounting and Finance from the University of North Dakota and a Master’s Certificate in Marketing from the Cox School of Business at Southern Methodist University. Kevin Maddock has served as our Executive Vice President, Chief Recurring Revenue Officer and General Manager, North America, since May 2024.
To meet the needs of our clients and prospects and to service what we believe is a significantly expanded addressable market opportunity, we designed, developed and are now delivering a new, expanded solutions portfolio (our “Solutions Portfolio”) for a wider array of enterprise software – including an expanded list of supported software; managed services for Oracle, SAP, IBM, Salesforce® and open-source database software; and new solutions for security, interoperability, observability and consulting.
To meet the needs of our clients and prospects and to service what we believe is a significantly expanded addressable market opportunity, we continue to expand our solutions portfolio (our “Solutions Portfolio”) to a wider array of enterprise software – including an expanded list of supported software for VMware; managed services for Oracle, SAP, Salesforce®, IBM, ServiceNow®, and open-source database software; and new solutions for security, interoperability, observability and consulting.
Our Product Delivery organization is scalable and has the capability to deploy its solutions for additional countries based on the needs of our clients. For the year ended December 31, 2023, we have delivered more than 51,000 tax, legal and regulatory updates to clients with quality and accuracy.
Our Product Delivery organization is scalable and has the capability to deploy its solutions for additional countries based on the needs of our clients. For the year ended December 31, 2024, we have delivered more than 46,000 tax, legal and regulatory updates to clients.
As of December 31, 2023, we employed over 2,120 professionals and supported over 3,030 active clients globally, including 73 Fortune 500 companies and 20 Fortune Global 100 companies, across a broad range of industries.
As of December 31, 2024, we employed over 2,040 professionals and supported over 3,080 active clients globally, including 73 Fortune 500 companies and 20 Fortune Global 100 companies, across a broad range of industries.
The table below sets out the vendors and products we currently support and/or could support in the future: -5- Supported Vendor or Product Category Supported and/or Managed Software SAP Applications Business Suite, R/3, BusinessObjects, S/4HANA, S/4HANA Cloud (public and private editions), SuccessFactors, Ariba, Hybris, SAP IBP, SAP Analytics, Analytics Cloud, Fieldglass, Concur, Governance Risk and Compliance, IS-Oil, IS-Retail, IS-Media, IS-Utilities, IS-Auto, IS-Mills, IS-Mining, IS-Aerospace & Defense, IS-Automotive, IS-Apparel & Footwear, IS-Public Sector, IS-Higher Education, IS-Healthcare, IS-Telco, IS-Insurance, IS-Banking SAP Databases HANA, ASE (Sybase), IQ, MaxDB, SQL Anywhere Oracle Applications E-Business Suite, PeopleSoft, JD Edwards - Enterprise One, JD Edwards – World, Siebel, Hyperion, Oracle Retail (Retek), Agile Product Lifecycle Management (PLM), ATG Web Commerce, Oracle Utilities, Financial Services Analytical Applications (OFSAA), Communications, Endeca, Demantra, Governance Risk and Compliance (GRC), Oracle Transportation Manager (OTM), Primavera, Oracle Global Knowledge Software Releases/ User Productivity Kit (UPK), Oracle Banking Oracle Technology Oracle’s Application Integration Architecture Releases, GoldenGate, OBI and OBIEE, Essbase, Fusion Middleware, Identity Management, WebLogic, WebCenter, SOA Suite, Oracle Data Integrator (ODI) Oracle Databases Oracle Database Microsoft Databases SQL Server IBM Databases Db2 Open-Source Databases PostgreSQL, MySQL, MongoDB, MariaDB Salesforce Service Cloud, Sales Cloud, Data Cloud, Experience Cloud, Energy and Utilities Cloud, CPQ, MuleSoft, Health Cloud, Field Service, Revenue Cloud, Marketing Cloud, Tableau, Commerce Cloud, Higher Education Cloud, ClickSoftware Other Software OpenText, Informatica, IBM Middleware When we provide our Rimini Support solutions for a perpetual software license, we generally offer our clients service for a fee that we believe is equal to approximately 50% of the annual fees charged by the software vendor for their base support.
The table below sets out the vendors and products we currently support and/or could support in the future: -6- Supported Vendor or Product Category Supported and/or Managed Software SAP Applications Business Suite, R/3, BusinessObjects, S/4HANA, S/4HANA Cloud (public and private editions), SuccessFactors, Ariba, Hybris, SAP IBP, SAP Analytics, Analytics Cloud, Fieldglass, Concur, Governance Risk and Compliance, IS-Oil, IS-Retail, IS-Media, IS-Utilities, IS-Auto, IS-Mills, IS-Mining, IS-Aerospace & Defense, IS-Automotive, IS-Apparel & Footwear, IS-Public Sector, IS-Higher Education, IS-Healthcare, IS-Telco, IS-Insurance, IS-Banking SAP Databases HANA, ASE (Sybase), IQ, MaxDB, SQL Anywhere Oracle Applications E-Business Suite, PeopleSoft, JD Edwards - Enterprise One, JD Edwards – World, Siebel, Hyperion, Oracle Retail (Retek), Agile Product Lifecycle Management (PLM), ATG Web Commerce, Oracle Utilities, Financial Services Analytical Applications (OFSAA), Communications, Endeca, Demantra, Governance Risk and Compliance (GRC), Oracle Transportation Manager (OTM), Primavera, Oracle Global Knowledge Software Releases/ User Productivity Kit (UPK), Oracle Banking Oracle Technology Oracle’s Application Integration Architecture Releases, GoldenGate, OBI and OBIEE, Essbase, Fusion Middleware, Identity Management, WebLogic, WebCenter, SOA Suite, Oracle Data Integrator (ODI) Oracle Databases Oracle Database Microsoft Databases SQL Server IBM Db2, Informix, IBM Middleware Open-Source Databases PostgreSQL, MySQL, MongoDB, MariaDB VMware vSphere, ESX and ESXi, vCenter, Workstation, vRealize, Aria Suite, NSX, vSAN, Site Recovery Manager, Horizon, Workspace ONE, Tanzu ServiceNow Creator Workflow, App Engine for ERP, ERP Canvas, Sourcing & Procurement Operations, Supplier Lifecycle Operations, Account Payable Operations, App Engine, Workflow Data Fabric, Integration Hub, HR Service Delivery, IT Service Management, IT Operations Management Salesforce Service Cloud, Sales Cloud, Data Cloud, Experience Cloud, Energy and Utilities Cloud, CPQ, MuleSoft, Health Cloud, Field Service, Revenue Cloud, Marketing Cloud, Tableau, Commerce Cloud, Higher Education Cloud, ClickSoftware Other Software OpenText, Informatica, Blue Yonder, Tibco When we provide our Rimini Support solutions for a perpetual software license, we generally offer our clients service for a fee that we believe is equal to approximately 50% of the annual fees charged by the software vendor for their base support.
We believe features, service levels, service breadth, technology and pricing differentiate our software products and services from our competitors. We also believe clients utilize our portfolio of software support products and services to facilitate achieving their strategic, operational, and financial objectives.
We believe features, service levels, service breadth, technology and pricing differentiate our software products and services from our competitors. We also believe clients utilize our portfolio of software support products and services to support and optimize their existing enterprise software portfolio and transform their business to facilitate achieving their strategic, operational, and financial goals.
For example, for fiscal year 2023, SAP reported that support revenue represented approximately 37% of its total revenue and, for fiscal year 2023, Oracle reported a margin of 78% for cloud services and license support.
For example, for fiscal year 2024, SAP reported that support revenue represented approximately 33% of its total revenue and, for fiscal year 2024, Oracle reported a margin of 76% for cloud services and license support.
We believe that we offer the most comprehensive scope of tax, legal and regulatory research available from a single vendor, including collecting and analyzing information from more than 4,400 government sites, close to 200 information sources and over 26,000 localities for 139 countries.
We believe that we offer the most comprehensive scope of tax, legal and regulatory research available from a single vendor, including collecting and analyzing information from more than 5,300 government sites and over 26,000 localities for over 140 countries.
We believe enterprises are steadily increasing their use of open-source databases, which have now surpassed commercial databases in popularity according to DB-Engines, in order to save on license and support costs, speed time to results, and avoid complex license compliance issues. We believe there is a gap in open-source database support sufficient and reliable enough for enterprises.
We believe enterprises are steadily increasing their use of open-source databases to save on license and support costs, speed time to results, and avoid complex license compliance issues. We believe there is a gap in open-source database support that is not sufficient and reliable enough for enterprises.
We believe that we have product and service advantages that will benefit our clients. Our key strengths include: Client Support Delivery Our Client Support Delivery operation is staffed globally and provides product support services to our clients 24 hours a day, seven days a week.
Our key strengths include: Client Support Delivery Our Client Support Delivery operation is staffed globally and provides product support services to our clients 24 hours a day, seven days a week.
Previously, he served as our Executive Vice President, Global Sales - Recurring Revenue from March 2020 until March 2021, -15- our Senior Vice President, Global Sales - Recurring Revenue from January 2018 to March 2020 and our Senior Vice President, Global Sales from December 2008 to January 2018. Prior to joining us, Mr.
Previously, he served as our Executive Vice President, Chief Recurring Revenue from March 2021 until May 2024, our Executive Vice President, Global Sales - Recurring Revenue from March 2020 until March 2021, our Senior Vice President, Global Sales - Recurring Revenue from January 2018 to March 2020 and our Senior Vice President, Global Sales from December 2008 to January 2018.
As a result of our efforts in educating organizations, we believe we are recognized as a thought leader in the enterprise application support market and a growing, serious competitor in our other newer solution markets such as managed services, security, interoperability, observability, and consulting. -8- Our marketing programs include the following: • use of our website to provide enterprise application and Rimini Street company information, as well as learning opportunities for potential clients; • business development representatives who respond to incoming leads to convert them into new sales opportunities; • participation in, and sponsorship of, field marketing events including user conferences, trade shows and industry events; • online marketing activities including email campaigns, online advertising, social media, webinars and content syndication; • public relations; • thought leadership through marketing to industry analysts, webinars, speaking engagements and sponsored research; and • outreach and engagement with our active clients to explore cross-sell opportunities and maintain high retention rates.
Our marketing programs include the following: • use of our website to provide enterprise application and Rimini Street company information, as well as learning opportunities for potential clients; • business development representatives who respond to incoming leads to convert them into new sales opportunities; • participation in, and sponsorship of, field marketing events including user conferences, trade shows and industry events; • online marketing activities including email campaigns, online advertising, social media, webinars and content syndication; • public relations; • thought leadership through marketing to industry analysts, webinars, speaking engagements and sponsored research; and • outreach and engagement with our active clients to explore cross-sell opportunities and maintain high retention rates.
The following table sets forth the names, ages and positions of our executive officers as of February 28, 2024: Name Age Position Executive Officers Seth A.
Information about our Executive Officers. -16- The following table sets forth the names, ages and positions of our executive officers as of February 27, 2025: Name Age Position Executive Officers Seth A.
We also believe that our proven ability to deliver value to an extensive list of clients across a broad range of industries validates our business model and provides us with important references to prospective clients.
We also believe that our proven ability to deliver value to an extensive list of clients across a broad range of industries validates our business model and provides us with important references to prospective clients. Strategic partnerships In 2024, we expanded our strategic initiative to go to market with elective roster of partners.
We market and sell our services globally, primarily through our direct sales force, and currently have wholly-owned subsidiaries in Australia, Brazil, UAE (Dubai), France, Germany, Hong Kong, India, Israel, Japan, Korea, Malaysia, Mexico, Netherlands, New Zealand, Poland, Singapore, Sweden, Taiwan, Canada, the United Kingdom and the United States. -2- Our subscription-based revenue provides a strong foundation for, and visibility into, future period results.
We market and sell our services globally, primarily through our direct sales force, and currently have subsidiaries in Australia, Brazil, UAE (Dubai), France, Germany, Hong Kong, India, Israel, Japan, Korea, Malaysia, Mexico, Netherlands, New Zealand, Poland, Singapore, Sweden, Taiwan, Canada, the United Kingdom and the United States.
We also now offer an integrated package of our services as Rimini ONE™, a unique end-to-end, “turnkey” outsourcing option for Oracle and SAP landscapes designed to optimize our clients’ existing technologies with a minimum of 15 extended years of operating lifespan and enable our clients to focus their IT talent and budget on potentially higher-value, innovative projects that will support competitive advantage and growth. -1- Rimini ONE™ is our service program designed to offer a comprehensive set of unified, integrated services to run, manage, support, customize, configure, connect, protect, monitor, and optimize our clients’ application, database, and technology enterprise software.
We also offer a unified package of our services as Rimini ONE™, a unique end-to-end, “turnkey” outsourcing option for Oracle and SAP landscapes designed to optimize our clients’ existing technologies with a minimum of 15 extended years of operating lifespan and enable our clients to focus their IT talent and budget on potentially higher-value, innovative projects that will support competitive advantage and growth.
Comprehensive support services We offer clients a comprehensive suite of independent support offerings in terms of features and capabilities; global breadth; vendor products and releases supported; and tax, legal and regulatory updates. We believe our continued investment in our software support, products and services will expand our scope of services to the benefit of our clients.
Comprehensive support services We offer clients a comprehensive suite of independent support offerings in terms of features and capabilities; global breadth; vendor products and releases supported; and tax, legal and regulatory updates.
We believe our client support model enables us to scale quickly and cost-effectively to meet growing global demand in our existing product lines. We have become proficient at applying our support methodologies and approach to new product lines, enabling us to rapidly and efficiently support additional enterprise software products in the future.
We have become proficient at applying our support methodologies and approach to new product lines, enabling us to rapidly and efficiently support additional enterprise software products in the future.
From April 2000 to March 2001, Mr. Ravin served as Vice President of Inside Sales for Saba Software, Inc., a provider of e-Learning and human resource management software. From April 1996 to April 2000, Mr. Ravin served in various management roles at PeopleSoft, Inc. (acquired by Oracle), most recently as a Vice President of the Customer Sales Division. Mr.
Edwards applications, and was acquired in January 2005 as a wholly-owned subsidiary of SAP America, Inc. From April 2000 to March 2001, Mr. Ravin served as Vice President of Inside Sales for Saba Software, Inc., a provider of e-Learning and human resource management software. From April 1996 to April 2000, Mr. Ravin served in various management roles at PeopleSoft, Inc.
Ravin served in various executive roles at TomorrowNow, Inc. from May 2002 to April 2005, most recently as President and a board director. TomorrowNow, Inc. was a supplier of software maintenance and support services for Oracle’s PeopleSoft and J.D. Edwards applications, and was acquired in January 2005 as a wholly-owned subsidiary of SAP America, Inc.
He also previously served as our President from September 2005 to January 2011. Prior to founding Rimini Street, Mr. Ravin served in various executive roles at TomorrowNow, Inc. from May 2002 to April 2005, most recently as President and a board director. TomorrowNow, Inc. was a supplier of software maintenance and support services for Oracle’s PeopleSoft and J.D.
Rimini Custom™ is a program that expands our support and related services to a broader portfolio of enterprise software, beyond Oracle, SAP, Salesforce and a few other vendor solutions for which we have historically provided support and services.
Rimini Custom™ is a program that expands our support and related services to a broader portfolio of enterprise software, beyond Oracle, SAP, Salesforce and a few other vendor solutions for which we have historically provided support and services. -2- During 2024, we made Rimini Support, Rimini Protect and Rimini Consult for VMware products globally available, in a first-of-its-kind, comprehensive third-party offering.
In 2023, we launched “Rimini Street University,” an internal program led by the Learning & Development arm of our Human Resources Department in partnership with various functions across the Company.
In 2023, we launched “Rimini Street University,” an internal program led by the Learning & Development arm of our Human Resources Department in partnership with various functions across the Company. The program provides professional development and learning opportunities designed to support, guide and develop individual contributors, teams, managers and future leaders of Rimini Street.
No other foreign country individually comprised more than 10% of revenue for the three-year period ended December 31, 2023. -10- Expand the portfolio of supported vendors and products Since our inception over 18 years ago, we have developed a comprehensive portfolio of enterprise software support and related products and services, including support services for applications, databases and technologies; management services for applications, databases, technologies, cloud and security; security, interoperability and observability solutions; and professional services.
Expand the portfolio of supported vendors and products Since our inception over 19 years ago, we have developed a comprehensive portfolio of enterprise software support and related products and services, including support services for applications, databases and technologies; managed services for applications, databases, technologies, cloud and security; security, interoperability and observability solutions; and professional services.
Five selected Japan-based charities each received the equivalent of $10,000 USD and were celebrated at a meeting of over 200 Company client executives and senior leaders. As of December 31, 2023, we employed over 2,120 professionals globally. We also engage temporary employees and consultants as needed. None of our U.S.-based employees are covered by collective bargaining agreements.
Five selected United Kingdom-based charities each received £10,000 grants. As of December 31, 2024, we employed over 2,040 professionals globally. We also engage temporary employees and consultants as needed. None of our U.S.-based employees are covered by collective bargaining agreements.
Ravin 57 President, Chief Executive Officer and Chairman of the Board of Directors Nancy Lyskawa 61 Executive Vice President & Chief Client Officer Kevin Maddock 58 Executive Vice President and Chief Recurring Revenue Officer Michael L. Perica 52 Executive Vice President and Chief Financial Officer David Rowe 58 Executive Vice President, Global Transformation & Chief Product Officer Seth A.
Ravin 58 President, Chief Executive Officer and Chairman of the Board of Directors Steve Hershkowitz 61 Executive Vice President and Chief Revenue Officer Nancy Lyskawa 62 Executive Vice President and Chief Client Officer Kevin Maddock 59 Executive Vice President and Chief Recurring Revenue Officer Michael L.
Perica joined EnerSys in December 2018 as the result of EnerSys’ acquisition of Alpha Technologies, where he led the sell-side process as Alpha Technologies’ Chief Financial Officer. Prior to his appointment as Chief Financial Officer in August 2015, he served as Alpha Technologies Vice President, International Finance and Operations since November 2013.
Prior to his appointment as Chief Financial Officer in August 2015, he served as Alpha Technologies Vice President, International Finance and Operations since November 2013.
Rimini Support™ is our award-winning, mission-critical support for Oracle, SAP, proprietary and open-source database, and technology software – delivered 24x7x365 with service level agreements (“SLAs”) providing 10-minute guaranteed support time. We extended the global availability of our award-winning, mission-critical, 24x7x365 support services beyond proprietary databases to leading open-source database platforms, including, but not limited to, MySQL, MariaDB, PostgreSQL and MongoDB.
We extended the global availability of our award-winning, mission-critical, 24/7/365 support services beyond proprietary databases to leading open-source database platforms, including, but not limited to, MySQL, MariaDB, PostgreSQL and MongoDB.
For the years ended December 31, 2023, 2022 and 2021, we recorded net income of $26.1 million, net loss of $2.5 million and net income of $75.2 million, respectively.
We have a history of losses, and as of December 31, 2024, we had an accumulated deficit of $238.5 million. For the years ended December 31, 2024, 2023 and 2022, we recorded a net loss of $36.3 million, net income of $26.1 million and a net loss of $2.5 million, respectively.
In 2021, we were granted a U.S. patent for our “Case Assignment Advisor,” which is one of our AI applications used as a competitive advantage in servicing our clients.
We were granted a U.S. patent for our “Case Assignment Advisor,” which is one of our AI applications used as a competitive advantage in servicing our clients. We believe our AI applications have already delivered substantial service benefits to clients, including accelerating case resolution times by an average of approximately 23%.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

130 edited+49 added−39 removed219 unchanged
Biggest changeAdverse outcomes and future adverse outcomes in the litigation could result in the payment of substantial attorneys’ fees and/or costs and/or injunctions against certain of our business practices. • The Oracle software products that are part of our ongoing Rimini I Injunction compliance and that are the subject of the Rimini II litigation with Oracle and the Rimini II Injunction represent a significant portion of our revenue. -16- • Our ongoing litigation with Oracle presents challenges for growing our business. • Oracle has a history of litigation against companies offering alternative support programs for Oracle products, and Oracle could pursue additional litigation with us. • Economic uncertainties, changes in economic conditions, including rising inflation, or downturns in the general economy or the industries in which our clients operate could disproportionately affect the demand for our products and services and may have a material adverse effect on our business. • The market for independent software support services is relatively undeveloped and may not grow. • We face significant competition for all components of our Solutions Portfolio. • We have had a history of losses and may not achieve or sustain revenue growth or profitability in the future. • If our retention rates decrease or we do not accurately predict retention rates, our future revenue and results of operations may be harmed. • If we are unable to attract new clients or retain and sell additional products or services to existing clients, our revenue growth will be adversely affected. • Because we recognize revenue from subscriptions over the term of the relevant contract, downturns or upturns in sales are not immediately reflected in full in our results of operations. • The variability of timing in our sales cycle or our failure to accurately forecast revenue could affect our results of operations and liquidity. • Our future liquidity and results of operations may be adversely affected by the timing of new orders, the level of client renewals and cash receipts from clients. • The loss of one or more key employees could harm our business. • The failure to attract and retain additional qualified personnel, including sales personnel, or to expand our marketing and sales capabilities could prevent us from executing our business strategy. • Our past growth is not indicative of future growth, and, if we grow rapidly, we may not be able to manage our growth effectively. • Our failure to generate significant capital or raise additional capital necessary to fund our operations and invest in new services and products could reduce our ability to compete and could harm our business. • Our business may suffer if it is alleged or determined that our technology infringes others’ intellectual property rights. • Interruptions to or degraded performance of our services, including as a result of interruptions or performance problems with technologies provided by third parties, could result in client dissatisfaction, damage to our reputation, loss of clients, limited growth and reduction in revenue. • Interruptions or performance problems with SaaS technologies and related services from third parties that we use to operate critical functions of our business, including any deficiencies associated with generative artificial intelligence technologies potentially used by such third parties, may adversely affect our business and operating results. • We may experience fluctuations in our results of operations due to the sales cycles for our products and services, which makes our future results difficult to predict and could cause our results of operations to fall below expectations or our guidance. • We may need to change our pricing to compete successfully. • If we are not able to scale our business quickly and grow efficiently, our results of operations could be harmed. • Our business will be susceptible to risks associated with global operations as our growth strategy involves further expansion of our sales to clients outside the United States . • Consolidation in our target sales markets is continuing at a rapid pace, which could harm our business. • If there is a widespread shift by clients or potential clients to enterprise software vendors, products and releases for which we do not provide software products or services, our business would be adversely impacted. • Cybersecurity threats continue to increase in frequency and sophistication; if our data security measures are compromised or our services are perceived as not being secure, clients may curtail or cease their use of our services, our reputation may be harmed, and we may incur significant liabilities. • We are subject to governmental and other legal obligations related to privacy, and our actual or perceived failure to comply with such obligations could harm our business. • If our products and services fail due to defects or other similar problems, and if we fail to correct any defect or other software problems, we could lose clients, become subject to service performance or warranty claims or incur significant costs. • If we are not able to maintain an effective system of internal control over financial reporting, investors could lose confidence in our financial reporting, which could harm our business and have an adverse effect on our stock price. • If we fail to enhance our brand, our ability to expand our client base will be impaired. • If we fail to adequately protect our proprietary rights, our competitive position could be impaired and we may lose valuable assets, experience reduced revenue and incur costly litigation to protect our rights. • We may be subject to additional obligations to collect and remit sales tax and other taxes, and we may be subject to tax liability, interest and/or penalties for past sales, which could adversely harm our business. -17- • The amount of and ultimate realization of the benefits from the net operating loss carryforwards for income tax purposes is dependent, in part, upon future events, the effects of which cannot be determined; if we are not able to use a significant portion of our net operating loss carryforwards, our profitability could be adversely affected. • We are a multinational organization, and we could be obligated to pay additional taxes in various jurisdictions. • Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters.
Biggest changeAdverse outcomes and future adverse outcomes in the ongoing litigation could result in the payment of substantial attorneys’ fees and/or costs and/or injunctions against certain of our business practices. • The Oracle software products that are part of our ongoing Rimini I Injunction compliance and that are the subject of the Rimini II litigation with Oracle represent a significant portion of our current revenue. • Our ongoing litigation with Oracle presents challenges for maintaining and growing our business. • Oracle has a history of litigation against companies offering alternative support programs for Oracle products, and Oracle could pursue additional litigation with us. • Economic uncertainties, changes in economic conditions, including rising inflation, or downturns in the general economy or the industries in which our clients operate, may result in increased costs of operations, could -18- disproportionately affect the demand for our products and services and could negatively impact our results of operations. • The market for independent software support services is relatively undeveloped and may not grow. • We face significant competition the services comprising each component of our Solutions Portfolio. • We have had a history of losses and may not achieve revenue growth or profitability in the future. • If we are unable to attract new clients or retain and sell additional products or services to existing clients, our revenue growth could be adversely affected. • Our past revenue growth and financial performance are not indicative of future performance, and if our revenue continues to decline or fails to grow at a rate sufficient to offset expenses, we may not be able to achieve and maintain profitability in future periods. • We may not be able to effectively manage efforts for future growth or execute such efforts successfully. • If our retention rates continue to decrease or we do not accurately predict retention rates, our future revenue and results of operations may be harmed. • Because we recognize revenue from subscriptions over the term of the relevant contract, downturns or upturns in sales are not immediately reflected in full in our results of operations. • Due to the variability of timing in our sales cycle, if we fail to forecast our revenue accurately, or if we fail to match our expenditures with corresponding revenue, our results of operations and liquidity could be adversely affected. • Our future liquidity and results of operations may be adversely affected by the timing of new orders, the level of client renewals and cash receipts from clients. • The loss or disability of one or more key employees could harm our business. • The failure to attract and retain additional qualified personnel, including sales personnel, or to expand our marketing and sales capabilities could prevent us from executing our business strategy. • Our failure to generate significant capital through our operations or raise additional capital necessary to fund and expand our operations, invest in new services and products, and service our debt could reduce our ability to compete and could harm our business. • Our business may suffer if it is alleged or determined that our technology infringes others’ intellectual property rights. • Interruptions to or degraded performance of our services could result in client dissatisfaction, damage to our reputation, loss of clients, limited growth and reduction in revenue. • Interruptions or performance problems with SaaS technologies and related services from third parties that we use to operate critical functions of our business, including any deficiencies associated with generative artificial intelligence (AI) technologies potentially used by us or such third parties, may adversely affect our business and operating results. • We may experience fluctuations in our results of operations due to the sales cycles for our products and services, which makes our future results difficult to predict and could cause our results of operations to fall below expectations. • We may need to change our pricing models to compete successfully. • We may not be able to scale our business systems quickly enough to meet our clients’ changing needs or decrease our costs adequately in response to changing client demand, and if we are not able to manage these changes efficiently, our results of operations could be harmed. • Because our long-term strategy involves further expansion of our sales to clients outside the United States, our business will be susceptible to risks associated with global operations, including currency exchange rate fluctuations. • Consolidation in our target sales markets is continuing at a rapid pace, which could harm our business in the event that our clients are acquired and their agreements are terminated, or not renewed or extended. • If there is a widespread shift by clients or potential clients to enterprise software vendors, products and releases for which we do not provide software products or services, our business, financial condition and results of operations would be adversely impacted. • Cybersecurity threats continue to increase in frequency and sophistication; if our data security measures are compromised or our services are perceived as not being secure, clients may curtail or cease their use of our services, our reputation may be harmed, and we may incur significant liabilities. • We are subject to governmental and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business. • If our products and services fail due to defects or other similar problems, and if we fail to correct any defect or other software problems, we could lose clients, become subject to service performance or warranty claims or incur significant costs. • If we are not able to maintain an effective system of internal control over financial reporting, investors could lose confidence in our financial reporting, which could harm our business and have an adverse effect on our Common Stock price. • If we fail to enhance and protect our brand, our ability to expand our client base will be impaired. • If we fail to adequately protect our proprietary rights, our competitive position could be impaired and we may lose valuable assets, experience reduced revenue and incur costly litigation to protect our rights. -19- • We may be subject to additional obligations to collect and remit sales tax, VAT and other taxes, and we may be subject to tax liability, interest and/or penalties for past sales, which could adversely harm our business. • The amount of and ultimate realization of the benefits from the net operating loss carryforwards for income tax purposes is dependent, in part, upon future events, the effects of which cannot be determined; if we are not able to use a significant portion of our net operating loss carryforwards, our profitability could be adversely affected. • We are a multinational organization, and we could be obligated to pay additional taxes in various jurisdictions. • Our reputation and/or business could be negatively impacted by ESG matters and/or our reporting of such matters and expose us to additional costs and risks.
The following is a summary of some of the principal risk factors which are more fully described below. Risks Related to Our Business, Operations and Industry • Since 2010, we and our Chief Executive Officer, Chairman of the Board and President have been involved in continuing litigation with Oracle.
The following is a summary of some of the principal risk factors which are more fully described below. Risks Related to Our Business, Operations and Industry • Since 2010, we and our President, Chief Executive Officer and Chairman of the Board have been involved in continuing litigation with Oracle.
Rimini Street, Inc. et al (United States District Court for the District of Nevada) (the “District Court”) (“Rimini I”), against us and our Chief Executive Officer, Chairman of the Board and President, Seth Ravin, alleging that certain of our processes (Process 1.0) violated Oracle’s license agreements with its customers and that we committed acts of copyright infringement and violated other federal and state laws.
Rimini Street, Inc. et al (United States District Court for the District of Nevada) (the “District Court”) (“Rimini I”), against us and our President, Chief Executive Officer and Chairman of the Board, Seth Ravin, alleging that certain of our processes (Process 1.0) violated Oracle’s license agreements with its customers and that we committed acts of copyright infringement and violated other federal and state laws.
The District Court also found in favor of Oracle on its DMCA and Lanham Act claims, enjoining us from making certain statements and prohibiting certain actions in connection with the manner of marketing, selling and providing services to clients of the Oracle products in question as further described below, and on indirect and vicarious copyright infringement claims against our Chief Executive Officer, Chairman of the Board and President, Mr.
The District Court also found in favor of Oracle on its DMCA and Lanham Act claims, enjoining us from making certain statements and prohibiting certain actions in connection with the manner of marketing, selling and providing services to clients of the Oracle products in question as further described below, and on indirect and vicarious copyright infringement claims against our President, Chief Executive Officer and Chairman of the Board, Mr.
In addition, certain of our existing clients may choose to license a new or different version of enterprise software from an enterprise software vendor, and such clients’ license agreements with the enterprise software vendor will typically include a minimum one-year mandatory maintenance and support services agreement.
In addition, certain of our existing clients may choose to license a new or different version of enterprise software from an enterprise software vendor, and such clients’ license agreements with the enterprise software vendor will typically include a minimum one-year mandatory maintenance and support services agreement.
We rely on our management team and other key employees, including our Chief Executive Officer, Chairman of the Board and President, and the loss or disability of one or more key employees could harm our business.
We rely on our management team and other key employees, including our President, Chief Executive Officer and Chairman of the Board, and the loss or disability of one or more key employees could harm our business.
Ravin’s condition has not adversely impacted his performance as Chief Executive Officer, Chairman of the Board and President or on the overall management of the Company, we can provide no assurance that his condition will not affect his ability to perform the role of Chief Executive Officer, Chairman of the Board and President in the future.
Ravin’s condition has not adversely impacted his performance as President, Chief Executive Officer and Chairman of the Board or on the overall management of the Company, we can provide no assurance that his condition will not affect his ability to perform the role of President, Chief Executive Officer and Chairman of the Board in the future.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • a classified Board of Directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors; • the ability of our Board of Directors to issue shares of preferred stock, including “blank check” preferred stock, and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of our directors and officers; • the exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • the requirement that directors may only be removed from our Board of Directors for cause; • a prohibition on common stockholder action by written consent, which forces common stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; • the requirement that a special meeting of stockholders may be called only by our Board of Directors, the chairperson of our Board of Directors, our chief executive officer or our president (in the absence of a chief executive officer), which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of Board of Directors and stockholder meetings; • the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal any provision of our certificate of incorporation or our bylaws, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; • the ability of our Board of Directors to amend the bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may -37- discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.
Among other things, our certificate of incorporation and bylaws include provisions regarding: • a classified Board of Directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board of Directors; • the ability of our Board of Directors to issue shares of preferred stock, including “blank check” preferred stock, and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of our directors and officers; • the exclusive right of our Board of Directors to elect a director to fill a vacancy created by the expansion of the Board of Directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our Board of Directors; • the requirement that directors may only be removed from our Board of Directors for cause; -39- • a prohibition on common stockholder action by written consent, which forces common stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; • the requirement that a special meeting of stockholders may be called only by our Board of Directors, the chairperson of our Board of Directors, our chief executive officer or our president (in the absence of a chief executive officer), which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of Board of Directors and stockholder meetings; • the requirement for the affirmative vote of holders of at least 66 2/3% of the voting power of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal any provision of our certificate of incorporation or our bylaws, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; • the ability of our Board of Directors to amend the bylaws, which may allow our Board of Directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board of Directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board of Directors and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.
Our Credit Facility and other debt instruments we may enter into in the future may significantly impact our business, including the following among others: • our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired; • our requirement to use a significant portion of our cash flows from operations to pay principal and interest on our indebtedness, which will reduce the funds available to us for operations and other purposes; • our level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less debt; • our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; and • our level of indebtedness may make us more vulnerable to economic downturns and adverse developments in our business.
Our 2024 Credit Facility and other debt instruments we may enter into in the future may significantly impact our business, including the following among others: • our ability to obtain additional financing for working capital, capital expenditures, acquisitions or general corporate purposes may be impaired; • our requirement to use a significant portion of our cash flows from operations to pay principal and interest on our indebtedness, which will reduce the funds available to us for operations and other purposes; • our level of indebtedness could place us at a competitive disadvantage compared to our competitors that may have proportionately less debt; • our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate may be limited; and • our level of indebtedness may make us more vulnerable to economic downturns and adverse developments in our business.
As we increase our client base and our brand becomes more widely known and recognized, we may become more of a target for third parties seeking to compromise our systems or security measures or gain unauthorized access to our clients’ proprietary information and protected data as was the case in a 2021 successful phishing incident where we were a victim, which resulted in some unauthorized -30- sharing of client addresses and outstanding billing data information, but did not significantly impact our business or client relationships.
As we increase our client base and our brand becomes more widely known and recognized, we may become more of a target for third parties seeking to compromise our systems or security measures or gain unauthorized access to our clients’ proprietary information and protected data as was the case in a 2021 successful phishing incident where we were a victim, which resulted in some unauthorized sharing of client addresses and outstanding billing data information, but did not significantly impact our business or client relationships.
A breach of any of these financial covenants or our inability to comply with required financial ratios in our Credit Facility could result in a default under the Credit Facility in which case the lenders would have the right to declare all borrowings, which includes any principal amount outstanding, together with all accrued, unpaid interest and other amounts owing in respect thereof, to be immediately due and payable.
A breach of any of these financial covenants or our inability to comply with required financial ratios in our 2024 Credit Facility could result in a default under the 2024 Credit Facility in which case the lenders would have the right to declare all borrowings, which includes any principal amount outstanding, together with all accrued, unpaid interest and other amounts owing in respect thereof, to be immediately due and payable.
While we believe our insurance coverage addresses all material risks to which we are -38- exposed and is adequate and customary for our current global operations, we have observed rapidly changing conditions in the insurance markets relating to nearly all areas of traditional corporate insurance, resulting in higher premium costs, rising policy deductibles/self-insured retentions and lower coverage limits.
While we believe our insurance coverage addresses all material risks to which we are exposed and is adequate and customary for our current global operations, we have observed rapidly changing conditions in the insurance markets relating to nearly all areas of traditional corporate insurance, resulting in higher premium costs, rising policy deductibles/self-insured retentions and lower coverage limits.
Consolidation in our target sales markets is continuing at a rapid pace, which could harm our business in the event that our clients are acquired and their agreements are terminated, or not renewed or extended. -29- Consolidation among companies in our target sales markets has been robust in recent years, and this continuing trend poses a risk for us.
Consolidation in our target sales markets is continuing at a rapid pace, which could harm our business in the event that our clients are acquired and their agreements are terminated, or not renewed or extended. Consolidation among companies in our target sales markets has been robust in recent years, and this continuing trend poses a risk for us.
In certain jurisdictions, these regulatory requirements may be more stringent than those in the United States. Noncompliance with applicable requirements could subject us to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions and may result in our inability to provide certain products and services.
In certain jurisdictions, these regulatory requirements may be more stringent than those in the United States. Noncompliance with applicable requirements could subject us to investigations, sanctions, enforcement actions, disgorgement of profits, fines, damages, civil and criminal penalties or injunctions and may result in our inability to provide certain products -41- and services.
Should these jurisdictions determine that we should be collecting additional sales, use, value-added or other taxes, it could result in substantial tax liabilities and related penalties for past sales, discourage clients from purchasing our products and services or otherwise harm our business and results of operations.
Should these jurisdictions determine that we should be collecting additional sales, use, value-added or other taxes, it could result in substantial tax liabilities and related -35- penalties for past sales, discourage clients from purchasing our products and services or otherwise harm our business and results of operations.
In mid-October 2022, Oracle withdrew all of its monetary damages claims against us and our Chief Executive Officer, Chairman of the Board and President, Mr. Ravin, in Rimini II and moved to proceed with a bench trial instead of a jury trial for its claims for equitable relief.
In October 2022, Oracle withdrew all of its monetary damages claims against us and our President, Chief Executive Officer and Chairman of the Board, Mr. Ravin, in Rimini II and moved to proceed with a bench trial instead of a jury trial for its claims for equitable relief.
We have had a history of losses and may not achieve or sustain revenue growth or profitability in the future. Further, if we are unable to attract new clients or retain and/or sell additional products or services to our existing clients, our revenue growth could be adversely affected.
We have had a history of losses and may not achieve revenue growth or profitability in the future. Further, if we are unable to attract new clients or retain and/or sell additional products or services to our existing clients, our revenue growth could be adversely affected.
For further information regarding our controls and procedures, see “Controls and Procedures” in Part I, Item 4 of this Report. If we fail to enhance and protect our brand, our ability to expand our client base will be impaired and our financial condition may suffer.
For further information regarding our controls and procedures, see “Controls and Procedures” in Part I, Item 4 of this Report. -34- If we fail to enhance and protect our brand, our ability to expand our client base will be impaired and our financial condition may suffer.
The Rimini II Injunction also prohibits using, distributing, copying, or making derivative works from certain files, and it prohibits the transfer or copying of PeopleSoft files, updates, and modifications, and portions of PeopleSoft software that are developed, tested, or exist in one client’s systems to our systems or another client’s systems.
The Rimini II Injunction also prohibits using, distributing, copying, or making derivative works from certain files, and prohibits the transfer or copying of PeopleSoft files, updates, and modifications, and portions of PeopleSoft software that are developed, tested, or exist in one client’s systems to our systems or another client’s systems.
Our current indebtedness and any inability to pay our debt obligations as they come due or an inability to incur additional debt could adversely affect our business and results of operations. The terms of our Credit Facility impose operating and financial restrictions on us.
Our current indebtedness and any inability to pay our debt obligations as they come due or an inability to incur additional debt could adversely affect our business and results of operations. The terms of our 2024 Credit Facility impose operating and financial restrictions on us.
If we default in our payment obligations under the Credit Facility and the indebtedness under the Credit Facility were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full, and we could be forced into bankruptcy or liquidation.
If we default in our payment obligations under our 2024 Credit Facility and the indebtedness under our 2024 Credit Facility were to be accelerated, there can be no assurance that our assets would be sufficient to repay such indebtedness in full, and we could be forced into bankruptcy or liquidation.
We currently offer our clients support services for a fee that is equal to a percentage of the annual fees charged by the enterprise software vendor; therefore, changes in such vendors’ fee structures would impact the fees we would receive from our clients.
We currently offer our clients support services for a fee that is equal to a percentage of the annual fees charged by the enterprise software vendor; therefore, changes in such vendors’ fee structures would impact the fees we would receive from our -30- clients.
In addition, the laws of some countries do not protect proprietary rights to the -32- same extent as the laws of the United States. To the extent we expand our global activities, our exposure to unauthorized copying and use of our brand, processes and software tools may increase.
In addition, the laws of some countries do not protect proprietary rights to the same extent as the laws of the United States. To the extent we expand our global activities, our exposure to unauthorized copying and use of our brand, processes and software tools may increase.
In particular, we have experienced extreme hiring competition in the San Francisco Bay Area, where we have a significant amount of operations, but also face extremely competitive hiring environments across the United States and the other countries in which we operate.
In particular, we have experienced extreme hiring competition in the San Francisco Bay Area, where we have a significant amount of operations, but -28- also face extremely competitive hiring environments across the United States and the other countries in which we operate.
If we do not generate adequate -34- resources, we may be required to refinance all or part of our then existing debt, sell assets or borrow more money, in each case on terms that may not be acceptable to us.
If we do not generate adequate resources, we may be required to refinance all or part of our then existing debt, sell assets or borrow more money, in each case on terms that may not be acceptable to us.
The payment of any cash dividends on our Common Stock will depend upon our revenue, earnings, cash flow and financial condition from time to time. The payment of any dividends is at the discretion of our Board of Directors and is also limited under the terms of our Credit Facility.
The payment of any cash dividends on our Common Stock will depend upon our revenue, earnings, cash flow and financial condition from time to time. The payment of any dividends is at the discretion of our Board of Directors and is also limited under the terms of our 2024 Credit Facility.
If we breach these covenants or fail to comply with other terms of the Credit Facility and the lenders accelerate the amounts outstanding under the Credit Facility, our business and results of operations would be adversely affected.
If we breach these covenants or fail to comply with other terms of the 2024 Credit Facility and the lenders accelerate the amounts outstanding under the 2024 Credit Facility, our business and results of operations would be adversely affected.
As a result of market interest rate fluctuations, interest rates under our Credit Facility or other variable rate indebtedness we may incur in the future could be higher or lower than current levels.
As a result of market interest rate fluctuations, interest rates under our 2024 Credit Facility or other variable rate indebtedness we may incur in the future could be higher or lower than current levels.
Our Credit Facility may limit our ability to engage in these types of transactions even if we believe that a specific transaction would contribute to our future growth or improve our operating results.
Our 2024 Credit Facility may limit our ability to engage in these types of transactions even if we believe that a specific transaction would contribute to our future growth or improve our operating results.
In February 2012, Oracle filed suit against ServiceKey, Inc. and settled the case in October 2013 after the District Court issued an injunction against ServiceKey and its CEO. Oracle also filed suit against CedarCrestone Corporation in September 2012 and settled the case in July 2013.
In February 2012, Oracle -24- filed suit against ServiceKey, Inc. and settled the case in October 2013 after the District Court issued an injunction against ServiceKey and its CEO. Oracle also filed suit against CedarCrestone Corporation in September 2012 and settled the case in July 2013.
We have entered into an interest rate swap agreement that involves the exchange of floating for fixed rate interest payments in order to partially reduce interest rate volatility under our Credit Facility.
We have entered into an interest rate swap agreement that involves the exchange of floating for fixed rate interest payments in order to partially reduce interest rate volatility under our 2024 Credit Facility.
The District Court entered an order on October 24, 2022, dismissing with prejudice Oracle’s claims in Rimini II “for monetary relief of any kind under any legal theory[,] including but not limited to claims for damages, restitution, unjust enrichment, and engorgement. . . .” In addition, Oracle’s claims for breach of contract, inducing breach of contract and an accounting were dismissed with prejudice, meaning that the claims (including for monetary damages) have been dismissed on their merits and that the judgment rendered is final.
The District Court entered an order on October 24, 2022, dismissing with prejudice Oracle’s claims in Rimini II “for monetary relief of any kind under any legal theory[,] including but not limited to claims for damages, restitution, unjust enrichment, and engorgement. . . .” In addition, Oracle’s claims for breach of contract, inducing breach of contract and an accounting were dismissed with prejudice, meaning that the claims (including for monetary damages) were dismissed on their merits and the judgment rendered is final.
Risks Related to Our Business, Operations and Industry Risks Related to Litigation We and our Chief Executive Officer, Chairman of Board and President have been involved in continuing litigation with Oracle since 2010.
Risks Related to Our Business, Operations and Industry Risks Related to Litigation We and our President, Chief Executive Officer and Chairman of the Board have been involved in continuing litigation with Oracle since 2010.
We may be subject to additional obligations to collect and remit sales tax and other taxes, and we may be subject to tax liability, interest and/or penalties for past sales, which could adversely harm our business.
We may be subject to additional obligations to collect and remit sales tax, VAT and other taxes, and we may be subject to tax liability, interest and/or penalties for past sales, which could adversely harm our business.
We expect to depend primarily on cash generated by our operations for funds to pay our expenses and any amounts due under our Credit Facility and any other indebtedness we may incur.
We expect to depend primarily on cash generated by our operations for funds to pay our expenses and any amounts due under our 2024 Credit Facility and any other indebtedness we may incur.
Our Credit Facility contains certain restrictions and covenants that generally limit our ability to, among other things, create liens on assets, sell assets, engage in mergers or consolidations, make loans or investments, incur additional indebtedness, engage in certain transactions with affiliates, incur certain material ERISA or pension liabilities and pay dividends or repurchase capital stock and in each case, subject to certain exceptions set forth in our credit agreement.
Our 2024 Credit Facility contains certain restrictions and covenants that generally limit our ability to, among other things, create liens on assets, sell assets, engage in mergers or consolidations, make loans or investments, incur additional indebtedness, engage in certain transactions with affiliates, incur certain material ERISA or pension liabilities and pay dividends or repurchase capital stock and in each case, subject to certain exceptions set forth in our 2024 Credit Facility.
Additionally, we may need to refinance our Credit Facility at maturity or upon default, and future financing may not be available on acceptable terms, or at all. Our variable rate indebtedness subjects us to interest rate risk, which, along with the phase-out of LIBOR and transition to SOFR, could cause our indebtedness service obligations to increase significantly.
Additionally, we may need to refinance our 2024 Credit Facility at maturity or upon default, and future financing may not be available on acceptable terms, or at all. Our variable rate indebtedness subjects us to interest rate risk, which, along with the previous phase-out of LIBOR and transition to SOFR, could cause our indebtedness service obligations to increase significantly.
We are also subject to certain restrictions for future financings as discussed in the risk factor “ The terms of our Credit Facility impose operating and financial restrictions on us. ” If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests and the value of our Common Stock could decline.
We are also subject to certain restrictions for future financings as discussed in the risk factor “The terms of our 2024 Credit Facility impose operating and financial restrictions on us.” If we raise additional equity financing, our stockholders may experience significant dilution of their ownership interests and the value of our Common Stock could decline.
In addition, the terms of existing or future debt agreements, including our existing Credit Facility, may restrict us from adopting some or any of these alternatives.
In addition, the terms of existing or future debt agreements, including our existing 2024 Credit Facility, may restrict us from adopting some or any of these alternatives.
Our current global operations and future initiatives will involve a variety of risks, including among others: • changes in a specific country’s or region’s political or economic conditions; • the occurrence of catastrophic events, including natural disasters, that may disrupt our business; • changes in regulatory requirements, taxes or trade laws or the imposition of trade sanctions; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into currency exchange rate hedging transactions; • more stringent regulations relating to data security, such as where and how data can be housed, accessed and used, and the unauthorized use of, or access to, commercial and personal information; • differing labor regulations, especially in countries and geographies where labor laws are more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations; • challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs as well as hire and retain local management, sales, marketing and support personnel, along with the ability to recapture costs to open up new geographies; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems; • increased logistics, travel, real estate, infrastructure and legal compliance costs associated with global operations; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors; • limited or insufficient intellectual property protection; • war, political instability or terrorist activities, including geopolitical actions specific to an international region, such as the ongoing geopolitical conflict between Israel and Hamas; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the United States Foreign Corrupt Practices Act and similar laws and regulations in other jurisdictions; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
Our current global operations and future initiatives will involve a variety of risks, including among others: • changes in a specific country’s or region’s political or economic conditions; • the occurrence of catastrophic events, including natural disasters, that may disrupt our business; • changes in regulatory requirements, taxes or trade laws or the imposition of trade sanctions; • currency exchange rate fluctuations and the resulting effect on our revenue and expenses, and the cost and risk of entering into currency exchange rate hedging transactions; • more stringent regulations relating to data security, such as where and how data can be housed, accessed and used, and the unauthorized use of, or access to, commercial and personal information; • differing labor regulations, especially in countries and geographies where labor laws are more advantageous to employees as compared to the United States, including deemed hourly wage and overtime regulations; • challenges inherent in efficiently managing an increased number of employees over large geographic distances, including the need to implement appropriate systems, policies, benefits and compliance programs as well as hire and retain local management, sales, marketing and support personnel, along with the ability to recapture costs to open up new geographies; • difficulties in managing a business in new markets with diverse cultures, languages, customs, legal systems, alternative dispute systems and regulatory systems; • increased logistics, travel, real estate, infrastructure and legal compliance costs associated with global operations; • limitations on our ability to reinvest earnings from operations in one country to fund the capital needs of our operations in other countries; • laws and business practices favoring local competitors or general preferences for local vendors; -31- • changes in diplomatic and trade relationships, including new tariffs, trade protection measures, import or export licensing requirements, trade embargoes and sanctions and other trade barriers; • limited or insufficient intellectual property protection; • war, political instability or terrorist activities, including geopolitical actions specific to an international region, such as the ongoing geopolitical conflict between Israel and Hamas; • exposure to liabilities under anti-corruption and anti-money laundering laws, including the United States Foreign Corrupt Practices Act and similar laws and regulations in other jurisdictions; and • adverse tax burdens and foreign exchange controls that could make it difficult to repatriate earnings and cash.
If current or prospective clients regard these rulings as negative, it could negatively impact our new client sales or renewal sales. While we plan to continue to vigorously litigate the pending matters in our Rimini II appeal, we are unable to predict the timing or outcome of these matters.
If current or prospective clients regard these rulings as negative, it could negatively impact our new client sales or renewal sales. While we plan to continue to vigorously litigate the pending matters in the Rimini II litigation, we are unable to predict the timing or outcome of these matters.
Specifically, we face intense competition from enterprise software vendors, such as Oracle and SAP, who provide software support for their own products, as well as from other competitors who -23- provide independent enterprise software support, products and services. Competitors, including enterprise software vendors, have offered, and may continue to offer, discounts to companies to whom we have marketed our services.
Specifically, we face intense competition from enterprise software -25- vendors, such as Oracle and SAP, who provide software support for their own products, as well as from other competitors who provide independent enterprise software support, products and services. Competitors, including enterprise software vendors, have offered, and may continue to offer, discounts to companies to whom we have marketed our services.
Risks Related to our Indebtedness, Capitalization Matters and Corporate Governance • Our level of indebtedness and any future indebtedness we may incur may limit our operational and financing flexibility. • The terms of our credit facility impose operating and financial restrictions on us. • Our variable rate indebtedness subjects us to interest rate risk, which, along with the phase-out of LIBOR and transition to SOFR, could cause our indebtedness service obligations to increase significantly. • Our stock repurchase program could affect the price of our Common Stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our Common Stock. • The price of our Common Stock may be volatile and risk compliance with stock exchange requirements. • Any issuance of Common Stock upon the exercise of remaining warrants will cause dilution to existing stockholders and may depress the market price of our Common Stock. • Certain of our common stockholders can exercise significant control, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control. • We do not currently intend to pay dividends on our Common Stock. • The DGCL and our organizational documents contain provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable. • Our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, stockholders or employees could be limited by our choice of forum in our bylaws.
Risks Related to our Indebtedness, Capitalization Matters and Corporate Governance • Our level of indebtedness and any future indebtedness we may incur may limit our operational and financing flexibility. • The terms of our 2024 Credit Facility impose operating and financial restrictions on us. • Our variable rate indebtedness subjects us to interest rate risk, which, along with the phase-out of LIBOR and transition to SOFR, could cause our indebtedness service obligations to increase significantly. • The price of our Common Stock may be volatile and risk compliance with stock exchange requirements. • Any issuance of Common Stock upon the exercise of remaining warrants will dilute existing stockholders and such issuances and/or any sales of Common Stock by large stockholders may depress the market price of our Common Stock. • Certain of our common stockholders can exercise significant control, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control. • We do not currently intend to pay dividends on our Common Stock. • Our stock repurchase program could affect the price of our Common Stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our Common Stock. • The DGCL and our organizational documents contain provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable. • Our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, stockholders or employees could be limited by our choice of forum in our bylaws.
Accordingly, we have made no associated accrual as of December 31, 2023. Required changes to how support services are delivered to our PeopleSoft clients could have a material adverse impact on our financial position, results of operations and cash flows.
Accordingly, we have made no associated accrual as of December 31, 2024. Required changes to how support services are delivered to our PeopleSoft clients could have a material adverse impact on our financial position, results of operations and cash flows.
Corporate action might be -36- taken even if other stockholders oppose the action being taken. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.
Corporate action might be -38- taken even if other stockholders oppose the action being taken. This concentration of ownership might also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.
A portion of such judgment was paid by our insurance carriers (for additional information on this topic, see Note 10 to our Consolidated Financial Statements included in Part II, Item 8 of this Report).
A portion of such judgment was paid by our insurance carriers (for additional information on this topic, see Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Report).
We may need to incur additional debt under our Credit Facility and/or raise additional capital beyond what is available under our Credit Facility if we cannot fund our growth or service our debt through our operating cash flows.
We may need to incur additional debt under our 2024 Credit Facility and/or raise additional capital beyond what is available under our 2024 Credit Facility if we cannot fund future growth or service our debt through our operating cash flows.
We may experience fluctuations in our results of operations due to the sales cycles for our products and services, which makes our future results difficult to predict and could cause our results of operations to fall below expectations or our guidance.
We may experience fluctuations in our results of operations due to the sales cycles for our products and services, which makes our future results difficult to predict and could cause our results of operations to fall below expectations.
The percentage of revenue derived from services we provide solely for Oracle’s PeopleSoft software product was approximately 8% of our total revenue for the year ended December 31, 2023.
The percentage of revenue derived from services we provide solely for Oracle’s PeopleSoft software product was approximately 8% of our total revenue for the year ended December 31, 2024.
See the section titled “ Legal Proceedings ” in Part I, Item 3 and Note 10 to our Consolidated Financial Statements included in Part II, Item 8 of this Report for more information related to this litigation. -21- The Oracle software products that are part of our ongoing Rimini I Injunction compliance and that are the subject of the Rimini II litigation with Oracle and the Rimini II Injunction represent a significant portion of our current revenue.
See the section titled “ Legal Proceedings ” in Part I, Item 3 and Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Report for more information related to this litigation. -23- The Oracle software products that are part of our ongoing Rimini I Injunction compliance and that are the subject of the Rimini II litigation with Oracle represent a significant portion of our current revenue.
As interest rates increase, our debt service obligations under our Credit Facility may increase even though the amounts borrowed remain the same, and our net income (loss) and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
As interest rates increase, our debt service -37- obligations under our 2024 Credit Facility may increase even though the amounts borrowed remain the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease.
In August 2023, the District Court issued an order denying our emergency motion to stay the Rimini II Injunction pending our appeal with the Court of Appeals and granting an administrative stay of the Rimini II Injunction pending the outcome of a motion to stay to be filed by us with the Court of Appeals.
In August 2023, the District Court issued an order denying our emergency motion to stay the Rimini II Injunction pending our appeal with the Ninth Circuit and granting an administrative stay of the Rimini II Injunction pending the outcome of a motion to stay to be filed by us with the Ninth Circuit.
We are also subject to certain requirements in other international jurisdictions with or developing strong privacy and security legislation, as well as expanding U.S. state law, including the California Consumer Privacy Act of 2018, the California Privacy Rights Act of 2020, the Virginia Consumer Data Protection Act of 2021 (effective Jan 1, 2023), the Colorado Consumer Privacy Act of 2021 (effective July 1, 2023), as well as privacy and security legislation in other states, including Nevada, each of which add to the range of privacy- and security-related compliance requirements.
We are also subject to certain requirements in other international jurisdictions with or developing strong privacy and security legislation, as well as expanding U.S. state law, including the California Consumer Privacy Act of 2018, the California Privacy Rights Act of 2020, the Virginia Consumer Data Protection Act of 2021, the Colorado Consumer Privacy Act of 2021, as well as privacy and security legislation in other states, including Nevada, each of which add to the range of privacy- and security-related compliance requirements.
Our directors and officers or persons affiliated with our directors and officers have aggregate voting power of approximately 39.9% as of December 31, 2023. As a result, these stockholders, acting together, have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions.
Our directors and officers or persons affiliated with our directors and officers have aggregate voting power of approximately 39.6% as of December 31, 2024. As a result, these stockholders, acting together, have significant influence over all matters that require approval by our stockholders, including the election of directors and approval of significant corporate transactions.
We continue to invest resources in research and development to enhance our current product and service offerings, and other new offerings that will appeal to clients and potential clients, for example, our partnership with Salesforce to support SaaS solutions, our Application Management Services (AMS) for SAP and Oracle products and our Rimini ONE integrated services.
We continue to invest resources in research and development to enhance our current product and service offerings, and other new offerings that will appeal to clients and potential clients, for example, our partnership with Salesforce to support SaaS solutions, our managed services for SAP and Oracle products and our Rimini ONE integrated services.
We also deliver tax, legal and regulatory updates to our clients. If there are inaccuracies in these updates, or if we are not able to deliver them on a timely basis to our clients, our reputation may be damaged, and we could be found liable for damages to our clients and potentially lose clients.
If there are inaccuracies in these updates, or if we are not able to deliver them on a timely basis to our clients, our reputation may be damaged, and we could be found liable for damages to our clients and potentially lose clients.
In addition, we will need to appropriately scale our internal business systems and our global operations and client engagement teams to serve our growing client base, particularly as our client demographics expand over time. Any such expansion may be expensive and complex, requiring financial investments, management time and attention.
In addition, we will need to appropriately scale our internal business systems and our global operations and client engagement teams to serve the changing needs of our client base, particularly as our client demographics expand over time. Any such expansion may be expensive and complex, requiring financial investments, management time and attention.
Although we provide support services for additional Oracle product lines that are not subject to the Rimini I Injunction or the Rimini II Injunction, as well as for software products provided by companies other than Oracle, our current revenue depends significantly on the product lines that are the subject of the Rimini I Injunction and Rimini II Injunction.
Although we provide support services for additional Oracle product lines that are not the subject of the Rimini I Injunction or the Rimini II litigation, as well as for software products provided by companies other than Oracle, our current revenue depends significantly on the product lines that are the subject of these matters.
Further, our competitors may attempt to use the Oracle litigation and the existence of the Rimini I Injunction and the Rimini II Injunction described above under the section titled “Risks Related to Litigation,” to dissuade certain of our prospective or existing clients from purchasing or continuing to purchase any or all of the components of our Solutions Portfolio, including our enterprise software support services.
Further, our competitors may attempt to use the Oracle litigation described above under the section titled “Risks Related to Litigation,” to dissuade certain of our prospective or existing clients from purchasing or continuing to purchase any or all of the components of our Solutions Portfolio, including our enterprise software support services.
As of December 31, 2023, (i) approximately 26.3% of our outstanding voting capital stock is held by Adams Street Partners LLC and certain Adams Street fund limited partnerships and (ii) approximately 12.0% of our outstanding voting capital stock is beneficially owned by our Chief Executive Officer, Chairman of the Board and President.
As of December 31, 2024, (i) approximately 25.9% of our outstanding voting capital stock is held by Adams Street Partners LLC and certain Adams Street fund limited partnerships and (ii) approximately 12.0% of our outstanding voting capital stock is beneficially owned by our President, Chief Executive Officer and Chairman of the Board.
Among other things, the Rimini II Injunction requires us to immediately and permanently delete certain PeopleSoft software environments, files and updates identified in the Rimini II Injunction, as well as to delete and immediately and permanently discontinue use of certain Company-created automated tools.
Among other things, the Rimini II Injunction would require us to immediately and permanently delete certain PeopleSoft software environments, files and updates identified in the Rimini II Injunction, and to immediately and permanently discontinue the use of, and to delete, certain Company-created automated tools.
If we fail to attract highly qualified new sales and other personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed. Moreover, our sales personnel typically take an average of between nine to twelve months before any new sales personnel can operate at the capacity typically expected of experienced sales personnel.
If we fail to attract highly qualified new sales and other personnel or fail to retain and motivate our current personnel, our growth prospects could be severely harmed. Moreover, it generally takes our new sales personnel an average of between nine to twelve months to operate at the capacity typically expected of experienced sales personnel.
Certain of our common stockholders can exercise significant control, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control. Based on the number of shares of Common Stock outstanding as of December 31, 2023, two of our stockholders have aggregate voting power of 38.3% of our outstanding capital stock.
Certain of our common stockholders can exercise significant control, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control. Based on the number of shares of Common Stock outstanding as of December 31, 2024, two of our stockholders have aggregate voting power of approximately 37.9% of our outstanding capital stock.
We expect competition to continue to increase in the future, particularly if we prevail in our appeal of the District Court’s order and injunction in Rimini II, which could harm our ability to increase sales, maintain or increase renewals and maintain our prices.
We expect competition to continue to increase in the future, particularly if we prevail in our appeal of the Rimini II litigation, which could harm our ability to increase sales, maintain or increase renewals and maintain our prices.
Our software support agreements with our clients generally guarantee a 10-minute response time with respect to certain high-priority issues. If we do not meet the 10-minute guarantee, our clients may in some instances be entitled to liquidated damages, service credits or refunds. To date, no such payments have been made.
Our software support agreements with our clients generally guarantee a 10-minute response time with respect to certain high-priority issues. If we do not meet the 10-minute guarantee, our clients may in some instances be entitled to liquidated damages, service credits or refunds.
If we are obligated to pay substantial civil assessments arising from any finding of contempt, this could reduce the amount of cash flows available to pay principal, interest, fees and other amounts due under our credit facility dated July 20, 2021, as amended (our “Credit Facility”), which could result in an event of default, in which case the lenders could demand accelerated payment of principal, accrued and unpaid interest, and other fees.
If we are obligated to pay substantial civil assessments arising from any finding of contempt, this could reduce the amount of cash flows available to pay principal, interest, fees and other amounts due under our 2024 Credit Facility, which could result in an event of default, in which case the lenders could demand accelerated payment of principal, accrued and unpaid interest, and other fees.
Additionally, the existence of this ongoing litigation, including the July 2023 District Court order, could negatively impact the value of our equity securities, and could negatively impact our ability to raise additional equity or debt financing, as well as result in other legal claims against us.
Additionally, the existence of this ongoing litigation could negatively impact the value of our equity securities, and could negatively impact our ability to raise additional equity or debt financing, as well as result in other legal claims against us.
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. If no additional analysts commence coverage of us, the market price and volume for our common shares could be adversely affected. -39-
If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, our share price or trading volume could decline. If no additional analysts commence coverage of us, the market price and volume for our common shares could be adversely affected. Item 1B. Unresolved Staff Comments None.
Further, these jurisdictions’ rules regarding tax nexus are complex and can vary significantly. As a result, we could face the possibility of tax assessments and audits, and our liability for these taxes and associated interest and penalties could exceed our original estimates.
Further, these jurisdictions’ rules regarding tax nexus are complex and can vary significantly. Currently, we are under audit in some of our jurisdictions and as a result, we could face the possibility of tax assessments and additional audits, and our liability for these taxes and associated interest and penalties could exceed our original estimates.
While we currently believe our cash on hand, accounts receivable and contractually committed backlog provides us with liquidity to cover attorneys’ fees and related costs, such as travel, hotels, and consultants, associated with the ongoing litigation with Oracle, we cannot assure our liquidity will be sufficient.
While we currently believe our cash on hand, accounts receivable, contractually committed backlog and borrowing capacity under our 2024 Credit Facility provide us with liquidity to cover attorneys’ fees and related costs, such as travel, hotels, and consultants, associated with the ongoing litigation with Oracle, we cannot assure our liquidity will be sufficient.
Our exposure in operating our business globally with the risks noted above and the unique challenges of each new geography increase the risk that any potential future expansion efforts that we may undertake will not be successful.
Our exposure in operating our business globally with the risks noted above and the unique challenges of each new geography, as well as changes in U.S. trade policies, increase the risk that any potential future expansion efforts that we may undertake will not be successful.
As an expanding global company, we are subject to the laws and regulations of numerous jurisdictions worldwide regarding accessing, processing, sharing, using, storing, transmitting, disclosure and protection of personal data, the scope of which are constantly changing, subject to differing interpretation and related to jurisdictions where we have operations, clients, or where we conduct marketing, and such laws may be inconsistent between countries or in conflict with other laws, legal obligations or industry standards.
We are subject to governmental and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business. -33- As an expanding global company, we are subject to the laws and regulations of numerous jurisdictions worldwide regarding accessing, processing, sharing, using, storing, transmitting, disclosure and protection of personal data, the scope of which are constantly changing, subject to differing interpretation and related to jurisdictions where we have operations, clients, or where we conduct marketing, and such laws may be inconsistent between countries or in conflict with other laws, legal obligations or industry standards.
We may not successfully accomplish all or any of these objectives. -26- In addition, our historical growth has placed and may continue to place significant demands on our management and our operational and financial resources.
We may not successfully accomplish all or any of these objectives. In addition, efforts to encourage growth have placed and may continue to place significant demands on our management and our operational and financial resources.
General worldwide economic conditions have experienced significant fluctuations in recent years, and market volatility and uncertainty remain widespread, with the expectation that inflation, other economic challenges and possible recession will be exacerbated for an extended period. Inflation has accelerated in the U.S. and globally.
General worldwide economic conditions have experienced significant fluctuations in recent years, and market volatility and uncertainty remain widespread, with the expectation that inflation and other economic challenges will be exacerbated for an extended period.
Our Credit Facility also requires us to achieve specified financial and operating results and maintain compliance with specified financial ratios, including as a condition to accessing additional amounts available for borrowing. As of December 31, 2023 and on the date of filing this Report, we were in compliance with each of these financial covenants.
Further, we are required under our 2024 Credit Facility to achieve specified financial and operating results and maintain compliance with specified financial ratios, including as a condition to accessing additional amounts available for borrowing. As of December 31, 2024 and on the date of filing this Report, we were in compliance with each of these financial covenants.
Moreover, multiple events, including changes in U.S. trade policies and responsive changes in policy by foreign jurisdictions, geopolitical developments, including the economic disruption continuing to be caused by the Israel-Hamas conflict, the Russian invasion of Ukraine in early 2022 and recent political and trade turmoil with China and elsewhere, and governmental and multinational organizations’ responses to the COVID-19 pandemic, have increased levels of political and economic unpredictability globally, and may increase the volatility of global financial markets and the global and regional economies.
Moreover, multiple events, including changes in U.S. trade policies and responsive changes in policy by foreign jurisdictions, geopolitical developments, including the economic disruption caused by the Israel-Hamas conflict, the Russian invasion of Ukraine and recent political and trade turmoil with China and elsewhere have increased levels of political and economic unpredictability globally, and may increase the volatility of global financial markets and the global and regional economies.
In October 2014, we filed a separate lawsuit, Rimini Street Inc. v. Oracle Int’l Corp. , in the District Court against Oracle seeking a declaratory judgment that our revised “Process 2.0” support practices, in use since at least July 2014, did not infringe certain Oracle copyrights (“Rimini II”).
Oracle Int’l Corp. , in the District Court against Oracle seeking a declaratory judgment that our revised “Process 2.0” support practices, in use since at least July 2014, did not infringe certain Oracle copyrights (“Rimini II”).
Our services sometimes involve accessing, processing, sharing, using, storing and transmitting proprietary information and protected data of our clients. We rely on proprietary and commercially available systems, software, tools and monitoring, as well as other processes, to provide security for accessing, processing, sharing, using, storing and transmitting such information and data.
We rely on proprietary and commercially available systems, software, tools and monitoring, as well as other processes, to provide security for accessing, processing, sharing, using, storing and transmitting -32- such information and data.
Additional factors impacting the price of our Common Stock could include: • the failure of securities analysts to publish research about us, or shortfalls in our results of operations compared to levels forecast by securities analysts; • any delisting of our Common Stock from Nasdaq Global Market due to any failure to meet listing requirements, including the minimum trading price requirements as a result of our stock price volatility, particularly since the July 2023 District Court order in the Rimini II litigation, which is currently stayed; and • the general state of securities markets.
Additional factors impacting the price of our Common Stock could include: • the failure of securities analysts to publish research about us, or shortfalls in our results of operations compared to levels forecast by securities analysts; • any delisting of our Common Stock from Nasdaq Global Market due to any failure to meet listing requirements, including the minimum trading price requirements as a result of our stock price volatility; and • the general state of securities markets.
SOFR is calculated based on short-term repurchase agreements, backed by Treasury securities. As such, SOFR is observed and backward looking, which stands in contrast with LIBOR under the previous methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting bank panel members.
As such, SOFR is observed and backward looking, which stands in contrast with LIBOR under the previous methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting bank panel members.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThese reports will include analyses of recent cybersecurity threats and incidents at the Company and across the industry, as well as a review of our own security controls, assessments and program maturity. It is anticipated that Audit Committee oversight will include review of periodic tabletop exercises to test cybersecurity infrastructure and incident response measures.
Biggest changeThe full Board, at least annually, and the Audit Committee of the Board, generally quarterly, receive reports on our cybersecurity program and developments. These reports include analyses of recent cybersecurity threats and incidents at the Company and across the industry, as well as a review of our own security controls, assessments and program maturity.
Data Privacy Week messaging includes highlighting the various departments and employees who support our data privacy and security compliance efforts, as well as trivia challenges designed to engage employees on this topic. Finally, our -40- compliance program requires all employees to take periodic awareness training on data privacy.
Data Privacy Week messaging includes highlighting the various departments and employees who support our data privacy and security compliance efforts, as well as trivia challenges designed to engage employees on this topic. Finally, our compliance program requires all employees to take periodic awareness training on data privacy.
Regarding data privacy, in 2023, our Ethics & Compliance Department implemented an annual privacy awareness initiative known as “Data Privacy Week,” celebrating an event known as International Data Privacy Day, which is acknowledged in over 50 countries as promoting data privacy best practices and raising awareness about the importance of data protection.
Regarding data privacy, in 2023, our Ethics & Compliance function implemented an annual privacy awareness initiative known as “Data Privacy Week,” celebrating an event known as International Data Privacy Day, which is acknowledged in over 50 countries as promoting data privacy best practices and raising awareness about the importance of data protection.
At its regular meetings, the Audit Committee, which meets no less than four times per year, receives regular reports from our GVP & Chief Counsel, Chief Ethics and Compliance Officer on matters relating to data privacy and compliance, as well as from our Vice President of Risk Management on enterprise risk management, including the activities of our internal audit department surrounding audits and risk assessments of our information security management system, coverage by our insurance carriers for cybersecurity incidents, and our ISO 9001 and 27001 certifications (described above under the heading “Compliance and Certifications” in Part I, Item 1 (“ Business ”) of this Report.
At its regular meetings, the Audit Committee, which meets no less than four times per year, receives regular reports from our Company’s Ethics & Compliance function, on matters relating to data privacy and compliance, as well as from our Vice President of Risk Management on enterprise risk management, including the activities of our internal audit department surrounding audits and risk assessments of our information security management system, coverage by our insurance carriers for cybersecurity incidents, and our ISO 9001 and 27001 certifications (described above under the heading “Compliance and Certifications” in Part I, Item 1 (“ Business ”) of this Report.
Cybersecurity Governance The Audit Committee of our Board includes members with significant experience and/or expertise in technology or cybersecurity, as well as a member with cybersecurity training certifications, and is responsible for the primary oversight of enterprise risk assessment and management pertaining to the financial, accounting, liquidity, market, tax, cybersecurity and other information technology risks facing our company.
Cybersecurity Governance The Audit Committee of our Board includes members with significant experience and/or expertise in technology or cybersecurity and is responsible for the primary oversight of enterprise risk assessment and management pertaining to the financial, accounting, liquidity, market, tax, cybersecurity and other information technology risks facing our company.
Our IRT is led by our Vice President, Global Security, with representatives from our IT, Security, Corporate Legal, Communications and Public Relations, Human Resources, Ethics & Compliance and Finance departments/functions. We conduct post-incident reviews of our response to cybersecurity threats and incidents, in addition to evaluating the effectiveness of supporting recovery protocols.
Our IRT is led by our Chief Information Security Officer, with representatives from our IT, Security, Corporate Legal, Communications and Public Relations, Human Resources, Ethics & Compliance and Finance departments/functions. -42- We conduct post-incident reviews of our response to cybersecurity threats and incidents, in addition to evaluating the effectiveness of supporting recovery protocols.
Cyberattacks continue to increase in frequency and magnitude generally, and cyber criminals are becoming more sophisticated.
Cyberattacks continue to increase in frequency and magnitude generally, and cyber criminals are becoming more sophisticated, including increased usage of emerging technologies such as advanced automation and artificial intelligence.
Removed
Beginning in the first quarter of 2024, the full Board, at least annually, and the Audit Committee of the Board, at least quarterly, will receive quarterly reports on our cybersecurity program and developments from our Vice President of Global Security.
Added
It is anticipated that Audit Committee oversight will include review of periodic tabletop exercises to test cybersecurity infrastructure and incident response measures. -43- Our Global IT and Global Security departments are led by our Chief Information Security Officer (CISO), who also serves as the Senior Vice President and General Manager of our Rimini Protect and Rimini Watch solutions.
Removed
Our Global IT and Global Security departments are led by our Executive Vice President and Chief Information Officer, Gertrude Van Horn, who joined us in January 2024. Ms. Van Horn is a globally recognized, award-winning executive with over 40 years of experience in global IT leadership, information security, crisis management, strategic planning and decision-making.
Added
In this role, he is responsible for providing strategic leadership and management of Rimini Street’s internal information security and compliance team and programs, the Rimini Protect client-facing security services and solutions, and the Rimini Watch observability solution.
Removed
Her expertise spans a diverse group of industries including financial services, chemicals, global manufacturing and retail. Prior to joining us, Ms. Van Horn served in C-level and executive IT leadership roles for NCH Corporation, IntegraColor, Haggar Clothing Company, JOANN Stores, Office Depot, Victoria’s Secret, American Express, and J.P. Morgan. Our Vice President of Global Security, Darren Remblence, reports to Ms.
Added
Our CISO has over 25 years of experience in IT and security for private and public-sector organizations and expertise in strategic consulting services, risk analysis/risk mitigation, and compliance.
Removed
Van Horn and is responsible for the development of strategic direction, execution, and day-to-day management of global security. Mr. Remblence has more than 20 years of international experience and expertise in information security, cybersecurity, physical security, IT operations, investigations, business continuity and disaster recovery. Prior to joining us, Mr.
Added
Previously, he held roles developing and managing technology and security teams, operations, business development, client-facing programs, budgets, and compliance in highly diverse organizations including the Global 100, defense, healthcare, energy, financial, retail, and education industries. He holds a Bachelor of Science degree in Information Systems with a concentration in Internetworking from Strayer University in Maryland.
Removed
Remblence worked at PayPal Inc., eBay Inc., The London Clearing House Ltd, Centrica Plc. and DHL International (UK) Ltd. He also served 14 years in the British Royal -41- Air Force, where he specialized in cybersecurity and counterintelligence.
Removed
He received his Master of Science in IT security from the University of Westminster, London and holds CISM (Certified Information Security Manager) and CISSP (Certified Information Systems Security Professional) certifications.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also have offices located in Pleasanton, California; Chicago, Illinois; Greensboro, North Carolina; London, United Kingdom; Sydney, Australia; Melbourne, Australia; Brisbane, Australia; Dubai, United Arab Emirates; Kuala Lumpur, Malaysia; Mexico City, Mexico; Amsterdam, Netherlands; São Paulo, Brazil; Frankfurt, Germany; Paris, France; Stockholm, Sweden; Taipei, Taiwan; Tel Aviv, Israel; Tokyo, Japan; Osaka, Japan; Seoul, South Korea; Hyderabad, India; Bengaluru, India; and Singapore.
Biggest changeWe also lease office facilities or contract with flexible workspace providers in various U.S. cities located in California, Illinois, New York and North Carolina, as well as internationally in Australia, Brazil, Canada, China, France, Germany, India, Israel, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Singapore, South Korea, Sweden, Taiwan, the United Arab Emirates and the United Kingdom.
We lease all of our facilities, and we do not own any real property. We are expanding in multiple locations globally. To the extent we may require additional office space in the future, we believe that it would be readily available on commercially reasonable terms.
We lease all of our facilities, and we do not own any real property. To the extent we may require additional office space in the future, we believe that it would be readily available on commercially reasonable terms.
For additional information regarding impairment charges related to certain of our office leases, please refer to Part II, Item 7 of this report “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Impairment charges related to operating lease right-of-use assets.”
For additional information regarding impairment charges related to certain of our office leases, please refer to Note 2 of the 2024 Consolidated Financial Statement included in Part II, Item 8 of this report.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings The legal proceedings and government inquiry described in Note 10 of the 2023 consolidated financial statements included in Item 8 of this Report are incorporated in this Item 3. Legal Proceedings by reference.
Biggest changeItem 3. Legal Proceedings The legal proceedings and government inquiry described in Note 9 of the 2024 Consolidated Financial Statements included in Part II, Item 8 of this Report are incorporated in this Item 3. Legal Proceedings by reference.
Regardless of the outcome, litigation can have an adverse impact on us because of judgment, defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. -42- PART II
Regardless of the outcome, litigation can have an adverse impact on us because of judgment, defense and settlement costs, diversion of management resources and other factors. Item 4. Mine Safety Disclosures Not applicable. -44- PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor further information about dividends on our Series A Preferred Stock, please refer to Note 6 of our consolidated financial statements included in Part II, Item 8 of this Report. The payment of any dividends on our Common Stock is currently within the discretion of our Board of Directors subject to certain restrictions under the terms of our Credit Facility.
Biggest changeDividends The payment of any dividends on our Common Stock is currently within the discretion of our Board of Directors subject to certain restrictions under the terms of our Amended Credit Facility.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock trades on the Nasdaq Global Market under the symbol “RMNI.” Holders On February 26, 2024, there were approximately 46 stockholders of record of our Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock trades on the Nasdaq Global Market under the symbol “RMNI.” Holders On February 25, 2025, there were approximately 43 stockholders of record of our Common Stock.
Removed
Dividends On July 20, 2021, we redeemed the remaining 87,802 shares of our 13.00% Series A Preferred Stock at an aggregate total redemption price of $88.4 million.
Removed
The total redemption price consisted of $87.8 million related to the outstanding shares of Series A Preferred Stock with a face value of $1,000 per share and $0.6 million or $6.86 per share of Series A Preferred Stock related to the dividends earned for the period from July 1, 2021 through July 19, 2021.
Removed
The redeemed shares of the Series A Preferred Stock, along with the dividends, were recorded on the redemption date of July 20, 2021.
Removed
The holders of Series A Preferred Stock were entitled to (i) a cash dividend of 10.0% per annum (the “Cash Dividend”), payable quarterly in arrears, and (ii) a quarterly payment-in-kind dividend of 3.0% per annum (the “PIK Dividend” and together with the Cash Dividend, the “Dividends”).
Removed
The PIK dividend had been accrued quarterly in arrears following the July 19, 2018 issuance and through July 1, 2021. Thereafter all Dividends on such Series A Preferred Stock were payable in cash at a rate of 13.0% per annum until the redemption of the Series A Preferred Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

110 edited+26 added−24 removed75 unchanged
Biggest changeResults of Operations Comparison of Years ended December 31, 2023 and 2022 Our consolidated statements of operations for the years ended December 31, 2023 and 2022 are presented below (in thousands): Variance 2023 2022 Amount Percent Revenue $ 431,496 $ 409,662 $ 21,834 5.3% Cost of revenue: Employee compensation and benefits 103,700 102,314 1,386 1.4% Engineering consulting costs 26,738 23,296 3,442 14.8% Administrative allocations (1) 14,540 15,416 (876) (5.7)% All other costs 17,535 11,359 6,176 54.4% Total cost of revenue 162,513 152,385 10,128 6.6% Gross profit 268,983 257,277 11,706 4.5% Gross margin 62.3% 62.8% Operating expenses: Sales and marketing 142,339 143,018 (679) (0.5)% General and administrative 73,044 75,367 (2,323) (3.1)% Impairment charges related to operating lease right-of-use assets — 3,013 (3,013) (100.0)% Reorganization costs 59 2,525 (2,466) (97.7)% Litigation costs and related recoveries, net 9,776 25,265 (15,489) (61.3)% Total operating expenses 225,218 249,188 (23,970) (9.6)% Operating income 43,765 8,089 35,676 441.0% Non-operating expenses: Interest expense (5,522) (4,271) (1,251) 29.3% Other income (expenses), net 2,989 (13) 3,002 (23,092.3)% Income before income taxes 41,232 3,805 37,427 983.6% Income taxes (15,173) (6,285) (8,888) 141.4% Net income (loss) $ 26,059 $ (2,480) $ 28,539 (1,150.8)% _____________________ (1) Includes the portion of costs for information technology, security services and facilities costs that are allocated to cost of revenue.
Biggest changeResults of Operations Comparison of Years ended December 31, 2024 and 2023 Our consolidated statements of operations for the years ended December 31, 2024 and 2023 are presented below (in thousands): Variance 2024 2023 Amount Percent Revenue $ 428,753 $ 431,496 $ (2,743) (0.6)% Cost of revenue: Employee compensation and benefits 105,647 103,700 1,947 1.9% Engineering consulting costs 26,225 26,738 (513) (1.9)% Administrative allocations (1) 16,267 14,540 1,727 11.9% All other costs 19,592 17,535 2,057 11.7% Total cost of revenue 167,731 162,513 5,218 3.2% Gross profit 261,022 268,983 (7,961) (3.0)% Gross margin 60.9% 62.3% Operating expenses: Sales and marketing 149,736 142,339 7,397 5.2% General and administrative 73,084 73,044 40 0.1% Reorganization costs 5,737 59 5,678 9,623.7% Litigation costs and related recoveries, net 64,593 9,776 54,817 560.7% Total operating expenses 293,150 225,218 67,932 30.2% Operating income (loss) (32,128) 43,765 (75,893) (173.4)% Non-operating expenses: Interest expense (6,305) (5,522) (783) 14.2% Other income (expenses), net 1,790 2,989 (1,199) (40.1)% Income before income taxes (36,643) 41,232 (77,875) (188.9)% Income taxes 371 (15,173) 15,544 (102.4)% Net income (loss) $ (36,272) $ 26,059 $ (62,331) (239.2)% _____________________ (1) Includes the portion of costs for information technology, security services and facilities costs that are allocated to cost of revenue.
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. Income Taxes and Valuation of Deferred Tax Assets -56- We account for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”).
Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. Income Taxes and Valuation of Deferred Tax Assets We account for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”).
Our solutions are designed to meet specific client needs and are designed to provide what we believe is exceptional value and return -46- for the fees charged. For more details about our Solutions Portfolio, please see Item 1 “Business” included in Part I of this Report.
Our solutions are designed to meet specific client needs and are designed to provide what we believe is exceptional value and return for the fees charged. For more details about our Solutions Portfolio, please see Item 1 “Business” included in Part I of this Report.
We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that -58- are not readily apparent from other sources.
Also the costs associated with running and supporting these systems; failure and downtime; security exposure; integrating and monitoring; and maintaining the tax, legal and regulatory compliance of these software systems, have increased in both actual spend and as a percentage of the full IT budget.
The costs associated with running and supporting these systems; failure and downtime; security exposure; integrating and monitoring; and maintaining the tax, legal and regulatory compliance of these software systems, have increased in both actual spend and as a percentage of the full IT budget.
For the year ended December 31, 2023, net other income of approximately $3.0 million was comprised of gains from cash equivalents and investments of $3.7 million which were offset, in part, by foreign exchange losses of approximately $0.3 million and other costs of $0.4 million.
For the year ended December 31, 2023, other income, net of $3.0 million was comprised of gains from cash equivalents and investments of $3.7 million which were offset, in part, by foreign exchange losses of $0.3 million and other costs of $0.4 million.
Cash Flows Used in Investing Activities Cash flows used in investing activities were primarily driven by investment purchases, investment sales and capital expenditures for software development costs, computer equipment and leasehold improvements as we continued to invest in our business infrastructure and geographic locations.
Cash Flows Used in Investing Activities Cash flows used in investing activities were primarily driven by investment purchases, investment sales and maturities, and capital expenditures for software development costs, computer equipment and leasehold improvements as we continued to invest in our business infrastructure and geographic locations.
For the year ended December 31, 2023, cash provided by investing activities of $3.1 million consisted of proceeds from sales of investments of $40.8 million, offset by investment purchases of $30.5 million and capital expenditures of $7.2 million.
For the year ended December 31, 2023, cash provided by investing activities of $3.1 million consisted of proceeds from sales and maturities of investments of $40.8 million, offset by investment purchases of $30.5 million and capital expenditures of $7.2 million.
Covenants in our Credit Facility could also have consequences on our operations, including restricting or delaying our ability to obtain additional financing, potentially limiting our ability to adjust to rapidly changing market conditions or respond to business opportunities.
Covenants in our 2024 Credit Facility could also have consequences on our operations, including restricting or delaying our ability to obtain additional financing, potentially limiting our ability to adjust to rapidly changing market conditions or respond to business opportunities.
We also expect to continue investing in the development and improvement of new and existing enterprise software support, products, and services to address current and evolving client needs. Recent Developments Reference is made to Note 10 to our consolidated financial statements included in Part II, Item 8 of this Report for a discussion of developments in our litigation with Oracle.
We also expect to continue investing in the development and improvement of new and existing enterprise software support, products, and services to address current and evolving client needs. Recent Developments Reference is made to Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Report for a discussion of developments in our litigation with Oracle.
We believe our primary competitors for our support services are the enterprise software vendors whose products we service and support, including IBM, Microsoft, Oracle and SAP.
We believe our primary competitors for our support services are the enterprise software vendors whose products we service and support, including Oracle, SAP, IBM, Microsoft and VMware.
The extent to which rising inflation, interest rate increases and continuing global economic and geopolitical uncertainty impact our business going forward, however, will depend on numerous evolving factors we cannot reliably predict, including continued governmental and business actions in response to increasing global economic and geopolitical uncertainty.
The extent to which rising inflation, interest rate changes and continuing global economic and geopolitical uncertainty impact our business going forward, however, will depend on numerous evolving factors we cannot reliably predict, including continued governmental and business actions in response to increasing global economic and geopolitical uncertainty.
We believe our primary competitors for our other solutions include systems integrators, security, interoperability and observability vendors; and IT consulting firms. -45- Our subscription-based revenue provides a strong foundation for, and visibility into, future period results.
We believe our primary competitors for our other solutions include systems integrators, security, interoperability and observability vendors; and IT consulting firms. -47- Our subscription-based revenue provides a strong foundation for, and visibility into, future period results.
As a result, we believe that licensees often view enterprise software support, products and services as a mandatory cost of doing business. The majority of our revenue through December 31, 2023, was generated from our support solutions.
As a result, we believe that licensees often view enterprise software support, products and services as a mandatory cost of doing business. The majority of our revenue through December 31, 2024, was generated from our support solutions.
Such insurance recoveries were reflected as a reduction of litigation costs upon notification of approval for reimbursement by the insurance company. Interest expense. Interest expense is incurred under our Credit Facility and other debt obligations.
Such insurance recoveries were reflected as a reduction of litigation costs upon notification of approval for reimbursement by the insurance company. Interest expense. Interest expense is incurred under our Credit Facilities and other debt obligations.
Interest expense also includes payments incurred or received as a result of the interest rate swap agreement. Other income (expenses), net. Other income (expenses), net consists primarily of gains or losses on foreign currency transactions and interest income. -49- Income taxes.
Interest expense also includes payments incurred or received as a result of the interest rate swap agreement. -51- Other income (expenses), net. Other income (expenses), net consists primarily of gains or losses on foreign currency transactions and interest income. Income taxes.
We founded Rimini Street to disrupt and redefine the enterprise software support market by developing and delivering innovative new solutions that filled a then-unmet need in the enterprise software market. We became and remain the leading independent software support provider for Oracle and SAP products based on both the number of active clients supported and recognition by industry analyst firms.
We founded Rimini Street to disrupt and redefine the enterprise software support market by developing and delivering innovative new solutions that filled a then-unmet need in the enterprise software market. We became and remain the leading independent software support provider for enterprise software based on both the number of active clients supported and recognition by industry analyst firms.
Further, although our operations are influenced by general economic conditions, we do not believe the impacts of the economic -48- disruptions described above had a significant net impact on our revenue or results of operations during the year ended December 31, 2023.
Further, although our operations are influenced by general economic conditions, we do not believe the impacts of the economic disruptions described above had a significant net impact on our revenue or results of operations during the year ended December 31, 2024.
For the year ended December 31, 2023, the unfavorable foreign currency impact was primarily related to our foreign cash held in Japan as the Japanese yen weakened significantly against the U.S. dollar.
For the year ended December 31, 2024, the unfavorable foreign currency impact was primarily related to our foreign cash held in Japan as the Japanese yen weakened against the U.S. dollar.
As of December 31, 2023, 2022 and 2021, we had approximately 3,030, 3,020 and 2,840 active clients, respectively. We define a unique client as a distinct entity, such as a company, an educational or government institution or a subsidiary, division or business unit of a company that purchases one or more of our support, products or services.
As of December 31, 2024, 2023 and 2022, we had approximately 3,080, 3,030 and 3,020 active clients, respectively. We define a unique client as a distinct entity, such as a company, an educational or government institution or a subsidiary, division or business unit of a company that purchases one or more of our support, products or services.
We count as two separate unique clients when two separate subsidiaries, divisions or business units of an entity purchase our products or services. As of December 31, 2023, 2022 and 2021, we had over 1,530, 1,510 and 1,470 unique clients, respectively.
We count as two separate unique clients when two separate subsidiaries, divisions or business units of an entity purchase our products or services. As of December 31, 2024, 2023 and 2022, we had over 1,570, 1,530 and 1,510 unique clients, respectively.
The imposition of the Transition Tax set forth in the U.S. Tax Cuts and Jobs Act of 2017 may reduce or eliminate U.S. federal deferred taxes on the unremitted earnings of our foreign subsidiaries. However, we may still be liable for withholding taxes, state taxes, or other income taxes that might be incurred upon the repatriation of foreign earnings.
Tax Cuts and Jobs Act of 2017 may reduce or eliminate U.S. federal deferred taxes on the unremitted earnings of our foreign subsidiaries. However, we may still be liable for withholding taxes, state taxes, or other income taxes that might be incurred upon the repatriation of foreign earnings.
These cash uses were offset by proceeds of $0.1 million received from stock option exercises. -55- For the year ended December 31, 2022, cash utilized in financing activities of $13.6 million was attributable to principal payments related to the Credit Facility of $9.5 million, payments to repurchase shares of Common Stock totaling $4.7 million and finance lease payments of $0.3 million.
For the year ended December 31, 2023, cash utilized in financing activities of $6.9 million was attributable to principal payments related to the Credit Facility of $5.6 million, payments to repurchase shares of Common Stock totaling $1.0 million and finance lease payments of $0.3 million. These cash uses were offset by proceeds of $0.1 million received from stock option exercises.
We recorded net income of $26.1 million, net loss of $2.5 million and net income of $75.2 million for the years ended December 31, 2023, 2022 and 2021, respectively. We generated approximately 51% of our revenue in the United States and approximately 49% of our revenue from our international business for the year ended December 31, 2023.
We recorded net loss of $36.3 million, net income of $26.1 million and net loss of $2.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. We generated approximately 49% of our revenue in the United States and approximately 51% of our revenue from our international business for the year ended December 31, 2024.
References to “management” or “management team” refer to the officers of the Company. -44- A discussion regarding our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 is presented below.
References to “management” or “management team” refer to the officers of the Company. -46- A discussion regarding our financial condition and results of operations for fiscal 2024 compared to fiscal 2023 is presented below.
The $1.4 million increase in cost of revenue attributable to employee compensation and benefits for the year ended December 31, 2023, was primarily due to an increase in salaries, wages and benefit costs due to a 16% increase in the average number of employees devoted to cost of revenue functions and annual pay increases.
The $1.9 million increase in cost of revenue attributable to employee compensation and benefits for the year ended December 31, 2024, was primarily due to an increase in salaries, wages and benefit costs due to a 11% increase in the average number of employees devoted to cost of revenue functions and annual pay increases.
As a percentage of our revenue, sales and marketing expenses have decreased from 35% for the year ended December 31, 2022 to 33% for the year ended December 31, 2023.
As a percentage of our revenue, sales and marketing expenses have increased from 33% for the year ended December 31, 2023 to 35% for the year ended December 31, 2024.
We also offer a special support service, Rimini Street Extra Secure Support, available to clients that require a more rigorous level of security background checks and/or government security clearance for engineers accessing a client’s system than our standard employment security background check and requirements. Clients may be asked to pay an additional fee for Rimini Street Extra Secure Support.
We also offer a special support service, Rimini Street Extra Secure Support, available to clients that require a more rigorous level of security background checks and/or government security clearance for engineers accessing a client’s system than our standard employment security background check and requirements.
In addition, our deferred revenue had an unfavorable impact on our operating cash flows of $11.4 million, primarily due to recognizing revenue of $431.5 million offset by recording billings, net of $418.5 million for the year ended December 31, 2023.
In addition, our deferred revenue had an unfavorable impact on our operating cash flows of $11.4 million, primarily due to recognizing revenue of $431.5 million offset by recording billings, net of $418.5 million for the year ended December 31, 2023. Also, accounts payable had an unfavorable operating cash flow impact of $2.0 million during the year ended December 31, 2023.
As discussed below in greater detail, for the year ended December 31, 2023, we generated cash flows from our operating activities of $12.5 million. We believe our operating cash flows for the year ending December 31, 2023 will be sufficient to fund the portion of our contractual obligations that is not funded with existing capital resources.
As discussed below in greater detail, for the year ended December 31, 2024, we utilized cash flows of $38.8 million from our operating activities. We believe our operating cash flows for the year ending December 31, 2024 will be sufficient to fund the portion of our contractual obligations that is not funded with existing capital resources.
As of December 31, 2023, we employed over 2,120 professionals and supported over 3,030 active clients globally, including approximately 73 Fortune 500 companies and 20 Fortune Global 100 companies across a broad range of industries.
As of December 31, 2024, we employed over 2,040 professionals and supported over 3,080 active clients globally, including approximately 73 Fortune 500 companies and 20 Fortune Global 100 companies across a broad range of industries.
Our revenue retention rate was 90% for the year ended December 31, 2023 and 92% for each of the years ended December 31, 2022 and 2021, respectively.
Our revenue retention rate was 88%, 90% and 92% for each of the years ended December 31, 2024, 2023 and 2022, respectively.
We have not made any provision for additional income taxes on undistributed earnings of our foreign subsidiaries. As of December 31, 2023, we had cash and cash equivalents of $65.4 million in our foreign subsidiaries.
We have not made any provision for additional income taxes on undistributed earnings of our foreign subsidiaries. As of December 31, 2024, we had cash and cash equivalents of $43.9 million in our foreign subsidiaries.
Please refer to Notes 5, 7 and 8 to the consolidated financial statements included in Part II, Item 8 of this Report for information regarding our Credit Facility. A key component of our business model generally requires that customers prepay us annually for the services we will provide over the following year or longer.
Please refer to Note 5 to the Consolidated Financial Statements included in Part II, Item 8 of this Report for information regarding our 2024 Credit Facility. A key component of our business model requires that substantially all clients prepay us annually for the services we will provide over the following year or longer.
A discussion regarding our financial condition and results of operations for fiscal 2022 compared to fiscal 2021 that are not in this Report can be found under Part II, Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on the Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on March 1, 2023, and is available on the SEC’s website at sec.gov.
A discussion regarding our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 that are not in this Report can be found under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 28, 2024, which discussion is hereby incorporated by reference and is available on the SEC’s website at sec.gov.
Additionally, reference is made to Note 5 to our consolidated financial statements included in Part II, Item 8 of this Report for a discussion of developments related to our credit facility dated July 20, 2021, as amended (as amended, the “Credit Facility”).
Additionally, reference is made to Note 5 to our Consolidated Financial Statements included in Part II, Item 8 of this Report for a discussion of developments related to our amended credit facility dated April 30, 2024, (as amended, the “2024 Credit Facility”).
For additional information on recently issued accounting standards and our plans for adoption of those standards, please refer to the section titled Recent Accounting Pronouncements under Note 2 to our Consolidated Financial Statements included in Item 8 of this Report.
For additional information on recently adopted accounting standards, please refer to the section titled Recently Adopted Accounting Pronouncements under Note 2 to our Consolidated Financial Statements included in Item 8 of this Report.
Global Economic Uncertainty We have experienced some clients not renewing our services due to the adverse impact on their businesses from current global economic uncertainty, as well as by the economic disruption continuing to be caused by the Israel-Hamas conflict, the Russian invasion of Ukraine in early 2022 and recent political and trade turmoil with China, amongst other global challenges.
Global Economic Uncertainty We have experienced some clients not renewing our services due to the adverse impact on their businesses from current global economic uncertainty, as well as by the economic disruption continuing to be caused by current conflicts and recent political and trade turmoil with China, amongst other global challenges.
As a result, we collect cash from our customers in advance of when the related service costs are incurred, which resulted in deferred revenue of $263.1 million that is included in current liabilities as of December 31, 2023.
As a result, we typically collect cash from our clients in advance of when the related service costs are incurred, which resulted in deferred revenue of $258.0 million that is included in current liabilities as of December 31, 2024.
We also now offer an integrated package of our services in a unique end-to-end, “turnkey” outsourcing option for Oracle and SAP landscapes that optimizes our clients’ existing technologies with a minimum of 15 extended years of operating lifespan and enables our clients to focus their IT talent and budget on higher-value, innovative projects that will support competitive advantage and growth.
We also offer a unified package of our services as Rimini ONE™, a unique end-to-end, “turnkey” outsourcing option for Oracle and SAP landscapes designed to optimize our clients’ existing technologies with a minimum of 15 extended years of operating lifespan and enable our clients to focus their IT talent and budget on potentially higher-value, innovative projects that will support competitive advantage and growth.
To meet the needs of our clients and prospects and to service a significantly expanded addressable market opportunity, we designed, developed and are now delivering a new, expanded solutions portfolio for a wider array of enterprise software – including an expanded list of supported software; managed services for Oracle, SAP, IBM, Salesforce and open-source database software; and new solutions for security, interoperability, observability and consulting.
To meet the needs of our clients and prospects and to service what we believe is a significantly expanded addressable market opportunity, we continue to expand our solutions portfolio (our “Solutions Portfolio”) to a wider array of enterprise software – including an expanded list of supported software for VMware; managed services for Oracle, SAP, Salesforce®, IBM, ServiceNow®, and open-source database software; and new solutions for security, interoperability, observability and consulting.
Therefore, we believe that working capital deficit is not as meaningful in evaluating our liquidity since the costs of fulfilling our commitments to provide services to customers are currently limited to approximately 38% of the related deferred revenue based on our gross margin of 62% for the year ended December 31, 2023.
Therefore, we believe that working capital deficit is not as meaningful in evaluating our liquidity since the costs of fulfilling our commitments to provide services to clients are currently limited to approximately 39.1% of the related deferred revenue based on our gross profit percentage of 60.9% for the year ended December 31, 2024.
The capital expenditures of $7.2 million consisted primarily of $3.6 million for capitalized software development costs, new computer equipment, and furniture and fixtures in our U.S. entity, and $3.6 million for computer equipment at our foreign locations, primarily in India of $1.9 million, Brazil of $0.7 million, and Japan of $0.7 million.
The capital expenditures of $3.4 million consisted primarily of $2.5 million for capitalized software development costs, new computer equipment, and leasehold improvements in our U.S. entity, and $0.9 million for computer equipment at our foreign locations, primarily in India of $0.3 million and Brazil of $0.3 million.
In addition to our support services, we also offer a breadth of enterprise software support, products and services through our full portfolio of solutions at an additional fee that is calculated based on a variety of factors and metrics.
Clients may be asked to pay an additional fee for Rimini Street Extra Secure Support. -48- In addition to our support services, we also offer a breadth of enterprise software support, products and services through our full portfolio of solutions at an additional fee that is calculated based on a variety of factors and metrics.
An adverse outcome in the ongoing litigation could result in the payment of substantial damages and/or an injunction against certain of our business practices, either of which could have a material adverse effect on our business and financial results, ” is incorporated by reference herein.
Adverse outcomes and future adverse outcomes in the ongoing litigation could result in the payment of substantial attorneys’ fees and/or costs and/or injunctions against certain of our business practices, which could have a material adverse effect on our business and financial results, ” is incorporated by reference herein.
Cash provided by investing activities totaled $3.1 million and cash used in investing activities was $24.4 million for the years ended December 31, 2023 and 2022, respectively.
Cash provided by investing activities totaled $6.4 million and $3.1 million for the years ended December 31, 2024 and 2023, respectively.
We generated revenue of $431.5 million, $409.7 million and $374.4 million for the years ended December 31, 2023, 2022 and 2021, respectively, representing a year-over-year increase of 5% and 9% for 2023 and 2022, respectively. We have a history of losses, and as of December 31, 2023, we had an accumulated deficit of $202.2 million.
We generated revenue of $428.8 million, $431.5 million and $409.7 million for the years ended December 31, 2024, 2023 and 2022, respectively, representing a year-over-year decrease of 1% for 2024 and 5% increase for 2023. We have a history of losses, and as of December 31, 2024, we had an accumulated deficit of $238.5 million.
The unfavorable change in deferred contract costs of $0.8 million was due to capitalizing $20.1 million of commission costs and amortizing $19.4 million of these costs during the year ended December 31, 2023. For the year ended December 31, 2022, cash flows provided by operating activities amounted to $34.9 million.
The unfavorable change in deferred contract costs of $0.8 million was due to capitalizing $20.1 million of commission costs and amortizing $19.4 million of these costs during the year ended December 31, 2023.
Also, accounts payable had an unfavorable operating cash flow impact of $2.0 million during -54- the year ended December 31, 2023. Accrued compensation, benefits, commissions and other liabilities were also unfavorable to our operating cash flows for $17.8 million during the year ended December 31, 2023.
Accrued compensation, benefits, commissions and other liabilities were also unfavorable to our operating cash flows for $17.8 million during the year ended December 31, 2023.
While we do not physically operate in Russia, the Ukraine or in mainland China, we do have operations in Israel. These global events, together with inflationary pressures, have negatively impacted the global economy, causing the U.S. Federal Reserve to raise interest rates in 2022.
While we do not physically operate in some of -50- these countries, we do have operations in Israel. These global events, together with inflationary pressures, have negatively impacted the global economy, causing the U.S. Federal Reserve to raise interest rates in 2022 and to reduce interest rates in 2024.
Any adverse outcome in our ongoing judicial proceedings could have a material adverse effect on our results of operations. Gross Profit. Gross profit increased from $257.3 million for the year ended December 31, 2022 to $269.0 million for the year ended December 31, 2023, an increase of $11.7 million or 5%.
Any adverse outcome in our ongoing judicial proceedings could have a material adverse effect on our results of operations. Gross Profit. Gross profit decreased from $269.0 million for the year ended December 31, 2023 to $261.0 million for the year ended December 31, 2024, a decline of $8.0 million or 3%.
Public company costs that are expected to increase in the future include additional information systems costs, costs for additional personnel in our accounting, human resources, IT and legal functions, SEC and Nasdaq fees, and incremental -51- professional, legal, audit and insurance costs.
Public company costs that are expected to increase in the future include additional information systems costs, costs for additional personnel in our accounting, human resources, IT and legal functions, SEC and Nasdaq fees, and incremental professional, legal, audit and insurance costs. As a result, we currently expect our general and administrative expenses to increase in dollar terms in future periods.
For the years ended December 31, 2023 and 2022, cash flows provided by operating activities amounted to $12.5 million and $34.9 million, respectively. For the year ended December 31, 2023, cash flows provided by operating activities amounted to $12.5 million.
For the years ended December 31, 2024 and 2023, cash flows used in and provided by operating activities amounted to $38.8 million and $12.5 million, respectively. For the year ended December 31, 2024, cash flows utilized by operating activities amounted to $38.8 million.
For the year ended December 31, 2022, the non-cash expenses, net of $20.9 million were comprised of the following: stock-based compensation expense of $10.9 million, amortization and accretion related to ROU assets and liabilities of $5.5 million, a non-cash impairment charge related to ROU assets of $3.0 million, depreciation and amortization expense of $2.5 million, and accretion and amortization of debt discount and issuance costs of $1.0 million.
For the year ended December 31, 2024, the non-cash expenses, net of $8.6 million were comprised of the following: stock-based compensation expense of $9.5 million, amortization and accretion related to ROU assets and liabilities of $4.6 million, depreciation and amortization expense of $3.6 million, accretion and amortization of debt discount and issuance costs of $0.8 million, and deferred tax provision benefit of $9.8 million.
Total cost of revenue for the year ended December 31, 2023 increased by $10.1 million, or 7%, compared to the year ended December 31, 2022.
Total cost of revenue for the year ended December 31, 2024 increased by $5.2 million, or 3%, compared to the year ended December 31, 2023.
This expense was offset by a payment received from Oracle of $0.1 million relating to the reduced sanctions award for the Rimini I Injunction contempt proceedings.
As a result, we recorded an incremental expense of $2.8 million for the year ended December 31, 2023. This expense was offset by a payment received from Oracle of $0.1 million relating to the reduced sanctions award for the Rimini I Injunction contempt proceedings.
Our annualized subscription revenue was approximately $432 million, $420 million and $393 million as of December 31, 2023, 2022 and 2021, respectively. Revenue retention rate A key part of our business model is the recurring nature of our revenue. As a result, it is important that we retain clients after the completion of the non-cancelable portion of the support period.
Revenue retention rate A key part of our business model is the recurring nature of our revenue. As a result, it is important that we retain clients after the completion of the non-cancelable portion of the support period.
The Credit Facility contains certain financial covenants, including a minimum fixed charge coverage ratio greater than 1.25, a total leverage ratio less than 3.75, and a minimum liquidity of $20 million in U.S. cash.
The 2024 Credit Facility contains certain financial covenants, including a minimum fixed charge coverage ratio greater than 1.25, a total leverage ratio less than 3.75, and a minimum liquidity balance of at least $20 million in U.S. cash. We believe that we are in compliance with these financials covenants for the year ended December 31, 2024.
Cash Flows Summary Presented below is a summary of our operating, investing and financing cash flows for the years ended December 31, 2023 and 2022 (in thousands): 2023 2022 Change Net cash provided by (used in): Operating activities $ 12,467 $ 34,898 $ (22,431) Investing activities 3,077 (24,445) 27,522 Financing activities (6,892) (13,568) 6,676 The effect of foreign currency translation was unfavorable by $2.2 million and $7.4 million for the years ended December 31, 2023 and 2022, respectively, due to unfavorable foreign exchange impacts related to foreign cash.
Cash Flows Summary Presented below is a summary of our operating, investing and financing cash flows for the years ended December 31, 2024 and 2023 (in thousands): 2024 2023 Change Net cash provided by (used in): Operating activities $ (38,849) $ 12,467 $ (51,316) Investing activities 6,448 3,077 3,371 Financing activities 14,016 (6,892) 20,908 The effect of foreign currency translation was unfavorable by $8.2 million and $2.2 million for the years ended December 31, 2024 and 2023, respectively, due to unfavorable foreign exchange impacts related to foreign cash.
The $0.2 million increase in general and administrative expenses attributable to employee compensation and benefits for the year ended December 31, 2023, was primarily due to an increase in stock-based compensation expense of $2.0 million, offset by a reduction in salaries, wages and benefit costs of $1.8 million, which was primarily a result of reorganization activity that occurred during the year ended December 31, 2022.
The $3.6 million decline attributable to employee compensation and benefits for the year ended December 31, 2024, was primarily due to a decrease in stock-based compensation expense of $2.1 million, as well as a reduction in salaries, wages, bonus and benefit costs of $1.5 million, which was primarily a result of reorganization activity that occurred during the year ended December 31, 2024.
We recognized a net loss of $2.5 million, non-cash expenses, net amounted to $20.9 million, and favorable changes in operating assets and liabilities, net were $16.5 million for the year ended December 31, 2022.
We recognized net loss of $36.3 million, non-cash expenses, net amounted to $8.6 million, and unfavorable changes in operating assets and liabilities, net were $11.2 million for the year ended December 31, 2024.
In dollar terms, sales and marketing expenses declined slightly from $143.0 million for the year ended December 31, 2022 to $142.3 million for the year ended December 31, 2023, a decline of $0.7 million or 0.5%.
In dollar terms, sales and marketing expenses increased from $142.3 million for the year ended December 31, 2023 to $149.7 million for the year ended December 31, 2024, an increase of $7.4 million or 5%.
As discussed in Note 10 to our consolidated financial statements included in Item 8 of this Report, the District Court issued its findings of fact and conclusions of law in Rimini II, accompanied by the “Rimini II Injunction” on July 24, 2023. The District court found infringement as to Oracle’s PeopleSoft and Oracle Database products.
As discussed in Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Report, the District Court issued its findings of fact and conclusions of law in Rimini II, accompanied by the “Rimini II Injunction” in July 2023, which had been subject to an administrative stay.
Professional fees and other defense costs associated with litigation decreased from $25.7 million for the year ended December 31, 2022 to $7.0 million for the year ended December 31, 2023, a decrease of $18.6 million. This decrease was primarily due to costs associated with the Rimini II trial, which occurred from November 2022 to December 2022.
Professional fees and other defense costs associated with litigation decreased from $7.0 million for the year ended December 31, 2023 to $6.1 million for the year ended December 31, 2024, a decrease of $1.0 million.
For the next 12 months, assuming that our operations are not significantly impacted by rising inflation, interest rate increases, other global economic or geopolitical uncertainties, or the litigation matters as described in Note 10 to the consolidated financial statements included in Part II, Item 8 of this Report, we believe that cash, cash equivalents, and restricted cash of $115.9 million as of December 31, 2023, plus future cash flow from operating activities will be sufficient to meet our anticipated cash needs including working capital requirements, planned capital expenditures, and our contractual obligations of approximately $21.7 million that are due during the 12 months ending December 31, 2024. -53- Our future capital requirements depend on many factors, including client growth, number of employees, expansion of sales and marketing activities, and the introduction of new and enhanced services offerings.
For the next year, assuming that our operations are not significantly impacted by rising inflation, continued interest rate changes, other global economic or geopolitical uncertainties, or the litigation matters as disclosed in Note 9 to our Consolidated Financial Statements included in Part II, Item 8 of this Report, we believe that cash, cash equivalents and restricted cash of $89.2 million as of December 31, 2024, plus future cash flows from operating activities and our 2024 Credit Facility will be sufficient to meet our anticipated cash needs including working capital requirements, planned capital expenditures and our contractual obligations.
The first item was a favorable change of $18.9 million for accounts receivable as we collected $434.5 million of accounts receivable during the year ended December 31, 2022 compared to billings, net of $409.3 million, for the year ended December 31, 2022. As a result, our days sales outstanding for accounts receivable was 72 days as of December 31, 2022.
The first item was an unfavorable change of $15.2 million for accounts receivable as we collected $416.3 million of accounts receivable during the year ended December 31, 2024 compared to billings, net of $423.0 million, for the year ended December 31, 2024. As a result, our days sales outstanding for accounts receivable was 71 days as of December 31, 2024.
The $0.6 million increase in sales and marketing expense attributable to employee compensation and benefits for the year ended December 31, 2023 was primarily due to an increase in bonus payouts and commissions of $2.2 million due to new customer wins, which was offset by a reduction salaries, wages and benefit costs of $1.6 million. General and administrative.
The $1.4 million increase in employee compensation and benefits for the year ended December 31, 2024 was primarily due to an increases of salaries, wages and benefits of $2.1 million offset by a reduction of stock-based compensation expense of $0.6 million. -53- General and administrative.
All the costs incurred in providing these products and services are recognized as part of the cost of revenue. The cost of revenue includes all direct product line expenses, as well as the expenses incurred by our shared services organization which supports all product lines.
The cost of revenue includes all direct product line expenses, as well as the expenses incurred by our shared services organization which supports all product lines. -49- We define gross profit as the difference between revenue and the costs incurred in providing the software products and services. Gross margin is the ratio of gross profit divided by revenue.
Given that the increase in the cost of revenue was 7% compared to an increase in revenue of 5%, it resulted in a decline of 50 basis points in our gross margin for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Given that the increase in the cost of revenue was 3% and we experienced a decline in revenue of 1%, we realized a decline of 150 basis points in our gross margin for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Gross margin for the year ended December 31, 2022 was 62.8% compared to 62.3% for the year ended December 31, 2023. Our revenue for the year ended December 31, 2023 increased by $21.8 million or 5% compared to the year ended December 31, 2022.
Gross margin for the year ended December 31, 2023 was 62.3% compared to 60.9% for the year ended December 31, 2024. Our revenue for the year ended December 31, 2024 declined by $2.7 million or 1% compared to the year ended December 31, 2023.
These cash uses were offset by proceeds of $1.0 million received from stock option exercises. Foreign Subsidiaries Our foreign subsidiaries and branches are dependent on our U.S.-based parent company for continued funding. We currently do not intend to repatriate any amounts that have been invested overseas back to the U.S.-based parent.
Foreign Subsidiaries Our foreign subsidiaries and branches are dependent on our U.S.-based parent company for continued funding. We currently do not intend to repatriate any amounts that have been invested overseas back to the U.S.-based parent. The imposition of the Transition Tax set forth in the U.S.
The decline in our retention rate for the year ended December 31, 2023 was due to attrition during the fourth quarter, as certain clients did not renew specific subscriptions; however, in some cases maintained or added subscriptions for other products and services.
The decline in our retention rate for the year ended December 31, 2024 was due to attrition during the fourth quarter of 2023 as well as the first and second quarters of 2024, as certain clients did not renew specific subscriptions for a variety of reasons.
The applicable margin remains the same as the existing Credit Agreement, and is based on the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) and whether the Company elects Adjusted Term SOFR (ranging from 1.75 to 2.50%) or Base Rate (ranging from 0.75 to 1.50%).
The applicable margin remains the same as the Original Credit Facility and is based on our Consolidated Total Leverage Ratio (as defined in the 2024 Credit Facility) and whether we elect SOFR (ranging from 2.75% to 3.50%) or a Base Rate (ranging from 1.75% to 2.5%).
The lower gross margin for the year ended December 31, 2023 was primarily due to accelerating employee compensation and benefits, engineering consulting costs and all other costs more rapidly than our revenue growth. Sales and marketing expenses.
The lower gross margin for the year ended December 31, 2024 was primarily due to increasing employee compensation and benefits, all other costs and administrative allocations despite a slight decline in our revenue. Sales and marketing expenses.
This decrease was primarily due to (i) a reduction of computer software costs of $1.9 million, (ii) a decline of contract labor costs of $1.6 million, (iii) a decrease in rent and facility costs of $1.3 million, (iv) a decline in travel and entertainment costs of $0.4 million and (v) a net decrease in sales and other taxes of $0.2 million.
This increase was primarily due to (i) an increase of computer software costs of $2.7 million, (ii) an increase of professional fees of $1.4 million, (iii) an increase in sales and other taxes of $0.8 million, (iv) an increase of depreciation and amortization expense of $0.6 million, (v) an increase in rent and facility costs of $0.5 million and (vi) an increase of contract labor of $0.4 million.
On a regional basis, United States revenue grew from $215.4 million for fiscal 2022 to $220.0 million for fiscal 2023, an increase of $4.6 million or 2%, while international revenue grew from $194.3 million for fiscal 2022 to $211.5 million for fiscal 2023, an increase of $17.2 million or 9%. -50- Cost of revenue.
On a regional basis, United States revenue declined from $220.0 million for fiscal 2023 to -52- $210.0 million for fiscal 2024, a decline of $10.0 million or 5%, while international revenue grew from $211.5 million for fiscal 2023 to $218.8 million for fiscal 2024, an increase of $7.2 million or 3%.
General and administrative expenses decreased from $75.4 million for the year ended December 31, 2022 to $73.0 million for the year ended December 31, 2023, a decrease of $2.3 million or 3%.
General and administrative expenses increased from $73.0 million for the year ended December 31, 2023 to $73.1 million for the year ended December 31, 2024, a slight increase of $40.0 thousand or 0.1%.
As of February 28, 2023, the Company has a choice of interest rates between (a) Adjusted Term SOFR and (b) Base Rate, in each case plus an applicable margin.
We have a choice of interest rates under the 2024 Credit Facility between (a) SOFR and (b) Base Rate, in each case plus an applicable margin.
We had previously accrued $6.9 million as an estimate of attorney’s fees and costs during the year ended December 31, 2021, with no change to our estimate for the year ended December 31, 2022, resulting in incremental expense of $2.8 million for the year ended December 31, 2023.
In December 2023, we reached an agreement with Oracle for $9.7 million for attorneys’ fees and costs, relating to the Rimini I Injunction contempt proceedings. We had previously accrued $6.9 million as an estimate of attorney’s fees and costs during the year ended December 31, 2021.
This decrease was primarily due to (i) a $2.0 million decline in travel and entertainment costs, (ii) a $1.1 million decrease in recruitment costs, (iii) a $1.2 million reduction in administrative allocated costs, and (iv) a reduction of $0.4 million of other costs.
This increase was primarily due to (i) a $6.3 million increase in travel and entertainment costs, primarily related to a sales training event held in January 2024 (ii) a $1.4 million increase in employee compensation and benefits, (iii) a $1.2 million increase in administrative allocated costs, and (iv) a $1.3 million increase of other costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAccordingly, we were previously exposed to market risk due to variable interest rates based on LIBOR and are currently exposed to market risk due to variable interest rates based on SOFR. As of December 31, 2023, we had $72.6 million outstanding debt under the Credit Facility.
Biggest changeAccordingly, we were previously exposed to market risk due to variable interest rates based on LIBOR and are currently exposed to market risk due to variable interest rates based on SOFR.
As of this date, a reasonably possible hypothetical adverse change of 100 basis points in would have resulted in an increase of approximately $0.7 million in annual interest expense.
As of this date, a reasonably possible hypothetical adverse change of 100 basis points in would have resulted in an increase of approximately $0.9 million in annual interest expense.
We generated between 47% and 49% of our revenue from our international business for the years ended December 31, 2023, 2022 and 2021. Increases in the relative value of the U.S. Dollar to other currencies may negatively affect our revenue, partially offset by a positive impact to operating expenses in other currencies as expressed in U.S. Dollars.
We generated between 47% and 51% of our revenue from our international business for the years ended December 31, 2024, 2023 and 2022. Increases in the relative value of the U.S. Dollar to other currencies may negatively affect our revenue, partially offset by a positive impact to operating expenses in other currencies as expressed in U.S. Dollars.
Inflation Risk With regards to inflation risk and other economic conditions, please refer to Item 1A. Risk Factors included in Part I of this Report. -58-
Inflation Risk With regards to inflation risk and other economic conditions, please refer to Item 1A. Risk Factors included in Part I of this Report. -60-
As of December 31, 2023, the effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would have impacted our income before income taxes by a plus or minus of $0.7 million in our Consolidated Statements of Operations and Comprehensive Income (Loss) and would have impacted the effect of foreign currency changes on cash by a plus or minus $6.6 million in our Consolidated Statement of Cash Flows.
As of December 31, 2024, the effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would have impacted our income before income taxes by a plus or minus of $0.9 million in our Consolidated Statements of Operations and Comprehensive Income (Loss) and would have impacted the effect of foreign currency changes on cash by a plus or minus $4.6 million in our Consolidated Statement of Cash Flows.
Added
As of December 31, 2024, we had $73.1 million of outstanding debt under the term loan and $15.0 million of outstanding debt under the revolving line of credit as part of our 2024 Credit Facility.

Other RMNI 10-K year-over-year comparisons