The macro-economic environment will help Rimini Street in the longer term, says CEO Seth Ravin, but for now it’s creating some headwinds that impacted revenue growth in Q2.
The company turned in quarterly revenue of $101.2 million, up 10.5% year-on-year, with net income of $0.1 million, down from $6.8 million for the comparable period last year. Ravin said:
In line with other companies, we faced global macro-environment and currency exchange rate headwinds that impacted quarter results. We believe that the macro-environment will ultimately benefit our business after organizations complete a replanning adjustment cycle and we’re addressing it and other opportunities with changes that include my return to oversee global revenue operations to reaccelerate growth.
He added:
Globally, companies are facing impact to profits caused by continuing post-pandemic supply chain challenges, global macro challenges, including war, sanctions, trade disputes, deglobalization, inflation, rising interest rates and currency exchange rate movements. These macro-shocks were originally believed to be short-term impacts but are now being viewed as likely multi-year headwinds that are forcing organizations to replan their businesses, including their IT investment plans.
The replanning phase has frozen many investment decisions. Frozen IT decisions impacted the market as a whole during the second quarter as reflected in extended and delayed IT sales cycles for many companies, including Rimini Street. However, as previously noted, we believe that once organizations complete their replanning process, Rimini Street is well positioned to ultimately benefit from this macro-environment with growth in new client acquisitions.
Other stats of note from the post earnings analyst call:
New customers in Q2 included Labeyrie Fine Food, Sajo Systems, SK Networks, Lwart, E-LAND Innople and State Library of Victoria, Australia’s oldest library. Ravin cited a couple of use cases:
The State Library of Victoria, Australia’s oldest library trusted Rimini Street for support of their Oracle E-business and Oracle database software. Rimini Street is also providing the library with its advanced database security and advanced application with our security solutions; 2 solutions and its Rimini Protect suite of security products. These solutions provide an innovative approach to security that can block vulnerabilities before an attack or close an attack vector within hours, unlike traditional and old vendor software patch models that can take days, weeks, months or years to receive a patch and require significant testing time and cost to implement.
Rimini Street’s cybersecurity solutions provides the library with peace of mind that digital threats are being addressed. Chief Financial Officer, Bradley Vice noted that his finance team are very happy with the support and security that Rimini Street provides, which keeps their assets and their customers secure and their finance services running. He further noted that Rimini Street worked with his team to identify and provide solutions for the risks they face and that the team enjoys the services they are receiving.
He also pointed to Labeyrie Fine Food, a French retailer with facilities in 48 countries:
Labeyrie switched its Oracle JD Edwards and Oracle Database Support to Rimini Street. With 80 application modules connected to the Oracle ecosystem, Labeyrie processes more than 500,000 batches of orders nightly. Maintaining the system became challenging after the software vendor ended full support for this mission-critical system. Labeyrie sought a solution to provide the mission-critical support they needed and create more value for the organization while simultaneously reducing costs.
Labeyrie’s CIO, Louis Goffaux, stated that in addition to supporting their ERP system, Rimini Street’s experts provide guidance on potential changes to how they use the platform. And that the monthly and quarterly meetings with the Rimini Street are extremely worthwhile, exactly the type of close all-around support they were looking for. He goes on to note that Rimini Street provides an efficient, agile service at half the price they were previously paying the software vendor.
There are deals that pushed. As you’re seeing in so many different company earnings, delayed sales cycles, lengthened sales cycles, we’re certainly seeing some of that as well because as these companies and government organizations re-jig their plans in order to prepare for a multi-year potential recession, different type of environment, they are not doing anything because they’re not buying anything while they finish those plans. Based on the involvement that we’ve seen, the kind of work that we’re involved with clients and prospects around the world, we feel pretty positive about the fact that we’re going to benefit when they finally finish their plans. We intend to be a part of them.
There’s a long game in play here with the underlying message being one of ‘keep calm and carry on’ as what Ravin calls “this daily global macro-drama’ unfolds:
It’s havoc on businesses. I mean, there’s no other way to say it. When you have so many different question – should I build a factory in China? Am I going to have political issues with that? How do I deal with Eastern Europe? How do I think about energy, if I’m going to build a plant inside of Europe? All these questions are now wreaking havoc to the point of causing internal paralysis for a lot of companies and they’re having to step back and rethink. Now that doesn’t mean they don’t want to save money. That’s why I said, ultimately, I expect to prevail
Onwards.
Image credit – Rimini Street
Disclosure – At time of writing, Rimini Street is a premier partner of diginomica.
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