- Deferred revenue as of June 30, 2016 increased 41% year over year to $128.5 million.
- Billings for 2016 Q2 increased 74% year over year, to $56.4 million.
- Total signed clients to date as of June 30, 2016 increased 34% year over year to 1,451.
- Employee count as of June 30, 2016 increased 33% year over year to 781.
- All-time quarterly record of 107 new client transactions worldwide, up 98% year over year.
The company noted that it's current annual run rate is now in the $160 million range, a figure I have previously predicted. The run rate could now accelerate further, depending on how things pan out in a post-Brexit spending squeeze. Can we say $170 million yet? Possibly.
Some of my UK sources are reporting an immediate 8.5% average cost increment for new software acquisition and maintenance costs for Oracle customers, purely as a result of the weakening of GBP against USD.
Returning to the Rimini Street story, acceleration at these levels is good news for customers who want and/or need to conserve IT resources for other projects. Acceleration has been achieved, in part, because uncertainty from its long running copyright infringement case with Oracle is now seen as a past event, with little direct impact on the company, despite the sizable award. Subject to any future surprises coming out of litigation, that minimal impact is largely due to the fact Rimini Street is insured for such matters, as is common in the software business.
In an email exchange, the company said that when you look at the numbers, volume growth is not the only driver. As customers gain more experience working with Rimini Street, they are finding more value through larger contracts.
Over the last year or so, Rimini Street has invested heavily in Latin America, Asia-Pacific and Europe. The company says it is sees the fruits of those investments coming through but we expect to see significant adds to the top line in the coming quarters, especially in Europe and Latin America.
The relatively low growth in employee count doesn't worry us. We view that as a statement of greater operational efficiency as the company scales its support services but that does not mean Rimini will pull back from spending on marketing resources for those regions in which the infrastructure investments have already been made.
There is another factor in play worth watching out for.
SAP and Oracle's cosy arrangement where customers acquire Oracle DB runtime licenses for running SAP applications is coming to an end in 2017. While SAP anticipates a good number of those licenses will switch to HANA, this is not guaranteed. Either way, Rimini Street says it 'has the customer's back' since they offer HANA maintenance support on the same terms as are provided for their other database and applications support for both SAP and Oracle.
As we've noted in the past, the third party maintenance (3PM) market is ripe for exploitation. Rimini Street is the vendor making the most noise and, on current performance, leading the charge. Let's see how they perform next quarter.