Rimini Street has another blow out quarter
- Summary:
- Rimini Street continues a healthy growth rate, this time reporting 37 percent uplift YoY. It hasn't hit the hockey stick moment yet but it is doing very well.
Rimini Street has announced its Q2 2014 earnings. Once again they beat previous records recording net revenue of $20.4 million, up 37% on the previous year. Deferred revenue grew 33% to $61.2 million. Active supported client rose 30% to 574. From the blurbs:
"Our performance for the fiscal second quarter exceeded sales plan for both new clients and renewing clients," saidSeth Ravin, CEO, Rimini Street. "Accordingly, we accelerated our global investment and expansion to meet the growing needs of our expanding client base around the world."
Looking back over the company's five year reported history, it is clear that as Rimini Street grows, it will become highly profitable at the gross profit margin level. Check out the chart I created below. Note that 2014 figures are projections I made based upon past trends.
Right now, Rimini Street reports net losses and I would anticipate them continuing to make losses for the next couple of years at least. Much depends on the point at which the company is able to hit some kind of hockey stick moment. That will be dependent upon a number of factors, not least the extent to which its prime targets, SAP and Oracle, stumble or fail to capitalize upon their own product offerings.
To date, Rimini Street has been most successful going after the Oracle customer base but as of now, it counts more than 100 SAP accounts in its total 574 customer count. That figure has grown appreciably in the last couple of quarters as SAP customers hold back on significant investment while customers figure out how the Business Suite on HANA value proposition plays out.
Rimini Street is not the only beneficiary of the trend towards third party maintenance. Spinnaker Support recently reported first half 2014 results. While it does not talk specific numbers, it reported a doubling of SAP contracts and in the recent past has reported a continuing 30% and up growth in its support business.
Disclosure: SAP, Oracle and Rimini Street are all partners