Rimini Street, Inc.

Previous wording

•our ability to expand our leadership position in independent enterprise software support and to sell our application management services (“AMS”), our Rimini ONE™ integrated services and the individual services comprising our Rimini ONE solutions portfolio;

Current wording

•our ability to expand our leadership position in independent enterprise software support and to sell our managed services, professional services and innovation offerings;

Previous wording

•our expectations regarding new product offerings, partnerships and alliance programs, including but not limited to our partnership with ServiceNow;

Current wording

•our expectations regarding new product offerings, innovation solutions, partnerships and alliance programs;

Previous wording

•our ability to prevent unauthorized access to our information technology systems and other cybersecurity threats, protect the confidential information of our employees and clients and comply with privacy and data protection regulations, as well as any deficiencies associated with generative artificial intelligence (AI) technologies potentially used by us or by our third-party vendors and service providers;

Current wording

•our ability to prevent unauthorized access to our information technology systems and other cybersecurity threats, protect the confidential information of our employees and clients and comply with privacy and data protection regulations, as well as any deficiencies associated with artificial intelligence (AI) technologies used by us or by our third-party vendors and service providers or incorporated by us into our service offerings;

Previous wording

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. 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.

Current wording

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. We also offer a unified package of our services as Rimini ONE™, a unique end-to-end, “turnkey” outsourcing option for certain 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.

Previous wording

As of June 30, 2025, we employed over 2,010 professionals and supported approximately 3,060 active clients globally, including 70 Fortune 500 companies and 19 Fortune Global 100 companies across a broad range of industries. 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 services to support a specific product. For example, we count as two separate active clients instances where we provide support for two different products to the same entity.

Current wording

As of September 30, 2025, we employed over 2,000 professionals and supported over 3,150 active clients globally, including 81 Fortune 500 companies and 21 Fortune Global 100 companies across a broad range of industries. 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 services to support a specific product. For example, we count as two separate active clients instances where we provide support for two different products to the same entity.

Previous wording

Our subscription-based revenue provides a foundation for, and visibility into, future period results. For the three months ended June 30, 2025 and 2024, we generated revenue of $104.1 million and $103.1 million, respectively, representing an increase of 1%. During the three months ended June 30, 2025, we recorded net income of $30.3 million, and as of June 30, 2025, we had an accumulated deficit of $204.9 million. Approximately 47% and 50% of our revenue was generated in the United States for the three months ended June 30, 2025 and 2024, respectively. Approximately 53% and 50% of our revenue was generated in foreign jurisdictions for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Our subscription-based revenue provides a foundation for, and visibility into, future period results. For the three months ended September 30, 2025 and 2024, we generated revenue of $103.4 million and $104.7 million, respectively, representing a decrease of 1%. During the three months ended September 30, 2025, we recorded net income of $2.8 million, and as of September 30, 2025, we had an accumulated deficit of $202.1 million. Approximately 45% and 49% of our revenue was generated in the United States for the three months ended September 30, 2025 and 2024, respectively. Approximately 55% and 51% of our revenue was generated in foreign jurisdictions for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

On July 7, 2025, we and Mr. Ravin entered into a Settlement Agreement with Oracle Corporation relating to the Rimini II litigation. Under the terms of this agreement, we are required to complete the Wind Down no later than July 31, 2028 (the “Wind Down Period”). The Wind Down includes our Rimini Support, Rimini Manage and Rimini Consult services for Oracle PeopleSoft products. As we provide services for Oracle PeopleSoft products to clients globally, the Wind Down process is expected to take place over the Wind Down Period, but both the pace of revenue reduction and the final date that the Company will receive revenue from the discontinued services is unknown as of the date of this Report. We expect significant reductions in revenue related to services for Oracle PeopleSoft products over the course of the Wind Down Period. Revenue related to providing services for Oracle PeopleSoft products accounted for approximately 6% of revenue for the six months ended June 30, 2025 and approximately 8% of revenue for the six months ended June 30, 2024.

Current wording

On July 7, 2025, we and Mr. Ravin entered into a Settlement Agreement with Oracle Corporation relating to the Rimini II litigation. Under the terms of this agreement, we are required to complete the Wind Down no later than July 31, 2028 (the “Wind Down Period”). The Wind Down includes our Rimini Support, Rimini Manage and Rimini Consult services for Oracle PeopleSoft products. As we provide services for Oracle PeopleSoft products to clients globally, the Wind Down process is expected to take place over the Wind Down Period, but both the pace of revenue reduction and the final date that the Company will receive revenue from the discontinued services is unknown as of the date of this Report. We expect significant reductions in revenue related to services for Oracle PeopleSoft products over the course of the Wind Down Period. Revenue related to providing services for Oracle PeopleSoft products accounted for approximately 6% of revenue for the nine months ended September 30, 2025 and approximately 8% of revenue for the nine months ended September 30, 2024.

Previous wording

Uncertainty regarding changes continuing to be made in laws and regulations by the current U.S. administration, along with uncertainty about U.S. trade policies, particularly when pertaining to treaties, tariffs and other limitations on international trade, are causing economic and geopolitical uncertainty. Despite these macroeconomic and geopolitical pressures, we expect to continue to be able to market, sell and provide our current and future products and services to clients in non-sanctioned countries globally. We also expect to continue investing in the development and improvement of new and existing products and services to address client needs. 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 three and six months ended June 30, 2025.

Current wording

Uncertainty regarding changes continuing to be made in laws and regulations by the current U.S. administration, along with uncertainty about U.S. trade policies, particularly when pertaining to treaties, tariffs and other limitations on international trade, are causing economic and geopolitical uncertainty. Despite these macroeconomic and geopolitical pressures, we expect to continue to be able to market, sell and provide our current and future products and services to clients in non-sanctioned countries globally. We also expect to continue investing in the development and improvement of new and existing products and services to address client needs. 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 three and nine months ended September 30, 2025.

Previous wording

Since the founding of our Company, we have made the expansion of our client base a priority. We believe that our ability to expand our client base is an indicator of the growth of our business, the success of our sales and marketing activities, and the value that our services bring to our clients. 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 services to support a specific product. For example, we count as two separate active clients when support for two different products is being provided to the same entity. As of June 30, 2025 and 2024, we had approximately 3,060 and 3,007 active clients, respectively.

Current wording

Since the founding of our Company, we have made the expansion of our client base a priority. We believe that our ability to expand our client base is an indicator of the growth of our business, the success of our sales and marketing activities, and the value that our services bring to our clients. 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 services to support a specific product. For example, we count as two separate active clients when support for two different products is being provided to the same entity. As of September 30, 2025 and 2024, we had approximately 3,155 and 3,097 active clients, respectively.

Previous wording

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 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 June 30, 2025 and 2024, we had approximately 1,553 and 1,532 unique clients, respectively.

Current wording

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 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 September 30, 2025 and 2024, we had approximately 1,590 and 1,577 unique clients, respectively.

Previous wording

We recognize subscription revenue on a daily basis. We define annualized recurring revenue as the amount of subscription revenue recognized during a quarter and multiplied by four. This gives us an indication of the revenue that can be earned in the following 12-month period from our existing client base assuming no cancellations or price changes occur during that period. Subscription revenue excludes any non-recurring revenue, which has been insignificant to date.

Current wording

We recognize subscription revenue on a daily basis. We define annualized recurring revenue as the amount of subscription revenue recognized during a quarter and multiplied by four. This gives us an indication of the revenue that can be earned in the following 12-month period from our existing client base assuming no cancellations or price changes occur during that period. Subscription revenue, which excludes any non-recurring revenue, was $98 million, or 95% of total revenue for the three months ended September 30, 2025 and $100 million, or 96% of total revenue for the three months ended September 30, 2024.

Previous wording

Our annualized recurring revenue was $394 million and $399 million as of June 30, 2025 and 2024, respectively. The decline reflects the recent reduction in client retention, not fully offset by new client engagements.

Current wording

Our annualized recurring revenue was $391 million and $402 million as of September 30, 2025 and 2024, respectively. The decline reflects the recent reduction in client retention, not fully offset by new client engagements.

Previous wording

We define revenue retention rate as the actual subscription revenue (dollar-based) recognized in a 12-month period from clients that existed on the day prior to the start of the 12-month period divided by our annualized recurring revenue as of the day prior to the start of the 12-month period. Our revenue retention rate was 90% and 88% for the 12 months ended June 30, 2025 and 2024, respectively. The improvement in our revenue retention rate for the 12 months ended June 30, 2025 was due to attrition during the preceding trailing twelve months, as certain clients did not renew specific subscriptions due to a variety of reasons; however, in some cases these clients maintained or added subscriptions for other products and services.

Current wording

We define revenue retention rate as the actual subscription revenue (dollar-based) recognized in a 12-month period from clients that existed on the day prior to the start of the 12-month period divided by our annualized recurring revenue as of the day prior to the start of the 12-month period. Our revenue retention rate was 89% for each of the 12 months ended September 30, 2025 and 2024, respectively.

Previous wording

We define gross profit as the difference between revenue and the costs incurred in providing the software products and services. Gross profit margin is the ratio of gross profit divided by revenue. Our gross profit margin was approximately 60.4% and 59.1% for the three months ended June 30, 2025 and 2024, respectively. Our gross profit margin improved for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 due to better management of costs in our non-core products and services.

Current wording

We define gross profit as the difference between revenue and the costs incurred in providing the software products and services. Gross profit margin is the ratio of gross profit divided by revenue. Our gross profit margin was approximately 59.9% and 60.7% for the three months ended September 30, 2025 and 2024, respectively. Our gross profit margin declined for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 due to a change in our revenue mix as evidenced by a decline in PeopleSoft and other subscription revenue, which was offset, in part, by an increase in professional services revenue.

Previous wording

Revenue. Revenue grew from $103.1 million for the three months ended June 30, 2024 to $104.1 million for the three months ended June 30, 2025, an increase of $1.0 million or 1%. The increase in revenue was driven by a 2% increase in the average number of unique clients, from 1,534 for the three months ended June 30, 2024 to 1,564 for the three months ended June 30, 2025. On a geographic basis, United States revenue declined from $51.5 million for the three months ended June 30, 2024 to $49.2 million for the three months ended June 30, 2025, a decrease of $2.3 million or 4%. Our international revenue grew from $51.7 million for the three months ended June 30, 2024 to $55.0 million for the three months ended June 30, 2025, an increase of $3.3 million or 6%.

Current wording

Revenue. Revenue declined from $104.7 million for the three months ended September 30, 2024 to $103.4 million for the three months ended September 30, 2025, a decrease of $1.2 million or 1%. The decrease in revenue was driven, in part, by a reduction in PeopleSoft and other subscription clients. The subscription revenue decline of $2.6 million for the three months ended September 30, 2025 was offset, in part, by an increase in our professional services revenue of $1.4 million for the same three months ended September 30, 2025. Our average number of unique clients has increased 1% from 1,555 for the three months ended September 30, 2024 to 1,572 for the three months ended September 30, 2025. On a geographic basis, United States revenue declined from $51.6 million for the three months ended September 30, 2024 to $46.3 million for the three months ended September 30, 2025, a decrease of $5.3 million or 10%. Our international revenue grew from $53.1 million for the three months ended September 30, 2024 to $57.2 million for the three months ended September 30, 2025, an increase of $4.1 million or 8%.

Previous wording

We are required to complete the Wind Down of support and services for Oracle PeopleSoft products no later than July 31, 2028. The percentage of revenue derived from support and services the Company provides solely for Oracle PeopleSoft products was approximately 6% and 8% of the Company’s total revenue for the three months ended June 30, 2025 and 2024, respectively.

Current wording

We are required to complete the Wind Down of support and services for Oracle PeopleSoft products no later than July 31, 2028. The percentage of revenue derived from support and services the Company provides solely for Oracle PeopleSoft products was approximately 5% and 8% of the Company’s total revenue for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Cost of revenue. Cost of revenue decreased from $42.2 million for the three months ended June 30, 2024 to $41.3 million for the three months ended June 30, 2025, a decrease of $0.9 million or 2%. The key drivers related to the cost of revenue decrease were a decline in employee compensation and benefits of $1.8 million, offset in part by a $0.5 million increase in engineering consulting costs, a $0.1 million increase in administrative allocations and a $0.3 million increase in all other costs.

Current wording

Cost of revenue. Cost of revenue increased from $41.1 million for the three months ended September 30, 2024 to $41.5 million for the three months ended September 30, 2025, an increase of $0.4 million or 1%. The key drivers related to the cost of revenue increase were a $1.0 million increase in engineering consulting costs and a $0.7 million increase in administrative allocations, which were offset, in part, by a decline in employee compensation and benefits of $1.1 million and a $0.2 million decrease in all other costs.

Previous wording

Gross profit. Gross profit increased from $60.9 million for the three months ended June 30, 2024 to $62.9 million for the three months ended June 30, 2025, an increase of $1.9 million or 3%. Gross profit margin for the three months ended June 30, 2024 was 59.1% compared to 60.4% for the three months ended June 30, 2025. For the three months ended June 30, 2025, the total cost of revenue decreased by 2% compared to an increase in revenue of 1% for the three months ended June 30, 2025. As a result, our gross profit margin improved by 130 basis points period over period. We do not expect the Wind Down of PeopleSoft to unfavorably impact our gross margins going forward. We will continue to monitor and manage our overall gross margin as we enter and invest in a broader mix of products and services.

Current wording

Gross profit. Gross profit decreased from $63.5 million for the three months ended September 30, 2024 to $61.9 million for the three months ended September 30, 2025, a decrease of $1.6 million or 3%. Gross profit margin for the three months ended September 30, 2024 was 60.7% compared to 59.9% for the three months ended September 30, 2025. For the three months ended September 30, 2025, the total cost of revenue increased by 1% compared to a decrease in revenue of 1% for the three months ended September 30, 2025. As a result, our gross profit margin declined by 80 basis points period over period. We will continue to monitor and manage our overall gross margin as we enter and invest in a broader mix of products and services.

Previous wording

Sales and marketing expenses. As a percentage of our revenue, sales and marketing expenses were 37% and 36% for the three months ended June 30, 2025 and 2024, respectively. In dollar terms, sales and marketing expenses increased from $37.4 million for the three months ended June 30, 2024 to $38.0 million for the three months ended June 30, 2025, an increase of $0.6 million or 2%. This increase was primarily due a $0.4 million increase in employee compensation and benefits, a $0.4 million increase related to travel expenses and a $0.7 million increase in other costs. These increases were primarily offset by a $0.7 million decrease in marketing and advertising expenses. We will continue to seek additional revenue by selectively investing in resources and marketing programs that we believe will be scalable and help drive future revenue growth.

Current wording

Sales and marketing expenses. As a percentage of our revenue, sales and marketing expenses were 37% and 34% for the three months ended September 30, 2025 and 2024, respectively. In dollar terms, sales and marketing expenses increased from $35.8 million for the three months ended September 30, 2024 to $37.9 million for the three months ended September 30, 2025, an increase of $2.2 million or 6%. This increase was primarily due a $1.2 million increase in employee compensation and benefits, a $0.6 million increase related to travel expenses and a $0.8 million increase in allocated costs. These increases were primarily offset by a $0.3 million decrease in marketing and advertising expenses. We will continue to seek additional revenue by selectively investing in resources and marketing programs that we believe will be scalable and help drive future revenue growth.

Previous wording

Reorganization costs. During the year ended December 31, 2024, we began a process to optimize our cost structure through a headcount reduction. We recognized reorganization costs of $0.7 million for the three months ended June 30, 2025 compared to $3.2 million for the three months ended June 30, 2024. The costs were primarily related to severance costs associated with our reorganization plan. We are likely to incur additional reorganization costs during the third quarter of 2025 as we continue to optimize our cost structure in areas where opportunities to streamline our operations exist.

Current wording

Reorganization costs. During the year ended December 31, 2024, we began a process to optimize our cost structure through a headcount reduction. We recognized reorganization costs of $0.8 million for the three months ended September 30, 2025 compared to $1.4 million for the three months ended September 30, 2024. The costs were primarily related to severance costs associated with our reorganization plan. We are likely to incur additional reorganization costs during the fourth quarter of 2025 as we continue to optimize our cost structure in areas where opportunities to streamline our operations exist.

Previous wording

Professional fees and other costs associated with litigation increased from $1.6 million for the three months ended June 30, 2024 to $2.3 million for the three months ended June 30, 2025, an increase of $0.7 million. This increase was primarily due to the timing of when litigation costs relating to the Rimini II litigation were incurred. We expect to incur additional professional fees and other costs associated with litigation in future quarters relating to filings and other actions contemplated by the Settlement Agreement as well as throughout the Wind Down Period. Please refer to Note 8 to our Unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Report, for additional information regarding our litigation with Oracle.

Current wording

Professional fees and other costs associated with litigation decreased from $0.9 million for the three months ended September 30, 2024 to $0.6 million for the three months ended September 30, 2025, a decrease of $0.3 million. This decrease was primarily due to the timing of when litigation costs relating to the Rimini II litigation were incurred. Also, in July 2025, we entered into a Settlement Agreement with Oracle. While we expect to incur professional fees and other costs associated with litigation in the future throughout the Wind Down Period, it is our expectation that those costs will decrease from our historical spend. Please refer to Note 8 to our Unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Report, for additional information regarding our litigation with Oracle.

Previous wording

Other income (expenses), net. Other income (expenses), net is primarily comprised of interest income, foreign exchange gains and losses, and other non-operating income and expenses. For the three months ended June 30, 2025, net other income of approximately $1.2 million was comprised of foreign exchange losses of $1.2 million and other expenses of $0.1 million, which was offset by interest income primarily from cash and cash equivalents of $2.6 million, of which $1.7 million was related to interest income comprising a portion of the total $37.9 million of attorneys’ fees and costs remitted by Oracle to us. For the three months ended June 30, 2024, net other income of approximately $1.5 million was comprised primarily of gains from foreign exchanges of $0.9 million and interest income from cash and cash equivalents of $0.9 million, offset by other expenses of approximately $0.3 million.

Current wording

Other income (expenses), net. Other income (expenses), net is primarily comprised of interest income, foreign exchange gains and losses, and other non-operating income and expenses. For the three months ended September 30, 2025, net other income of approximately $0.5 million was comprised of interest income of $1.0 million, which was offset by foreign currency losses of $0.4 million and other expenses of $0.1 million. For the three months ended September 30, 2024, net other expense of approximately $0.6 million was comprised primarily of foreign exchange losses of $1.7 million and other expenses of $0.1 million, which were offset by interest income from cash and cash equivalents of $1.1 million.

Previous wording

Income taxes. We had an income tax expense of $0.4 million for the three months ended June 30, 2024 compared to $10.5 million for the three months ended June 30, 2025. For the three months ended June 30, 2025, the primary reason for the change in income taxes was due to an increase of income before taxes of $41.6 million in the current year period compared to the prior year period.

Current wording

Income taxes. We had an income tax benefit of $8.7 million for the three months ended September 30, 2024 compared to an income tax expense of $0.7 million for the three months ended September 30, 2025. For the three months ended September 30, 2025, the primary reason for the change in income taxes was due to an increase of income before taxes of $55.3 million in the current year period compared to the prior year period because of the litigation settlement expense recognized during the three months ended September 30, 2024. In addition, we incurred income taxes as a result of our settlement of a foreign tax audit for $0.4 million during the three months ended September 30, 2025.

Previous wording

Our consolidated statements of operations for the six months ended June 30, 2025 and 2024, are presented below (in thousands):

Current wording

Our consolidated statements of operations for the nine months ended September 30, 2025 and 2024, are presented below (in thousands):

Previous wording

We are required to complete the Wind Down of support and services for Oracle PeopleSoft products no later than July 31, 2028. The percentage of revenue derived from support and services the Company provides solely for Oracle PeopleSoft products was approximately 6% and 8% of the Company’s total revenue for the six months ended June 30, 2025 and 2024, respectively.

Current wording

We are required to complete the Wind Down of support and services for Oracle PeopleSoft products no later than July 31, 2028. The percentage of revenue derived from support and services the Company provides solely for Oracle PeopleSoft products was approximately 6% and 8% of the Company’s total revenue for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Cost of revenue. Cost of revenue decreased from $85.1 million for the six months ended June 30, 2024 to $81.9 million for the six months ended June 30, 2025, a decrease of $3.2 million or 4%. The key drivers related to the cost of revenue decrease were a $4.1 million decrease in employee compensation and benefits as the average headcount decreased 5%, offset by a $0.3 million increase in administrative allocations, a $0.4 million increase in all other costs and a $0.2 million increase in engineering consulting costs.

Current wording

Cost of revenue. Cost of revenue decreased from $126.2 million for the nine months ended September 30, 2024 to $123.4 million for the nine months ended September 30, 2025, a decrease of $2.8 million or 2%. The key drivers related to the cost of revenue decrease were a $5.2 million decrease in employee compensation and benefits as the average headcount decreased 6%, which was offset by a $1.2 million increase in engineering consulting costs, a $1.0 million increase in administrative allocations and a $0.2 million increase in all other costs.

Previous wording

Gross profit. Gross profit increased from $124.8 million for the six months ended June 30, 2024 to $126.4 million for the six months ended June 30, 2025, an increase of $1.6 million or 1%. Gross profit margin for the six months ended June 30, 2024 was 59.5% compared to 60.7% for the six months ended June 30, 2025. For the six months ended June 30, 2025, the total cost of revenue decreased by 4%, primarily due to a decrease in average headcount of 5% compared to a decline in revenue of 1% for the six months ended June 30, 2025. As a result, our gross profit margin improved by 120 basis points period over period. We do not expect the Wind Down of PeopleSoft to unfavorably impact our gross margins going forward. We will continue to monitor and manage our overall gross margin as we enter and invest in a broader mix of products and services.

Current wording

Gross profit. Gross profit increased $15 thousand from $188.3 million for the nine months ended September 30, 2024 to $188.3 million for the nine months ended September 30, 2025. Gross profit margin for the nine months ended September 30, 2024 was 59.9% compared to 60.4% for the nine months ended September 30, 2025. For the nine months ended September 30, 2025, the total cost of revenue decreased by 2%, primarily due to a decrease in average headcount of 6% compared to a decline in revenue of 1% for the nine months ended September 30, 2025. As a result, our gross profit margin improved by 50 basis points period over period. We will continue to monitor and manage our overall gross margin as we enter and invest in a broader mix of products and services.

Previous wording

Sales and marketing expenses. As a percentage of our revenue, sales and marketing expenses were 35% and 36% for the six months ended June 30, 2025 and 2024, respectively. In dollar terms, sales and marketing expenses decreased from $76.5 million for the six months ended June 30, 2024 to $72.3 million for the six months ended June 30, 2025, a decrease of $4.2 million or 6%. This decline was primarily due to a reduction of $3.6 million related to travel and entertainment costs incurred as part of a sales training event held in January 2024. In addition, both our employee compensation and benefits and marketing and advertising costs declined $0.5 million and $0.7 million, respectively, for the six months ended June 30, 2025. These declines were offset, in part, by increases in administrative allocations and all other costs of $0.5 million and $0.6 million, respectively, for the six months ended June 30, 2025. We will continue to seek additional revenue by selectively investing in resources and marketing programs that we believe will be scalable and help drive future revenue growth.

Current wording

This decline was primarily due to a reduction of $3.0 million related to travel and entertainment costs incurred as part of a sales training event held in January 2024. In addition, marketing and advertising costs declined $1.0 million for the nine months ended September 30, 2025. These declines were offset, in part, by increases in costs for employee compensation and benefits of $0.7 million and for administrative allocations of $1.3 million, respectively, for the nine months ended September 30, 2025. We will continue to seek additional revenue by selectively investing in resources and marketing programs that we believe will be scalable and help drive future revenue growth.

Previous wording

General and administrative expenses. General and administrative expenses decreased from $37.9 million for the six months ended June 30, 2024 to $34.4 million for the six months ended June 30, 2025, a decrease of $3.6 million or 9%. This decrease was comprised of several items, which included a decrease in employee compensation and benefits of $1.7 million, an increase in administrative allocations of $0.8 million, a decrease of contract labor of $0.6 million and a reduction of professional fees of $0.6 million for the six months ended June 30, 2025. These favorable variances were offset by an increase in rent and facility costs of $0.5 million.

Current wording

General and administrative expenses. General and administrative expenses decreased from $54.5 million for the nine months ended September 30, 2024 to $52.6 million for the nine months ended September 30, 2025, a decrease of $1.8 million or 3%. This decrease was comprised of several items, which included a decrease in employee compensation and benefits of $0.5 million, an increase in administrative allocations of $2.3 million, a decrease of contract labor of $0.6 million and a reduction of professional fees of $0.7 million for the nine months ended September 30, 2025. These favorable variances were offset by an increase in other taxes of $1.6 million, primarily due to the settlement of a foreign tax audit for $0.8 million, and rent and facility costs of $0.6 million.

Previous wording

Reorganization costs. During the year ended December 31, 2024, we began a process to optimize our cost structure through a headcount reduction. We recognized reorganization costs of $1.2 million for the six months ended June 30, 2025 compared to $3.2 million for the six months ended June 30, 2024. The costs were primarily related to severance costs associated with our reorganization plan. We are likely to incur additional reorganization costs during the third quarter of 2025 as we continue to optimize our cost structure in areas where opportunities to streamline our operations exist.

Current wording

Reorganization costs. During the year ended December 31, 2024, we began a process to optimize our cost structure through a headcount reduction. We recognized reorganization costs of $1.9 million for the nine months ended September 30, 2025 compared to $4.6 million for the nine months ended September 30, 2024. The costs were primarily related to severance costs associated with our reorganization plan. We are likely to incur additional reorganization costs during the fourth quarter of 2025 as we continue to optimize our cost structure in areas where opportunities to streamline our operations exist.

Previous wording

On July 9, 2025, in accordance with the terms of the Settlement Agreement, we received from Oracle approximately $37.9 million of the $58.7 million in attorneys’ fees and costs that we previously paid to Oracle in late 2024. As a result, we recognized the loss recovery as litigation settlement income of $36.2 million and interest income of $1.7 million for the three months ended June 30, 2025.

Current wording

Litigation settlement expense decreased from an expense of $58.5 million for the nine months ended September 30, 2024 to a litigation settlement benefit of $36.2 million for the nine months ended September 30, 2025, a change of $94.7 million. In September 2024, the District Court issued its order on Oracle’s motion for attorneys’ fees and taxable costs and awarded Oracle approximately $58.5 million in attorneys’ fees and costs, which we recorded during the nine months ended September 30, 2024. In July 2025, in accordance with the terms of the Settlement Agreement, we received from Oracle approximately $37.9 million of the $58.5 million in attorneys’ fees and costs and $0.2 million of interest that we previously paid to Oracle in late 2024. This loss recovery was recognized as litigation settlement income of $36.2 million and interest income of $1.7 million during the nine months ended September 30, 2025. While we expect to incur professional fees and other costs associated with litigation in the future throughout the Wind Down Period, it is our expectation that those costs will decrease from our historical spend.

Previous wording

Professional fees and other costs associated with litigation decreased from $4.5 million for the six months ended June 30, 2024 to $4.2 million for the six months ended June 30, 2025, a decrease of $0.3 million. This decrease was primarily due to the timing of when litigation costs relating to the Rimini II litigation were incurred. Please refer to Note 8 to our Unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Report, for additional information regarding our litigation with Oracle.

Current wording

Professional fees and other costs associated with litigation decreased from $5.4 million for the nine months ended September 30, 2024 to $4.8 million for the nine months ended September 30, 2025, a decrease of $0.6 million. This decrease was primarily due to the timing of when litigation costs relating to the Rimini II litigation were incurred. Please refer to Note 8 to our Unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1 of this Report, for additional information regarding our litigation with Oracle.

Previous wording

Interest expense. Interest expense increased from $1.5 million for the three months ended June 30, 2024 to $1.6 million for the three months ended June 30, 2025. Interest expense increased primarily due to initially borrowing $15.0 million in October 2024 under the revolving line of credit, which resulted in interest expense of $0.2 million for the three months ended June 30, 2025.

Current wording

Interest expense. Interest expense increased from $4.4 million for the nine months ended September 30, 2024 to $4.8 million for the nine months ended September 30, 2025. Interest expense increased primarily due to borrowing $15.0 million in October 2024 under the revolving line of credit, which resulted in interest expense of $0.5 million for the nine months ended September 30, 2025.

Previous wording

Other income (expenses), net. Other income (expenses), net is primarily comprised of interest income, foreign exchange gains and losses, and other non-operating income and expenses. For the six months ended June 30, 2025, net other income of approximately $1.2 million was comprised primarily of interest income of $3.2 million, which included $1.7 million related to interest income comprising a portion of the total $37.9 million of attorneys’ fees and costs remitted by Oracle to us as well as interest income earned from cash and cash equivalents. The interest income was offset, in part, by foreign exchange losses of $1.8 million and other expenses of $0.2 million. For the six months ended June 30, 2024, net other income of approximately $2.5 million was comprised primarily of income from cash equivalents and investments of $1.9 million and foreign exchange gains of $1.1 million, This other income was offset, in part, by other expenses of $0.5 million.

Current wording

Other income (expenses), net. Other income (expenses), net is primarily comprised of interest income, foreign exchange gains and losses, and other non-operating income and expenses. For the nine months ended September 30, 2025, net other income of approximately $1.7 million was comprised primarily of interest income of $4.1 million, which included $1.7 million related to interest income comprising a portion of the total $37.9 million of attorneys’ fees and costs remitted by Oracle to us as well as interest income earned from cash and cash equivalents. The interest income was offset, in part, by foreign exchange losses of $2.1 million and other expenses of $0.3 million. For the nine months ended September 30, 2024, net other income of approximately $1.8 million was comprised primarily of income from cash equivalents and investments of $3.0 million which were offset, in part, by foreign exchange losses of $0.6 million and other expenses of $0.6 million.

Previous wording

Income tax expense. We recorded income tax expense of $2.1 million for the six months ended June 30, 2024 compared to an income tax expense of $14.8 million for the six months ended June 30, 2025. For the six months ended June 30, 2025, the primary reason for the increase in income tax expense was due to an increase of income before taxes of $46.2 million in the current year period compared to the prior year period.

Current wording

Income tax expense. We recorded an income tax benefit of $6.7 million for the nine months ended September 30, 2024 compared to an income tax expense of $15.5 million for the nine months ended September 30, 2025. For the nine months ended September 30, 2025, the primary reason for the increase in income tax expense was due to an increase of income before taxes of $101.5 million in the current year period compared to the prior year period was because of reaching a Settlement Agreement with Oracle in July 2025.

Previous wording

As of June 30, 2025, we had a working capital deficit of $24.7 million and an accumulated deficit of $204.9 million. For the three months ended June 30, 2025, we recorded net income of $30.3 million. As of June 30, 2025, we had available cash, cash equivalents and restricted cash of $102.5 million.

Current wording

As of September 30, 2025, we had a working capital deficit of $41.4 million and an accumulated deficit of $202.1 million. For the three months ended September 30, 2025, we recorded net income of $2.8 million. As of September 30, 2025, we had available cash, cash equivalents and restricted cash of $109.9 million.

Previous wording

In April 2024, we refinanced our Original Credit Facility, which had an outstanding principal balance of $70.9 million, with a new five-year senior secured credit facility (“2024 Credit Facility”) consisting of a $75.0 million term loan and a $35.0 million revolving line of credit. As of June 30, 2025, we had outstanding term loan borrowings of $71.3 million as well as borrowings on the revolving line of credit of $10.0 million under our 2024 Credit Facility. As a result, we had net availability of $25.0 million under our revolving line of credit as of June 30, 2025. On July 15, 2025, we repaid the remaining $10.0 million outstanding balance due under our revolving line of credit, resulting in $35.0 million of borrowing capacity.

Current wording

In April 2024, we refinanced our Original Credit Facility, which had an outstanding principal balance of $70.9 million, with a new five-year senior secured credit facility (“2024 Credit Facility”) consisting of a $75.0 million term loan and a $35.0 million revolving line of credit. As of September 30, 2025, we had outstanding term loan borrowings of $70.3 million and no borrowings on the revolving line of credit under our 2024 Credit Facility, as we repaid the remaining $10.0 million outstanding on July 15, 2025. As a result, we had net available borrowing capacity of $35.0 million under our revolving line of credit as of September 30, 2025.

Previous wording

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 three months ended June 30, 2025.

Current wording

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 financial covenants for the three months ended September 30, 2025.

Previous wording

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. 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 $241.4 million that is included in current liabilities as of June 30, 2025. 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 40% of the related deferred revenue based on our gross profit percentage of 60% for the three months ended June 30, 2025.

Current wording

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. 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 $206.9 million that is included in current liabilities as of

Previous wording

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, political and trade turmoil between the U.S. and China and other countries, or the litigation matters as disclosed in Note 8 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Report, we believe that cash, cash equivalents and restricted cash of $102.5 million as of June

Current wording

For the next year, assuming that our operations are not significantly impacted by inflation, continued interest rate changes, other global economic or geopolitical uncertainties, political and trade turmoil between the U.S. and China, continuation or resumption of conflict in Israel and other countries, or the litigation matters as disclosed in Note 8 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Report, we believe that cash, cash equivalents and restricted cash of $109.9 million as of September 30, 2025, 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.