Rimini Street, Inc.
For the period ended Mar 31, 2026. Filed Apr 30, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 30, 2026
RMNI$5.22+0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001635282-25-000215
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0001635282-26-000042
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 158 previous paragraphs and 132 current paragraphs.
34 unchanged; 65 reworded; 29 added; 50 removed; 9 previous and 4 current paragraphs rearranged.
Tables are not compared: 5 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
•our ability to attract new clients or retain and/or sell additional products or services to existing clients;
Current report
•our ability to successfully educate the market regarding the advantages of our support and managed services for enterprise resource planning (ERP) software and to sell the products and services comprising our “Rimini Smart Path™” solutions portfolio, including but not limited to our Agentic AI ERP solutions;
Current report
•the effects of the efforts of enterprise software vendors to sell upgrades or migrations to cloud-based versions of their enterprise software on our results of operations;
Current report
•our ability to scale our operations quickly enough to meet our clients’ changing needs or decrease our costs adequately in response to changing client demand;
Current report
•the loss of one or more members of our management team and our ability to attract and retain additional qualified technical, sales and marketing personnel;
Current report
•our ability to expand our marketing and sales capabilities;
Current report
•our ability to avoid interruptions to, or degraded performance of, our services and the impact of interruptions or performance problems on our operations;
Current report
•our ability to expand internationally and the risks associated with global operations;
Current report
•risks relating to retention rates, including our ability to accurately forecast retention rates;
Current report
•our ability to protect our intellectual property;
Current report
•the volatility of our stock price;
Current report
Our mission is to enable our clients to better control their IT roadmap by offering a comprehensive portfolio of unified software support services and related ERP solutions – designed to be funded within existing budgets – to accelerate the vision of Transformation without Disruption,™ empowering clients to put technology to work to produce more efficient business outcomes to provide a competitive advantage and facilitate growth.
Current report
We founded Rimini Street to disrupt and redefine the enterprise software support market by developing and delivering new solutions that filled an unmet need in the enterprise software market: an alternative to software vendor support. 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.
Current report
As our reputation for technical capability, value, ingenuity, responsiveness and reliability has grown over the past twenty years, clients and prospects have asked us to expand the scope of our support, product and service offerings to meet other current and evolving needs and opportunities related to their enterprise software. As a result, we began expanding our solutions portfolio (our “Solutions Portfolio”) to provide a wider array of support for enterprise software – including an expanded list of supported software through our Rimini Custom program; managed services for Workday, Dayforce and ServiceNow; and new solutions for security, interoperability, observability and consulting.
Current report
We also understand that clients and client prospects increasingly face shrinking IT budgets, driving a further need to obtain efficiencies and savings across their entire enterprise software landscape while meeting expectations of continued new innovation to remain competitive in their respective industries – doing more with less.
Current report
To address these evolving needs and to service what we believe is a significantly expanded addressable market opportunity, we have developed a proprietary operating model for enterprise software, the Rimini Smart Path.
Current report
The Rimini Smart Path methodology applies a portfolio of solutions to transform how businesses support and optimize their software portfolio so they can innovate with new technologies, such as agentic artificial intelligence (AI). It has three steps: Support > Optimize > Innovate. We believe that by following the Rimini Smart Path, IT and business leaders can transform how they support andoptimize their enterprise software portfolio to maximize return on their software investments, save on software support costs and improve operational performance. In our experience, these measures unlock the ability toinnovate within existing IT budgets, including by investing in AI solutions such as Rimini Agentic UX, which was initially launched in December 2025 in partnership with ServiceNow®as an intelligent user experience layer powered by AI and deployed across existing enterprise software systems for process automation, AI-enabled productivity and enterprise visibility. For more details about the Rimini Smart Path, please see Item 1 “Business” included in Part I of our 2025 Form 10-K.
Current report
Our annualized recurring revenue was $401 million and $396 million as of March 31, 2026 and 2025, respectively. Excluding subscription revenue from support for Oracle PeopleSoft products, our annualized subscription revenue was $388 million and $370 million as of March 31, 2026 and 2025, respectively.
Current report
We expect to incur higher sales and marketing expenses associated with supporting the growth of our business as we continue to bring to market our new solutions and partnerships.
Current report
Research and development expenses. In 2026, we made a strategic decision to utilize key personnel and resources to focus on research and development in regard to existing products as well as to develop new products for our technology solutions. Research and development expenses were $0.6 million for the three months ended March 31, 2026.
Current report
Interest expense. Interest expense decreased from $1.7 million for the three months ended March 31, 2025 to $1.3 million for the three months ended March 31, 2026. Interest expense declined due to several reasons. To begin with, we had no borrowings under the revolving line of credit during the three months ended March 31, 2026 compared to borrowing $15.0 million during the three months ended March 31, 2025. As result, the interest expense incurred under the revolving line of credit declined $0.3 million during the three months ended March 31, 2026. In addition, the effective interest rate for the term loan was 7.4% for the three months ended March 31, 2026 compared to 8.0% for the three months ended March 31, 2025 as the SOFR was approximately 60 bps lower during three months ended March 31, 2026 compared to the three months ended March 31, 2025. Also, we made principal prepayments of $5.0 million on February 4, 2026 and $5.0 million on March 30, 2026 which impacted the interest expense incurred.
Current report
As of March 31, 2026, our primary source of cash is collections from client billings. Other customary sources of cash have historically included proceeds from interest income earned on cash and cash equivalents and short-term investments, sales and maturities of short-term investments and proceeds from our Credit Facility. Our primary uses of cash are general business expenses, capital expenditures and repayments of borrowings on our Credit Facility. Other customary uses of cash have included purchases of short-term investments and our stock repurchase program, from time to time.
Current report
Credit Facility
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Cash Flows From Operating Activities
Current report
Our primary source of operating cash is collections from client billings. 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. As a result, we collect cash in advance of the date when the vast majority of the related services are provided. Our primary uses of operating cash are for employee-related expenditures, outsourced labor, marketing activities, computer supplies, software and licenses, litigation and leased facilities. For the three months ended March 31, 2026 and March 31, 2025, cash flow provided by operating activities amounted to $24.5 million and $33.7 million, respectively.
Current report
For the three months ended March 31, 2026, cash flows provided by operating activities of $24.5 million consisted of net income of $1.4 million adjusted for non-cash expenses, net of $3.7 million, and favorable changes in operating assets and liabilities, net of $19.4 million. The favorable changes in operating assets and liabilities were driven primarily by a decrease in accounts receivable as we collected $138.1 million during the three months ended March 31, 2026 which was offset by billings, net of $95.3 million during the same period. Offsetting this favorable change was a decrease in deferred revenue as we recognized $10.2 million more in revenue than we billed, and a decrease in accrued compensation as we paid bonuses and commissions from the prior year.
Current report
For the three months ended March 31, 2025, cash flows provided by operating activities of $33.7 million consisted of net income of $3.4 million adjusted for non-cash expenses, net of $7.4 million, and favorable changes in operating assets and liabilities, net of $22.9 million. The favorable changes in operating assets and liabilities were primarily driven by a decrease in accounts receivable as we collected $134.3 million during the three months ended March 31, 2025, which was offset by billings, net of $79.4 million during the same period. Offsetting this favorable change was a decrease in deferred revenue as we recognized $24.8 million more in revenue than we billed during the three months ended March 31, 2025.
Current report
Cash Flows From Investing Activities
Current report
Cash Flows From Financing Activities
Removed paragraphs (50)
Previous report
•our ability to expand our leadership position in independent enterprise software support and to sell our managed services, professional services and innovation offerings;
Previous report
•our ability to attract and retain clients and our ability to further penetrate our existing client base;
Previous report
•our ability to maintain our competitive technological advantages against new entrants in our industry;
Previous report
•our ability to timely and effectively scale and adapt our existing technology;
Previous report
•our ability to innovate new products and bring them to market in a timely manner;
Previous report
•our ability to capitalize on changing market conditions including a market shift to hybrid and cloud/SaaS offerings for information technology environments and retirement of certain software releases by software vendors;
Previous report
•benefits associated with the use of our services;
Previous report
•our ability to expand internationally;
Previous report
•a failure by us to establish adequate reserves for tax events;
Previous report
•economic and industry trends or trend analysis;
Previous report
•the attraction and retention of additional qualified personnel and the retention of key personnel;
Previous report
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 report
Enterprise software support, products and services is one of the largest categories of overall global information technology (“IT”) spending. We believe enterprise resource planning (“ERP”), customer relationship management (“CRM”), product lifecycle management (“PLM”) database and technology software systems have become increasingly important in the operation of mission-critical business processes over the last 30 years. We also believe organizations are increasingly creating more complex IT environments that are a mixture of multiple technologies, business models and vendors, including perpetual license and subscription license software solutions, deployed across the client’s system and cloud computing providers (hybrid IT environments), and consisting of proprietary and non-proprietary open-source software, all from a multitude of different technology vendors. 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. 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 September 30, 2025, was generated from our support solutions.
Previous report
In a traditional licensing model, the customer typically procures a perpetual software license and pays for the license in a single upfront fee (“perpetual license”), and base software support services can be optionally procured from the software vendor for an annual fee that is typically 20-23% of the total cost of the software license. In a newer subscription-based licensing model, such as software as a service (“SaaS”), the customer generally pays for the usage of the software on a monthly or annual basis (“subscription license”). Under a subscription license, the product license and a base level of software support are generally bundled together as a single purchase, and the base level of software support is not procured separately nor is it an optional purchase.
Previous report
When we provide our 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. When providing supplemental software support for a perpetual license, where the client procures our support service in addition to retaining the software vendor’s base support, we generally offer our clients service for a fee that is equal to approximately 25% of the annual fees charged by the software vendor for their base 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. Clients may be asked to pay an additional fee for Rimini Street Extra Secure Support.
Previous report
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. 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 our 2024 Form 10-K.
Previous report
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 report
Looking forward on a quarter-over-quarter basis, we are monitoring the demand for our services in light of current global economic conditions and competitive pressures and will adjust our expenditures accordingly. However, we expect to incur higher expenses associated with supporting the growth of our business, both in terms of size and geographical diversity. Our company costs that are expected to increase in the future include costs relating to 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 expect continued pressure on our general and administrative expenses in future periods.
Previous report
Litigation settlement expense decreased from $58.5 million for the three months ended September 30, 2024 to no expense for the three months ended September 30, 2025. 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 three months ended September 30, 2024.
Previous report
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 report
Interest expense. Interest expense decreased from $1.6 million for the three months ended September 30, 2024 to $1.4 million for the three months ended September 30, 2025. Interest expense declined primarily due to a reduction in the SOFR rate for the three months ended September 30, 2025 compared to the prior year. This decline was offset in part by interest incurred on the revolving line of credit for the three months ended September 30, 2025.
Previous report
Comparison of Nine Months Ended September 30, 2025 and 2024
Previous report
Revenue. Revenue declined from $314.5 million for the nine months ended September 30, 2024 to $311.7 million for the nine months ended September 30, 2025, a decrease of $2.8 million or 1%. The decline in revenue was driven, in part, by a reduction in PeopleSoft and other subscription clients. The subscription revenue decline of $8.8 million for the nine months ended September 30, 2025 was offset, in part, by an increase in our professional services revenue of $6.1 million over the same nine months ended September 30, 2025. On a geographic basis, United States revenue declined from $156.9 million for the nine months ended September 30, 2024 to $145.5 million for the nine months ended September 30, 2025, a decrease of $11.3 million or 7%. Our international revenue grew from $157.7 million for the nine months ended September 30, 2024 to $166.2 million for the nine months ended September 30, 2025, an increase of $8.5 million or 5%.
Previous report
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 report
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 report
Sales and marketing expenses. As a percentage of our revenue, sales and marketing expenses were 35% and 36% for the nine months ended September 30, 2025 and 2024, respectively. In dollar terms, sales and marketing expenses decreased from $112.3 million for the nine months ended September 30, 2024 to $110.2 million for the nine months ended September 30, 2025, a decrease of $2.1 million or 2%.
Previous report
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 report
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 report
Litigation costs, net of related insurance recoveries. Litigation costs, net of related insurance recoveries, consist of the following (in thousands):
Previous report
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 report
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 report
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 report
Cash Flows Provided By (Used In) Operating Activities
Previous report
As clients typically prepay us annually for the services which we will provide over the following year or longer, we typically collect cash in advance of the date when the vast majority of the related services are provided. Historically, we have experienced seasonality in our operating cash flows as we tend to generate cash from operating activities during the first half of the year. Our operating cash flows are then utilized by operating activities during the second half of the year. This has been due to the cyclical variations in our billings from period to period.
Previous report
For the nine months ended September 30, 2025, cash flows provided by operating activities was approximately $40.7 million, which included the receipt of $37.9 million of litigation settlement proceeds in July 2025. The other key drivers resulting in our cash provided by operating activities for the nine months ended September 30, 2025, included net income of $36.4 million and adjustments to reconcile net income to net cash totaling $25.1 million, offset in part by unfavorable changes in operating assets and liabilities of $20.8 million, resulting in net cash provided by operating activities of $40.7 million.
Previous report
For the nine months ended September 30, 2025, adjustments to reconcile net income to net cash consisted primarily of stock-based compensation expense of $8.4 million, amortization and accretion related to operating lease ROU assets of
Previous report
$3.7 million, depreciation and amortization expense of $2.8 million, accretion and amortization of debt discount and issuance costs of $0.5 million and a favorable change in deferred income taxes of $9.7 million. For the nine months ended September 30, 2025, the changes in operating assets and liabilities, net consisted of favorable changes to accounts receivable of $50.3 million and deferred contract costs of $0.3 million. The favorable change to accounts receivable was a result of collecting $303.9 million during the nine months ended September 30, 2025 which was offset by billings, net of $256.5 million during the nine months ended September 30, 2025. As a result, our days sales outstanding for accounts receivable was 119 days as of September 30, 2025. The favorable change in deferred contract costs was due to capitalizing $13.8 million of commissions and amortizing $14.2 million of deferred contract costs during the nine months ended September 30, 2025.
Previous report
Offsetting these favorable changes were unfavorable changes to deferred revenue of $59.6 million, accrued compensation, benefits, commissions and other of $4.3 million and prepaid expenses, deposits and other of $6.9 million for the nine months ended September 30, 2025. The use of cash for deferred revenue was due to recognizing $311.7 million in revenue for the current period, which was offset by recording billings, net of $256.5 million during the current period. The unfavorable use of prepaid expenses, deposits and other of $6.9 million was primarily due to payments for software licenses $4.0 million and future marketing trade shows for $1.2 million. The unfavorable use of accrued liabilities of $4.3 million was due primarily to payments for bonuses, commissions and taxes during the nine months ended September 30, 2025.
Previous report
For the nine months ended September 30, 2024, cash flows used in operating activities amounted to approximately $1.2 million. The key drivers resulting in our cash provided by operating activities for the nine months ended September 30, 2024, included a net loss of $42.9 million and adjustments to reconcile a net loss to net cash totaling $0.8 million, as well as favorable changes in operating assets and liabilities of $41.0 million, resulting in net cash used in operating activities of $1.2 million.
Previous report
For the nine months ended September 30, 2024, adjustments to reconcile a net loss to net cash consisted primarily of stock-based compensation expense of $7.1 million, amortization and accretion related to operating lease ROU assets of $3.4 million, depreciation and amortization expense of $2.7 million, accretion and amortization of debt discount and issuance costs of $0.6 million and an unfavorable change in deferred income taxes of $13.0 million. For the nine months ended September 30, 2024, the changes in operating assets and liabilities, net consisted of favorable changes to accounts receivable of $51.1 million, accrued liabilities of $48.3 million and deferred contract costs of $4.0 million. The favorable change to accounts receivable was a result of collecting $304.8 million during the nine months ended September 30, 2024 which was offset by billings, net of $250.9 million during the nine months ended September 30, 2024. As a result, our days sales outstanding for accounts receivable was 115 days as of September 30, 2024. The favorable change related to accrued liabilities was primarily a result of recording an expense of $58.5 million related to the District Court ruling for the nine months ended September 30, 2024. The favorable change in deferred contract costs was due to capitalizing $10.8 million of commissions and amortizing $14.8 million of deferred contract costs during the nine months ended September 30, 2024.
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Reworded paragraphs (65)
Previous wording
This Quarterly Report on Form 10-Q (this “Report”) includes forward-looking statements. All statements other than statements of historical facts contained in this Report, including statements regarding our future results of operations and financial position, business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “anticipate,” “assume,” “believe,” “continue,” “could,” “currently,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “might,” “outlook,” “plan,” “possible,” “goal,” “potential,” “predict,” “project,” “seem,” “seek,” “should,” “will,” “would” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements include, but are not limited to, information concerning:
Current wording
This Quarterly Report on Form 10-Q (this “Report”) includes forward-looking statements. All statements other than statements of historical facts contained in this Report, including statements regarding our future results of operations and financial position, business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “anticipate,” assume,” “believe,” budget,” “continue,” “could,” “currently,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “might,” “outlook,” “plan,” “possible,” “goal,” “potential,” “predict,” “project,” “reflect,” “results,” “seem,” “seek,” “should,” “will,” “would” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements include, but are not limited to, information concerning:
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•our ability to maintain an adequate rate of revenue growth;
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•our ability to achieve and maintain an adequate rate of revenue growth;
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•cost of revenue, including changes in costs associated with production and client support, and the results of any efforts to manage costs to align with current revenue expectations and expansion of our offerings;
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•cost of revenue, including changes in costs associated with our efforts to grow and the results of any efforts to manage costs to align with current revenue expectations and the expansion of our offerings;
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•the effects of increased competition in our market and our ability to compete effectively;
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•the effects of increased intense competition in our industry and our ability to compete effectively;
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•expectations of client savings relative to use of other providers;
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•our intentions with respect to our pricing model and expectations of client savings relative to use of other providers;
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•the evolution of the enterprise software management and support landscape facing our clients;
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•the evolution of the ERP software management and support landscape facing our clients and prospects;
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•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;
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•risks arising from incorporating artificial intelligence (“AI”) technologies into our products or services or any deficiencies associated with AI technologies used by us or by our third-party vendors and service providers;
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•our ability to maintain, protect, and enhance our brand and intellectual property;
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•our ability to maintain, protect, and enhance our brand;
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•our expectations regarding new product offerings, innovation solutions, partnerships and alliance programs;
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•our expectations regarding new product offerings, innovation solutions, partnerships and alliance programs and our ability to develop and maintain strategic partnerships;
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•the settlement agreement dated July 7, 2025 (the “Settlement Agreement”), among us, our President, Chief Executive Officer and Chairman of the Board, Mr. Seth Ravin, and Oracle Corporation (and certain affiliates) relating to the Rimini II litigation and the wind down of support services for Oracle PeopleSoft software products (the “Wind Down”);
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•the continuing impact of the July 2025 Settlement Agreement, among us, our President, Chief Executive Officer and Chairman of the Board, Mr. Seth Ravin, and certain affiliates of Oracle Corporation relating to the Rimini IIlitigation and our Wind Down of support services for Oracle PeopleSoft software products;
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•our ability to successfully complete the Wind Down by July 31, 2028 and our expectations as to future period revenue loss and costs incurred related to the Wind Down;
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•our successful completion of the Wind Down by July 31, 2028 to comply with the Settlement Agreement and our expectations as to future period revenue loss and costs incurred related to the Wind Down;
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•the impact of any macro-economic trends, including inflation, rising interest rates and changes in foreign exchange rates;
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•the impact of macro-economic trends, including inflation and changes in foreign exchange rates, as well as general financial, economic, regulatory and political conditions affecting the industry in which we operate and the industries in which our clients operate;
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•our ability to maintain sufficient cash flow and capital or raise additional capital necessary to fund our operations and invest in new services and products;
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•our ability to generate significant capital through our operations or to raise additional capital necessary to fund and expand our operations and invest in new services and products;
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•our business plan and ability to effectively manage our growth and associated investments;
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•our business plan and our ability to effectively secure and manage our growth and associated investments;
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•our ability to maintain an effective system of internal control over financial reporting and our ability to remediate any identified material weaknesses in our internal controls; and
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•our ability to maintain an effective system of internal control over financial reporting;
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•tariff costs, including tariff relief or the ability to mitigate tariffs, in light of new or increased tariffs imposed by the United States government and the potential for retaliatory trade measures by affected countries;
Current wording
•tariff costs, including those imposed by the United States government and the potential for retaliatory trade measures by affected countries;
Previous wording
•any negative impact of environmental, social and governance matters on our reputation or business and the exposure of our business to additional costs or risks from our reporting on such matters;
Current wording
•any negative impact of environmental, social and governance (“ESG”) matters on our reputation or business and the exposure of our business to additional costs or risks from our reporting on such matters;
Previous wording
•the impact of our Credit Facility’s debt service obligations and financial and operational covenants on our business and related interest rate risk;
Current wording
•the impact of the debt service obligations and financial and operational covenants under our amended and restated credit agreement dated as of April 30, 2024, as amended (our “Credit Facility”) on our business and related interest rate risk;
Previous wording
•our need and ability to raise equity or debt financing on favorable terms and our ability to generate cash flows from operations to help fund increased investment in our growth initiatives;
Current wording
•our need and ability to raise equity or debt financing on favorable terms; our ability to generate cash flows from operations to help fund increased investment in our growth initiatives and the sufficiency of our cash and cash equivalents to meet our liquidity requirements;
Previous wording
•our ability to maintain our good standing with the United States government and international governments and capture new contracts with governmental entities;
Current wording
•our ability to maintain our good standing with the United States government and international governments and capture new contracts with governmental entities/agencies;
Previous wording
•the occurrence of catastrophic events, including terrorism and geopolitical actions specific to an international region, that may disrupt our business or that of our current and prospective clients;
Current wording
•the occurrence of catastrophic events, including terrorism and geopolitical actions that may disrupt our business or that of our current and prospective clients;
Previous wording
•the expected impact of reductions in our workforce during the last and current fiscal year;
Current wording
•the expected impact of reductions in our workforce during the last and current fiscal year; and
Previous wording
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those referred to under “Risk Factors” in Part II, Item 1A of this Report, many of which are beyond our control. Moreover, we operate in very competitive and rapidly changing markets. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Current wording
We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those referred to under “Risk Factors” in Part I, Item 1A of this Report. Moreover, we operate in very competitive and rapidly changing markets in which new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Report may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
Previous wording
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements in this Report are made as of the date of the filing, and except as required by law, we disclaim and do not undertake any obligation to update or revise publicly any forward-looking statements in this Report. You should read this Report and the documents that we reference in this Report and have filed with the SEC as exhibits with the understanding that our actual future results, levels of activity and performance, as well as other events and circumstances, may be materially different from what we expect.
Current wording
You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements in this Report are made as of the date of the filing, and except as required by law, we disclaim and do not undertake any obligation to update or revise publicly any forward-looking statements in this Report. You should read this Report and the documents that we reference in this Report and have filed with the United States Securities and Exchange Commission (the “SEC”) as exhibits with the understanding that our actual future results, levels of activity and performance, as well as other events and circumstances, may be materially different from what we expect.
Previous wording
Rimini Street, Inc. and its subsidiaries (referred to as “Rimini Street”, the “Company”, “we” and “us”) are global providers of end-to-end enterprise software support, products and services. The Company offers a comprehensive family of unified solutions to run, manage, support, customize, configure, connect, protect, monitor, and optimize clients’ enterprise application, database, and technology software platforms.
Current wording
Rimini Street, Inc. and its subsidiaries (referred to as “Rimini Street”, the “Company”, “we” and “us”) are global providers of end-to-end third-party enterprise software support, managed services and Agentic AI ERP innovation solutions.
Previous wording
Over the years, as our reputation for technical capability, value, innovation, responsiveness and trusted reliability grew, clients and prospects began asking us to expand the scope of our support, product and service offerings to meet other current and evolving needs and opportunities related to their enterprise software. We also heard from prospects and clients that their goals include reducing the number of IT vendors to more manageable numbers from a governance perspective, with a desire to select vendors who can provide a wider scope of IT services and become true trusted partners.
Current wording
We believe that our current and prospective clients often seek to reduce the number of IT vendors to allow more manageable governance, with a desire to select vendors who can provide a wider scope of IT services and become true trusted partners.
Previous 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.
Current wording
As of March 31, 2026, we employed over 1,950 professionals and supported over 3,130 active clients globally, including 78 Fortune 500 companies and 20 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 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.
Current wording
Our subscription-based revenue provides a foundation for, and visibility into, future period results. For the three months ended March 31, 2026 and 2025, we generated revenue of $105.5 million and $104.2 million, respectively, representing an increase of 1%. During the three months ended March 31, 2026, we recorded net income of $1.4 million, and as of March 31, 2026, we had an accumulated deficit of $200.0 million. Approximately 44% and 48% of our revenue was generated in the United States for the three months ended March 31, 2026 and 2025, respectively. Approximately 56% and 52% of our revenue was generated in foreign jurisdictions for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
In 2024, we announced that we would Wind Down services for Oracle PeopleSoft products and began the Wind Down project. The Wind Down includes our Rimini Support™, Rimini Manage™ and Rimini Consult™ services for Oracle PeopleSoft products.
Current wording
In July 2024, we announced that we would Wind Down services for Oracle PeopleSoft products and began the Wind Down project. The Wind Down includes, but is not limited to, our Rimini Support™, Rimini Manage™ and Rimini Consult™ services for Oracle PeopleSoft products.
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 nine months ended September 30, 2025 and approximately 8% of revenue for the nine months ended September 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”). 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 3% of revenue for the three months ended March 31, 2026 and approximately 7% of revenue for the three months ended March 31, 2025.
Previous wording
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 military conflicts, and recent political and trade turmoil between the U.S. and other countries, amongst other global challenges. While we do not physically operate in some of these countries where conflict is occurring, we do have operations in Israel. These global events, together with inflationary pressures, have negatively impacted the global economy and driven changes in interest rates.
Current wording
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 military conflicts, and recent political and trade turmoil between the U.S. and other countries, amongst other geopolitical challenges. While we do not physically operate in some of these countries where conflict is occurring, we do have operations in Israel. These global events, together with inflationary pressures, have negatively impacted the global economy.
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 nine months ended September 30, 2025.
Current wording
Uncertainty regarding changes continuing to be made in laws and regulations by the current U.S. administration, changing interest rates, 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 months ended March 31, 2026.
Previous wording
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 and that are beyond our control, including continued governmental and business actions in response to increasing global economic and geopolitical uncertainty. As such, the effects of rising inflation, interest rate increases and other negative impacts on the global economy may not be fully reflected in our financial results until future periods. Refer to “Risk Factors” (Part II, Item 1A of this Report) for a discussion of these factors and other risks.
Current wording
The extent to which 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 and that are beyond our control, including continued governmental and business actions in response to increasing global economic and geopolitical uncertainty. As such, the effects of inflation, interest rate changes and other negative impacts on the global economy may not be fully reflected in our financial results until future periods. Refer to “Risk Factors” (Part II, Item 1A of this Report) for a discussion of these factors and other risks.
Previous wording
Reference is made to Note 8 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Report for a discussion of recent developments regarding our litigation with Oracle, including the July 7, 2025, Settlement Agreement referenced above.
Current wording
Reference is made to Note 5 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Report for a discussion of recent developments regarding the first amendment dated March 27, 2026 to our Credit Facility, as originally executed.
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 September 30, 2025 and 2024, we had approximately 3,155 and 3,097 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 March 31, 2026 and 2025, we had approximately 3,130 and 3,092 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 September 30, 2025 and 2024, we had approximately 1,590 and 1,577 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 March 31, 2026 and 2025, we had approximately 1,572 and 1,575 unique clients, respectively.
Previous wording
The increases in both our active and unique client counts have been a combination of new unique client wins as well as cross-sales of new support products and services to existing clients. We intend to focus future growth on both new and existing clients and we believe that growth in our number of unique clients is an indication that we can grow our enterprise software products and services in the future.
Current wording
The increase in our active client counts is attributable to a combination of new unique client wins as well as to cross-sales of new support, products and services to existing clients. While we saw strong unique client wins throughout the quarter, we did lose some clients with a single product line, which resulted in a decline in our ending unique client count. As noted previously, we intend to focus future growth on both new and existing clients who more broadly adopt our enterprise software products and services.
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, 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.
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 $100 million, or 95% of total revenue for the three months ended March 31, 2026 and $99 million, or 95% of total revenue for the three months ended March 31, 2025. Excluding subscription revenue from support for Oracle PeopleSoft products, our subscription revenue was $97 million and $92 million as of March 31, 2026 and 2025, respectively.
Previous wording
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-cancellable portion of the support period. We believe that our revenue retention rate provides insight into the quality of our products and services and the value that our products and services provide our clients.
Current wording
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-cancellable portion of the support period. We believe that our revenue retention rate provides insight into the quality of our products and services and the value that our products and services provide to our clients.
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 89% for each of the 12 months ended September 30, 2025 and 2024, respectively.
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 88% and 88% for the 12 months ended March 31, 2026 and 2025, respectively.
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Current report — wording carried from elsewhere
•our ability to defend against cybersecurity threats, protect the confidential information of our employees and clients and comply with data protection and privacy regulations;
Current report — wording carried from elsewhere
For the three months ended March 31, 2026, cash utilized in financing activities of $10.6 million was attributable to principal payments related to the Credit Facility term loan offset, in part, by proceeds from stock option exercises.
Current report — wording carried from elsewhere
Effect of Foreign Currency Translation and Foreign Subsidiaries
Current report — wording carried from elsewhere
We describe our significant accounting policies in Note 2 to our Consolidated Financial Statements for the year ended December 31, 2025, included in Part II, Item 8 of our 2025 Form 10-K, and we discuss our critical accounting policies and estimates in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section included in Part II, Item 7 of our 2025 Form 10-K. Since the filing of our 2025 Form 10-K, there have been no material changes in our critical accounting policies and estimates from those disclosed therein.
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Previous report — wording carried elsewhere
•beliefs and objectives for future operations;
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•our ability to develop and maintain strategic partnerships;
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•our intentions with respect to our pricing model;
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
Our consolidated statements of operations for the nine months ended September 30, 2025 and 2024, are presented below (in thousands):
Previous report — wording carried elsewhere
(1)Includes the portion of costs for IT, security services and facilities costs that are allocated to cost of revenue. In our Unaudited Condensed Consolidated Financial Statements, the total of such costs is allocated between cost of revenue, sales and marketing, and general and administrative expenses, based primarily on relative headcount, except for facilities which is based on occupancy.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
September 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 September 30, 2025.