Rimini Street, Inc.
For the period ended Sep 30, 2026. Filed Oct 29, 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.
Sep 30, 2026 · Filed Oct 29, 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 2026-06-30; filed 2026-07-30.
0001635282-26-000056
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-10-29.
0001635282-26-000074
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 155 previous paragraphs and 160 current paragraphs.
96 unchanged; 55 reworded; 8 added; 3 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 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 (8)
Current report
We present adjusted revenue as a supplemental non-GAAP financial measure. We believe this measure provides useful information to investors regarding underlying revenue trends as we transition away from PeopleSoft-related services because management uses the measure to evaluate the performance of the business during this transition. Adjusted revenue should be considered in addition to, and not as a substitute for or superior to, GAAP revenue and may not be comparable to similarly titled measures used by other companies.
Current report
Interest expense. Interest expense decreased from $1.4 million for the three months ended September 30, 2025 to $1.0 million for the three months ended September 30, 2026, primarily due to lower outstanding borrowings. During the nine months ended September 30, 2026, we made principal payments totaling $25.9 million on the term loan, consisting of multiple voluntary prepayments and one scheduled payment. Our most recent voluntary prepayment was $5.0 million on August 27, 2026. These principal payments reduced interest expense by $0.5 million for the three months ended September 30, 2026.
Current report
Comparison of Nine Months Ended September 30, 2026 and 2025
Current report
We present adjusted revenue as a supplemental non-GAAP financial measure. We believe this measure provides useful information to investors regarding underlying revenue trends as we transition away from PeopleSoft-related services because management uses the measure to evaluate the performance of the business during this transition. Adjusted revenue should be considered in addition to, and not as a substitute for or superior to, GAAP revenue and may not be comparable to similarly titled measures used by other companies.
Current report
Liquidity
Current report
As of September 30, 2026, we had $93.3 million of cash and cash equivalents and $35.0 million of available borrowing capacity under our revolving line of credit. We also had $43.4 million of outstanding term loan principal, with the next and final scheduled principal payment not due until April 30, 2029, though we will continue to evaluate whether any additional principal prepayments will be made prior to that date.
Current report
For the nine months ended September 30, 2026 and 2025, net cash provided by operating activities was $7.7 million and $40.7 million, respectively. The $40.7 million for the nine months ended September 30, 2025 included the receipt of $37.9 million of litigation settlement proceeds in July 2025, which did not recur in 2026.
Current report
For the nine months ended September 30, 2025, net cash provided by operating activities was $40.7 million, including the benefit of the litigation settlement proceeds, as described above. Operating cash flows also reflected a decrease in accounts receivable as cash collections exceeded billings, partially offset by a decrease in deferred revenue as revenue recognized exceeded billings, and an increase in prepaid expenses, deposits and other assets resulting from payments for software licenses and future marketing tradeshows.
Removed paragraphs (3)
Previous report
Interest expense. Interest expense decreased from $1.6 million for the three months ended June 30, 2025 to $1.1 million for the three months ended June 30, 2026. Interest expense declined due to multiple reasons. First, we had no borrowings under the revolving line of credit during the three months ended June 30, 2026 compared to an average principal balance of $12.0 million during the three months ended June 30, 2025. As result, the interest expense incurred under the revolving line of credit declined $0.2 million during the three months ended June 30, 2026. Second, we made voluntary prepayments of $10.0 million, $5.0 million and $5.0 million on the outstanding term loan principal balance on June 25, 2026, March 30, 2026 and February 4, 2026, respectively. These payments resulted in a reduction of the outstanding average principal balance for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, which helped to reduce the interest expense by $0.3 million.
Previous report
Comparison of Six Months Ended June 30, 2026 and 2025
Previous report
For the six months ended June 30, 2025, cash flows provided by operating activities of $15.9 million consisted of net income of $33.6 million adjusted for non-cash expenses, net of $20.7 million, and unfavorable changes in operating assets and liabilities, net of $38.4 million. The unfavorable changes in operating assets and liabilities were primarily driven by a decrease in accounts receivable as we collected $218.4 million during the six months ended June 30, 2025, which was offset by billings, net of $190.1 million during the same period. Offsetting this favorable change was a decrease in deferred revenue as we recognized $18.3 million more in revenue than we billed during the six months ended June 30, 2025.
Reworded paragraphs (55)
Previous wording
•the effects of increased intense competition in our industry and our ability to compete effectively;
Current wording
•the effects of increased competition in our industry and our ability to compete effectively;
Previous wording
•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;
Current wording
•risks arising from incorporating artificial intelligence (“AI”) technologies into our products or services or any deficiencies or risks associated with AI technologies, including agentic AI technologies, used by us or by our third-party vendors and service providers;
Previous wording
As of June 30, 2026, we employed over 1,980 professionals and supported 3,132 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.
Current wording
As of September 30, 2026, we employed over 1,990 professionals and supported 3,214 active clients globally, including 79 Fortune 500 companies and 22 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, 2026 and 2025, we generated revenue of $111.1 million and $104.1 million, respectively, representing an increase of 7%. During the three months ended June 30, 2026, we recorded net income of $2.4 million, and as of June 30, 2026, we had an accumulated deficit of $197.6 million. Approximately 44% and 47% of our revenue was generated in the United States for the three months ended June 30, 2026 and 2025, respectively. Approximately 56% and 53% of our revenue was generated in foreign jurisdictions for the three months ended June 30, 2026 and 2025, respectively.
Current wording
Our subscription-based revenue provides a foundation for, and visibility into, future period results. For the three months ended September 30, 2026 and 2025, we generated revenue of $112.1 million and $103.4 million, respectively, representing an increase of 8%. During the three months ended September 30, 2026, we recorded net income of $6.5 million, and as of September 30, 2026, we had an accumulated deficit of $191.1 million. Approximately 43% and 45% of our revenue was generated in the United States for the three months ended September 30, 2026 and 2025, respectively. Approximately 57% and 55% of our revenue was generated in foreign jurisdictions for the three months ended September 30, 2026 and 2025, 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”). 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% and 6% of revenue for the six months ended June 30, 2026 and 2025, respectively.
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% and 6% of revenue for the nine months ended September 30, 2026 and 2025, respectively.
Previous 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 and six months ended June 30, 2026.
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 and nine months ended September 30, 2026.
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, 2026 and 2025, we had 3,132 and 3,060 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, 2026 and 2025, we had 3,214 and 3,155 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, 2026 and 2025, we had 1,569 and 1,553 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, 2026 and 2025, we had 1,601 and 1,590 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, which excludes any non-recurring revenue, was $103 million, or 93% of total revenue, for the three months ended June 30, 2026 and $99 million, or 95% of total revenue for the three months ended June 30, 2025. Excluding subscription revenue from support for Oracle PeopleSoft products, our subscription revenue was $100 million and $93 million for the three months ended June 30, 2026 and 2025, respectively.
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 $105 million, or 94% of total revenue, for the three months ended September 30, 2026 and $98 million, or 95% of total revenue for the three months ended September 30, 2025. Excluding subscription revenue from support for Oracle PeopleSoft products, our subscription revenue was $103 million and $93 million for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Our annualized recurring revenue was $413 million and $394 million as of June 30, 2026 and 2025, respectively. Excluding subscription revenue from support for Oracle PeopleSoft products, our annualized subscription revenue was $401 million and $371 million as of June 30, 2026 and 2025, respectively.
Current wording
Our annualized recurring revenue was $421 million and $391 million as of September 30, 2026 and 2025, respectively. Excluding subscription revenue from support for Oracle PeopleSoft products, our annualized subscription revenue was $410 million and $374 million as of September 30, 2026 and 2025, respectively.
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 90% for the 12 months ended June 30, 2026 and 2025, 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 90% and 89% for the 12 months ended September 30, 2026 and 2025, 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 60.9% and 60.4% for the three months ended June 30, 2026 and 2025, respectively.
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 61.4% and 59.9% for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
(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.
Current wording
(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.
Previous wording
Revenue. Revenue grew from $104.1 million for the three months ended June 30, 2025 to $111.1 million for the three months ended June 30, 2026, an increase of $7.0 million or 7%. The increase in revenue was driven primarily by growth in our subscription revenue of $4.7 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Excluding revenue for Oracle’s PeopleSoft software products, adjusted revenue increased by 10% for the three months ended June 30, 2026.
Current wording
Revenue. Revenue grew from $103.4 million for the three months ended September 30, 2025 to $112.1 million for the three months ended September 30, 2026, an increase of $8.6 million or 8%. The increase in revenue was driven primarily by growth in our subscription revenue of $7.5 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Excluding revenue for Oracle’s PeopleSoft software products, adjusted revenue increased by 11% for the three months ended September 30, 2026.
Previous wording
On a geographic basis, United States revenue declined from $49.2 million for the three months ended June 30, 2025 to $48.4 million for the three months ended June 30, 2026, a decrease of $0.8 million or 2%. Excluding revenue for Oracle’s PeopleSoft software products, U.S. revenue increased 3%. Our international revenue grew from $55.0 million for the three months ended June 30, 2025 to $62.7 million for the three months ended June 30, 2026, an increase of $7.8 million or 14%. Excluding revenue for Oracle’s PeopleSoft software products, international revenue increased 16%.
Current wording
On a geographic basis, United States revenue grew from $46.3 million for the three months ended September 30, 2025 to $48.3 million for the three months ended September 30, 2026, an increase of $2.0 million or 4%. Excluding revenue for Oracle’s PeopleSoft software products, U.S. revenue increased 7%. Our international revenue grew from $57.2 million for the three months ended September 30, 2025 to $63.8 million for the three months ended September 30, 2026, an increase of $6.6 million or 12%. Excluding revenue for Oracle’s PeopleSoft software products, international revenue increased 14%.
Previous wording
Presented below is a reconciliation of actual reported revenue to adjusted revenue, which excludes PeopleSoft revenue (in thousands):
Current wording
Presented below is a reconciliation of our GAAP revenue to adjusted revenue, which excludes PeopleSoft revenue (in thousands):
Previous wording
We are required to complete our previously-announced 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 3% and 6% of the Company’s total revenue for the six months ended June 30, 2026 and 2025, respectively.
Current wording
We are required to complete our previously-announced 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 2% and 5% of the Company’s total revenue for the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Cost of revenue. Cost of revenue increased from $41.3 million for the three months ended June 30, 2025 to $43.4 million for the three months ended June 30, 2026, an increase of $2.1 million or 5%. The key drivers related to the cost of revenue increase were a $1.3 million increase in engineering consulting costs, a $0.6 million increase in administrative allocations and a $0.6 million increase in all other costs. These items were slightly offset by a decrease in employee compensation and benefits of $0.5 million.
Current wording
Cost of revenue. Cost of revenue increased from $41.5 million for the three months ended September 30, 2025 to $43.3 million for the three months ended September 30, 2026, an increase of $1.8 million or 4%. The key drivers related to the cost of revenue increase were a $0.9 million increase in engineering consulting costs, a $0.5 million increase in administrative allocations and a $0.9 million increase in all other costs. These items were offset by a decrease in employee compensation and benefits of $0.5 million.
Previous wording
Gross profit. Gross profit grew from $62.9 million for the three months ended June 30, 2025 to $67.7 million for the three months ended June 30, 2026, an increase of $4.8 million or 8%. Gross profit margin for the three months ended June 30, 2025 was 60.4% compared to 60.9% for the three months ended June 30, 2026. For the three months ended June 30, 2026, the total cost of revenue increased by 5% compared to an increase in revenue of 7% for the three months ended June 30, 2026. 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.
Current wording
Gross profit. Gross profit grew from $61.9 million for the three months ended September 30, 2025 to $68.8 million for the three months ended September 30, 2026, an increase of $6.9 million or 11%. Gross profit margin for the three months ended September 30, 2025 was 59.9% compared to 61.4% for the three months ended September 30, 2026. For the three months ended September 30, 2026, the total cost of revenue increased by 4% compared to an increase in revenue of 8% for the three months ended September 30, 2026. As a result, our gross profit margin improved by 150 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 38% and 37% for the three months ended June 30, 2026 and 2025, respectively. In dollar terms, sales and marketing expenses increased from $38.0 million for the three months ended June 30, 2025 to $42.7 million for the three months ended June 30, 2026, an increase of $4.7 million or 12%. This increase was primarily due to the following: (i) a $1.8 million increase in employee compensation and benefits, (ii) a $1.1 million increase in travel costs, (iii) a $1.1 million increase related to marketing programs and promotions and (iv) a $0.9 million increase in allocated costs. 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 35% and 37% for the three months ended September 30, 2026 and 2025, respectively. In dollar terms, sales and marketing expenses increased from $37.9 million for the three months ended September 30, 2025 to $39.0 million for the three months ended September 30, 2026, an increase of $1.1 million or 3%. This increase was primarily due to the following: (i) a $0.6 million increase in employee compensation and benefits, (ii) a $0.7 million increase related to marketing programs and promotions and (iii) a $0.5 million increase in allocated costs. These increases were partially offset by a decline in travel costs of $0.6 million. 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 increased from $16.8 million for the three months ended June 30, 2025 to $17.3 million for the three months ended June 30, 2026, an increase of $0.5 million or 3%. This increase was generally due to the following: (i) an increase in employee compensation and benefits of $0.3 million, (ii) an increase in computer and software licenses of $0.6 million, (iii) an increase in professional services of $0.3 million and (iv) an increase of other costs of approximately $1.0 million. The unfavorable variances were offset primarily by an increased benefit of administrative allocation expenses of $1.6 million.
Current wording
General and administrative expenses. General and administrative expenses decreased from $18.2 million for the three months ended September 30, 2025 to $16.8 million for the three months ended September 30, 2026, a decrease of $1.5 million or 8%. This decrease was generally due to the following: (i) a decline in sales and other taxes of $1.4 million, (ii) an increased benefit of administrative allocation expenses of $1.1 million and (iii) a decline in employee compensation and benefits of $1.0 million. These favorable variances were offset primarily by (iv) an increase in computer and software licenses of $0.8 million, (v) an increase in professional services of $0.3 million and (vi) an increase in other costs of approximately $0.9 million.
Previous wording
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. Our primary development strategy is to incorporate Agentic AI solutions to extend the life cycle of existing highly customizable ERP systems by automating and organizing business processes for enhanced flexibility, scalability and integration. Research and development expenses were $1.1 million for the three months ended June 30, 2026.
Current wording
Research and development expenses. In 2026, we made a strategic decision to utilize key personnel and resources to focus on research and development activities related to existing products and the development of new products for our technology solutions. Our primary development strategy is to incorporate Agentic AI solutions to extend the life cycle of existing highly customizable ERP systems by automating and organizing business processes for enhanced flexibility, scalability and integration. Research and development expenses were $1.2 million for the three months ended September 30, 2026.
Previous wording
Reorganization costs. Reorganization costs decreased from $0.7 million for the three months ended June 30, 2025 to $0.2 million for the three months ended June 30, 2026. The costs were primarily related to severance costs associated with our reorganization plan. We may incur additional reorganization costs during the second half of 2026 as we continue to optimize our cost structure in areas where opportunities exist to streamline our operations.
Current wording
Reorganization costs. Reorganization costs increased from $0.8 million for the three months ended September 30, 2025 to $1.9 million for the three months ended September 30, 2026. The costs were primarily related to severance costs associated with our reorganization plan. We may incur additional reorganization costs during the fourth quarter of 2026 as we continue to optimize our cost structure in areas where opportunities exist to streamline our operations.
Previous wording
Professional fees and other costs associated with the above litigation decreased from $4.2 million for the six months ended June 30, 2025 to none for the six months ended June 30, 2026. 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 our litigation with Oracle decreased from $0.6 million for the three months ended September 30, 2025 to none for the three months ended September 30, 2026. 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, 2026, net other expense of approximately $0.3 million was comprised of foreign exchange losses of $1.1 million and other expenses of $0.1 million, which were offset by interest income from cash and cash equivalents of $0.9 million. For the three months ended June 30, 2025, net other income of approximately $1.2 million was comprised primarily of interest income from cash and cash equivalents of $2.6 million, which was offset by foreign exchange losses of $1.2 million and other expenses of $0.1 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, 2026, net other income of approximately $1.1 million was comprised of interest income from cash and cash equivalents of $0.9 million and foreign currency gains of $0.2 million, which was offset by other expenses of $0.1 million. For the three months ended September 30, 2025, net other income of approximately $0.5 million was comprised primarily 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.
Previous wording
Income taxes. We had an income tax expense of $10.5 million for the three months ended June 30, 2025 compared to $2.6 million for the three months ended June 30, 2026. For the three months ended June 30, 2026, the primary reason for the change in income taxes was due to a decrease of income before taxes of $35.8 million in the current year period compared to the prior year period.
Current wording
Income taxes. We had an income tax expense of $0.7 million for the three months ended September 30, 2025 compared to $3.4 million for the three months ended September 30, 2026. For the three months ended September 30, 2026, the primary reason for the change in income taxes was due to an increase of income before taxes of $6.5 million in the current year period compared to the prior year period.
Previous wording
Our consolidated statements of operations for the six months ended June 30, 2026 and 2025, are presented below (in thousands):
Current wording
Our consolidated statements of operations for the nine months ended September 30, 2026 and 2025, are presented below (in thousands):
Previous wording
(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.
Current wording
(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.
Previous wording
Revenue. Revenue grew from $208.3 million for the six months ended June 30, 2025 to $216.5 million for the six months ended June 30, 2026, an increase of $8.2 million or 4%. The increase in revenue was driven primarily by growth in our subscription revenue of $5.9 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. Excluding revenue for Oracle’s PeopleSoft software products, adjusted revenue increased by 8% for the six months ended June 30, 2026.
Current wording
Revenue. Revenue grew from $311.7 million for the nine months ended September 30, 2025 to $328.6 million for the nine months ended September 30, 2026, an increase of $16.9 million or 5%. The increase in revenue was driven primarily by growth in our subscription revenue of $13.3 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. Excluding revenue for Oracle’s PeopleSoft software products, adjusted revenue increased by 9% for the nine months ended September 30, 2026.
Previous wording
On a geographic basis, United States revenue declined from $99.3 million for the six months ended June 30, 2025 to $95.3 million for the six months ended June 30, 2026, a decrease of $4.0 million or 4%. Excluding revenue for Oracle’s PeopleSoft software products, U.S. revenue increased by 1% for the six months ended June 30, 2026. Our international revenue grew from $109.1 million for the six months ended June 30, 2025 to $121.3 million for the six months ended June 30, 2026, an increase of $12.2 million or 11%. Excluding revenue for Oracle’s PeopleSoft software products, international revenue increased by 13% for the six months ended June 30, 2026.
Current wording
On a geographic basis, United States revenue declined from $145.5 million for the nine months ended September 30, 2025 to $143.5 million for the nine months ended September 30, 2026, a decrease of $2.0 million or 1%. Excluding revenue for Oracle’s PeopleSoft software products, U.S. revenue increased by 3% for the nine months ended September 30, 2026. Our international revenue grew from $166.2 million for the nine months ended September 30, 2025 to $185.1 million for the nine months ended September 30, 2026, an increase of $18.9 million or 11%. Excluding revenue for Oracle’s PeopleSoft software products, international revenue increased by 13% for the nine months ended September 30, 2026.
Previous wording
Presented below is a reconciliation of actual reported revenue to adjusted revenue, which excludes PeopleSoft revenue (in thousands):
Current wording
Presented below is a reconciliation of our GAAP revenue to adjusted revenue, which excludes PeopleSoft revenue (in thousands):
Previous wording
We are required to complete our previously-announced 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 3% and 6% of the Company’s total revenue for the three months ended June 30, 2026 and 2025, respectively.
Current wording
We are required to complete our previously-announced 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 3% and 6% of the Company’s total revenue for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
Cost of revenue. Cost of revenue increased from $81.9 million for the six months ended June 30, 2025 to $86.6 million for the six months ended June 30, 2026, an increase of $4.7 million or 6%. The key drivers related to the cost of revenue increase were a $2.8 million increase in engineering consulting costs, a $1.5 million increase in administrative allocations, and a $0.5 million increase in all other costs. These unfavorable variances were slightly offset by a decrease in employee compensation and benefits of $0.2 million.
Current wording
Cost of revenue. Cost of revenue increased from $123.4 million for the nine months ended September 30, 2025 to $129.9 million for the nine months ended September 30, 2026, an increase of $6.4 million or 5%. The key drivers related to the cost of revenue increase were a $3.7 million increase in engineering consulting costs, a $2.0 million increase in administrative allocations, and a $1.4 million increase in all other costs. These unfavorable variances were slightly offset by a decrease in employee compensation and benefits of $0.7 million.
Previous wording
Gross profit. Gross profit increased from $126.4 million for the six months ended June 30, 2025 to $130.0 million for the six months ended June 30, 2026, an increase of $3.6 million or 3%. Gross profit margin for the six months ended June 30, 2025 was 60.7% compared to 60.0% for the six months ended June 30, 2026. For the six months ended June 30, 2026, the total cost of revenue increased by 6% compared to an increase in revenue of 4% for the six months ended June 30, 2026. As a result, our gross profit margin declined by 70 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.
Current wording
Gross profit. Gross profit increased from $188.3 million for the nine months ended September 30, 2025 to $198.8 million for the nine months ended September 30, 2026, an increase of $10.4 million or 6%. Gross profit margin for the nine months ended September 30, 2025 was 60.4% compared to 60.5% for the nine months ended September 30, 2026. For the nine months ended September 30, 2026, the total cost of revenue increased by 5.2% compared to an increase in revenue of 5.4% for the nine months ended September 30, 2026. As a result, our gross profit margin increased by 10 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 38% and 35% for the six months ended June 30, 2026 and 2025, respectively. In dollar terms, sales and marketing expenses increased from $72.3 million for the six months ended June 30, 2025 to $81.4 million for the six months ended June 30, 2026, an increase of $9.1 million or 13%. This increase was primarily due to the following; (i) a $3.3 million increase in employee compensation and benefits, (ii) a $2.4 million increase related to marketing programs and promotions, (iii) a $1.9 million increase in allocated costs and (iv) a $1.4 million increase in travel costs. 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 35% for the nine months ended September 30, 2026 and 2025, respectively. In dollar terms, sales and marketing expenses increased from $110.2 million for the nine months ended September 30, 2025 to $120.4 million for the nine months ended September 30, 2026, an increase of $10.2 million or 9%. This increase was primarily due to the following: (i) a $3.9 million increase in employee compensation and benefits, (ii) a $2.7 million increase related to marketing programs and promotions, (iii) a $2.5 million increase in allocated costs, (iv) a $0.8 million increase in travel costs and (v) a $0.6 million increase in contract labor. These increases were partially offset by a $0.3 million decrease in all other costs. 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 increased from $34.4 million for the six months ended June 30, 2025 to $35.2 million for the six months ended June 30, 2026, an increase of $0.8 million or 2%. This increase was due to the following; (i) an increase in employee compensation and benefits of $1.9 million, (ii) an increase in computer and software licenses of $1.2 million and (iii) an increase of other expenses totaling $1.1 million. These unfavorable variances were offset primarily by an increased benefit of administrative allocation expenses of $3.5 million.
Current wording
General and administrative expenses. General and administrative expenses decreased from $52.6 million for the nine months ended September 30, 2025 to $51.9 million for the nine months ended September 30, 2026, a decrease of $0.7 million or 1.3%. This decrease was due to the following: (i) an increased benefit of administrative allocation expenses of $4.7 million and (ii) a decrease in sales and other taxes of $1.3 million. These favorable variances were offset, in part, by (i) an increase in employee compensation and benefits of $0.9 million, (ii) an increase in computer and software licenses of $2.1 million and (iii) an increase in other expenses totaling $2.3 million.
Previous wording
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. Our primary development strategy is to incorporate Agentic AI solutions to extend the life cycle of existing highly customizable ERP systems by automating and organizing business processes for enhanced flexibility, scalability and integration. Research and development expenses were $1.7 million for the six months ended June 30, 2026.
Current wording
Research and development expenses. In 2026, we made a strategic decision to utilize key personnel and resources to focus on research and development activities related to existing products and the development of new products for our technology solutions. Our primary development strategy is to incorporate Agentic AI solutions to extend the life cycle of existing highly customizable ERP systems by automating and organizing business processes for enhanced flexibility, scalability and integration. Research and development expenses were $2.9 million for the nine months ended September 30, 2026.
Previous wording
Reorganization costs. Reorganization costs decreased from $1.2 million for the six months ended June 30, 2025 to $0.6 million for the six months ended June 30, 2026. The costs were primarily related to severance costs associated with our reorganization plan. We may incur additional reorganization costs during the second half of 2026 as we continue to optimize our cost structure in areas where opportunities exist to streamline our operations.
Current wording
Reorganization costs. Reorganization costs increased from $1.9 million for the nine months ended September 30, 2025 to $2.5 million for the nine months ended September 30, 2026. The costs were primarily related to severance costs associated with our reorganization plan. We may incur additional reorganization costs during the fourth quarter of 2026 as we continue to optimize our cost structure in areas where opportunities exist to streamline our operations.
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
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 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 nine months ended September 30, 2025.
Previous wording
Professional fees and other costs associated with the above litigation decreased from $2.3 million for the three months ended June 30, 2025 to none for the three months ended June 30, 2026. 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 the above litigation decreased from $4.8 million for the nine months ended September 30, 2025 to none for the nine months ended September 30, 2026. 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.
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Current report — wording carried from elsewhere
As of September 30, 2026, we had outstanding term loan borrowings of $43.4 million and no borrowings on the revolving line of credit under our Credit Facility. During the nine months ended September 30, 2026, we made aggregate principal payments of $25.9 million.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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 six months ended June 30, 2025.