Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] This call is being recorded on Thursday, February 19, 2026. I would now like to turn the conference over to Dean Pohl, VP, Treasurer and Investor Relations. Please go ahead.

Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal Fourth Quarter 2025 Earnings Conference Call. On the call with me today is Seth Ravin, our CEO and President; and Michael Perica, our CFO. Today, we issued our earnings press release for the fourth quarter and fiscal year ending December 31, 2025, a copy of which can be found on our website under the Investor Relations section. A reconciliation of GAAP to non-GAAP financial measures has been provided in the tables following the financial statements in the press release. An explanation of these measures and why we believe they are meaningful is also included in the press release and our website under the heading About Non-GAAP Financial Measures and Certain Key Metrics. As a reminder, today's discussion will include forward-looking statements about our operations that reflect our current outlook. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. We encourage you to review our most recent SEC filings, including our Form 10-K filed today for a discussion of risks that may affect our future results or stock price. Now before taking questions, we'll begin with prepared remarks. With that, I'd like to turn the call over to Seth.

Thank you, Dean, and thank you, everyone, for joining us. Fourth quarter and full year results. Our fourth quarter results reflect solid execution and continued accelerating sales growth adjusted for the Oracle PeopleSoft support and services wind down. We grew our core Rimini Support subscription billings and launched our next-generation Agentic AI ERP solutions. Overall sales bookings and billings continue to improve, and we delivered strong ARR subscription renewals as well. We closed 19 new client transactions over $1 million in TCV and totaling $58.1 million compared to 22 transactions totaling $51.9 million last year. We added 73 new logos that included household global and regional brand wins. We saw accelerating momentum in bookings, pipeline and RPO throughout the second half of 2025, reinforcing our confidence in delivering growth in 2026. ERP software is dead, the rise of Agentic AI ERP. ERP software is peaking technically, and we will deliver new ERP capabilities and ERP process execution faster, better and cheaper with more agility and speed to market, leveraging Rimini Street's Agentic AI ERP solutions. Meanwhile, we will keep existing ERP software releases delivering value for many years to come at significant savings. Our Agentic AI ERP solutions can be easily and quickly deployed over the top of existing ERP software without the cost or risk of unnecessary ERP software upgrades, migrations or replatforming. Rimini Street can reduce operating costs by up to 90% for existing ERP software landscapes, allowing clients to bank the savings or reinvest the savings into Rimini Street's Agentic AI solutions to modernize rather than replace their current ERP infrastructure. We're positioning Rimini Street as the bridge between existing traditional ERP software infrastructure and the capability and benefits of modern AI innovation, and we expect growing subscriptions for both Rimini Support as our core service offering…

Thank you, Seth, and thank you for joining us, everyone. Q4 and fiscal 2025 results. Our fourth quarter results reflect solid execution and early signs of momentum, highlighted by record remaining performance obligations, RPO, growing 11.1% year-over-year. Full year 2026 billings, excluding support services for Oracle PeopleSoft software products, increasing 4.2% and annualized recurring revenue, ARR, increasing 3.1% year-over-year, excluding support services for PeopleSoft products. We ended the year with a strong cash position and a stronger balance sheet. Our capital allocation actions included ongoing share repurchases. Regarding client retention, as our full suite of support becomes increasingly integrated with our Agentic AI solutions, we are enhancing client retention while providing clients with what we believe is a clear lower risk path to innovation and modernization of their existing ERP environments. Revenue for the fourth quarter and the full year 2025 was $109.8 million and $421.5 million, respectively, a year-over-year decrease of 3.9% for the quarter and a decrease of 1.7% for the full year. Excluding support services for PeopleSoft products, revenue decreased by 0.4% for the quarter and increased 1% for full year 2025. Fourth quarter 2025 included a onetime $2.1 million revenue recognition, while fourth quarter 2024 included a onetime revenue recognition of $5.4 million. Excluding all the aforementioned items, Q4 revenue grew 2.6% for the quarter. Annualized recurring revenue was $411.4 million for the fourth quarter, a year-over-year decrease of 0.8%. Our revenue retention rate for service subscriptions, which makes up 96% of our revenue, was approximately 88%, with approximately 86% of subscription revenue noncancelable for at least 12 months. We note that for the full year 2025, FX movements negatively impacted our total revenue by 0.01% compared to a negative impact of 1.3% for 2024. Billings for our fourth quarter were $171.3 million, relatively flat year-over-year…

[Operator Instructions] Your first question comes from the line of Brian Kinstlinger from AGP.

The implied revenue change in the first quarter of '26 is about a 1.5% year-over-year decline, plus or minus. the obvious math is that the year-over-year comparisons are going to have to grow more than 4% to 6% for the remaining 3 quarters in 2026. So I'm curious as to the visibility of this, not only return to growth, but exiting the year close to 6%. Is it supported by expected new business wins or already signed business wins? And then remind us, once a contract has been awarded to Rimini, whether it's traditional maintenance or your new Agentic AI offering, how quickly does it begin and then ramp?

Sure, Brian. Good to hear from you. We expect that the Q1 numbers will obviously be a component of what was signed in Q4 because these are subscription contracts rolling into Q1 and of course, business that we would expect is already closed. So given that and where we report versus Q1, we do expect that these numbers are very solid. That's why the range is pretty tight. I'll let Michael go ahead and add on top of that.

Yes, Brian. would keep in mind, of course, that there is the PeopleSoft component in that guidance. This is on a GAAP perspective, right? So when excluding into Q1, the PeopleSoft component, which will be down year-over-year and expected down sequentially as we run off we would -- we do expect it to be a growth period. Now for the remainder of the year, the answer is certainly, we do expect an acceleration. And we have, I would say, improved visibility relative to entering the year in the last couple of years. So certainly a higher confidence factor in our top line guidance.

What gives you that visibility? Is it a backlog? You've already won contracts? Is it you're excited about the new product and new salespeople? What gives you that improved visibility, particularly?

No, go ahead, Michael.

Certainly highlighting, as we noted, the momentum. We've had a few quarters in a row here with our growing TCV, obviously laying down the foundation, giving us a higher base. The sales momentum that has been built by Mr. Hershkowitz, and with Seth as well. That, as well as our expanded suite of offerings, the conversations that we're having with our clients with regard to alternate road maps are giving us the combined increased confidence in this year.

On top of that, Brian, was the -- if you look at the close rates in the fourth quarter, we actually increased our close rates to over 30% of pipeline. So I think we saw, again, a better visibility, as Michael was saying, not only around the pipeline, but a better confidence in the future ability of the close rates based on growing win rates against those pipes.

Okay. Just the last part of the question. Suppose you win one of these Agentic AI projects, if you will, or contracts, how quickly does that contract start? And how quickly does it ramp? And are these very sizable contracts that will move the needle? Or are they going to start small?

Well, I think they're going to be all different sizes, Brian. I mean we've been doing projects already on Agentic AI. We've already been doing them for several months. Those projects have bringing -- they're bringing in both professional service revenue, which you get right away because we're delivering the service, being able to take that revenue. And then there are subscription components, which could then take a little longer to ramp in terms of the revenue. So I think you're going to get a mix of services that come in with each of these projects. And that means we should see accretive capabilities faster than you normally would just under the subscription agreements.

Your next question comes from the line of Richard Baldry from ROTH Capital Partners.

We look at both the COGS line and the sales and marketing lines, the absolute dollar spending came in pretty well above recent trending levels. Are there any onetime items in there? Or do you view this as sort of a new level to hit ahead? And then maybe more specifically in the sales and marketing, how much of that is maybe new heads being brought on or as a result of better billings?

Sure, Rich. I think you're seeing an investment in both points. I think you're seeing us ramp up a little bit in the sales and marketing because we have new products and services to bring to market. So you're definitely going to see that. And when you look at 2026, we're looking at going from roughly mid-70s in terms of number of sellers at the company in 2025. We're in the process of hiring roughly 20 new sellers to get us into the early 90s so that we can be in a position to meet the demands that we see coming down in the pipeline. We also took a step of raising quotas for our sellers around the world, averaging 12% to 15% increases across the board. So we're doing several things to increase quota-carrying capacity. We also increased our marketing spend a bit just because we're launching the whole Agentic line. that, of course, takes some money to go out there and get the customer base moving to get the pipelines built. Those are not new levels that we're expecting to keep. We have always said that we expect eventually at scale, which we've described in the past as being somewhere around $1 billion of annualized sales that we're going to be in a position to see somewhere around the mid-30s, 33% to 35%, somewhere in that range. As far as G&A, we're going to continue to drive down costs. The litigation costs have come down substantially. We've even reduced the size of our internal litigation team, but there are still costs of compliance and wind downs of PeopleSoft, et cetera, that will continue on for at least the next couple of years.

And then when you look at any preliminary evaluation of the sales pipelines or win rates in the early stages of litigation being behind you, are there any changes or like top of funnel new logo trending that is you think you can sort of tie to the exit from the litigation past?

I definitely do, Rich. I think, again, it's more anecdotal. It's very hard to statistically tie it. But I think if you look at the fact that we reached a settlement in July of 2025, and you look at the increase in pipes, you look at the increase in win rates, the fact that we're making these additional moves and making investments in growing the sales team, I think that we're seeing win rates that are some of the highest we've ever seen. We expect those to continue to rise based on our analysis. And I think you're seeing us win deals that I truly don't believe we would have won on the support side, for example, even a year ago. I think we're bringing in some brand names, and we're seeing those cycle times of getting the deals done much faster because we're not having to answer and go through the normal diligence cycles around the litigation. And we're seeing that meaningfully reduce the cycle time to get a deal closed.

Last for me, if your typical seasonality of collections holds, you could end next quarter with well over $1.50 in cash per share. But contrast that to the severe valuation pressure small-cap tech seen due to the emergence of generative AI. Can you talk about how aggressive you'd be willing to be on the buyback side of the table? Because it seems like you're gaining momentum on the market valuations across the board, not just you specifically, but have seen some pretty severe pressure. It seems like you're in an unusual opportunity where you could get pretty aggressive on that front.

Sure, Rich. I think that as we've said before, I think everybody knows we're very focused on shareholder value, shareholder return. Post litigation settlement, we've been in a position to rethink what surplus cash looks like. And I think we're continually looking for opportunities that we believe will drive that shareholder return. But as you know, when it comes to stock buyback, it's a little bit complicated. You're limited by the share volumes. You've got calculations, you've got covenants from lenders, et cetera. All those things weigh in, including MMPI and if we have any restrictions. So it is not as simple as saying we would love to put as much money in cash as we have in surplus towards buying stock if it's truly an undervalued asset. We have to look at multiple ways to define shareholder value. And I think, Michael, you probably want to talk a little bit more on that on some of the recent moves we've made.

Yes. We're certainly -- we do share that sentiment, right, that there is value here, as Seth noted, with regard to our surplus, we do evaluate all of the factors around capital return, which you do very well know we have done the last couple of open windows. We did recently earlier this month, pay down another avenue that we assess deployment of our surplus our term debt by $5 million earlier this month. So we look at all these opportunities to utilize our surplus. But of course, we are highlighting our confidence entering this year. We also do feel comfortable and are looking at reinvesting in the business to continue our momentum and really drive the growth.

Your next question comes from the line of Derrick Wood from TD Cowen.

It's Andrew on for Derek. On your -- Michael, RPO was a strong 12% ex PeopleSoft that accelerated from 9% last quarter. Any specific drivers of that? And this is well above your revenue growth guide? Is this just conservatism? Or is there any reason why it would take longer to translate into a higher revenue number?

No particular trend that altered from last quarter with regard to the constitution on the duration of our RPO. We believe, again, this is giving us increased confidence, right, in being able to at least achieve and potentially beat on the top line our expectations. But again, 2 quarters doesn't make a long-term trend, but we are encouraged by the momentum.

Yes, that's great. And then, Seth, on the go-to-market front, it would be great to hear how you're feeling about sales productivity. You talked about adding a lot of sales capacity. And how is the hunter farmer model progressing in North America? And do you think you can get the North American business back to stronger growth this year?

Sure. We definitely saw increasing sales across North America in Q1 and Q2, Q3 and topping it in Q4, setting the stage again for a much stronger '26. I think as we all discussed on the Analyst Day, the bigger challenge has not been the new client invoicing growth. It has been the retention. We had higher retention losses in '25 than we expected. And of course, that flowed through the revenue numbers as well. So from our point of view, we're watching, we believe, a stabilization in North America. I don't think we would have raised quotas across the board on the sales team, all the way up through sales leadership, all the way up through Steve Hershkowitz number himself and that we have to deliver. So we're definitely feeling bullish enough to raise quotas. We're feeling confident enough to add another 20 sellers into the mix so that we have the capacity coming into the back half of the year, which, as you know, is our strongest sales quarters. So I think we're doing the things and making the investments based on that confidence that we will drive higher numbers all through the year, but of course, especially in the back half of the year.

Your next question comes from the line of Alex Fuhrman from Lucid Capital Markets.

Curious, do you expect the return to growth this year to be driven more so by increasing acceleration growth of new clients or better retention? Or is it really more about higher spend per customer as more clients adopt the new Agentic AI offering?

Alex, I think we have a combination of them. We expect to see, as we already talked about for the fourth quarter, we have growing support sales. And the reason for that is the software vendors are creating environments that are really pushing customers to do new versions, to go to new releases, to switch over to SaaS and subscription licenses when they've already paid for their perpetual license. You have a lot of things going on in the mix. And our ability to come in and stabilize that environment and guarantee support through 2040 and beyond for existing software and then to be able to show them the path forward with the Agentic AI on top, this is a combination that's giving them a road map and a visibility to go decades into the future and that is creating a lot of comfort from the customers to be able to move forward with our total vision and solution. And so yes, I do think it's going to be a combination of those services. But as you saw in the Investor Day, we're about 87% of revenue comes from support, about 13% from our optimized services. And now we have the entirely new accretive innovation services. And I think we're going to start putting those numbers on the board, of course, in '26, and you're going to see those numbers start to grow in all categories. I think this is a fact that customers are coming to us for all different services, even including our security services, which are well known as well as our interoperability, all these things that are coming in and are required in order to connect big ERP systems and core transactions to the rest of what's going on in AI, and we intend to be the leaders in AI for the ERP systems.

Great. That's really helpful, Seth. So as revenue growth accelerates after Q1, do we expect to see that growth in active customers also accelerate at a similar pace throughout the year?

I would expect to see, again, growth both on the new customer line where you're going to see more logos, new logos coming on. I do think that the hunter farmer model in North America is generating results. It took a little while. I think we all know every time you switch customers around with new sellers, you reorganize your sales operation, those operations always, always have some lag time, always are slightly disruptive. And I think we're seeing the disruption end. I think we're seeing the results start to improve. And we're confident that we're going to see good results from that model, not only across North America, we're using that model now in Latin America as well. So all of the Americas is using the Hunter Farmer model, and we're looking at other deployments in different countries around the world.

Your next question comes from the line of Daniel Hibshman from Craig-Hallum.

This is Daniel on for Jeff. Seth, maybe just starting off on the adoption to date on Rimini Agentic UX. I know that came out in December, and then we had the GA here in January of the 20 additional solutions. You talked on this call about a few specific adopters. If you could help us understand the scale of that adoption. Are we talking about a handful of early adopters? Are we talking dozens? Just what stage those are at as well, whether we're talking pilots or full-scale production?

Sure. I think you start off with the walk before you jog before you run. I think customers, as you well know, are so overwhelmed with the pace of change between whether there's an anthropic release or something is going on at ServiceNow or there's an acquisition, they can't keep up. This is why we've been focusing on this concept of AI for the real world. These are tools that we use when they're appropriate. The highlighting of our 21st solutions of our Agentic UX solutions really was about saying we are focused on solving business issues. We are not focused on trying to get customers to adopt a particular platform for AI. There's a lot of confusion within customers and competing platforms. So we're focused on here's the solution to a particular business problem. And oh, by the way, you can choose your platform. Of course, our preferred platform is ServiceNow. We have a close partnership with Bill McDermott and the team over there. And so I think you're watching customers very interested, very interested in the path I think they're still learning and they're getting their heads around what are we doing here. This is a different architecture. And if you look at even SAP is advocating the same architecture as we are, which is don't make changes to the software code itself, do your changes above the software code in the new Agentic layer. So we're in alignment with that architecture. The customers have never seen this before. And so this is going to take a little bit of while for everyone to really understand how these technologies work together, look at the architecture. They have their people on the ground, their technical people, try to review them. But from a business perspective, the fact that we are able to solve these problems faster, better, cheaper, get the cost of operations for an ERP system covering the world down by reducing the amount of labor required, increasing the speed to market, increasing agility in a world that's very, very disruptive right now. Those things can make a real difference in competitive advantage. So they're very interested in what we're bringing to the table. We just got to give them a little bit of time to digest them. We'll start getting these projects installed. You'll start building a reference-able customer base as we're already doing. And then that will, again, allow you to get more into that hockey stick mode, which I think is more towards -- starts more towards the back half of this year. But I think everyone needs to understand AI is such an overwhelming component of change for the business world that it's going to take a while for all this to get adopted.

And then, Michael, on the model, just the $5 million beat very nice. I know -- I think you called out that was $2.1 million, if I heard correct, that was onetime. Just anything else to call out in terms of the sources of strength on the quarter? And then also your thoughts on why that didn't flow into the -- I believe EBITDA was around the midpoint. Just your thoughts on the flow-through.

So no other elements up and down the P&L that I would call out or worth noting that would be onetime-ish nonrecurring in nature of any size. The drop-through to the bottom line, both this year, the $2.1 million and the last year from a revenue was fairly significant as these were longer-term commitments where we performed on our end and were released on our ability our need to perform in the future. So that revenue got pulled into this period versus 1 to 2 years out. So yes, there was contribution to the bottom line.

There are no further questions at this time. I'll go ahead and turn the call back over to Seth Ravin for closing comments. Sir, please go ahead.

Great. Thank you very much, and thanks, everyone, for joining us. We will be back and talking to you about Q1 earnings pretty fast and look forward to having you all join then. Thank you very much, everybody, and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.