Investor Presentation
RS
About Non-GAAP Financial Measures and Certain Key Metrics
To provide investors and others with additional information regarding Rimini Street's results, we have disclosed
the following non-GAAP financial measures and certain key metrics. We have described below Annualized
Recurring Revenue and Revenue Retention Rate, each of which is a key operational metric for our business. In
addition, we have disclosed the following non-GAAP financial measures: non-GAAP operating income, non-
GAAP net income, EBITDA, Adjusted EBITDA and Billings. Rimini Street has provided in the tables above a
reconciliation of each non-GAAP financial measure used in this earnings release to the most directly comparable
GAAP financial measure. Due to a valuation allowance for our deferred tax assets, there were no tax effects
associated with any of our non-GAAP adjustments. These non-GAAP financial measures are also described
below.
The primary purpose of using non-GAAP measures is to provide supplemental information that management
believes may prove useful to investors and to enable investors to evaluate our results in the same way
management does. We also present the non-GAAP financial measures because we believe they assist investors in
comparing our performance across reporting periods on a consistent basis, as well as comparing our results
against the results of other companies, by excluding items that we do not believe are indicative of our core
operating performance. Specifically, management uses these non-GAAP measures as measures of operating
performance; to prepare our annual operating budget; to allocate resources to enhance the financial performance
of our business; to evaluate the effectiveness of our business strategies; to provide consistency and comparability
with past financial performance; to facilitate a comparison of our results with those of other companies, many of
which use similar non-GAAP financial measures to supplement their GAAP results; and in communications with
our board of directors concerning our financial performance. Investors should be aware however, that not all
companies define these non-GAAP measures consistently.
Billings represents the change in deferred revenue for the current period plus revenue for the current period.
Annualized Recurring Revenue is the amount of subscription revenue recognized during a fiscal quarter and
multiplied by four. This gives us an indication of the revenue that can be earned in the following 12-month period
from our existing client base assuming no cancellations or price changes occur during that period. Subscription
revenue excludes any non-recurring revenue, which has been insignificant to date.
Revenue Retention Rate is the actual subscription revenue (dollar-based) recognized over a 12-month period
from customers that were clients on the day prior to the start of such 12-month period, divided by our Annualized
Recurring Revenue as of the day prior to the start of the 12-month period.
Non-GAAP Operating Income is operating income adjusted to exclude: litigation costs and related recoveries,
net, stock-based compensation expense and reorganization costs. The exclusions are discussed in further detail
below.
Non-GAAP Net Income is net income adjusted to exclude: litigation costs and related recoveries, net, stock-
based compensation expense and reorganization costs. These exclusions are discussed in further detail below.
Specifically, management is excluding the following items from its non-GAAP financial measures, as applicable,
for the periods presented:
Litigation Costs and Related Recoveries, Net: Litigation costs and the associated insurance and appeal
recoveries relate to outside costs of litigation activities. These costs and recoveries reflect the ongoing
litigation we are involved with, and do not relate to the day-to-day operations or our core business of
serving our clients.
Stock-Based Compensation Expense: Our compensation strategy includes the use of stock-based
compensation to attract and retain employees. This strategy is principally aimed at aligning the
employee interests with those of our stockholders and to achieve long-term employee retention, rather
than to motivate or reward operational performance for any particular period. As a result, stock-based
compensation expense varies for reasons that are generally unrelated to operational decisions and
performance in any particular period.
Reorganization Costs: The costs consist primarily of severance costs associated with the Company's
reorganization plan.
EBITDA is net income adjusted to exclude: interest expense, income taxes, and depreciation and amortization
expense.
Adjusted EBITDA is EBITDA adjusted to exclude: litigation costs and related recoveries, net, stock-based
compensation expense and reorganization costs, as discussed above.
Property of Rimini Street 2023 | Proprietary and Confidential
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