Rimini Street (RMNI) Q4 2025: RPO Jumps 12% as AI ERP Layering Drives Bookings Momentum

2026-02-19 | By EarningsIQ Research

Rimini Street’s Q4 results highlight a strategic pivot from legacy ERP support toward agentic AI ERP solutions, with a 12% surge in RPO excluding PeopleSoft signaling broadening demand for modernization overlays. Management’s confidence in 2026 growth is underpinned by higher close rates, expanded sales capacity, and early traction in AI-driven offerings, even as retention remains a near-term watchpoint. Investors should focus on the company’s ability to scale new innovation revenues and sustain margin expansion as litigation headwinds abate and operational investments ramp.

Summary

• AI ERP Layering Accelerates: Rimini Street’s agentic AI solutions gain traction as clients seek modernization without disruptive migrations.
• Sales Engine Expansion: Increased sales headcount and rising close rates drive pipeline confidence for 2026.
• Margin Rebuild in Focus: Litigation resolution frees capital, but operational leverage from new offerings is key for future margin gains.

Performance Analysis

Rimini Street’s Q4 and full-year 2025 results reflect a business in transition, with reported revenue down 3.9% for the quarter and 1.7% for the year, but underlying growth evident once the wind-down of PeopleSoft support is excluded. Core subscription billings grew 4.2% for the year excluding PeopleSoft, and annualized recurring revenue (ARR) was up 3.1% on the same basis. The company’s remaining performance obligations (RPO) expanded sharply, up 12% excluding PeopleSoft, signaling a strengthening bookings pipeline and longer contract durations.

Gross margin compressed to 60.4% from 63.7% in the prior year quarter, reflecting both higher sales and marketing spend to launch the agentic AI line and increased cost of goods sold. Sales and marketing expense rose to 37.7% of revenue, as Rimini Street invested in new sellers and marketing to support its expanded product suite. Operating cash flow improved substantially, bolstered by a $37.9 million litigation settlement, while net income swung positive for the year. The wind-down of PeopleSoft support continues, now just 4% of Q4 revenue, down from 8% when the process began.

• Bookings Momentum Builds: 19 new client deals over $1 million TCV and 73 new logos highlight broadening demand.
• Retention Still a Drag: Service subscription retention at 88% (96% of revenue) remains below ideal, impacting revenue stability.
• Litigation Drag Fades: Legal costs fell sharply, with future litigation expense expected to be immaterial and included in G&A.

Rimini Street is now positioned to shift its growth narrative from legacy support to AI-driven modernization, with operational investments and a larger sales force setting the stage for higher bookings and improved margin leverage in 2026.

Executive Commentary

Strategic Positioning

1. Agentic AI ERP as Growth Engine

Rimini Street’s agentic AI ERP solutions—modular AI-powered overlays for existing ERP systems—are positioned as a non-disruptive modernization path for clients. By layering automation and intelligence atop stable, customized ERP environments, the company enables cost savings, process acceleration, and improved audit readiness without the risk and expense of migrations or SaaS conversions. Early client results, such as 50% faster approvals and 70% reductions in order cycle times, validate the value proposition and underpin cross-sell potential.

2. Sales Capacity and Productivity Investment

The company is expanding its sales force by roughly 20 heads (to early 90s) and raising quotas 12% to 15% to capture pipeline momentum. This investment supports both core support and new AI-driven offerings, with management citing higher close rates (over 30% of pipeline) and faster deal cycles post-litigation. The hunter-farmer sales model is now deployed across the Americas, supporting both new logo acquisition and expansion within existing accounts.

3. Litigation Resolution and Capital Allocation

The Oracle litigation settlement has removed a major overhang, freeing up $37.9 million in cash and reducing ongoing legal costs. Management is now evaluating capital return options, including share repurchases and debt paydown, while also prioritizing reinvestment in growth. Buyback aggressiveness is tempered by liquidity, covenants, and market volume constraints, but Rimini Street’s cash balance ($120 million) provides flexibility for both offensive and defensive capital moves.

4. Partner Ecosystem as Strategic Multiplier

Alliances with platforms like ServiceNow are central to Rimini Street’s go-to-market for agentic AI solutions, enabling rapid deployment and client choice of underlying AI infrastructure. The partner ecosystem extends reach, accelerates adoption, and positions the company as a bridge between legacy ERP and next-generation automation, further differentiating its offering from traditional ERP vendors.

5. Retention and Revenue Mix Evolution

Retention remains a focus, with management acknowledging higher-than-expected attrition in 2025. The company expects stabilization as the new product suite matures and client value expands. Currently, 87% of revenue is from support, 13% from optimized services, with innovation revenues expected to ramp in 2026 as agentic AI projects move from pilots to production.

Key Considerations

Rimini Street’s Q4 underscores a business at an inflection point, balancing legacy support economics with the promise of AI-enabled growth. The following considerations will shape the investment case in 2026:

Key Considerations:

• AI Modernization Demand: Clients are increasingly seeking non-disruptive AI overlays rather than costly ERP migrations, validating Rimini Street’s SmartPath strategy.
• Sales Execution Leverage: The combination of higher close rates, expanded headcount, and increased quotas should drive bookings acceleration, but productivity ramp and retention must be monitored.
• Margin Expansion Hinges on Scale: Gross margin compression from upfront sales and marketing investment is expected to reverse as new offerings scale and litigation costs fade.
• PeopleSoft Wind-Down Progress: Only 4% of Q4 revenue now tied to PeopleSoft, reducing drag and clarifying the core growth profile.
• Capital Allocation Optionality: With litigation resolved, Rimini Street can flex between buybacks, debt paydown, and reinvestment, depending on market conditions and growth opportunities.

Risks

Retention risk remains elevated, with service subscription retention at 88%, below best-in-class SaaS norms. Adoption risk for agentic AI solutions is present, as customers digest new architectures and referenceability is still building. Margin pressure from increased sales and marketing spend could persist if new bookings or innovation revenues lag. Competitive risk from ERP vendors pushing forced migrations or bundled SaaS offerings may challenge Rimini Street’s positioning, while macroeconomic shifts could impact client IT budgets or delay modernization projects.

Forward Outlook

For Q1 2026, Rimini Street guided to:

• Revenue of $101.5 million to $103.5 million (noting PeopleSoft wind-down impact will weigh on YoY comparison)

For full-year 2026, management reiterated guidance:

• Revenue growth of 4% to 6% (excluding PeopleSoft)
• Adjusted EBITDA margins in the 12.5% to 15.5% range

Management highlighted several factors that support confidence in guidance:

• Strong RPO growth and longer contract durations underpin visibility
• Expanded sales capacity and higher close rates signal bookings acceleration, especially in the back half of the year

Takeaways

• AI Overlay Model Gains Traction: Rimini Street’s agentic AI ERP solutions are resonating with clients seeking modernization without the risk and cost of migrations, positioning the company as a bridge between legacy and future enterprise architectures.
• Sales Investments Set Up 2026 Inflection: Expanded sales force, higher quotas, and improved close rates underpin management’s confidence in accelerating growth, though retention and productivity must be closely watched.
• Margin and Capital Allocation Flexibility: Litigation resolution removes a key drag, enabling Rimini Street to focus on operational leverage and capital returns as innovation revenues scale through 2026.

Conclusion

Rimini Street’s Q4 2025 results mark a strategic turning point, with agentic AI ERP overlays driving new bookings momentum and a larger sales engine poised to accelerate growth. While retention and margin execution remain critical, the business is now better positioned to capitalize on modernization trends and deliver improved shareholder value as litigation headwinds recede.

Industry Read-Through

Rimini Street’s pivot to agentic AI ERP overlays highlights a broader enterprise IT trend: clients prefer modular, non-disruptive modernization over wholesale migrations. This signals opportunity for vendors offering automation, AI, and integration layers atop legacy systems, and challenges the SaaS-first narrative of traditional ERP providers. Sales execution and partner ecosystems will be key differentiators across the sector, while retention and referenceability remain gating factors for AI-driven transformation. Other IT services and software firms should note the growing demand for cost-saving, rapid-deployment solutions that deliver ROI without business disruption.

RMNI Technology Enterprise Software AI Modernization ERP Support Sales Execution Capital Allocation