Rimini Street - Q4 2025

Transcript

Operator (participant)

Good afternoon, ladies and gentlemen, and welcome to the Rimini Street Q4 and Fiscal Year 2025 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, February 19th, 2026. I would now like to turn the conference over to Dean Pohl, VP, Treasurer, and Investor Relations. Please go ahead.

Dean Pohl (VP, Treasurer, and Investor Relations)

Thank you, operator. I'd like to welcome everyone to Rimini Street's Fiscal Q4 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 ear nings press release for the Q4 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.

Seth Ravin (CEO and President)

Thank you, Dean, and thank you, everyone, for joining us. Q4 and Full-Year Results. Our Q4 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 continued 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 H2 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 and 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 and our new AI for the real-world service offerings to fuel top and bottom-line growth in 2026. Key benefits of Rimini Street's Smart Path vision, model, and offerings include funded innovation model. Rimini Street's support model frees up capital that organizations previously spent on mandatory software vendor upgrades, allowing them to reinvest in AI-driven, high ROI projects. Layering over existing ERP systems. Instead of migrating to new software products, releases, or platforms, Rimini Street promotes layering AI and automation on top of existing, customized, and stable enterprise ERP software. Strategic partnerships and alliances.

Collaborations with AI platform companies such as ServiceNow allow Rimini Street to offer advanced AI-powered Agentic solutions that automate business processes without requiring any upgrades, migrations, or replatforming, such as having to buy and implement a new SaaS subscription. Innovative support services. Rimini Street uses its own proprietary AI applications, including reductions of more than 23% in case resolution time. Risk and cost avoidance. Clients can avoid the risks and costs of unnecessary ERP upgrades, migrations, and SaaS implementations while receiving support for existing stable and highly customized code that ERP software vendors often refuse to include in their standard support contracts. Introducing Rimini Agentic UX Solutions, powered by ServiceNow.

Also, during the Q4, we announced the release of our first 20 Rimini Agentic UX solutions, developed through our partnership with ServiceNow and designed to deliver Agentic AI ERP capabilities over existing Oracle, SAP, and other ERP systems without requiring upgrades or migrations. These solutions are already in production and are helping clients achieve significant operational gains, including 50%-60% faster approvals, 70%-80% reduction in order cycle times, improved audit readiness, and greater than 95% data accuracy.

Each solution targets a specific ERP process challenge, spanning sales, procurement, logistics, master data, finance, maintenance, and compliance, and delivers ROI in days or weeks, compared to the months or years required for traditional ERP upgrade or migration projects. For example, our client, Melita Group, reported meaningful streamlining of SKU master data creation using Rimini's AI-assisted workflows, validating the platform's ability to simplify historical manual processes.

Rimini Street positioned Agentic AI ERP as the next evolution of enterprise systems, arguing traditional ERP software is peaked in value and lacks the agility organizations need. Instead of costly vendor-mandated upgrades, the company's Rimini Smart Path enables clients to redirect existing budgets towards rapid automation and innovation. Agentic AI ERP transforms ERP from a system of record into a system of action, enabling exponential efficiency gains and empowering organizations to modernize processes, reduce costs, and accelerate growth, all without disruption. Partner and alliance ecosystem progress.

We continue strengthening our ecosystem of global partners and alliances, including technology, service, and channel relationships. These partnerships extend our reach, bring complementary expertise, and help clients execute modernization strategies that combine Rimini Street support with world-class platforms, cloud services, and AI tooling. This ecosystem is becoming a strategic multiplier for us, accelerating adoption, expanding influence, and enabling shared go-to-market opportunities. Summary.

We will build on our 2025 investments, success, and momentum and help clients navigate business and technical complexity in the age of AI, reduce costs, reduce labor requirements, and improve operational performance across ERP and enterprise software landscapes, establishing and protecting competitive advantage without software vendor-driven costs, risks, or constraints. Now, over to you, Michael.

Michael Perica (EVP & CFO)

Thank you, Seth, and thank you for joining us, everyone. Q4 and fiscal 2025 results. Our Q4 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 Q4 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. Q4 2025 included a one-time $2.1 million revenue recognition, while Q4 2024 included a one-time 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 Q4, 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 non-cancellable for at least 12 months. We note that for the full year of 2025, FX movements negatively impacted our total revenue by 0.01%, compared to a negative impact of 1.3% for 2024. Billings for our Q4 were $171.3 million, relatively flat year-over-year, and full year 2025 billings were $427.9 million, an increase of 1.2%. Full year billings, excluding billings associated with support services for PeopleSoft products, increased by 4.2% on a year-over-year basis.

Gross margin was 60.4% of revenue for both the Q4 and the full year 2025, compared to 63.7% of revenue for the prior Q4 and 60.9% for full year 2024. On a non-GAAP basis, which excludes stock-based compensation expense, gross margin was 60.8% of revenue for the Q4 and 60.9% for full year 2025, compared to 64.0% of revenue for the prior year Q4 and 61.3% for full year 2024. As previously mentioned, both the current and prior year Q4s included one-time revenue recognition of $2.1 million and $5.4 million, respectively, which positively impacted revenue, gross margin, and earnings.

As noted during our Investor Day presentations last December, our use of innovation and other analytics deployed on top of our existing systems of record provides us with confidence in our ability to build from this current gross margin level. Operating expenses. Reorganization charges associated with optimization costs for the Q4 were $2.6 million, and for full year 2025 were $4.5 million. Sales and marketing expense as a percentage of revenue was 37.7% for the Q4 and 36% for full year 2025, compared to 32.8% of revenue for the prior year Q4 and 34.9% for full year 2024.

On a non-GAAP basis, which excludes stock-based compensation expense, sales and marketing expense as a percentage of revenue was 36.8% for the Q4 and 35% for full year 2025, compared to 32.2% of revenue for the prior year Q4 and 34.4% for full year 2024. General and administrative expenses as a percentage of revenue, excluding outside litigation costs, was 15.8% of revenue for the Q4 and 16.6% for full year 2025, compared to 16.3% of revenue for the prior year Q4 and 17% for the full year 2024.

On a non-GAAP basis, which excludes stock-based compensation expense and litigation costs, G&A was 14.7% of revenue for the Q4 and 15.4% for full year 2025, compared to 15.1% of revenue for the prior year Q4 and 15.7% for full year 2024. Outside litigation cost was $21,000 for the Q4, and for full year 2025 was $4.8 million, compared to $675,000 for the prior year Q4 and $6.1 million for full year 2024. During 2025, as part of the Oracle litigation settlement, we received $37.9 million of the $58.7 million in legal fees we previously paid to Oracle during 2024.

Going forward, we do not expect litigation expenses to be material and will be included in the G&A line item moving forward, obviating the need to disclose these expenses separately in our income statement. Net income attributable to shareholders for the Q4 was $724,000, or $0.01 per diluted share, compared to the prior year Q4 of $0.07 per diluted share. Full year 2025 net income was $0.39 per diluted share, compared to a net loss of $0.40 per diluted share for full year 2024. On a non-GAAP basis, net income for the Q4 was $6 million, or $0.06 per diluted share, compared to the prior year Q4 of $0.12 per diluted share.

Full year 2025 non-GAAP net income was $0.23 per diluted share, compared to net income of $0.48 per diluted share for full year 2024. Our non-GAAP operating margin, which excludes outside litigation spend, reorganization costs, and stock-based compensation, was 9.3% of revenue for the Q4 and 10.5% for full year 2025, compared to 16.7% for the prior year Q4 and 11.1% for full year 2024. Adjusted EBITDA, as defined in our earnings release, was $11.5 million for the Q4, or 10.4% of revenue, compared to the prior year Q4 of $20 million, or 17.5% of revenue.

Full year 2025 adjusted EBITDA was $49.8 million, or 11.8% of revenue, compared to adjusted EBITDA of $53.1 million or 12.4% of revenue for full year 2024. Balance sheet. We ended the Q4 of 2025 with a cash balance of $120 million, compared to $88.8 million of cash for the prior year Q4. On a cash flow basis for full year 2025, operating cash flow increased $60.2 million compared to the prior year 2024 decrease of $38.8 million. The results include litigation settlement proceeds of $37.9 million during 2025 and litigation-related expenses of $58.7 million during 2024.

Additionally, the effective foreign currency translation was favorable by $2.8 million and unfavorable by $8.2 million for full year 2025 and 2024, respectively. Deferred revenue as of December 31, 2025, was $288 million, compared to deferred revenue of $281 million for prior year 2024. Remaining performance obligations, RPO, which includes the sum of billed deferred revenue, contract assets, and non-cancellable future revenue, was $653 million as of December 31, 2025, compared to $588 million for prior year 2024, an increase of 11%. When excluding RPO related to support services for PeopleSoft products, the year-end balance increased 12%, reflecting our building momentum with both new bookings growth and longer duration commitments.

PeopleSoft Support Wind Down update. As we discussed during last quarter's earnings conference call, our settlement agreement with Oracle provides, amongst other obligations and terms between the parties, that the company will complete its previously announced wind down of its support and services for Oracle's PeopleSoft software no later than July 31, 2028. We have made progress in reducing both the number of PeopleSoft support clients and related revenues since announcing the wind down. Revenue from PeopleSoft support services was 4% of revenue for the Q4 and 5% for full year 2025, down from 8% of revenue when we began the wind down during the H2 of 2024. Business outlook.

The company is providing Q1 2026 revenue guidance to be in the range of $101.5 million-$103.5 million, and reiterating full year 2026 guidance as communicated at our Investor Day for revenue growth in the 4%-6% range, with adjusted EBITDA margins in the 12.5%-15.5% range. For additional information, please see the disclosures in our annual report on Form 10-K, filed today, February 19, 2026, with the U.S. Securities and Exchange Commission. This concludes our prepared remarks. Operator, we'll now take questions.

Operator (participant)

Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question, please press star, then the number one on your touchtone phone. You will hear a prompt that your hand has been raised. If you'd like to withdraw from the polling process, please press star then the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Brian Kinstlinger from AGP. Please go ahead.

Brian Kinstlinger (Senior Equity Research Analyst)

Great. Thanks so much. The implied revenue change in the Q1 of 2026 is about a 1.5% year-over-year decline, ±. So the obvious math is that the year-over-year comparisons are going to have to grow more than 4%-6% for the remaining three quarters in 2026. So I'm curious as to the visibility of this, not only return to growth, but pacing 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?

Seth Ravin (CEO and President)

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.

Michael Perica (EVP & CFO)

... 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, looking to Q1, that the PeopleSoft component, which will be down year-over-year and expected down sequentially as we run off, 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.

Brian Kinstlinger (Senior Equity Research Analyst)

So 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, what gives you that improved visibility, particularly?

Seth Ravin (CEO and President)

Sure.

Michael Perica (EVP & CFO)

Certainly highlighting- Go ahead, please. Please.

Seth Ravin (CEO and President)

No, no. Go ahead. Go ahead, Michael.

Michael Perica (EVP & CFO)

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 with staff as well. That, as well as our expanded suite of offerings, the conversations that we're having with our clients with regard to alternate roadmaps, are giving us the combined increased confidence in this year.

Brian Kinstlinger (Senior Equity Research Analyst)

Great.

Seth Ravin (CEO and President)

On top of that, Brian, if you look at the close rates in the Q4, 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.

Brian Kinstlinger (Senior Equity Research Analyst)

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?

Seth Ravin (CEO and President)

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 are bringing in both professional service revenue, which you get right away, because we're, 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, and that means we should see accretive capabilities faster than you normally would just under the subscription agreements.

Brian Kinstlinger (Senior Equity Research Analyst)

Okay. Thanks, guys.

Michael Perica (EVP & CFO)

Sure.

Seth Ravin (CEO and President)

Thank you, Brian.

Operator (participant)

The next question comes from the line of Richard Baldry from Roth Capital Partners. Please go ahead.

Richard Baldry (Managing Director and Senior Research Analyst)

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

Seth Ravin (CEO and President)

Sure, Rich. I think you're seeing an, 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 gonna 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%-15% increases across the board.

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 to 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%-35%, somewhere in that range.

As far as G&A, we're gonna 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.

Richard Baldry (Managing Director and Senior Research Analyst)

... Thanks. 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, you know, like, top of funnel, new logo, trending that is you think you can sort of tie to the exit from the litigation past?

Seth Ravin (CEO and President)

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, you know, 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. We're seeing that it meaningfully reduce the cycle time to get a deal closed.

Richard Baldry (Managing Director and Senior Research Analyst)

Thanks. Last for me, you know, if your typical seasonality of collections holds, you could end next quarter with, you know, well over $1.50 in cash per share. But contrast that to the severe valuation pressure small cap tech scene, 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 while the market valuations, you know, across the board, not just you specifically, but have seen some pretty severe pressure. It seems like you're in a, an unusual opportunity where you could get pretty aggressive on that front. Thanks.

Seth Ravin (CEO and President)

Sure, Rich. I, 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 MNPI 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. I think, Michael, you, you probably want to talk a little bit more on that on some of the recent moves we've made.

Michael Perica (EVP & CFO)

Yes, we're certainly, we do share that sentiment, right, that there is value here. As Seth noted, with regard to our surplus, we, we do evaluate, all of the factors around in 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 assessed 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.

Richard Baldry (Managing Director and Senior Research Analyst)

Great. Thanks for your answers.

Michael Perica (EVP & CFO)

Mm-hmm. Thank you.

Seth Ravin (CEO and President)

Thanks, Rich.

Operator (participant)

Your next question comes from the line of Derek Wood from TD Cowen. Please go ahead.

Speaker 8

Oh, great. Hey, it's Andrew on for Derek. Thanks, guys, for taking the questions. 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?

Michael Perica (EVP & CFO)

No particular trend that altered from last quarter with regard to the composition 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, two quarters doesn't make a long-term trend, but we are encouraged by the momentum.

Speaker 8

Yeah, that's great. And then, Seth, on the go-to-market front, would be great to hear how you're feeling about sales productivity. You talked about adding a lot of sales capacity, and how's 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?

Seth Ravin (CEO and President)

Sure. We've 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 2026. 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 2025 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 of 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's 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.

Speaker 8

Perfect. I'll pass it on. Thanks, guys.

Seth Ravin (CEO and President)

Thank you.

Michael Perica (EVP & CFO)

Thank you.

Operator (participant)

Your next question comes from the line of Alex Ferman from Lucid Capital Markets. Please go ahead.

Alex Fuhrman (Managing Director and Senior Equity Research Analyst)

Hey, guys. Thanks very much for taking my question. You know, curious, do you expect the return to growth this year to be driven, you know, 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?

Seth Ravin (CEO and President)

Well, Alex, I think we have a combination of them. We expect to see, as we already talked about for the Q4, 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 roadmap 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 gonna be a combination of those services, but as you saw in the Investor Day, you know, 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.

I think we're going to start putting those numbers on the board, of course, in 2026, 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.

Alex Fuhrman (Managing Director and Senior Equity Research Analyst)

Great. That's, that's really helpful, Seth. Thank you. 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?

Seth Ravin (CEO and President)

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, the disruption, and 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, in Latin America as well. So all of the Americas is, is using the Hunter-Farmer model, and we're looking at other deployments in different countries around the world.

Alex Fuhrman (Managing Director and Senior Equity Research Analyst)

Okay, that's really helpful. Thank you very much.

Seth Ravin (CEO and President)

Sure. Thank you.

Michael Perica (EVP & CFO)

Back to Alex.

Operator (participant)

Your next question comes from the line of Daniel Hubschman from Craig-Hallum. Please go ahead.

Daniel Hibshman (Senior Equity Research Analyst)

Hey, this is Daniel on for Jeff. Seth, maybe just starting off on the adoption to date on Rimini Agentic UX. You know, I know that came out in December, and then we had the GA here in January of the 20 additional solutions. And 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? You know, just what stage those are at as well, whether we're talking pilots or full-scale production.

Seth Ravin (CEO and President)

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's 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 AI-first 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 know, 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, but customers have never seen this before.

So this is gonna 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 referenceable 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 gonna take a while for all this to get adopted.

Daniel Hibshman (Senior Equity Research Analyst)

Thanks. 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. So that was one time. 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.

Michael Perica (EVP & CFO)

So, no other elements up and down the P&L that I would call out or worth noting that would be a one-time issue, non-recurring in nature of any size. The drop-through to the bottom line, both this year, the $2.1, 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 1-2 years out. So yes, there was contribution to the bottom line on it.

Daniel Hibshman (Senior Equity Research Analyst)

That's it for me. Thanks, Seth. Thanks, Michael.

Michael Perica (EVP & CFO)

Thank you.

Seth Ravin (CEO and President)

Thank you.

Operator (participant)

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.

Seth Ravin (CEO and President)

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 again. Thank you very much, everybody, and have a great day.

Operator (participant)

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