Rimini Street, Inc. (RMNI) Earnings Call Transcript & Summary

Good morning. I am Dean Pohl, Rimini Street's Vice President of Investor Relations. And it is my pleasure to welcome all of you to our first ever Investor Day. The duration of today's event is scheduled to be 2.5 hours, including our Q&A session at the end. We have a comprehensive program of speakers and topics today. Our goals for this event are to introduce you to the broader executive leadership team and provide a deeper dive into the vision, strategy, service offerings and execution plans that we believe will drive us to $1 billion in annual revenue and robust income and balance sheet metrics by 2026. Following the prepared presentations, we will have a Q&A session where speakers will take verbal questions from our covering financial analysts. And written questions from all other attendees submitted online through the event site. Questions will be answered as time permits. [Operator Instructions] Please note that the event website includes today's agenda, the presenters' biographies and the slide deck presentation. Today's Investor Day presentation is being recorded and will also be available for playback, together with the slide deck, on Rimini Street's Investor Relations website. Now a few disclosures. First, some of the matters we will discuss in today's conference including our business outlook, are forward-looking and, as such, are subject to known and unknown risks and uncertainties, including, but not limited to those factors set forth in our risk factors, in our most recent annual report and on Form 10-Q and other documents filed and furnished to the Securities and Exchange Commission. These risks and uncertainties may cause our actual results to differ materially from those expressed or implied during our presentation and are not a guarantee of our actual results. As always, Rimini Street assumes no obligation to update any statements made or information contained on presentation slides. Second, we are not planning to provide any information or comments today related to our 2020 fourth quarter and full year results that have not yet been reported or filed, nor are we planning to provide any 2021 guidance today. Rather, we will discuss these results and provide such guidance in our upcoming earnings announcement and conference call currently scheduled for March 3, 2021. Third, during today's presentations, we may reference certain non-GAAP financial measures, which we believe provide useful information for investors and analysts materials from today's conference, including a reconciliation to GAAP measures can be found in the appendix of today's financial presentation and on the Investor Relations section of our website. Okay. With housekeeping items out of the way, let's get started. It is now my pleasure to introduce our first speaker, Seth Ravin, Rimini Street's Co-Founder, Chief Executive Officer and Chairman of the Board.

Okay. Thank you very much, Dean. And good morning, everybody, and thank you for joining us on this virtual platform. We're sorry that the circumstances in the world don't allow us to get together for our first ever Rimini Street Analyst Day. But we certainly look forward to hosting a group with you for a live event, hopefully, at our headquarters next year if we can all get together. I wanted to talk to you today about the founding of the business, where we came from, and set this up for the rest of the presentations from our senior executive team. We're going to walk you through how we're going to move forward over the next 5 years and hit our goal of $1 billion in revenue plus some additional financial metrics that Michael Perica, our CFO, will lay out at the end of the presentation. But starting back at the beginning for those of you who are new to the story, we launched the company in 2005. We saw a very specific opportunity in a multibillion-dollar TAM to come in, and for the first time, offer competition to enterprise software vendors who really owned almost a monopoly on the support, the aftermarket service that they provided on their software. This is unlike any other normal consumer environment where you have multiple choices, whether it's a car or you could take it for repair or an oil change to another location instead of the dealer potentially at substantial savings or even a better particular service or even when you go out and you shop for different appliances. You always have choice in the consumer world. But enterprise software customers did not have those choices back in 2005. And that was reflected in the fact that the vendors had near 100% ownership of the aftermarket service environment, and they were getting price points with gross margins north of 90%. Again, very, very indicative of a monopolistic type of market. I came out of PeopleSoft, where a big group of us, in fact, 6 of the senior executives were with us at PeopleSoft. We built the company up from a few hundred thousand dollars up to $10 billion in terms of value of the company. And this was a really big growth operation that we had. And those of you who remember PeopleSoft, this is the team that built out the service components that we were known for in the industry that allowed us to compete and grow so rapidly against players like SAP and Oracle. So when we launched in 2005, this was based on years and years of experience in the maintenance side of the business. Sebastian Grady and Kevin Maddock on our senior team were part of the group that helped develop and build a commercial approach to maintenance and took it to $1.2 billion at PeopleSoft. So we know that business inside and out. The rest of us built out the account management operations, the client services components of the business, we ran support policy. And in fact, Brian Slepko even ran the global support operation. So we've had a lot of years in the business. And I would tell you that we have a management team steeped in maintenance that nobody else brings to the table. Now we looked at redefining the enterprise software support business. And you can see here with the different bullet points, the way we redefined the service back in 2005. Now one of the things that we did real quickly was we changed the total cost of ownership. Not only did we come in at half the price of what the software vendor was offering, look at this, we changed the total cost model to about 25% of what people were paying the software vendors. This is what fueled Rimini Street's early rise and continued growth over the years. This was a very, very strong value proposition that was easy for customers to understand. Better service at a better price point, and they were able to then use that money for other things, and we'll talk more about that. And in Seb Grady's presentation, he'll give you some examples as well. But we started with a very strong leadership team. As I mentioned, 6 of our top leaders came out of PeopleSoft, many from Accenture before that. We were at SAP, we've been all over through the enterprise software background as well as a lot of the business and consulting operations that you would expect, including the KPMGs and pricewaterhouses, et cetera. And we've built this out and recently added additional executives, such as Michael Perica, who just joined us recently as CFO, and you have Gerard Brossard, who came to us from Rackspace and HP. So we have a very, very wide, broad group of folks. And Nancy Lyskawa, who not only was at PeopleSoft, but also owned support marketing for Oracle for quite a few years. Now what business problem are we solving? If you take a look here on the screen, you're going to see the fundamental core. And you're going to hear more about the ways we're solving individual industry and client issues under Sebastian Grady's presentation. But you can see here, the problem is in nuts and bolts, that the IT budget of most companies is spent with 90% of that budget going to day-to-day operations. And only 10% of that budget is left for innovation, digital transformation, doing things that the business needs done to grow and to have better competitive advantage in the marketplace. That equation is simply not good enough. You can't build the business in a competitive world on 10% of that budget for innovation. What we do is we help companies strategically change that equation, and with -- if they buy all of our services, they can drop that, we believe, to about 60% of their total budget on day-to-day operations, freeing up 40% of the IT budget for innovation. In other words, Rimini Street becomes a vehicle to unlock budget within the existing it operation, reallocating costs that can be used and put to better use within the organization to grow the business and create more competitive advantage. That's what we do today. Now in 2015, we embarked on an expansion of our view of maintenance while we started off in the business of replacing the annual support that customers were paying the software vendors, which included things like break, fix. If something breaks, you provide a fix. You need tax, legal and regulatory updates around the world. You also need help when you want it, on demand, with a service level agreement. But in 2015, we saw an opportunity to move beyond that $88 billion TAM to double that TAM to $170 billion opportunity by changing beyond what we considered support in those early years. We now expanded support to include not just being there for the team who's running the system, but we will now run the system for customers. We will run it. We will provide the support, and we will do this as a single turnkey vendor going forward. This allows us a unique position to not only change the way services are bundled in the industry. But we are the only ones who are positioned at scale to provide both running the system and supporting it with no need for the software vendor whatsoever. And this allows us to deliver a client savings and a value proposition that nobody else in the industry can provide. We began this journey in 2015 with the vision. It took us till 2018 to begin executing publicly on it, which included a new partnership with Salesforce.com as we now support SaaS products as well as traditional on-premise. So we went to market with Salesforce, and we've launched that business. We then launched our application management, which means running the systems on Oracle and SAP products in 2019, with very successful clients in all 3 of those AMS products, Salesforce, SAP and Oracle. The bottom line is Rimini Street is positioned now, going forward, to make money no matter what the product is, whether it is a SaaS product like a sales force and eventually, potentially a workday and a service now product and others, as well as the big traditional on premise, of which there are tens of thousands of clients, and you'll hear more about that market opportunity from David Rowe in his marketing presentation. Now I mentioned that we're changing the way services are bundled. This is just a quick slide to show you how we're taking the application management services that are traditionally delivered by the big SIs. And we're coupling it with the traditional software vendor maintenance that's provided by the vendor only. And we're bringing those together in one expert vendor bundle, again, uniquely positioned ahead of everybody else and the only ones at scale to deliver that on a global basis. So when you think about looking at the different services Rimini Street now offers, we have 5 pillars of optimization and savings today. We have moved from a single-product company to a bag of products. And I'll talk to you about the first one. The first 1 is our traditional business that we've built on, and that is our total software and support replacement for the vendor. And we can help clients optimize that cost, reduce it over 50% and up to 90% total operating cost savings. Then we can help you by running your systems. And we can keep that with our application management services. This is our new AMS. We will run that system for you. And when we run it for you, you're required to also buy our maintenance. They have to go together. So that creates a bundling and a longer LTV increase for customers and a bigger footprint for us. We can then help them move to the public cloud. We can lift and shift existing on-premise applications into an AWS or an Azure or Google Cloud environment. Some of our customers are running on Oracle OCI, others are running on SAP's platform. We will help them move into the cloud to reduce data center cost and improve performance. Then we will help them manage that cloud environment, bringing further savings and better optimization. And then we will help them optimize their license structure with the vendor. Often, customers are paying too much on their licenses, and we can help them reduce that cost. These 5 pillars can drive exactly what we showed in the business problem, where we believe this would allow us to help a customer drop their day-to-day operating expenses to 60% of their IT budget. Unlike anybody else in the industry, we have continued to grow year after year since the beginning of our company in 2005, adding new Oracle product lines, additional SAP product lines, adding Salesforce product lines. And we plan to continue to expand and grow the portfolio of products that we service today and tomorrow. From a company snapshot, where are we today? Today, we're over $300 million run rate revenue. We've continued with a CAGR of 27% over the last 5 years. We have over 20 countries of operation, over 1,300 employees servicing customers around the world, hundreds and hundreds of engineers. We have a very robust set of products from the support that we started out with to the new application management business. And even strategic services where we're not yet known, but we're selling millions of dollars of Rimini Street security. In fact, one of our security products is based on the McAfee platform. And we have innovative solutions for interoperability and integration. We do monitoring of releases around the world to help customers head off issues before they ever happen in a proactive way. And we're helping customers, as I said, with license, database migrations between Oracle and open source, and we have professional services, which is a growing part of our business as well. Together, we've saved almost $5 billion for customers since the inception of the company. Today, you're going to hear from a variety of Rimini Street executives who are going to talk to you about the various coordinated integrated strategies and plans between now and 2026, that will drive us to the $1 billion in revenue and the financial metrics that Michael will outline in his presentation towards the end. We are very much known for being an execution shop over the years, a methodical player. We're methodical and detailed planners. And we always operate on a 5-year plan. So we're happy to share with you today this 5-year plan and vision between getting us from $300 million run rate to over $1 billion by 2026. And I hope you enjoy today's presentations and they provide value to you in terms of understanding the depth of Rimini Street's vision going forward. Thank you very much. And now I'm going to turn it over to Sebastian Grady, who is our President and spends a lot of time working with our bigger clients and strategic clients around the world. Seb, over to you.

Thank you, Seth. Good morning, everyone. As President, a majority of my focus is helping our global sales team win and retain significant accounts with executive to executive strategic deal support. Today, I will share with you why we believe clients buy Rimini Street services and then walk through a few select case studies that span different Rimini services, products supported, industries and geographies that support our buyer thesis. To get started, I will share 2 case studies around T-Mobile, an $80 billion major telecom in North America, now merged with Sprint; and PSEG, a $10 billion major U.S. utility that generates nuclear power and serves over 2 million customers in New Jersey in Long Island. This picture is our CEO, Seth Ravin, on stage with T-Mobile and PSEG at Gartner's large global Symposium event where our clients explain their IT strategies to delay and avoid costly low-value ERP upgrades and improved service levels at the same time. T-Mobile concluded that its time, resources and budget was better spent invested in 5G infrastructure and client acquisition, its top areas of competition rather than costly support and software changes for its SAP ERP system, that was meeting its current and expected future needs for years to come. Rimini Street was the proven solution to support the SAP system and extend its life for another 5, 10 or even 15 additional years. Likewise, PSEG also concluded that it needed to focus on and invest in more important IT projects than migrating and upgrading its highly customized and complex SAP financial system. And it not only turned over the support of the SAP system to Rimini Street, but a year later expanded their service contract with Rimini Street to include our application management services for SAP. So today, Rimini Street runs and supports the SAP system for PSEG using a global service delivery team. Some of the key operational accomplishments we have already achieved for PSEG include reducing the open case load to under 100 cases in 6 months, an important goal to PSEG and something their previous AMS provider could not accomplish in more than 10 years. Now those were just a couple of examples of how Rimini Street services different industries, each with different strategic priorities and objectives but both able to leverage Rimini Street's specialized and proven enterprise software services. Rimini Street has already served more than 3,700 clients across nearly all industries and geographies. As you can see in the charts, we cover diverse industries and geographies and can service just about any organization over about $100 million in annual revenue, who is running Oracle SAP or Salesforce products, providing a large addressable TAM for our services globally. David Rowe, our Chief Marketing Officer, will walk you through our addressable TAM in more detail in his presentation. When we look at some of the top reasons or business goals that drive clients to buy Rimini Street services, they include operating cost and capital investment savings, needs to reallocate overspend on their ERPs to other key initiatives and the need to improve ERP operating outcomes. Each business goal has associated ways in which we can help a client achieve that goal and many of our clients have more than one goal that we can help them achieve. In fact, most of our cross-sell opportunity with existing clients can be tied directly to new or additional business goals that we can help a client achieve above where we are already providing value. Getting a bit more granular here, we believe clients buy when we connect our services clearly to their strategic financial and IT goals. We think about the sale as tying together 4 different components of addressing the clients' needs, our core sales messaging, which applies to everyone as a foundational value proposition. Next, we address the specific industry challenges and opportunities and show how we can help. Then there are details around the products and current releases and this is a very specific road map discussion about what they're running today, where they think they want to go in the future and how we can help them achieve this objective. Lastly, we focus on the unique pain points of each client and how our services can help here as well. I already walked through the T-Mobile and PSEG buyer case studies covering the telco and utility sectors. So let's walk through a few more buyer case studies in other industries. We can start with retail, where Rimini Street has a significant global presence. Petco is a $3 billion specialty retailer. Petco has been a Rimini Street client for nearly 12 years, where we provide their PeopleSoft human capital management and financial support. In 2016, Petco expanded their Rimini Street services to include their Oracle Database, Oracle Middleware, Oracle Retail and Hyperion applications. These systems run Petco, and new CIO, John Zavada, pictured above with his dog, indicated Rimini Street is and has been an important and growing part of their IT and corporate strategy as there continue to be disruptive changes in consumer behavior, retail competitive strategies and technology. Nottinghamshire County Council, located in the United Kingdom, serves approximately 828,000 residents and offers around 400 adult and child services to the community. The Council was facing significant pressure for cost reductions while also needing to maintain all essential constituent services. The Council's SAP system has more than 6,000 users operating across 9 county offices and numerous satellite locations and now also thousands of home locations due to the pandemic. The Council determined they were paying too much for SAP support, and they were also dissatisfied with the quality of SAP support and the impact on their operations. NCC was able to significantly reduce its SAP operating cost with Rimini Street and improve the quality and breadth of support they receive. Rimini Street's support also enabled the council to reduce its accounts payable staff over 50% due to better system performance. Further, Rimini Street's tax, legal and regulatory support services ensure consistent, reliable and accurate on-time pay for its 7,000 staff members and tens of thousands of pensioners. BrandSafeway is a $6.7 billion global engineering firm. Brand's strategy was to streamline their operations and productivity through preventative maintenance consolidated vendor footprints and more consultative problem solving. Brand engaged Rimini Street to support their very complex Oracle EBS system. Based on the success of that initiative, they then expanded their Rimini Street services to include AMS for Salesforce, and most recently expanded their Rimini Street services to include AMS for their EBS system as well. Rimini Street has already delivered measured and valuable operational improvements for Brand, such as a 57% reduction in time to close security assets requests, and 82% reduction in the number of incidents opened for greater than 30 days, a 99% Salesforce case closure rate. As noted in the earlier industry pie chart, manufacturing is the largest industry segment of Rimini Street clients. Global manufacturers are under tremendous competitive pressure to increase productivity through reduced costs and innovation. Hyundai Motor Group is a $200 billion Global 100 manufacturer and conglomerate, and only one of the many leading global vehicle manufacturers who use Rimini Street services. Hyundai came to Rimini Street with a large, complex Oracle Database footprint, consisting of more than 1,500 global instances. As noted by Hyundai, Rimini Street enabled huge cost reductions with 0 impact to company-critical IT operations and has become a global strategic partner. Today, Rimini Street's global scale and capabilities enable us to support tens of thousands of Oracle Database instances and provide our proven mission-critical support for many of the largest and most complex Oracle Database landscapes in the world, including high security government and military operations. Financial services companies have been under a lot of pressure since the 2008 financial crisis to streamline operations and carefully manage their IT spend. Today, Rimini Street serves many of the largest global banks and insurance companies. RSA is a $9.3 billion multinational insurance company who wanted to optimize their SAP spend. Their landscape consisted of multiple SAP instances of R/3 and ECC 6. While SAP ceased providing support for R/3 many years ago, Rimini Street has provided full support for R/3 for more than a decade and plans to continue providing full support for its clients years into the future. RSA had no business case or desire to invest in a very expensive SAP S4/HANA migration. And Rimini Street's support is a proven scaled solution that meets their strategic business and IT objectives. Rimini Street will allow RSA to continue leveraging their current stable systems for years into the future while they reallocate savings to fund other priority investments. RSA notes that Rimini Street has been a game changer for them. Green Cargo is a government-owned organization transporting 22 million tons of freight every single year and serving close to 300 locations in Sweden, Norway and Denmark. CIO, Ingo Paas, was given the task of developing an IT strategy that would build a foundation for modernizing the business while mitigating major it risks. The company set strategic objectives that by 2030, they will increase the internal digitization of processes, automate its rail operations and lead the integration of eco-friendly systems. The first strategic decision was to decide whether to migrate away from its SAP environment and invest in a multiyear IT program to replace the existing SAP system or find a new approach to meet the strategic needs of the business. Green Cargo decided to remain with its existing SAP environment and leverage Rimini Street's support to improve system reliability and outcomes, while significantly lowering its ERP operating costs. Rimini Street gave the company confidence that its core business applications would remain stable while it adopted a more evolutionary approach to innovation. As a result of the success with Rimini Street, Green cargo has declared Rimini Street as 1 of its 5 trusted strategic partners and feels it can depend on Rimini Street to help secure, stabilize, and improve its critical SAP platform for many years to come while Green Cargo stays focused on the future. To wrap it up, I think what you should take away from these case studies is that Rimini Street has been successful by keeping a fanatical focus on helping our clients achieve their strategic, financial and IT goals, no matter what the industry or geography. When our clients are successful, Rimini Street is successful. This philosophy is ingrain deep in the Rimini Street culture and operating model and will remain at the center of our strategy to accelerate growth and achieve our financial and operating goals in the years ahead. With that, I will now turn it over to David Rowe, Rimini Street's Executive Vice President and Chief Marketing Officer.

Thank you, Sebastian. And today, I'm going to walk through an overview of our marketing strategy and plans. The primary mission of the Rimini Street marketing team is to cultivate strong brand recognition and value, develop a broad market understanding of how our solutions help organizations and deliver a qualified sales pipeline to meet sales targets today and into the future. But first, I want to put our goal of $1 billion in annual revenue into perspective. The leading industry research firm, Gartner published a report estimating the size of the third-party support market in 2019 sales at $351 million, and projected the market would grow to more than $1 billion in sales by 2023. So based on Gartner's figures in Rimini Street's 2019 results, our global market share of the $351 million is about 86%. So we're the clear market leader in the market and the only alternative to Oracle and SAP with global scale. Our next closest third-party support competitor who started their business around the same time as Rimini Street, we believe, is less than 10% of our annual revenue and does not have the same global scale to compete effectively against us. Now Gartner's market size estimates, coupled with our overwhelming market share, further validate that our goal of achieving $1 billion in annual revenue by 2026 is both reasonable and feasible. Additionally, these estimates, remember, are only for third-party support market and do not include the additional substantial revenue opportunities for AMS, our application management services or any of our other subscription services such as security, interoperability or monitoring. So now let's move from Gartner's estimates of the expanding size of total industry sales. And let's take a look at just how large our current market -- our current total addressable market opportunity is for the products we cover just for today. You can see that the addressable market opportunity is many times the size of the current estimated sales into that market. So on the left is the third-party support market TAM. Just for Oracle and SAP products we cover today, about $14.5 billion. But if you go to the right, by adding in Oracle SAP and Salesforce application management services to our portfolio, our TAM has doubled to nearly $30 billion. In our experience so far, the AMS deals we closed with clients are, on average, larger than the original support deal, sometimes significantly larger. So it's a big market with more than enough opportunity to support our growth targets through 2026 and beyond. This graphic shows the Rimini Street market penetration rate just for our support services by geographic region. Even with our annual revenue now in the $300 million range, you can see just how much additional addressable opportunity there is in this market. To date, we've only captured about 3.5% of the global addressable support market for the vendor products we service. And when you add in our AMS addressable market opportunity, where we're just launching our global sales initiative and still have really an immaterial penetration, our total penetration of addressable market to date is even less. We are barely scratching the surface of the global opportunity for our services. So it's a large, it's an expansive market opportunity with plenty of runway in all the regions and for all the solutions that we offer today. So next, let's take a look at the market in more detail, the market dynamics, the business needs and the IT challenges, all of which are very favorably aligned to Rimini Street solutions. From a market landscape perspective, it's really a mix of challenges in new technologies. Budgets have always had to have been well managed, but the current economic pressures are adding to the pain for some industries, in particular. At the same time, cloud is a massively disruptive force in enterprise software, creating a seismic shift, if you will, in the large ERP vendor installed bases. The database market is also undergoing significant change with the commoditization of databases with the shift to open source and other alternatives as a big trend. In fact, Gartner has even stated that open source databases are now functionally equivalent to vendors, to traditional databases from vendors like Oracle and others. And it's really a hybrid world with the reality that traditional licensed and new cloud applications will coexist for the foreseeable future. Now this creates a very complex environment, both from an application strategy perspective, but also from a support standpoint. And as organizations look at their IT and business needs, there's a huge elephant in the room, and Seth covered this briefly earlier. According to Gartner, the 90% of IT budgets are spent on operational and enhancement activities, leaving just 10% of budgets left over for innovation. And with growth as one of the top business priorities for CEOs, there's a massive need to reduce the daily IT operating costs for systems and shift those funds to innovation that the business needs for business -- for digital transformation and other projects, all in alignment with the new initiatives of the business and their objectives. Now having the right skills on hand for all this, the existing and then the new technologies and software is proving to be a tremendous challenge. And of course, no list like this would be complete without security, where, as Seth mentioned, Rimini Street has innovative and very successful security solutions for our clients. Now we don't have time to explore every aspect of the landscape and the needs and how it ties to Rimini Street Solutions. But Rimini Street is incredibly well positioned to help companies navigate these challenges. Through Rimini Street support, we've helped clients save nearly $5 billion in total support cost, funds that can be used to invest in the innovation companies need, and need now. With a support commitment of at least 15 years, we help clients extend the lifespan and the value of their enterprise software. We've integrated AMS to help run and manage the software we support. And we're starting to help customers with defining their paths forward with business-driven roadmaps. And we also have strategic services to help modernize, future-proof and secure their enterprise software. And to help illustrate this, and really to add on to the examples that Sebastian talked about, I want to tell you briefly about a conversation I had recently with the CIO. And this is a CIO that has selected Rimini Street 3 times at 3 different companies. And he said to me, he said, Dave, the way I would describe Rimini Street is "predictable success." He said, "I get wonderful service. I free up millions of dollars in savings and I can immediately fund the projects the business has been wanting for years. I'm a hero, IT is a hero and the business moves forward more successfully to achieve its objectives." And I think that's a great example of how we help organizations move forward to grow and expand market share. All right, so now let's get into the go-to-market strategy and look at certain aspects of that in the next few slides. Now first of all, this is a simplified view of a marketing funnel, taking prospects from initial awareness at the top through to engagement with our sales team as qualified leads at the bottom. Now at Rimini Street, we have a highly developed, structured strategy and process for building demand and generating pipeline, strategies and processes that we have built and honed over 15 years. There's 2 primary components I want to highlight here on the slide. First, awareness and reputation. We have a coordinated set of activities across multiple channels to build awareness of Rimini Street Solutions and the value we create. And we do this across a defined set of personas or roles in the organization, industries and use cases. Now the channels and strategies we leverage include television commercials, public relations, where we connect our clients with the media, to do interviews and other activities like that. We build awareness and solidify our reputation with analysts like Gartner, Forrester, Constellation and others, as well as sophisticated digital strategies, especially important with a huge shift in 2020 away from any physical events to a digital virtual model. And the second component here I want to highlight is our scalable demand engine. We have a fully integrated demand engine connected into the integrated campaign engine, built on top of industrial-strength enabling technology that begins with understanding the roles in the industries that define our target accounts using a comprehensive set of data sources and tools to build and cleanse account contact and related data that then feed directly into the campaign engine, which generates thousands and thousands of prospect responses and engagements. And these build into marketing qualified leads that feed into our global lead generation sales development team who then directly follow-up with prospects to engage them on Rimini Street's value and solutions, and ultimately engage the prospect with our sales team directly. Now over the past 15 years, we've built a scalable industrial strength, automated and efficient global demand generation engine that we believe will fuel our growth in the years ahead. So now let's look at the global marketing team that drives execution of our go-to-market plans and they are located globally in each of our theaters of operation. Our corporate marketing team is in the U.S., and we've deployed field marketing and lead generation teams globally, all connected by state-of-the-art infrastructure and enabling tools. Our marketing teams in the field are directly aligned with general managers in each region as well as the local sales teams. We have a highly efficient marketing operation service center in India as well, which helps to ensure 24/7/365 marketing support to all our global marketing teams. And we drive a common marketing strategy, goals and themes from corporate. And then each of the regional teams translate and localize to their language, culture, market and unique mix of industries, as well as the differences in selling and buying models around the world. So now let's look at our go-to-market with regard to global brand and service awareness. And over the years, we've -- Rimini Street has been, what I believe, is a very efficient, highly productive direct marketing engine. But as we've grown and our scope increases, it's important that we also increase our global media air cover to build awareness and brand recognition globally. It's also important to educate the market on the strategic business value Rimini Street provides, not just to our traditional IT executive audience, but also to the C-level leadership of clients and prospects. So far, we've developed 3 television commercials and corresponding radio ads that have rolled out and are running in 90 countries plus around the world and on various other digital platforms. And we've seen excellent results from these efforts. In addition to significant anecdotal feedback in deals, we've received direct and measured direct increases in brand recognition, as well as even on website activity. And there's also a level of credibility that these ads have given our teams around the world with their senior executive contacts at clients and prospects. We're very happy with the positive impact of this air cover on our business, and we will be continuing it into the future. Now another important part of our marketing plan in our go-to-market is our modern and scalable digital platform centered around our riministreet.com website. Now you may know this, but in B2B sales and marketing, a key understanding is that buyers are able and want to complete 50% or more of their buyer journey before ever having contact with the vendor sales team. And our new website is built to enable this buyer journey and enable us to continue to scale as a business. Our website and other digital platform investments that we have made over the years are delivering improved results and better prospect engagement. And we've also transitioned over the last year to nearly 100% virtual marketing events, a substantive and very successful transition from our former mix of heavy in-person events. Attendance at our own hosted events have seen substantial increases compared to prior attendance numbers. And we're also seeing good lead generation results out of both our own hosted events and events where we are attendees and sponsors. All right, now let's turn over and look at our Rimini Street marketing or MarTech stack. And this really represents and shows additional examples of our digital investments that include marketing technology or MarTech, as I mentioned, for short. With exploding privacy laws and marketing restrictions that vary by geography as well as new analytics and insight tools that help target and nurture in a very personalized approach, MarTech has very important these days as an enabler for effective marketing and revenue growth. And a strong MarTech stack helps Rimini Street target, engage, nurture and convert qualified potential buyers into serious pipeline opportunities for sales at scale with effectiveness. And my background at Accenture, or the company previously known as Accenture, as well as with an enduring background, our skill is more important than we ever thought for success in the marketing world today. And it's that background plus the deep team that we've developed that has built an industrial strength set of marketing systems as part of our integrated MarTech stack. And you may notice several leading names among our tools that you recognize. Like Salesforce, which is the core of our sales and marketing systems; Marketo, which is our marketing automation engine; Qlik, which we use for analytics and measurement; and SalesLoft, which provides lead generation -- lead gen enablement and automation. Now you can also see that several names are blurred. And these represent what we think are differentiating, secret sauce combination of systems and technologies that give us a technical competitive advantage in our marketing, including leading-edge technologies like intent signals, account based marketing, lead attribution and data enrichment. Together, we believe these integrated systems and technologies give Rimini Street a solid marketing technical foundation for continued leadership in our market. So as I mentioned in my opening, the primary objectives of the Rimini Street marketing team are to cultivate strong brand recognition and value, develop broad market understanding of how our solutions can help organizations and deliver a qualified sales pipeline to meet sales targets today and into the future. And I think measured against these objectives, we're continuing to see positive execution gains. And here's just a few of the recent metrics: Website activity, more than doubling year-over-year; Gartner inquiries on third-party support and Rimini Street up 64% year-over-year; and campaign responses up 30%, and new pipeline growth up 37% year-over-year, which I think are all very, very strong results. So with that, what I'd like to do is now turn the presentation over to Gerard Brossard, Rimini Street's Executive Vice President and Chief Operating Officer; who will walk you through our go-to-market strategy for global sales execution and growth. Gerard?

Thank you, Dave. We do have indeed a great market opportunity with global -- growing global demand of our expanded portfolio. As Dave mentioned, I will now share with you some of our key strategies for 2021 to capture these opportunities and convert them to revenue on our road to $1 billion by 2026. I will go into more details on every one of those today, but let me first highlight what they are. One, we will continue to implement a consistent regional structure led by general managers. This model has been in place internationally for some time with different degrees of maturity based on the maturity and scale of our business in each of these regions. In 2021, we are continuing to implement this model further internationally and also extend it to North America with the hire of 3 key IT executives to lead our 3 namer regions this past December, actually. Two, North America is still our biggest region in sales, revenue and number of clients. And it has been continually growing however, at a slower pace than historically and slower than our international sales. We have a detailed execution plan to reaccelerate North America growth in 2021 and beyond with a goal to bring it to priority with international growth rates. Three, we are now a multiproduct company, as you have heard Seth and Dave talk about. We are focused on building out the infrastructure and the execution to sell our entire portfolio by deploying new specialized roles in our sales and technical sales organization. Four, we have traditionally fueled our growth by bringing in new clients or new logos to Rimini Street. We now have more than 2,400 clients. We can now cross sell to and we have an extended portfolio to meet the additional service needs. Cross-selling will not only help us grow but also make these clients stickier and stay longer with us, growing lifetime value. Of course, we will also focus on accelerating growth of new logo sales. And then five, having a large global market opportunity is a solid foundation, but we must hire the capacity plan to have the skills and the people needed to deliver and execute on the sales opportunity. But hiring is only one component, we need to also ensure we increase productivity of our sales and our client engagement teams year-over-year to deliver on our profitable growth between now and 2026. Now let's first look in more detail at our regional model. As you can see, we now have 4 theaters: North America, Europe, Middle East and Africa, Latin America and Asia Pacific. And underneath those 4 theaters, we actually have 9 regions with each a strong, experienced general manager leader. This regional model has proven to bring the right level of focus and attention to the operations internationally in the past and has been key to our success. And now we also have that general manager model in place for North America with 3 regions. Each general manager has full ownership of all our Ministry's activities in that region, from strategy to execution with full P&L responsibility. This gives us the right level of focus and understanding of the local markets, the customers, the competition, and allows us to address differences across regions. These GMs act as CEO of their regions and have the full accountability for it. They each define their regional strategy, their execution plans from marketing to lead generation, to sales, to customer success and to delivery. But they work closely with our global functional owners who ensure global consistency with the right functional strategies policies, processors, but execution is the full responsibility of the GMs. Now the second piece is about reaccelerating the growth in North America. And the focus to North America is absolutely critical to our success as it continues to be our largest region. Reaccelerating its growth is, obviously, a material component of achieving our plan to $1 billion by 2026. And in 2021, we have 3 major focus areas to help reaccelerate the growth in North America. The first one, as I mentioned earlier, is about implementing the same successful GM model as we deployed internationally. And to that extent, we've created 3 regions within North America: the East; the Central and Northwest region; and then the South and Southwest region. That will allow for better focus as we discussed previously. The coverage, by the way, of North America also includes Canada, where we also have a strong market opportunity and good client wins over the past years. Second, we've hired this past December 3 experienced IT executive leaders for these 3 regions. And I can already see that they're bringing the right discipline, the right structure and approach to the end-to-end operations. The -- we've also seen an acceleration of hiring in those regions since the end of last year and the beginning of this year due to this renewed focus to those North America region. And then the third, from North America to be able to accelerate or reaccelerate, I should say, its growth in a profitable way, it is really important to increase our average deal size, but winning more big deals in our mix. And by big deal, I mean, over $1 million of -- a year of annual recurring revenue. To that end, we've matured our big deal strategy and execution model from being reactive to opportunities to being more proactive, finding and creating those opportunities, identifying the big accounts for each of our regions, identifying their key strategies and pain points and then approach them at the right level with the right value proposition based on their own specific needs through account-based marketing. We have also established a structured big deal execution process involving the entire Rimini Street village with regular strategy and progress reviews, solutioning as well as close plans with executive leadership involved all along. Now going from a single-product company to a multiproduct company is challenging as it requires significant structural and operational changes across the entire revenue execution model. And one of this challenge is the ability for our sellers to be proficient in every product we offer. We have reached a point where we need to move from a more -- sorry, to a more specialized sales force. And last year, we started by focusing sellers between Oracle and SAP products as these have their own specificities and customer pain points are very different. We are now going to the next level and have implemented at the start of this year an overlay sales model, augmenting our sales engine with specialist sales reps for AMS for Oracle, ACP and Salesforce as well as for our strategic services. In this model, the senior account executive who has traditionally sold support remains the single point of contact to seller, owning the sales process for each opportunity end-to-end. But she or he will now have the ability to bring in a sales expert for every AMS, whether it being Oracle, SAP, Salesforce, or for any strategic services opportunities either cloud, Intel viability, security, consulting or monitoring. This will also ensure for our customers a cohesive and coordinating -- coordinated sales force and sales effort regardless of the services they buy from us. And at the same time, get a deep knowledge and expertise set of people to interact with. We are also augmenting our technical sales team of so-called SSAs with AMS specialist technical resources. Also as cross-selling into our existing client base is a key opportunity for us, we now have client success managers who own the client relationship on an ongoing basis. And they will be driving a coordinated management of our existing client across the entire Rimini Street organization. Their focus has shifted from the past being purely on retention to retention and growth of these clients. And then finally, with the success of SaaS technologies and the explosion of point solutions for almost every function of the enterprise, it is becoming increasingly more complicated for CIOs to decide the best road map for their ERP environment. We are now offering through experts a road mapping capability available to our customers to enable them to take control of their IT road map, especially for ERP and databases. This will help position us as a strategic partner with our clients and help drive the path to their future at their own pace and align with their own needs instead of being driven by the software vendors. Now increasing the client retention and cross-sell requires a strengthened engagement model with our clients. While we always deliver excellent service to every client strategically, we cannot engage every client the same way. They have different needs, different buying patterns and different road maps. To that extent, we have segmented our clients in 4 key tiers based on not only how much they buy from us today, but also on how much potential to buy from us exists in the future as well as their strategic value to the region that they are in. This allows us to tailor our engagement model to the specific needs of these different clients in these different categories. All clients will be touched, but each segment with a different model aligned with their characteristics. On top of that pyramid, we have a global category of multi-countries, multi-regions and extremely complex clients. The complexity of such clients requires an even more different model to service them and grow them, and we now have more of them as well. So we need to have a very different way of managing them and servicing them. Our ability to retain and cross-sell more into our existing client base is not achieved through a multiple disjointed set of events, but is actually the result of a specific engagement across their life cycle with different teams from Rimini Street acting as one across each of the different phases with the customer success manager being the central point of that relationship throughout this life cycle. Clients are not with us only while they wait to move to another ERP. We now have the ability to expand their lifespan with Rimini Street by continuously engaging at multiple stages of this ongoing journey with us. We also have realigned the goals and the compensation plans of all the Rimini team members to the common team goal of growing the total invoicing of that portfolio of clients, from the GMs all the way to the customer success managers. We also have now tools and processes like white space analysis that help build and execute on specific account plans for each of our clients. One account plan across all of our teams from sales to delivery, to marketing, et cetera, et cetera. And account-based marketing allows us, once we have the account plan clearly articulated, to address specific needs of these clients, specific areas we do not serve but we could serve. It is opening all of our time within these clients beyond the first sale we have made and beyond the first service we delivered. And with the segmentation that I just spoke about, even if the first sale was a small footprint within a big client, it actually allows us to expand by knowing the opportunities are there. Because our clients are extremely satisfied with the services we deliver as highlighted by our customer satisfaction rating, the door is wide open for Rimini Street to expand our footprint with additional services to existing clients. And with all of that, we plan to actually double the contribution of our sales into our existing clients as part of our entire new client invoicing in 2021 and beyond. Now all of this execution is great, but it can only happen with the right people, skills, capability and capacity. To maximize Rimini Street's opportunity in the market, we have aggressive goals of expanding our sales force globally and improving its efficiency and productivity. As mentioned before, we plan to have 100 sellers by the end of 2021. To support this, we have invested in a world-class sales recruiting, hiring and enablement program that ensures we source top talent quickly and efficiently, but also ramp them to productivity faster than ever and maintain them as premier sellers throughout their entire career at Rimini Street. We begin by sourcing top talent from the market, specifically focusing on candidates that have an extensive and successful background selling enterprise software and services into large enterprise organizations. We have recently been holding sales career fairs, virtual sales career fairs, and we had on each of those 2 more than 70 prospective sellers join every one of those calls. Once those candidates are identified, we narrow the pool through cutting-edge aptitude assessments, extensive panel interviews with business unit leaders, not only from sales, but also from product and service delivery teams. Successful candidates then participate in a multilevel 90-day onboarding program that completes with written and live assessments on technique, processes, products and services, industry and even buying personas, all of this being meant to challenge their understanding and real-life ability to be highly functional in the Rimini Street sales process. And that's just the tip of the iceberg. Our sellers then begin a career-long progression towards Rimini Street sales mastery. That is constantly evolving to keep pace with market dynamics, technology innovations and competitive pressures. Our continuing education programs includes both mandatory and optional on-demand as well as live -- right now, virtually live training classes and full courses that at the end, we cap with a proof of mastery assessment and certifications. And also in addition to that, to support these highly valuable and effective sellers, we do have an extensive proposal management organization. We also have a class-leading ratio of sales engineers to sellers and a dedicated reference and customer advocacy team, all with one purpose in mind, which is to maximize the potential of each of our seller and deliver a consistent and highly effective sales experience to our customer and prospects. Now with all that, I first want to thank all of you for your time, and I will hand it over to Kevin Maddock, Rimini Street Executive Vice President of Recurring Revenue Sales. Thank you.

Thank you, Gerard, and good morning, everyone, and good afternoon to those of you that are on the East Coast. Today, I will be speaking to you about how our recurring revenue sales operation will be contributing to Rimini Street's drive to $1 billion in revenue by 2026. As you all know, Rimini Street is a subscription revenue business with historically more than 90% of our revenue generated from our support services subscriptions. And as outlined in earlier presentations, we've been expanding our service offerings, and we now have several different service subscriptions, including support, AMS and strategic services such as security, interoperability and monitoring solutions. And today, more than 80% of our annual revenue comes from existing clients renewing their service subscriptions for an additional time period, and we've been consistently delivering a revenue retention rate above 90%. And as you can imagine, successfully renewing thousands of client subscriptions across more than 20 countries requires a complex, efficient and cross-organizational team strategy and execution process. And our team has extensive experience in the unique process and challenges of subscription renewals, and I want to walk you through how we methodically execute this part of the business. So we run the renewal sales process as a global process. And in our model, we have a global renewal sales team, which is part of the overall client account team and thus, very well integrated with our field sales, client engagement and strategic services organizations, all of which are continually selling value to our clients throughout their life cycle with us. The renewal sales org is structured in line with our regional sales territories, which Gerard just walked you through, and with comp plans to ensure that everyone in the company is aligned to deliver this very important revenue stream. At the same time though, the renewals organization operates as an independent organization that is primarily focused on driving recurring revenue. Now from a process perspective, the renewal sales process is ongoing, and the cycle begins upon the initial signing of a contract for a new customer or for existing customers just after its prior renewal. More specifically, as our contracts are time-based, 12 months prior to each renewal, the renewal sales org works with the client engagement success manager to proactively develop retention strategies for the accounts, ensuring that the customers are fully utilizing our services and optimizing the value that they receive from us. And during this process, as part of our land and expand strategy, white space analysis is done with a strategic services group who performs customer road mapping, looking for potential cross-sell opportunities. Now these opportunities may be for our traditional Level 4 support, for additional products not currently under Rimini Street support or for any of our growing number of advanced service offerings. And when an opportunity is identified, the CSM introduces the sales rep from our field sales organization who assumes ownership of the cross-sell opportunity and leverages the appropriate resources from within Rimini Street to support the execution of the sale. Now throughout the year, we hold weekly pipeline reviews that discuss current account renewal issues and opportunities and strategies surrounding them, and we manage the progress on these strategies throughout on a weekly basis. So then at about 4 months prior to the renewal date, the renewals rep confirms with the CSM and sales rep to determine if there are any outstanding issues that they should be aware of, and they develop and align on an overall renewal plan. The renewal sales rep then engages with the client 90 days prior to the renewal date and the rep is tasked with the objective of renewing and extending non-cancel agreements and converting annual contracts into multiyear agreements. Now as IT executives and personnel frequently change, we find ourselves often having to resell the value the client is receiving and reminding them why they are using us. To execute on this, we've developed a playbook, which includes renewal savings calculators, detailing the savings the customer has achieved with Rimini Street as well as client-specific reports showing the number of support cases open, the number of engineers used as well as support case milestones and tax and regulatory updates that they have received, all of which is presented to the customers during the renewal discussions. Now in terms of personnel makeup, the renewals organization is staffed with long-tenured renewal and former field sales resources, including multiple sales VPs who've come from the Rimini Street's field sales organization, and who are very experienced at selling and negotiating Rimini Street contracts. And as part of this process, the renewals organization will handle any required negotiations and it proactively looks for opportunities to upsell to multiyear and prepaid agreements. And the upselling of these multiyear agreements is a primary focus area for us. And as such, the renewals reps are well incented and measured on converting contracts to multiyear agreements. Additionally, as part of the renewals process, the renewals team requires certification from the client that attest to whether they have expanded their environment, being supported. And if we find that it has, then the annual support fee is increased by half of what the original vendor maintenance fee would have been for that growth, which, of course, further increases renewal revenue. When the clients do not want to commit to a multiyear agreement, we write in and negotiate price increases into both net new and renewal contracts, which generates further revenue. The final step in the renewal process, of course, is to have the renewal agreed to, including any new amendments negotiated and signed, such that the client can be invoiced 30 days prior to the renewal period and 30 days prior to the support start date. So now with our global renewal strategy, team and program matured and honed over the years and with other factors that I'll walk through here, we believe we're very well positioned to meet our objectives of increasing revenue retention rates and growing the lifetime value of our clients in the years ahead. Now many of the reasons that customers initially buy from Rimini Street and the stories around them that you heard Sebastian Grady speak about earlier today, also apply to our current customer base and why they continue to stay with us. So more specifically, the new vendor ERP products and releases have limited functionality, and the next jump to these new releases that are being pushed by the vendors is a very expensive, time-consuming and often disruptive upgrade project. And as a result, they often have a low ROI for most ERP licensees. So because of this low ROI coupled with the current economic climate we're in, in which organizations are continually looking to cut costs, we're finding that clients are increasingly breaking away from the vendor-dictated road map of forced upgrades and migrations, and they're taking back control of their IT environment, and consequently, are electing not to migrate or upgrade their systems. This means that they will run their current releases longer and they will be reallocating funds, which would otherwise be used for these migration upgrade projects to other more strategic investments which support their growth objectives. So as organizations are utilizing their ERP systems for longer periods of time, it naturally creates opportunities for Rimini Street to expand our services footprint, which in turn creates an even stronger value proposition for our clients, and it makes us more difficult to displace, which keeps our clients remaining with us longer. And we have multiple examples of customers who initially came to us thinking they would stay for 2 or 3 years and then go back to the vendor and do an upgrade, but then looking at the ROI or the lack thereof, they decided to forgo the upgrade and stay with Rimini Street. And then from a product offering perspective, the pieces are now in place to expand our footprint and drive an increase in revenue retention rates and long-term client value. And these pieces include the investments we're making to broaden our service and product offerings, such as Oracle and SAP, AMS, security and interoperability solutions, all of which you've heard discussed today. And I think it's important to point out that these new solutions tend to be longer-term service requirements compared to stand-alone Level 4 support. And AMS can often be -- can be more revenue on an annual basis than our Level 4 support contracts. But I think it's even more important to point out that you cannot use any of these new solutions without also maintaining a current Level 4 support contract with us. Therefore, we not only expect to have longer-term contracts in AMS and SSG solutions, but these solutions will also enable longer-term contracts on our Level 4 support agreements. So you can see that there are multiple factors which are converging, which we believe are paving the path for us to drive increased revenue retention and LTV, which will be a key contributor to the company reaching $1 billion in revenue by 2026. Now lastly, I wanted to further highlight that the global recurring revenue sales team not only focus on its 80% of revenue generation, but it also regularly assists field sales and client engagement with cross-sell opportunities that we identified during our renewal discussions. So as Gerard just noted in his presentation, an important part of our global revenue growth strategy involves selling a larger proportion of total sales into our existing clients. And to achieve this company goal, in 2021, we further align the team's incentives to support land and expand opportunities with existing clients to pass identified leads and opportunities that may arise during our renewal discussions through their field sales counterparts. And we've also removed any prior friction points and competing interests that we had in our plans. So the renewal compensation plans are very much in alignment with our goals of expanding our service footprint with existing clients in addition to their long-term renewals. So with that, I'm now going to turn it over to Brian Slepko, our Executive Vice President of Global Service Delivery.

Great. Thank you, Kevin. I really appreciate it. And I'm thrilled to be on with everybody today. I'm looking forward to having the conversation and kind of giving you a heads up on what we're doing in service delivery. As the Head of Service Delivery, I have responsibility for delivering our support and application managed services around the world. Now I've been with Rimini Street for over 13 years in this role, and as we've grown and scaled the company from a handful of clients in the beginning to thousands of clients today, and we are continuously innovating the model to ensure we can continue to scale as we grow. And I'll talk a little bit about that today. First, I'd like to share the principles we use to guide everything we do in service delivery, what we call our driving principles. I put these in place over 10 years ago and have -- these have been our way of staying focused on what is important to the company and our clients, and they guide us on everything that we do. Every project, process change, new tools or technology are run through an analysis of each of these driving principles. And if the request does not positively impact one or more of these principles, we'll pass on it. Quality is always first and foremost in everything that we do in service delivery, and I think that goes throughout the company. We strive and succeed in providing the best services in the world to our clients. Of course, we're running a business, and we have to deliver a quality product, but we have to do it efficiently and focus of -- laser focus on gross margin. And we have to be able to scale the business globally. And you'll see, as I go through this presentation, that we've been able to accomplish that. Of course, it also gives us a high-level way to measure how we're doing as well. And so far, we've been doing very well as we have significantly grown and scaled the business. The delivery business is built around 3 key pillars, and you've heard people mention this already. It's the support, it's the Level 4 support; it's the AMS, the application managed services; and the product delivery, which is the tax, legal and regulatory updates. And I'll talk about each one of these in a little bit more detail as we move forward. Support is the group of senior engineers, all with a minimum of 10 years of experience, but the average is actually 15 years of detailed in-depth experience in their particular field, be that with SAP or Oracle and specific products within. And these are the guys that solve some of our clients' most challenging issues day and night around the world. For instance, oftentimes, clients run into issues and challenges with their systems. They haven't been able to resolve it themselves. Their current AMS providers may have not been able to resolve it. We get in there and we help them and we solve every single case that we do take on. We built this business using our unique ISO-certified processes, sophisticated tools, top talent and focus for global scalability. Our success and future success is based on not any one of the 4 areas that I just mentioned, but it's really in how we combine them to deliver a scalable and efficient service. I think somebody had mentioned earlier, it's what we call in service delivery, our secret sauce. Now if you add up all of the cumulative experience of our engineers, it's 6,500 years, over 6,500 years of experience, and we're located globally in 17 countries working in 7 languages. We have very detailed processes and use technology in unique ways to drive quality, efficiency and scalability, combined with our extensive experience across our engineering group. However, we never let our -- rest on our laurels and are always challenging ourselves on how to improve. One of the key strategies we use to drive efficiency is our on-demand pool of resources. These are resources that have the same level of experience as our full-time engineers, but we have them as contractors, but we have no commitment to providing them hours. What we do use is we use them on-demand for covering products where we may not need full-time people yet or where we have spikes in workload. This gives us a flexible, fluid workforce that we can utilize to fill those gaps without having to hire full-time. Once again, it helps drive efficiency and scalability. Now these people, as I've mentioned, they have the same experience, the same training in the Rimini way that every other engineer brings to the table. And they are a great source of full-time talent when we have the demand for a full-time person as they are already proven entities. Last but not least, we continue to increase our client satisfaction scores year-over-year. Despite all of the growth in the business, we have ensured better quality service year after year. We also continue to expand our gross margin year-over-year and are targeting continued growth through '26 and beyond. Let me touch briefly on application managed services. Our application managed services is our newest service offering that integrates very closely with our support delivery service. As you can see in the graphic, AMS consists of incidents, service requests, admin tasks and enhancement hours. The key here, and this is really important, that for service incidents and service requests and admin tasks is unlimited. Clients can log as many as they need to log. This is very different than the path that other AMS vendors go down, where they're simply solving tickets, and it's all about ticket counts. Now this is critical for us as we are focused on not just solving tickets, but fixing the root cause of our clients' issues and reducing the overall number of tickets. The AMS resources, the folks that we use to drive the AMS business, by definition, are somewhat less experienced than our Level 4 engineers, typically 3 to 5 years. Hence, their cost is slightly less. It's actually about 2/3 what a full Level 4 engineer. That's important as we, Rimini, can solve more -- many more issues at a lower cost with the AMS team that may have typically gone to the L4 team. As a matter of fact, we are seeing data that shows one of our largest clients, 32% of the cases that would have gone to L4 were resolved by the AMS team. This means that 32% of the cases were resolved by lower-cost resources. This is really critical as we continue to drive up margins. And this is one of the ways that we're doing it. As we do with our Level 4 support, we also provide industry-leading response times and resolution targets, which I'll touch on in a later slide. As mentioned previously, our application management services catalog covers 4 areas: unlimited incidents, service requests, routine or admin tasks, and enhancement hours. As I mentioned, we offer unlimited service and incidents and service requests because we have the capability to do deep root cause analysis to find and fix the underlying issue proactively to prevent further issues. We fix things right the first time, so things don't break down, down the line. And for unlimited routine admin tasks, we're building the tools and processes to streamline these procedures. Rimini Street does not focus on case volumes. We can drive higher margin and client satisfaction by reducing the number of issues, which reduces client friction and improves our efficiency. Our pricing is also bottom-up and is based on a price calculator that takes into account case history, urgency, historic routine activity counts and service request history. For enhancement hours, we work with the clients to determine their needs as they may vary from client to client. We also look at other variables that may impact pricing, like restrictions on engineer country of residents, hours of support, shared versus dedicated resources, et cetera. We then deliver a single annual subscription price. And once again, that's with unlimited tickets. When working on client issues or more commonly referred to as problem management, there are typically 4 ways to resolve an issue. It's a process change, a data change, if it's break fix, if the system is broken, we may do a workaround or there may be a major enhancement required to solve the root cause. Of course, if it's a major enhancement to client, we'll typically pay for that. While these may solve the immediate issue, as part of our combined AMS and L4 support, we have the ability to identify what actually caused the issue and fix it. As I mentioned before, the deep root cause analysis. This drives fewer issues in the future and as mentioned before, raises margin and client satisfaction. As a matter of fact, we have seen this already played out with one of our largest AMS and support clients. We analyzed a full year of service requests and have seen a 75% reduction in overall open incidents. Overall, open issues have dropped by 20%. And for their Ariba product, 31% reduction in incidents, and a 38% drop in open HR incidents. And for their specific industry functionality, the open incidents dropped 22%. So we're really seeing the ability to drive that root cause analysis and keep the number of incidents going lower and lower and lower, which is, once again, great for margin and efficiency. I mentioned SLAs previously. Strong SLAs are critical to ensuring we provide great service to our clients, and we provide all of our clients, AMS and support, with industry-leading service level agreements. We have actually recently improved our response time SLA for urgent issues from 15 minutes to 10 minutes. Because if you're a client with their system down, critical key systems, every minute, every second is important. It's interesting -- it's also important to note that this not only applies to clients going forward, it applies historically to all of our clients at no additional cost. It's important to note that we don't provide SLAs on response times or moving resolution targets, we also offer SLAs on common service requests. We don't only provide SLAs on response times. The third pillar that I wanted to touch on today is product delivery. This is the tax, legal and regulatory organization. This team ensures our clients can remain compliant with the thousands of tax, legal and regulatory updates that happen around the world all the time. In fact, in 2020, we delivered nearly 90,000 updates for our clients globally. We currently deliver to clients in 117 countries as updates are required and have built an infrastructure that allows us to rapidly build capabilities in new countries, although as we scale the business, we now cover the vast majority of countries and regions. The team utilizes a 3-tier sourcing process to monitor 2,700 government sites, 3,300 information sources to monitor changes as they arise, using our proprietary technology to monitor, capture and analyze changes to determine if they impact our clients' ERP systems. Product delivery then uses a factory floor approach, using an agile methodology and framework to build-out new updates. The majority of the factory floor is based out of our offices in Hyderabad and Bangalore, India, where we have some of the best talent in the world, and we're driving great value. Our strategy for growth in the tax, legal and regulatory area is to build, buy or partner to deliver Rimini develop solutions that will continue to drive quality, efficiency and scalability. By building our own solutions, we will be able to build once and deploy multiple times as opposed to working with the vendor solutions while we develop for each client individually on their own systems. And updates typically come out earlier than the vendor equivalent and are tailored more for our clients' needs, which ensure that it -- issues are minimized, implementation is easier and gives clients more uptime, hence, higher client satisfaction. Now one of the things that I wanted to spend a few minutes on is our service delivery innovation. As part of our ongoing efforts to expand gross margin and continuously improve our client experience, we have a team that is responsible for driving innovation within service delivery. Over the past 1.5 years, we have built an artificial intelligence and machine learning platform that has allowed us to drive more efficiency in the business and solve complex delivery challenges. The team was formed to solve key business challenges with the group -- within the group and that adapt tools, technology and process to address those issues. They were initially tasked with identifying our most urgent business issues and then figure out a way to resolve them, rather than trying to fit a technology on top of a business issue. Based on the initial analysis, they identified 10 key areas where we could use technology and process to streamline how we work. Once those areas were identified, we looked at how to solve them and settled on the use of artificial intelligence and machine learning as tools to drive solutions. We investigated a number of outside vendors that had potential to assist us in solving these issues, but determined that while interesting technology, they weren't ready to solve our issues, so we built our own AI, machine learning platform based on open source tools and combinations of AI/ML formula and processes. For example, we're using natural language processing to understand the qualitative sentiments of our clients as we work solving cases and locating a distance to determine the best engineer for the job. It's very important to note that we did not use AI to distance ourselves from our clients. This is not automation that replaces human interaction or is designed to do so. We use AI to provide better support to our internal team on the front lines with our clients, so that they, in turn, can provide better support to our clients. With our AI components, each of specific function as it relates to customer service, we are now able to solve support issues more quickly, which in turn drives customer satisfaction and expands gross margin. I'll quickly go through one -- first example of an application we developed on top of our AI/ML platform to address one of the business issues that were -- was originally identified as an area of opportunity. The Case Assignment Advisor was built to support our engineers when identifying the best team of engineers to work on a case. It utilizes 35 different vectors, which is information about an incoming case, to quickly determine who the best engineer or engineering team is to work on that case. Our strategy is having the right team on the right issue at the right time. It can also be used throughout the life cycle of the case as the engineering needs may change as the case progresses. It analyzes the case to determine basics like product, line product, issue, type of issue, et cetera, and we'll match that with qualified resources. But it goes much deeper than that to determine engineer workload, time off, languages spoken, once again, to get the right people on the right job. For example, if there are 2 engineers that are equally qualified on all counts, the application will go as deep as looking at the client survey scores for those engineers and recommend the one with the better scores for that specific client. And of course, the model learns and improves as it does all this. Improvement has been really dramatic. What we may have -- what may have taken up to 20 minutes to identify the best engineers historically is now accomplished in seconds. So once again, it's getting the right people on the right job more quickly. And I'll touch briefly on another one that we're really excited about. This is called C-Signal cube. It's our AI/ML application that allows us to hear the voice of the customer. It analyzes interactions related to cases, contacts and clients to determine if we have a situation that looks as if there could be -- it looks as if it could be going negative. It also tells us when good things are happening with clients. For instance, it uses natural language processing to analyze the comments in the case to determine if they are positive or negative. If we do find areas where we could provide more focus in resolving the issue, there's a robust reporting and tracking tool that allows us to assign owners to the issue and track progress in resolving the potential issue -- the potential problem. This, once again, allows us to proactively address issues with a particular contact or even a customer before they become problems. Like Case Assignment Advisor, it looks at many different factors, in this case, over 40, to determine if we have a problem in the making or a happy client in the making. And as with our Case Assignment Advisor, it's integrated with other internal systems, including Salesforce and ServiceNow. We've already seen some impressive results after adding our first AI/ML applications to our unique and effective combination of tools, process, talent. It gives us significant competitive advantage. With our AI technology, which, by the way, is patent pending, we have several patent pendings on it, we have decreased the time to resolve customer cases by 23%. Our client survey scores are also the highest they've ever been, partly due to our ability to understand proactively what our clients are saying and allowing us to head off any potential negative outcomes before they happen by always monitoring our clients' voice in real-time throughout the life cycle cases. And all of this is happening seamlessly in the background. With that, I want to thank you for your time, and I'll now turn it over to Dan Winslow, Rimini Street's Executive Vice President and Chief Legal Officer.

Great. Thank you very much, Brian, and good morning, good afternoon, everybody. As Seth noted earlier, we're a company that was launched in 2005 to bring new competitive offerings into an industry where enterprise software vendors had de facto near-monopolies on the aftermarket support of their products as evidenced by the percentage of the aftermarket support they controlled and by their more than 90% gross profit margins. Now battles over aftermarket servicing of products has been around for decades, whether it was the battle between telecom and cable as the markets merged; or the deregulation of telecom and utilities; or recently, the disruption of huge lucrative markets like taxi or rental car transportation by Uber; or the disruption of the traditional hotel hospitality industry by Airbnb. All of these market disruptions led to litigation as those who controlled the market fiercely battle to protect their controlling positions. The likelihood of protracted and nasty litigation grows as new competitors win business against the incumbents and as the competitors grow in popularity and success. The original court case that's often cited an aftermarket competitive litigation involved Xerox, for example, not wanting anyone else to repair their copiers or IBM not wanting anybody else to service their mainframe computers, and car manufacturers trying to keep independent mechanics from getting the diagnostic tools necessary to compete repair of cars. All of these battles eventually were lost in the courts because they were found to violate consumer rights for choice and found to be anticompetitive. Thanks to these court battles, you can now get your car repaired in the local repair shop of your choice, and they'll have to pay the higher car dealer fees or you get to have your home appliances serviced by an independent repair shop. We can now hail an Uber instead of a taxi or stay in an Airbnb instead of a hotel. In our case, Rimini Street's more than 10-year court battle with Oracle is not about whether Rimini Street is a legal competitor. The courts ruled on that years ago and we're very clear that Rimini Street is a lawful competitor to Oracle. Instead, as the court has noted, our litigation is about the manner in which Rimini Street provides support for certain Oracle product lines. These are technical, how we deliver our service battles. To use the car analogy, everyone, including Oracle, agrees that Rimini Street has the right to fix the car. It's how we fix the car, what tools we use, what processes we use for certain Oracle product lines. That's the subject of ongoing litigation. I'll go a little bit deeper into that in the following slides. But what I wanted to point out to you on this slide is the summary of the facts. While Oracle and Rimini Street have continued our litigation for over 10 years and across 2 separate cases, what we call Rimini I, where Oracle sued Rimini Street; and Rimini ii, where Rimini Street sued Oracle in 2014. Rimini Street has continued to grow its revenue, launch new service offerings for Oracle products and expand its list of Oracle clients served. Further, we have no limitations or restrictions on our ability to offer support or other services for any Oracle product lines. However, an injunction that was put into place by the court defines the manner in which Rimini Street can provide support for services for certain Oracle product lines. And although Oracle contends otherwise in court filings, Rimini Street believes it has and continues to service its clients in compliance with the injunction, and we'll continue to vigorously defend our position in court, if and when necessary. I also want to note that while Rimini Street also fiercely competes with SAP for clients, since we launched SAP support over a decade ago, we do all of our competing on the sales battlefield with SAP, not in the courtroom. We've never had any litigation with SAP. Now as I noted, third-party support is allowed, and that's not an issue in our litigation. The court has declared and Oracle even admits that Oracle licensees have the right to choose to buy or not buy Oracle annual support, to buy or not buy Rimini Street or another competitor's offerings, or to buy no support at all and service their own software, although if you do that because support needs generally exceed almost every company's in-house resources and the costs would be too high. As further outlined in these judicial statements on the slide, Rimini Street is able to do the work necessary to provide support and AMS services to Oracle licensees under the terms of their license in accordance with the law. Now Rimini Street and Oracle have battled and continue battling over several very technical matters and have even had parts of our case heard before the United States Supreme Court, with Rimini Street prevailing in a unanimous win with the U.S. government siding with Rimini Street in support of our position. The Rimini I case was tried to a jury verdict in October of 2015. All appeals have now been exhausted and the case became final in early 2020. At the end of the day, 23 out of 24 claims asserted by Oracle were lost, dismissed or abandoned. On one claim, Rimini Street was found to have innocently infringed certain Oracle copyrights, meaning that Rimini was not aware and had no reason to believe, the jury found, that some of its legacy processes, what we call Process 1.0, infringed certain Oracle copyrights. Rimini paid Oracle approximately $35 million for fair market value license damages for use of the copyrights, and we were also ordered by the court to pay Oracle approximately $55 million in prejudgment interest, attorneys' fees and costs. The jury found that Oracle did not lose any profits as a result of Rimini Street's innocent infringement. Now let's look at the Rimini II case, which is still pending and which we expect is going to go to trial some time in early 2022. Rimini filed Rimini II against Oracle in October 2014 in a proactive effort to obtain a judicial declaration that our revised support processes, which is our Process 2.0 and AFW tools, do not infringe and do not exceed the scope of the relevant Oracle licenses. On September 15, 2020, the court issued its order resolving all of the Rimini II summary judgment motions, which had been filed by the parties about 2 years earlier, narrowing the disputes to be decided by the jury at the Rimini II trial. The order includes findings of infringement for, what we call, gap customers that were supported using the old Process 1.0 before the tradition -- the transition that is to Process 2.0 and which were not resolved in the Rimini I litigation as well as 2 other clients with unique facts, which the court described as limited circumstances. And this is important. The court did not find that the Rimini 2 Process by design infringed Oracle's copyrights is a matter of law. The court's order leaves Rimini's central copyright claims about Process 2.0 and the AFW tools to be resolved by the jury at trial. The court's order also allows Rimini Street to proceed with our injunctive claim against Oracle for its anticompetitive business practices. Rimini believes that no changes are required to Rimini's current support processes or to any other current practice or conduct as a result of the September 15 ruling. Further, the court has not awarded any damages of any kind to Oracle in Rimini II. Damage awards, if any, will be a decision addressed by the jury in case 2, Rimini II. Rimini Street does not believe that it should owe any damages to Oracle as a result of the Rimini II trial, and we look forward to holding Oracle accountable for its behavior in the marketplace. Rimini Street has reserved all of its rights, including its appellate rights with respect to all court orders and findings to date in Rimini II. And as I said, we don't expect the trial will occur until about the first half of 2022. And finally, I want to share with you Rimini Street's approach to strategic litigation. We never seek out costly and time-consuming litigation, but we don't shy away from litigation either. We have a world-class team of lawyers in-house, and we have the best of the best legal firms like Gibson, Dunn & Crutcher and Debevoise & Plimpton, 2 of the top IP law firms in the world, part of our litigation team. While we believe that our litigation with Oracle will run its course and the battles and the costs will wane in the years ahead and really become insignificant relative to the company's revenue, we will fight the battles we need to fight to assure that we can fairly compete in the $170 billion global support marketplace. And to the extent necessary, we will continue our battle with Oracle to protect our market right to aggressively challenge them for a significant share of their $20 billion of annual support revenue. Now with that, I'm going to turn the presentation over to Michael Perica, our Executive Vice President and Chief Financial Officer to close out our prepared presentations. Michael?

Thank you, Dan, and welcome, everyone. I'd like to start with a review of our historical financial performance, which highlights our strong growth profile, notwithstanding the growth slowdown during the 2017 to 2019 period, resulting from restrictions of a previous credit facility on sales and marketing spend that has since been lifted. Nonetheless, looking at the top left chart on the slide, we achieved a 5-year compounded annual growth rate of 27% through full year 2019. Also, our year-to-date revenue for the first 3 quarters of 2020, under challenging circumstances, rose 16.6% from the comparable period a year ago. Moving to the billings chart. We posted a 24% compounded annual growth rate over the similar period. We are pleased with our billings performance year-to-date for the first 3 quarters of 2020 in spite of the challenges that pandemic has brought to certain end market segments. In the bottom left of your screen is a chart displaying our annualized recurring revenue, which has also grown as well in that mid-20% compounded range over the past 5 years. For those of you not familiar with this metric, ARR is calculated by multiplying the most recent quarter's recurring revenue by 4. On the bottom right is our aggregate backlog balance. This figure is the aggregate value of contractually committed noncancelable client agreements in place. We are pleased this positive trend has continued during calendar 2020, increasing 19% from the ending Q3 balance versus the ending balance as of Q3 fiscal 2019, underscoring our efforts to enter into longer-term arrangements with our clients. This $0.5 billion backlog balance positions us well to further penetrate our impressive client roster with our expanding offerings, as you heard in great detail earlier in the session. Let's take a look at a few other key operating metrics for the company. At the top of the slide, we have active clients which has also expanded significantly over the past 5 years and is a clear recognition of our value proposition. To clarify, we define an active client as a distinct entity that subscribes to our support of a specific product. I would like to point out that of these clients, to date, over 180 are Fortune 500 and/or Global 100 entities that have highly complex requirements that we are very uniquely positioned to serve. Simply put, unlike our other third-party competitors, there is not an organization that is too large or complex that Rimini Street is not able to support. As you heard earlier, on Brian's segment, the key differentiator is our best-in-class tax, legal and regulatory offering where we provided nearly 90,000 proactive global updates in calendar 2020 alone. Moving over to the gross margin -- I'm sorry, moving over to the gross margin, which has improved over 700 basis points from 2015 to 2019 due to our proprietary processes and technologies that we have refined over the past 15 years with the focus of delivering unparalleled levels of service. However, our gross margin for the first 3 quarters in 2020, as expected, was under pressure due to our ramp in investment of our AMS services where we've yet to gain the efficiencies experienced in our more mature core L4 support offering. Turning to the bottom left. Here, we see how we have consistently achieved over a 90% retention rate over the past 5 years, underscoring our extremely high customer satisfaction ratings. Lastly, we have our adjusted EBITDA, which in recent years has been solidly positive with healthy yields. For the first 3 quarters of 2020, our adjusted EBITDA was up approximately 33% on a year-over-year basis. Here is a snapshot of our current capitalization. Excluding the Series A convertible preferred balance, all metrics are as of the most recent reported quarter. With regard to common equity, we have minimal potential dilution from existing outstanding options. Turning to the warrants. The 3.4 million that are in the money are associated with the previous restricted debt instrument, while the nearly 15 million $11.50 strike price warrants resulted from the SPAC merger in 2017. The majority of these warrants are publicly traded. We are mindful of the warrants as we evaluate options in the capital markets to further simplify and clean up our capital structure. However, we are very sensitive to dilution of our common shares. Lastly, the Series A convertible preferred does indeed have a conversion feature at $10 a share, which converts into 14.6 million common share equivalents. This calculation takes into account the recent retirement of $15 million of face value Series A shares that we purchased in late 2020 and early 2021. Now let's take a look at our planned financial model. Here, we can see our latest fiscal 2020 full year guidance for revenue, gross margin, operating expenses and litigation-related spending. I would like to note that this does not serve as an update to guidance, rather we are just displaying what was issued at the time we reported our third quarter results in November of last year. As announced earlier today, we expect to report our Q4 and full year 2020 results on Wednesday, March 3. As a center column outlines, at the $1 billion revenue level, we believe our gross margin should expand to the mid-60% range. We will maintain significant investment in sales and marketing efforts, allowing us to achieve our aggressive growth objectives. We do see, however, significant operating leverage in our G&A costs, such that we are targeting a 600 to 700 basis points decline by fiscal 2026. Given this operating model, we are targeting an operating profit margin in the low- to mid-20% range, up from our current guidance range in the high single digits. As we have stated previously, we believe our litigation spend will become less material over time and will decline to less than 1% of overall revenue. In the far right column, we have benchmarked ourselves against a comparative group of SaaS concerns with growth rates in excess of 20%. We are comfortable that we are targeting the correct balance of investing in growth while delivering the appropriate return on sales. I would like to note that in the benchmark comp group, we exclude stock-based compensation expenses which would have made the comparisons even more favorable. Now for a little more color on the operating levers that we believe will drive significant improvements to our model, starting with our top line growth. As you heard throughout the day, we are very encouraged regarding our ability to accelerate our growth due to the addition of our new services offerings and our differentiated approach of bundling that will improve our retention and customer lifetime value. On gross margin, our continued development of our proprietary processes, tools and AI applied together with lower-cost resources to deliver our AMS offering, we during the latter half of our long-term plan are quite comfortable we can achieve the mid-60% range. On the sales and marketing line, you heard extensive insight into our go-to-market and enhanced regional model led by GMs, allowing for productivity gains. However, we will continue to make substantial investments in these efforts. G&A is where we see substantial leverage given the expected continuation of our success as a virtual organization, allowing for lower facilities costs, less travel experience -- expenses and leverage from near-term investments we are currently making to have the core systems and processes in place, allowing the business to seamlessly scale to north of $1 billion in revenue. Turning to our financial levers. We ended our most recent reported quarter with net leverage of $75 million. This is calculated by subtracting a record cash balance of $83.7 million as of Q3 from the Series A preferred balance at that time of $158.7 million. This brings our net leverage ratio to the last 12 months adjusted EBITDA of 2.2x. While substantially improved, we are targeting a near-term ratio of under 2x with a steady decline over the intermediate term through free cash flow generation alone. We are quite confident our continued free cash flow generation is more than sufficient to fund our aggressive growth plans and service our current suboptimal Series A preferred instrument. Turning to the Series A preferred instrument. When taking into account the recent retirement of $15 million face value at a cash cost of $13.6 million, the balance is $146.1 million. The structure of the preferred is 10% cash interest with 3% payment in kind through dividends such that the balance at the time Rimini Street has the option to call the instrument in July of this calendar year will be $148.5 million. I would like to stress that the company has no obligation to refinance nor can it be forced to do so until after July of the year 2023, over 2.5 years from this point, if the majority of holders elect to redeem the instrument. Here, we have a look at our free cash flow conversion in relation to our adjusted EBITDA. Free cash flow, defined as operating cash flow minus capital expenditures as a percentage of adjusted EBITDA, has been improving since 2018, and this will be a key metric for us going forward. We encourage everyone to see the calculations of these non-GAAP measures in the appendix. However, the main add backs to our adjusted EBITDA calculation are stock compensation expense and litigation costs. As noted in the text in the callout box, our 2020 free cash flow conversion through the third quarter of 2020 was slightly over 100% to adjusted EBITDA. We are quite pleased with our free cash flow generation coupled with our strong overall top line growth in light of the challenges that the pandemic has brought to the global economy as a whole. This allowed us to take advantage of an opportunity previously announced to reduce our Series A preferred obligation, and we believe we are very well positioned to take advantage of or seek future deleveraging transactions. Now I'd like to take a moment on tax planning. Given the strong growth across several international theaters, we've experienced an expanding overall effective tax rate. Over the near term, we are optimizing our operating model structure, targeting certain high-taxation, high-growth international jurisdictions. Over the intermediate term, we are reevaluating our global operating structure to better and more appropriately utilize our significant net operating loss carryforward balance of approximately $170 million as of the end of the third quarter. Longer term, we are targeting consolidated effective tax rate no greater than the U.S. corporate rate. However, we do note that we are watching, as many of -- as you are, the new administration closely and expect another tax reform act over the intermediate term. We do stress that an increase in the U.S. corporate tax rate alone is not detrimental to Rimini Street given our substantial NOLs. Let me summarize our 2026 plan. We are confident we have a plan in place to accelerate our growth through our unique solutions offering that will result in substantially long client relationships, leading to strong and consistent free cash flow generation with significantly reduced cost of capital. This lays out a clear runway for our path to $1 billion of revenue and substantial earnings for shareholders. With that, I'll conclude my presentation, and now I ask the other speakers to join us for our Q&A session. Dean, back over to you to moderate the Q&A session.

Yes. Thank you, Michael, and thank you to all the speakers for delivering a great overview of the company. Now we will take -- first, we'll take questions from our covering analysts, who we thank for joining us today. And I'm going to shift it over to you, [ Harold ], to bridge them -- the analysts in, please.

[Operator Instructions] Your first question is from the line of Jeff Van Rhee.

Jeff, you there? It sounds like we might have a problem with the connection. Maybe we'd need to come back.

Could you hear me here?

Oh, there you go.

Yes, I'm not sure what's going on with the line there. But anyway, I appreciate it. I wanted to use my -- maybe my one question here and focus on AMS. I think there's a lot of opportunity there, and I think you had a lot of confusion. So you touched on PSEG. Who did you compete with there? Who did you displace? And then maybe just a little more context, like when you're in there pitching, who are you seeing typically? But also, how many customers do you have on the product now? And then I think, Seth, on the last call, you talked a little bit about your learnings on the product. I also think it would be helpful to expand on that. What have you learned early on in the product? So maybe just a little more clarity with success, competitive landscape and learnings, those 3 things.

Sure. I'm going to have Seb talk in a minute about the competitive landscape and a little bit about PSEG and what he believes he can disclose there for an active client. But we certainly -- as we mentioned on the last earnings call, the learnings, as we've rolled out, and as everyone knows, we're a very cautious company, very methodical introductions of new products, and we've learned a lot about the way that clients are thinking about value and about outcomes. And we started off as a company that was offering 50% off of vendor pricing, and you're watching us evolve quite a bit into a value-based sales model where, for example, on our AMS products, we don't come in -- we don't guarantee any percentage off of their current spend. We instead, from the ground up, design a bespoke operation and execution plan that's going to get them the results that they want, the outcomes that they want. And in some cases, we are charging the clients more than they were paying their prior vendor. But because the outcomes are better, the total return on value and spend is much higher. So this is a big shift, Jeff, in terms of the way that Rimini Street sort of has moved from that 50% off company to really being about value delivered in its pricing, and this will allow gross margin expansion going forward, will allow us to have longer-term, bigger contracts across a wider scope of services. Let me turn it over to Sebastian to talk to you a little bit more specifically around PSEG, who we competed against and how that strategy played out.

At PSEG, their Chief Information Officer noticed after about a year of our maintenance -- of our SAP maintenance replacement service that their existing AMS provider was throwing all the hard questions over the fence to us. And he asked me, why are we paying for 2 companies here? Why don't you guys get into the AMS business and make that a service offering? And the existing provider was a typical over $10 billion revenue systems integrator who had been in place at PSEG for 10 years. And they didn't dislike them. They were just wondering if there was a better way. And within 6 months of Rimini Street taking over AMS support, we got the open caseload under 100 open cases, and we solved over 10,000 incidents and cases for them in the AMS service. Now some of these cases are very simple, like resetting your password, things like that. And some are very complex, and they come bundled with x number of hours of consulting as well. So that was really the story at PSEG. And since then, one thing I want to talk about that PSEG and Rimini Street loves is that we are identifying the root cause of these issues and making them go away permanently. We believe the systems integrator existing model is a body shop, pay-by-the-drink type of model where they want the number of incidents or cases to go up every year so they make more money.

Thank you, Seb.

Definitely helpful. Maybe if I could just sneak one other follow-up in there. In terms of -- Seth, with respect to the pipeline and closures so far, can you put any finer point around how many people you have on AMS and kind of the growth of the pipeline specifically for that product?

Well, I think as we had talked on the last earnings call and because we can't get into the Q4, we're right in that period a few weeks, you saw we're going to announce Q4 earnings and full year on March 3. Just what I could tell you at a high level is that we continue to build pipe. We continue to hone our expertise in the global rollout and sales of the AMS product. And as I mentioned, Jeff, the complexity of switching from a 50% off model to a very different sales motion is complicated in the sales force. And as Gerard laid out, we've built these overlay sales models now where we have specialists in AMS, we have specialists in support, we have specialists in security. This is a new sales construct for us. We are already out there using it. We've been building out all these resources, and we now have the infrastructure in place to get the global sales underway. We're already seeing it. We're seeing it in proposals. We're seeing it in pipe. As the sales team becomes more comfortable in presenting and competing against the SIs, a whole different set of competitors and the vendors that we fight on the support side. So it is a pretty complicated rollout, which is why it started with vision in 2015, began launching in '18 after 3 years of preparation. And now you watched us, we have active, live, successful clients over a year on these platforms, and they're giving us great feedback. They love the service. We've honed the service as part of our learnings. We figured out what customers really want, the value that they want to see. And now we're taking it out on a global basis. So all of the movements are positive, in the right direction. And that's why you watch us very conservatively commit about how much. We say that this is going to be meaningful in 2021 but not necessarily material when you think about that as a 10% part of revenue as we grow our support service revenue at the same time.

Yes. Well, it's certainly compelling, what you laid out with respect to the gross margin and the cost of delivery benefits of layering the services on top of each other. So again, I know there are a lot of questions. I appreciate it. Sorry for the phone line snafus getting in there, but I do appreciate you doing the day for answering the question.

[ Technical -- we're all dealing with these things. ] We're all dealing with bandwidth and challenges. Thank you.

Your next question is from the line of Derrick Wood.

Great. And well done on the broad layout of the business, very informative and great to hear from a number of executives at the company. My first topic I wanted to drill into is on the go-to-market structure. And I guess that's for Seth or Gerard [Audio Gap]

Yes, we'll grab Gerard, and fire away, Derrick.

So first, on the 3 regional hires. Just wanted to hear about kind of the leadership skills or the experience that they bring that you think can up level the execution in the U.S. and the growth in the U.S. And then I was just wondering how significant of a shift this new structure is for CSMs to drive more expansion out of the installed base versus maybe AEs being responsible for it and the changes in comp plans. And kind of what's going to be incremental here that you hadn't focused on before?

Okay. So the leadership skills that they bring if you look at the profile of the 3 we hired in North America is a combination of things. First of all, they have an experience of both smaller companies and companies at scale. I mean 2 of them come from big companies, like IBM for one of them and Dell EMC for the other. So they know what it takes to be able to accelerate growth at scale at a bigger-size company. That's one thing. The second piece is that the 3 of them have been in general manager's role before. And it's a little bit of a different mindset, and I know general managers in some companies mean a lot of different things. But what we need here is people with strong understanding of sales but not necessarily just sales leader, people that can actually drive defining strategy for their own market and their regions, so a great understanding of the depth of that particular region. And if you look at the 3 regional GMs that we've hired, they've been in those regions in their past experiences and in their past companies, so they know their market very well. They can articulate proactively, strategically how so we can actually capture the opportunities there. And then they have a big execution skill set from how to drive the marketing plans, field marketing and lead generation to sales, obviously. But they also have, and have done that in the past, managed client success, organizational client engagement organizations. So that very well-rounded type of experience is what we've brought in that gives us -- in the past, we never had that in North America, and we had sales leader -- when I joined back in June, I had sales leaders reporting to me and nobody really looking at it from a holistic end-to-end perspective. So that's to the first question. To the second question, we've had AEs, and we've had so-called enterprise account managers. But the way that the executive -- sorry, enterprise account managers were compensated and the way their goals were set was on a pure nonrenewals target, so even kind of prevents revenue from leaving us. What we're shifting here is that we're turning that back to the positive, which is, a, on the retention, not on the nonretention; and b, is adding new sales into those existing clients to their compensation model. So it is a change, but it is a change that some of them have already started to kind of get acquainted to. And they're going to work very closely -- even more closely with the AEs in -- especially in the growing of those accounts. And by the way, not just with the AEs, as I mentioned earlier, we're building those one-team account plans which I believe are really critical to really understand clients from an end-to-end perspective. So working with delivery to understand the current satisfaction, the current pain points we're seeing, with tickets that are being loaded, with marketing to be able to have account-based marketing very tailored to the needs, obviously, to sales but also to our lead generation engine or inside sales team.

Great. That's very helpful color. Michael, on the long-term targets, it's very helpful to get those laid out. I was hoping to double click on a couple of items. And it may be early, but in terms of that $1 billion revenue goal, any color in terms of mix targets of kind of core subscription versus AMS and nonsubscription services? And then in terms of the net revenue retention rates, you've been around 92% given the new efforts on cross-sell, upsell. Any thoughts on how much that could be lifted long term?

So from a model perspective, Derrick, your hunch is correct. We'd rather not go into and it is early into an overall mix. Nonetheless, as you've heard, we have a compelling plan, a compelling value proposition in place that undeniably is going to be a key driver of our growth and getting us to the $1 billion objective in '26. What was the second question again? Apologies.

Just the ability to increase that net revenue retention rate and how much leverage maybe could be there.

So I would highlight our solution-based offering and increasing the lifetime value of customers. That is what -- as we execute, once again, on our compelling value proposition, our solution base solving problems, the unlimited approach, that's what we believe you're going to see that metric over time improve.