Unidentified Analyst: I’m curious how initial reception has been for Rimini Custom. It seems like a great way to get customers into the door, but curious, especially on how your service team has been handling all these inbounds. Thank you.
Seth Ravin: It’s an interestingly complex launch. I think those who are in the business understand when you open the door and say, we are the best at providing a support platform of any company out there, challenging the vendors themselves in what we believe is a better platform. When we take a look at that and say, we’re going to open the door, you bring us what you want us to support you, and we’re going to take a look at it, see if we can build a program and then come back to you with a custom bid to manage that, it is complicated. And we have had strong reception. We’ve certainly had a lot of customers bringing us their software, other companies by vendors, even other products within the Oracle and SAP world, bringing them to us and saying, can you give me a bid and find a way to keep this software for another 3, 5, 10 years while they think what their next platform might be because companies are moving to expire.
I’ll give you one example. Probably one of the largest apps that we’ve had so far is VMware because of the moves that happened over there with Broadcom’s acquisition. A lot of customers looking for a solution to their VMware challenge now. And of course, we’ll keep the market appraised if we do indeed launch something in that area. But I think this is an example where we can come in, in a marketplace where there is a sudden demand or a sudden surge and bring our expertise to the table and a solution potentially.
Unidentified Analyst: It’s great color. I appreciate that. I’ll just finish up one last question for you guys. But can you just highlight some of the key drivers for what’s driving customers into the door and maybe some of the drivers as to why some customers are churning off? Thank you.
Seth Ravin: I think you’re watching customers come to the table as soon as they really have awareness and understanding of what we can do for them. Rimini Street’s challenge even over its entire 19 years of history has always been one of awareness, especially more today with CFOs and even CIOs. And we’ve switched our marketing mix. We used to be about 80% CIO focus in terms of the selling motions and 20% into the procurement or the IT procurement side. Today, we have a different mix. We have a 40% focus on the CFO, 40% on the CIO and 20% on the procurement function and that really represents the fact that there’s so much financial pressure within organizations and the CFOs are where those return on investment decisions are often landing.
And let’s not forget, 50% of CIOs report to CFOs. And so I think you’re watching a sea change even within Rimini Street, the clients, we’re doing more and more deals at the CFO level than the CIO level. So there is some transition of buyer taking place within the organization that we’re doing work with. And then of course, the CIO combined with the CFO. And I think our messaging is resonating very, very strongly in the CFO suite on that ROI modeling because everything we do is about ROI. And of course, the world of CIO, they have different considerations where they’re looking at different packages and point releases, that’s not the world of the CFO. And so I think that’s one key thing you’re watching. In terms of customers coming and going, there are some natural generational changes.
Of course, you have the natural generational changes in the HCM world, what sort of the workdays as well as the success factor side. So you’ve got a little bit of a SaaS movement in that area as next generation and I think we’re also watching interestingly enough, a reversal of the cloud movement. Of course, as we all know, new technology, whether that’s now AI, everyone rushes out the gate, then there’s rethinking, there’s regrouping, we’ve gone too far in one direction. There’s even companies repatriating back from the cloud into data centers and saving millions. And so there’s a lot of movement back and forth. So I wouldn’t point to any one single trend that’s driving business in or out but I really do think that this economic situation, look at retail alone, look at how many retailers are going bankrupt, how much pressure there is on the lower end of the market, not just what we used to see in the midrange.
So I do think that there is a lot of financial pressure that will drive and build even more demand for us going forward.
Unidentified Analyst: Appreciate the color. Thank you very much.
Seth Ravin: Sure.
Operator: Your next question comes from the line of Brian Kinstlinger of Alliance Global Partners. Your line is open.
Brian Kinstlinger: Great. Thanks. First of all, you suspended guidance, do you think there’s been an impact to deal closings or retention related to litigation?
Seth Ravin: It’s hard to say, Brian. I don’t think we have data that would really give you a solid support one way or the other. I think it would be natural to assume that some level of impact happens in the sales side related to just the back and forth litigation with Oracle, especially on the Oracle side. I’m not sure as much on the SAP side is affected by the back and forth with Oracle, but it is something we’ve had for 14 years. Of course, it ebbs and flows depending on what’s happening with the court. We’re in a pretty – we’d consider it to be a high litigation point right now because we do have multiple things happening at the appellate courts, at the district court, there’s an injunction in the mix, this is exactly why we suspended guidance.
Because some of them are very significant issues before the court and how the court decides can have a varying impact to us. And so we felt that we really couldn’t give reliable guidance ranges given all that’s had appending before the court. And so yes, I would have to say that I am confident just reality that there’s some impact to sales.
Brian Kinstlinger: Okay. My last question, maybe for Michael is, how much do you expect to save in annual interest from the refinance?
Michael Perica: So Brian, as we disclosed, we do have our spread that increases by 100 basis points. So in that regard, it’s slightly higher cost, but we’re resetting the amortization. So slight movement there in the overall debt service. Nonetheless, we have the availability – overnight availability for working capital purposes, the revolver, but we have attractively swapped $40 million in fixed. As we have noted in our Q filing wasn’t in the press release, $40 million of the $75 million term piece. So we have that fixed in the mid-6% range. Again, also noting your interest line, we do have the nice offset with our surplus that we have at attractive rates. So given that we have this fixed portion right and depending on the movement of rates, what you can see where we have our cash surplus, how we manage that is how you could think about that line going forward.
Brian Kinstlinger: To be clear, just so I understand, it was a lot, is you’re taking on 100 basis points more of interest in order to have it be more floating given ultimately the world thinks that interest rates are coming down and see all benefit over time. Is that right?
Michael Perica: Yes, that’s a component as well. And I also want to note that we have extended five more years. We were in three or five years previously. So there is a commitment through these institutions for an incremental five years under these terms. That’s a key element as well.
Brian Kinstlinger: Okay. Thank you.
Seth Ravin: Thank you.
Operator: Thank you. And there are no further question at this time. I will now hand the call back to Seth Ravin for the closing remarks.
Seth Ravin: Thank you very much, operator. And again, I want to thank everyone for joining us for the call. I want to thank all our Rimini Street colleagues for their efforts in the first quarter as we rollout all these new products on a global basis and continue to serve our customers with such great client satisfaction rates. I look forward to having you join our next earnings call, we’ll discuss the second quarter of 2024 and with some third quarter 2024 performance to date commentary. Until then, again, wishing you and yours a continued good health and thoughts and continued charitable support, again, for those in need and suffering in harm’s way. Thank you all very much, and have a great day.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.
