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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Rimini Street, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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Foreign Currency Exchange Risk
We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. Dollar, primarily the Australian Dollar, Brazilian Real, British Pound Sterling, Euro, Indian Rupee, Japanese Yen and Israeli New Shekel. For the three months ended June 30, 2026 and 2025, we generated approximately 56% and 53% of our revenue from our international business, respectively. Increases in the relative value of the U.S. Dollar to other currencies may negatively affect our revenue, partially offset by a positive impact to operating expenses in other currencies as expressed in U.S. Dollars. We have experienced and will continue to experience fluctuations in our net income as a result of transaction gains or losses related to revaluing certain current asset and current liability balances, including intercompany receivables and payables, which are denominated in currencies other than the functional currency of the entities in which they are recorded. While we have not engaged in the hedging of our foreign currency transactions to date, we continue to evaluate the costs and benefits of entering into future hedge transaction for currencies other than the U.S. Dollar.
As of June 30, 2026, the effect of a hypothetical 10% change in foreign currency exchange rates applicable to our business would have impacted our income before income taxes by a plus or minus of $1.9 million in our Unaudited Condensed
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Consolidated Statements of Operations and Comprehensive Income and would have impacted the effect of foreign currency changes on cash by a plus or minus $3.0 million in our Unaudited Condensed Consolidated Statement of Cash Flows.
Interest Rate Risk
Risk with Respect to Investments
We hold cash and cash equivalents for working capital purposes. We do not have material exposure to market risk with respect to investments, as any investments we enter into are primarily highly liquid investments.
Variable Rate Debt
In 2024, we refinanced our $90 million five-year term loan with our Credit Facility consisting of a $75.0 million term loan and a $35.0 million revolving line of credit. For the term loan, we have a choice of interest rates between (a) SOFR and (b) a Base Rate (as defined in our Credit Facility), in each case plus an applicable margin.
Accordingly, we are exposed to market risk due to variable interest rates based on SOFR. As of June 30, 2026, we had $48.4 million outstanding debt under the Credit Facility and no borrowings under the revolving line of credit. As of June 30, 2026, a hypothetical adverse change of 100 basis points in SOFR would have resulted in an increase of approximately $0.5 million in annual interest expense. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 as well as Note 5 and Note 11 to our Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Report for more information related to the Credit Facility.