Ann: Software Subscription TCV and ARR Update, page-23

Jimmy C / Mars C

Apologies, in wait mode on RPM until year-end results, so have not been checking the forum regularly.

In terms of the Maintenance Revenue stream, can share my understanding as follows :

This is associated directly with the sale of Perpetual Licences. Customer pays for the Licence up front and then is liable for an annual Maintenance/ Support fee. These charges are all levied at the beginning of the Calendar year, so implies fixed not variable (as part of the Perpetual License Agreement). My understanding is that these Licences are EVERGREEN opposed to the typical 3 YR contracts for subscription.

This supports the fact that the historical data is pretty consistent with modest increases each year. Obviously, as Subscription becomes the preferred service and new Perpetual Licences decline, the incremental Revenue for Maintenance will decline. However, the historic income stream derived for Maintenance should continue, unless the Licence agreement is terminated.

Also worth remembering that the Perpetual Licence Business going forward is still alive and well. Customers essentially have the choice and then, in instances where there is Country risk, RPM will only offer the Perpetual Licence option.

So, I certainly don’t expect Maintenance Revenue to fall off a cliff. The base income from past Licence sales is bankable. The rate of growth on this base income will naturally decline, with the adoption rate increasing on subscription.

My understanding anyhow.

Take care.

Rokewa