Advent Software (ADVS)

If our existing customers do not renew their term license, perpetual maintenance or other recurring contracts, our business will suffer.

        Total recurring revenues represented 86%, 80% and 79% of total net revenues in fiscal 2009, 2008 and 2007, respectively. We expect to continue to derive a significant portion of our revenue from our clients' renewal of term license, perpetual maintenance and other recurring contracts and such renewals

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are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

•

The impact of the current economic environment and market volatility on our clients and prospects;



•

The impact of customers consolidating or going out of business;



•

The price, performance and functionality of our solutions;



•

The availability, price, performance and functionality of competing products and services;



•

The effectiveness of our maintenance and support services; and



•

Our ability to develop complementary products and services.

        Most of our perpetual license customers have historically renewed their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers. The current market downturn has caused, and may in the future cause, some clients not to renew their maintenance or reduce their level of maintenance, which would affect our renewal rates and revenue. Our renewal rates are based on cash collections and are disclosed one quarter in arrears. Our reported renewal rates for the first three quarters of 2009 were below the levels we disclosed for our quarterly periods of 2008. The decrease in renewal rates reflects increases in the number of customers who have gone out of business or reduced maintenance expenditures, as well as from slower payments received from renewal clients.

        As a result of our relatively recent transition to term licensing, we only have limited experience with renewals of our term license contracts. During the third quarter of 2007, we commenced renewing term license contracts signed in the third quarter of 2004. These were the first three-year term license contracts to be renewed by Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term license contracts and given the small number of contracts subject to renewal that were renewed in the second half of 2007 through 2009, we cannot yet conclude whether customers will renew at a rate consistent with our perpetual maintenance customers. Additionally, we cannot predict whether the renewals will be less advantageous to us than the original term contract. For example, the renewal periods for our term license contracts are typically shorter than our original term license contract and customers may request a reduction in the number of users or products licensed, resulting in a lower annual term license fee. Further, customers may elect to not renew their term license contracts at all. We may incur significantly more costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term license contract customers renew under terms less favorable to us or choose not to renew their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

If our existing customers do not renew their term license, perpetual maintenance or other recurring contracts, our business will suffer.

Revenues recognized from recurring contracts represented 84%, 79% and 77% of total net revenues in the first quarter of 2009, fiscal 2008 and 2007, respectively. We expect to continue to derive a significant portion of our revenue from our clients’ renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

·                  The impact of the current extreme market volatility on our clients and prospects;

·                  The price, performance and functionality of our solutions;

·                  The availability, price, performance and functionality of competing products and services;

·                  The effectiveness of our maintenance and support services; and

·                  Our ability to develop complementary products and services.

Most of our perpetual license customers have historically renewed their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers. The current market downturn has caused, and may in the future cause, some clients not to renew their maintenance or reduce their level of maintenance, which would affect our renewal rates and revenue. Our renewal rates are based on cash collections and are disclosed one quarter in arrears. Our renewal rates for the fourth quarter of 2008 were below the ranges of our previous four quarters. The decrease in renewal rates reflects increases in the number of customers who have gone out of business as well as from slower payments received from renewal clients.

As a result of our relatively recent transition to term licensing, we only have limited experience with renewals of our term license contracts. During the third quarter of 2007, we commenced renewing term license contracts signed in the third quarter of 2004.  These were the first three-year term license contracts to be renewed by Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term license contracts and given the small number of contracts subject to renewal that were renewed in the second half of 2007 and during 2008, we cannot yet conclude whether customers will renew in a

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If our existing customers do not renew their term license, perpetual maintenance or other recurring contracts, our business will suffer.

        Revenues recognized from recurring contracts represented 79% and 77% of total net revenues in fiscal 2008 and 2007, respectively. We expect to continue to derive a significant portion of our revenue from our clients' renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

•

The impact of the current extreme market volatility on our clients and prospects;



•

The price, performance and functionality of our solutions;



•

The availability, price, performance and functionality of competing products and services;

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•

The effectiveness of our maintenance and support services; and



•

Our ability to develop complementary products and services.

        Most of our perpetual license customers have historically renewed their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers. The current market downturn has caused, and may in the future cause, some clients not to renew their maintenance or reduce their level of maintenance, which would affect our renewal rates and revenue.

        As a result of our relatively recent transition to term licensing, we only have limited experience with renewals of our term license contracts. During the third quarter of 2007, we commenced renewing term license contracts signed in the third quarter of 2004. These were the first three-year term license contracts to be renewed by Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term license contracts and given the small number of contracts subject to renewal that were renewed in the second half of 2007 and during 2008, we cannot yet conclude whether customers will renew in a manner consistent with our perpetual maintenance customers. Additionally, we cannot predict whether the renewals will be less advantageous to us than the original term contract. For example, the renewal periods for our term license contracts are typically shorter than our original term license contract and customers may request a reduction in the number of users or products licensed, resulting in a lower annual term license fee. Further, customers may elect to not renew their term license contracts at all. We may incur significantly more costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term license contract customers renew under terms less favorable to us or choose not to renew their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

If our existing customers do not renew their term license, perpetual maintenance or other recurring contracts, our business will suffer.

        Revenues recognized from recurring contracts represented 79% and 77% of total net revenues in fiscal 2008 and 2007, respectively. We
expect to continue to derive a significant portion of our revenue from our clients' renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our
future success. Some factors that may affect the renewal rate of our contracts include:

•

The impact of the current extreme market volatility on our clients and prospects;




•

The price, performance and functionality of our solutions;




•

The availability, price, performance and functionality of competing products and services;

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HREF="#bg10501a_main_toc">Table of Contents

•

The effectiveness of our maintenance and support services; and




•

Our ability to develop complementary products and services.

        Most
of our perpetual license customers have historically renewed their annual maintenance although our customers have no obligation to renew such maintenance after the first year of
their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers. The current market
downturn has caused, and may in the future cause, some clients not to renew their maintenance or reduce their level of maintenance, which would affect our renewal rates and revenue.

        As
a result of our relatively recent transition to term licensing, we only have limited experience with renewals of our term license contracts. During the third quarter of 2007, we
commenced renewing term license contracts signed in the third quarter of 2004. These were the first three-year term license contracts to be renewed by Advent since our transition to a term
pricing model began. Our customers have no obligation to renew their term license contracts and given the small number of contracts subject to renewal that were renewed in the second half of 2007 and
during 2008, we cannot yet conclude whether customers will renew in a manner consistent with our perpetual maintenance customers. Additionally, we cannot predict whether the renewals will be less
advantageous to us than the original term contract. For example, the renewal periods for our term license contracts are typically shorter than our original term license contract and customers may
request a reduction in the number of users or products licensed, resulting in a lower annual term license fee. Further, customers may elect to not renew their term license contracts at all. We may
incur significantly more costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term license contract customers renew under terms less
favorable to us or choose not to renew their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

If Our Existing Customers Do Not Renew Their Term License, Perpetual Maintenance or Other Recurring Contracts, Our Business Will Suffer

Revenues recognized from recurring contracts represented 77% and 80% of total net revenues in fiscal 2007 and the first nine months of 2008, respectively. We expect to continue to derive a significant portion of our revenue from our clients’ renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

Most of our perpetual license customers renew their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers. In addition, the current market downturn has, and may in the future, caused some clients not to renew their maintenance or reduce their level of maintenance, which would affect our renewal rates and revenue.

We only have limited experience with renewals of our term license contracts. During the third quarter of 2007, we commenced renewing term license contracts signed in the third quarter of 2004.  These were the first three-year term license contracts to be renewed by Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term license contracts and given the small number of contracts subject to renewal that were renewed in the second half of 2007 and first nine months of 2008, we cannot yet conclude whether customers will renew in a manner consistent with our perpetual maintenance customers.  Additionally, we cannot predict whether the renewals will be less advantageous to us than the original term contract. For example, the renewal periods for our term license contracts are typically shorter than our original term license contract and customers may request a reduction in the number of users or products licensed, resulting in a lower annual term license fee.  Further, customers may elect to not renew their term license contracts at all. Additionally, we may incur significantly more costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term license contract customers renew under terms less favorable to us or choose not to renew their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

If Our Existing Customers Do Not Renew Their Term License, Perpetual Maintenance or Other Recurring Contracts, Our Business Will Suffer

Revenues recognized from recurring contracts represented 77% and 80% of total net revenues in fiscal 2007 and the first six months of 2008, respectively. We expect to continue to derive a significant portion of our revenue from our clients’ renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

·                  The price, performance and functionality of our solutions;

35

If Our Existing Customers Do Not Renew Their Term License, Perpetual Maintenance or Other Recurring Contracts, Our Business Will Suffer

In 2007, revenues recognized from recurring contracts represented 77% of total net revenues. We expect to continue to derive a significant portion of our revenue from our clients’ renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

·                  The price, performance and functionality of our solutions;

·                  The availability, price, performance and functionality of competing products and services;

·                  The effectiveness of our maintenance and support services; and

·                  Our ability to develop complementary products and services.

Most of our perpetual license customers renew their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers.

During the third quarter of 2007, we commenced renewing term contracts signed in the third quarter of 2004.  These are the first three-year term contracts to be renewed by Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term contracts and given the small number of contracts renewed in the second half of 2007, we cannot yet conclude whether customers will renew in a manner consistent with our perpetual maintenance customers.  Additionally, we cannot predict whether the renewals will be less advantageous to us than the original term contract. For example, the renewal periods for our term contracts are typically shorter than our original term contract and customers may request a reduction in the number of users or products licensed, resulting in a lower annual term license fee.  Further, customers may elect to not renew their term license contracts at all. Additionally, we may incur significantly more costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term contract customers renew under terms less favorable to us or choose not to renew their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

If Our Existing Customers Do Not Renew Their Term License, Perpetual Maintenance or Other Recurring Contracts, Our Business Will Suffer

        In 2007, revenues recognized from recurring contracts represented 77% of total net revenues. We expect to continue to derive a significant portion of our revenue from our clients' renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of our contracts include:

•

The price, performance and functionality of our solutions;



•

The availability, price, performance and functionality of competing products and services;



•

The effectiveness of our maintenance and support services; and



•

Our ability to develop complementary products and services.

        Most of our perpetual license customers renew their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers.

        During the third quarter of 2007, we commenced renewing term contracts signed in the third quarter of 2004. These are the first three-year term contracts to be renewed by Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term contracts and given the small number of contracts renewed in the third quarter of 2007, we can not yet conclude whether customers will renew in a manner consistent with our perpetual maintenance customers. Additionally, we cannot predict whether the renewals will be less advantageous to us than the original term contract. For example, the renewal periods for our term contracts are typically shorter than our original term contract and customers may request a reduction in the number of users or products licensed, resulting in a lower annual term license fee. Further, customers may elect to not renew their term license contracts at all. Additionally, we may incur significantly more costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term contract customers renew under terms less favorable to us or choose not to renew their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

If Our Existing Customers Do Not Renew Their Term License, Perpetual Maintenance or Other Recurring Contracts, Our Business Will Suffer

        In 2007, revenues recognized from recurring contracts represented 77% of total net revenues. We expect to continue to derive a significant portion of our revenue
from our clients' renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Some factors that may affect the renewal rate of
our contracts include:

•

The
price, performance and functionality of our solutions;




•

The
availability, price, performance and functionality of competing products and services;




•

The
effectiveness of our maintenance and support services; and




•

Our
ability to develop complementary products and services.

        Most
of our perpetual license customers renew their annual maintenance although our customers have no obligation to renew such maintenance after the first year of their license
agreements. In addition, our customers may select maintenance levels less advantageous to us upon renewal, which may reduce recurring revenue from these customers.

        During
the third quarter of 2007, we commenced renewing term contracts signed in the third quarter of 2004. These are the first three-year term contracts to be renewed by
Advent since our transition to a term pricing model began. Our customers have no obligation to renew their term contracts and given the small number of contracts renewed in the third quarter of 2007,
we can not yet conclude whether customers will renew in a manner consistent with our perpetual maintenance customers. Additionally, we cannot predict whether the renewals will be less advantageous to
us than the original term contract. For example, the renewal periods for our term contracts are typically shorter than our original term contract and customers may request a reduction in the number of
users or products licensed, resulting in a lower annual term license fee. Further, customers may elect to not renew their term license contracts at all. Additionally, we may incur significantly more
costs in securing our term license contract renewals than we incur for our perpetual maintenance renewals. If our term contract customers renew under terms less favorable to us or choose not to renew
their contracts, or if it costs significantly more to secure a renewal for us, our operating results may be harmed.

If Our Existing Customers Do Not Renew Their Term License, Perpetual Maintenance or Other Recurring Contracts, Our Business Will Suffer

In the third quarter of 2007, revenues recognized from these recurring contracts represented 77% of total revenues. We expect to continue to derive a significant portion of our revenue from our clients’ renewal of term license, perpetual maintenance and other recurring contracts and such renewals are critical to our future success. Factors that may affect the renewal rate of our contracts include:

•              The price, performance and functionality of our solutions;

•              The availability, price, performance and functionality of competing products and services;

•              The effectiveness of our maintenance and support services; and

•              Our ability to develop complementary products and services.

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