Here is my understanding of the 20% royalty growth remark.
None of the public RTOC companies report run-time license revenues as a separate line item. But they all give analysts subtle hints from time to time about the relative level of these revenues. To their credit, WIND has been more forthcoming than others under Dick Krabers stewardship as CFO. During the road show for the secondary, Dick announced publicly that run-time license revenues were about 20% of total revenue.
Perhaps also during the road show, but absolutely during the 3rd quarter analyst conference, he indicated that, in addition, over the last two years the portion of total revenues provided by run-time license fees had been growing at about 20% per year, and he seemed to imply the growth was expected to continue at about that pace. This means that for FY's 1995, 1996, 1997 run-time revenues, as a percent of total revenues, have been about 15%, 18% and 22%, respectively. If this pace continues, run-time license revenue portion of FY 1998, 1999 and 2000 total revenues would be about 26%, 32% and 38%.
This is why WIND's net profit is skyrocketing. Run-time revenues really are happening and the numbers are already big.
Allen |
