DECLARATION BY THE PERSON RESPONSIBLE FOR THE INTERIM FINANCIAL REPORT STATUTORY AUDITORS’ REPORT ON THE INTERIM FINANCIAL STATEMENTS FINANCIAL STATEMENTS CONDENSED INTERIM CONSOLIDATED MANAGEMENT REPORT HALF-YEAR 1 Business activity in the first half of 2021 7 AXWAY - 2021 INTERIM FINANCIAL REPORT Business activity in the first half of 2021 In H1 2021, Axway generated revenue of €138.4 million, up weakening of the U.S. dollar and the Brazilian real against the 5.2% organically and 1.3% overall. While the consolidation euro. Profit on operating activities was €10.5 million, scope did not change, currency fluctuations had a negative representing 7.6% of revenue compared with 1.9% in H1 2020. impact of €5.0 million on first-half revenue, mainly due to the Axway Software: Revenue by business line (in millions of euros) H1 2021 H1 2020 2020 Restated* Total Growth Organic Growth License 9.3 10.5 10.0 -11.6% -7.5% Subscription 51.8 37.2 35.7 39.1% 45.0% Maintenance 60.0 70.7 68.2 -15.1% -12.0% Services 17.3 18.2 17.6 -4.5% -1.5% Axway 138.4 136.6 131.6 1.3% 5.2% At comparable scope and exchange rates * License revenue was €9.3 million in H1 2021 (7% of total revenue), down 7.5% organically. While at the beginning of the year activity benefited from a more favourable comparison basis, license sales were again under pressure in the second half of the period. Although past seasonality suggests a slowdown in the decline in the second half of the year, the Company nevertheless anticipates a decrease in annual revenue and is unable to confirm at this stage whether a low point has been reached for the activity. With organic growth of 45.0%, the Subscription activity generated revenue of €51.8 million in H1 2021. The activity accounted for 37% of Axway’s H1 revenue, with total growth of 39.1%. While the acquisition of new customers accelerated, the Company continued to benefit from its extensive existing customer base, which is accelerating its migration to the most flexible contractual models. Sales performance confirmed these trends, as demonstrated by the signing of new Subscription contracts with an annual contract value (ACV) of €14.3 million during the first half, up 40.6% year-on-year. The Signature Metric for January to June 2021 therefore improved 28.7%, while the Net Signature Metric, restated for Maintenance attrition, grew 20.8%. Maintenance revenue reached €60.0 million in H1 2021, representing 43% of total revenue. As expected, activity declined 12.0% organically for the half-year. As customer adoption of more flexible contractual models leads to the migration of the value of certain Maintenance services to the Subscription revenue line, Axway anticipates an annual decline in this activity of over 10%. Axway’s recurring revenue, which includes Subscription and Maintenance activities, represented 81% of revenue in the first half of 2021, i.e., €111.8 million, an increase of 2 points compared to H1 2020. This includes €22.4 million of upfront revenue recognised on the signature of Subscription contracts.
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