When a company transitions legacy hardware/maintenance contracts to cloud subscription, the accounting can generate "material rights" revenue — a non-recurring catch-up item from prior-period contract obligations recognized as customers migrate. This inflates the transition year's reported revenue, making the subsequent year look like a sharp deceleration even when underlying growth is healthy. The reported YoY comparison is not apples-to-apples, and headline growth rates will mislead without stripping the distortion.
When a company's revenue accounting includes "material rights" or similarly labeled non-recurring contract-transition items, always compute normalized growth by stripping those items from both the current and prior year before assessing the growth trajectory. A 22% headline vs. 28% normalized is a different investment — one looks like deceleration into the low-growth bucket, the other stays in the high-growth cohort. Screen for this in hardware/maintenance-to-subscription transitions (data protection, networking, storage) and in any 10-K footnote that calls out material rights as a revenue component.