Yes, You are right.
See this snip from Microsoft.
Activation Count Cache
To track the activation threshold, the KMS host keeps a record of the KMS client computers that request activation. The KMS host gives each KMS client computer a client machine identification (CMID) designation, and the KMS host saves each CMID in a table. Each activation request remains in the table for 30 days. When a client computer renews its activation, the cached CMID is removed from the table, a new record is created, and the 30-day period begins again. If a KMS client computer does not renew its activation within 30 days, the KMS host removes the corresponding CMID from the table and reduces the activation count by one.
The KMS host caches twice the number of CMIDs that KMS clients require to help ensure that the CMID count does not drop below the activation threshold. For example, on a network with client computers running Windows 7, the KMS activation threshold is 25, so the KMS host caches the CMIDs of the most recent 50 activations. The KMS activation threshold for Windows Server 2008 R2 is 5. A KMS host that is contacted only by KMS client computers running Windows Server 2008 R2 would cache the 10 most recent CMIDs. If a client computer running Windows 7 later contacts that KMS host, KMS increases the cache size to 50 to accommodate the higher threshold. KMS never reduces the cache size.
KMS does not limit the number of machines that activate, the FAQ Post states you can use the same key to cover multiple agreements and to activate those machines with the single Key. You don't have to add any licenses, since there is not limit in KMS.
Hope this clarifies.
-Siva
