Ebix Announces Q1 2023 Revenues of $242.8 Million with $30.5 Million GAAP Operating Income
05/10/2023 - 08:00 AM
JOHNS CREEK, Ga., May 10, 2023 (GLOBE NEWSWIRE) -- Ebix, Inc. (NASDAQ: EBIX), a leading international supplier of on-demand software and e-commerce services to the insurance, financial services, travel, healthcare, and e-learning industries today announced the following results for the quarter ended March 31, 2023:
Revenues including pre-paid cards declined 4.9% year-over-year(YOY) while Revenues excluding pre-paid cards grew 17.6% YOY. Revenues including pre-paid cards in Q1 2023 were at $242.8 million vs. Q4 2022 Revenues of $255.2 million , on account of lower pre-paid card sales and the traditional Continuing Medical Education business decrease in Q1 after the preceding Q4 upsurge. GAAP operating income of $30.5 million , a sequential increase of 2.4% over Q4 2022 operating income of $29.8 million Non-GAAP operating income of $34.8 million , a sequential increase of 1.5% over Q4 2022 Non-GAAP operating income of $34.3 million GAAP Diluted EPS of $0.23 vs. $0.26 in Q4 2022 on account of higher interest costs of $4.6 million in Q1 2023, associated with our lending facilities. Non-GAAP diluted EPS of $0.49 vs. $0.36 in Q4 2022 Ebix will host a conference call to review its results today at 11:00 a.m. EDT (details below).
Robin Raina, President & CEO, Ebix, Inc. said. “Our operating results in Q1 2023 are encouraging and in line with our expectations. Our worldwide revenues excluding pre-paid cards grew 17.6% year-over-year in Q1 2023. Excluding pre-paid cards, the Company showed YOY growth in 9 of the 11 geographies. Our GAAP operating income, excluding the low margin pre-paid cards business was a healthy 28% - quite close to the Company’s operating income goal of 30% or above.”
“We are fully aware that non-operating costs like the costs of debt and the advisory costs associated with it, continue to hamper our overall financial results. We are accordingly committed to the aspirational goal of a debt-free Ebix in the year 2023 itself. Towards that, we are looking forward to the EbixCash IPO besides having advanced forward on a number of strategic carve-out alternatives with the stated goal of not having a debt overhang beyond 2023.”
Ebix delivered the following results for the first quarter of 2023:
Revenue: Q1 2023 revenue decreased 4.9% to $242.8 million compared to $286.3 million in Q1 2022. Excluding the pre-paid cards business, Q1 2023 revenues increased 17.6% as compared to Q1 2022 revenues. Total revenues on a constant currency basis would have been $19 million higher in Q1 2023 at $261.7 million
EbixCash total revenues decreased 20.0% year-over-year in Q1 2023. Excluding the prepaid gift card revenues, EbixCash revenues increased year-over-year by 32% . Insurance revenues worldwide decreased 3% year-over-year in Q1 2023 primarily on account of the US$ strengthening considerably as compared to a year back, and a record Q1 2022 for Ebix Australia. RCS revenues increased 13.9% year-over-year during Q1 2023.
Exchanges, including EbixCash and our worldwide insurance exchanges, continued to be Ebix’s largest channel, accounting for 94% of Q1 2023 revenues.
(dollar amounts in thousands) Channel Q1 2023 Q1 2022 Change EbixCash Exchanges $179,430 $224,152 -20.0 % Insurance Exchanges 42,436 43,764 -3.0 % RCS 20,895 18,337 +13.9 % Total Revenue $ 242,736 $ 286,253 -15.2 % Total Revenue without Pre-paid cards $ 117,348 $ 99,764 +17.6 %
Operating Income and Operating Cash: GAAP operating income for Q1 2023 of $30.5 million increased 1.2% year-over-year from $30.1 million in Q1 2022, primarily due to decreased services and other costs year-over-year. Sequentially, operating income increased 2.4% from $29.8 million in Q4 2022, primarily as a result of a reduction in services and other costs, as well as a decreased general and administrative expenses in Q1 2023 versus Q4 2022.
Non-GAAP operating income for Q1 2023 increased by 3% to $34.8 million as compared to $33.8 million in Q1 2022.
Cash generated from operations in Q1 2023 was $7.2 million , an increase of 28.6% as compared to $ 5.6 million in Q1 2022.
Earnings per Share and Net Income: Q1 2023 GAAP diluted earnings per share was at $0.23 as compared to $0.62 in Q1 2022. The decrease was primarily due to increased non-operating costs of $ 14.1 million including a year-over-year increase in interest expense of $12.0 million , and a foreign exchange differential loss of $2.1 million as compared to Q1 2022 – a cumulative effect of $0.46 in diluted earnings per share.
Despite higher operating income in Q1 2023 vs. Q1 2022, Q1 2023 GAAP net income decreased to $7.1 million compared to $19.2 million in Q1 2022, on account of the above increased non-operating costs. Q1 2023 non-GAAP net income was $15.1 million .
Q2 2023 Diluted Share Count: As of today, Ebix expects its diluted share count for Q2 2023 to be approximately 30.9 million.
Amit Kumar Garg, Chief Financial Officer, Ebix, Inc. said, “In Q1 2023, EBITDA plus noncash stock compensation added to $36.1 million , which translates to approximately 30.8% of our worldwide revenues excluding pre-paid cards. During Q1 2023, amongst other payments, we made cumulative payments of $41 million - for principal and interest payments to our lenders, taxes and Cap-ex ($17.5 million of principal payments, $17.5 million of interest payments, $3.4 million of cash taxes, and $2.6 million in Cap-Ex). In spite of that, as of March 31, 2023, the Company had strong liquidity on hand with cash, cash equivalents, short-term investments and restricted cash of $108.9 million .”
Reconciliation of GAAP operating income, net income and diluted earnings per share to non-GAAP operating income, net income and diluted earnings per share. Non-GAAP information is provided to enhance the understanding of the Company's financial performance and is reconciled to the Company's GAAP information in the accompanying tables.
Q1 2023 Net Income Diluted EPS Q1 2023 GAAP Net Income $7,073 $0.23 Q1 2023 GAAP Operating Income $30,485 Non-GAAP Adjustments: Amortization of Intangibles (1) $3,526 $0.11 Stock-Based Compensation (1) $644 $0.02 One-time Legal and Professional Services Costs (2) $169 $0.01 Non-operating expense (3) $4,210 $0.14 Income Tax Effects of Non–GAAP Adjustments (4) ($551 ) ($0.02 ) Total Non-GAAP Adjustments (Operating Income) $4,339 Total Non-GAAP Adjustments (Net Income) $7,998 $0.26 First Quarter 2023 Non-GAAP Net Income $15,071 $0.49 First Quarter 2023 Non-GAAP Operating Income $34,824
Adjustments related to amortization of acquired intangibles and stock-based compensation recognized during the periods for GAAP purposes. Non-recurring legal and professional services costs recorded during the period for GAAP purposes. Non-recurring non-operating expense that is unrelated to any operating activities. Non-GAAP adjustment is based on the Q1 2023 effective tax rate, which reflects currently available information and could be subject to change.
Non-GAAP Financial Measures and Other Metrics
This press release contains the following non-GAAP financial measures: non-GAAP net income, non-GAAP operating income and non-GAAP diluted earnings per share. Non-GAAP operating income , non-GAAP net income and non-GAAP diluted earnings per share from operations exclude amortization of intangibles, stock-based compensation, as well as certain non-recurring expenses that are not associated with our ongoing operating business activities.
Ebix believes that these non-GAAP financial measures and other metrics provide useful information to management and investors regarding certain financial and business trends relating to Ebix’s financial condition and results of operations. The Company’s management uses these non-GAAP measures and other metrics to compare the Company’s performance to that of prior periods for trend analysis, for purposes of determining executive and senior management incentive compensation, and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures and other metrics provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures and other metrics to investors.
Management of the Company does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. Ebix urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including the financial tables at the end of this press release, and not to rely on any single financial measure to evaluate the Company’s business.
Conference Call Details:
About Ebix, Inc.
With approximately 200 offices across 6 continents, Ebix, Inc., (NASDAQ: EBIX) endeavors to provide on-demand software and e-commerce services to the insurance, financial services, travel, healthcare and e-learning industries. In the Insurance sector, Ebix’s main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis using Software-as-a-Service ("SaaS") enterprise solutions in the area of customer relationship management (CRM), front-end and back-end systems, and outsourced administration and risk compliance services.
With a "Phygital” strategy that combines over 650,000 physical distribution outlets in many Association of Southeast Asian Nations (“ASEAN”) countries, to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio of software and services encompasses domestic and international money remittance, foreign exchange (Forex), travel, pre-paid gift cards, utility payments, lending and wealth managementin India and other countries primarily in Asia and the Middle East. EbixCash’s Forex operations is a leader in India’s airport Forex business, with operations in 16 international airports, including Delhi, Mumbai, Hyderabad, Chennai and Kolkata, combined having conducted over $4.8 billion in gross transaction value per year (pre-COVID-19). EbixCash’s inward remittance business in India processed approximately $5 billion in gross annual remittance volume (pre-COVID-19) and is the clear market leader. EbixCash, through its travel portfolio of Via and Mercury, is also one of Southeast Asia’s leading travel exchanges with over 500,000 agents and approximately 18,000 registered corporate clients, combined having processed an estimated $2.5 billion in gross merchandise value per annum (pre-COVID-19). EbixCash's financial technologies business offers software solutions at the enterprise level for banks, asset and wealth management companies and trust companies within India, Southeast Asia, the Middle East and Africa. The EbixCash's e-learning solutions are provided to schools across the breadth of India via high quality 2-D and 3-D animation and multimedia learning. EbixCash's business process outsourcing services provide information technology and call center services to a variety of industries.
Through its various SaaS-based software platforms, Ebix employs thousands of domain-specific technology professionals to provide products, support and consultancy to thousands of customers on six continents. For more information, visit the Company’s website at www.ebix.com
SAFE HARBOR REGARDING FORWARD-LOOKING STATEMENTS
As used herein, the terms “Ebix,” “the Company,” “we,” “our,” and “us” refer to Ebix, Inc., a Delaware corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only Ebix, Inc.
The information contained in this Press Release contains forward-looking statements and information within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. This information includes assumptions made by, and information currently available to management, including statements regarding future economic performance and financial condition, liquidity and capital resources, acceptance of the Company’s products by the market, and management’s plans and objectives. In addition, certain statements included in this and our future filings with the Securities and Exchange Commission (“SEC”), in press releases, and in oral and written statements made by us or with our approval, which are not statements of historical fact, are forward-looking statements. Words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “seeks,” “plan,” “project,” “continue,” “predict,” “will,” and other words or expressions of similar meaning are intended by the Company to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are found at various places throughout this report and in the documents incorporated herein by reference. These statements are based on our current expectations about future events or results and information that is currently available to us, involve assumptions, risks, and uncertainties, and speak only as of the date on which such statements are made.
Our actual results may differ materially from those expressed or implied in these forward-looking statements. Factors that may cause such a difference, include, but are not limited to those discussed in our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequent reports filed with the SEC, as well as: the ongoing effects of the Covid-19 global pandemic, the willingness of independent insurance agencies to outsource their computer and other processing needs to third parties; pricing and other competitive pressures and the Company’s ability to gain or maintain share of sales as a result of actions by competitors and others; changes in estimates in critical accounting judgments; changes in or failure to comply with laws and regulations, including accounting standards, taxation requirements (including tax rate changes, new tax laws and revised tax interpretations) in domestic or foreign jurisdictions; exchange rate fluctuations and other risks associated with investments and operations in foreign countries (particularly in India, Australia and Asia, Latin America and Europe wherein we have significant and/or growing operations); fluctuations in the equity markets, including market disruptions and significant interest rate fluctuations, which may impede our access to, or increase the cost of, external financing; ability to secure additional financing to support capital requirements; credit facility provisions that could materially restrict our business; costs and effects of litigation, investigations or similar matters that could affect our business, operating results and financial condition; and international conflict, including terrorist acts and wars.
Except as expressly required by the federal securities laws, the Company undertakes no obligation to update any such factors, or to publicly announce the results of, or changes to any of the forward-looking statements contained herein to reflect future events, developments, changed circumstances, or for any other reason.
Readers should carefully review the disclosures and the risk factors described in the documents we file from time to time with the SEC, including future reports on Forms 10-Q and 8-K, and any amendments thereto.
You may obtain our SEC filings at our website, www.ebix.com under the “Investor Information” section, or over the Internet at the SEC’s web site, www.sec.gov
CONTACT:
Darren Joseph
David Collins or Chris Eddy ebix@catalyst-ir.com
Ebix, Inc. and Subsidiaries Condensed Consolidated Statements of Income (In thousands, except per share data) Three Months Ended March 31, 2023 2022 Operating revenue $ 242,761 $ 286,253 Operating expenses: Cost of services provided 156,479 210,843 Product development 9,983 10,258 Sales and marketing 3,331 3,765 General and administrative, net 37,467 26,913 Amortization and depreciation 5,016 4,364 Total operating expenses 212,276 256,143 Operating income 30,485 30,110 Interest income 81 62 Interest expense (22,264 ) (10,251 ) Non-operating (loss) income (330 ) (734 ) Foreign currency exchange gain (loss) (1,220 ) 894 Income before income taxes 6,752 20,081 Income tax (expense) benefit (623 ) (1,704 ) Net income including noncontrolling interest 6,129 18,377 Net loss attributable to noncontrolling interest (944 ) (814 ) Net income attributable to Ebix, Inc. $ 7,073 $ 19,191 Basic earnings per common share attributable to Ebix, Inc. $ 0.23 $ 0.62 Diluted earnings per common share attributable to Ebix, Inc. $ 0.23 $ 0.62 Basic weighted average shares outstanding 30,841 30,712 Diluted weighted average shares outstanding 30,842 30,762
Ebix, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (In thousands, except share amounts) March 31, December 31, 2023 2022 ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 77,559 $ 110,637 Receivables from service providers 307 4,223 Short-term investments 17,111 17,438 Restricted cash 8,453 8,210 Fiduciary funds - restricted 2,157 2,092 Trade accounts receivable, less allowances of $18,078 and $18,167 , respectively 160,707 154,533 Other current assets 107,578 87,387 Total current assets 373,872 384,520 Property and equipment, net 53,540 52,448 Right-of-use assets 9,509 9,636 Goodwill 885,470 881,676 Intangibles, net 49,241 50,900 Indefinite-lived intangibles 16,647 16,647 Capitalized software development costs, net 16,324 15,342 Deferred tax asset, net 105,822 96,290 Other assets 31,125 30,096 Total assets $ 1,541,550 $ 1,537,555 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 106,924 $ 99,194 Payables to service agents 11,020 11,299 Accrued payroll and related benefits 10,053 10,652 Working capital facility 277 3,367 Fiduciary funds - restricted 2,157 2,092 Revolving line of credit 444,902 449,902 Short-term debt 1,039 3,000 Current portion of long term debt and financing lease obligations, net of deferred financing costs of $1,189 and $1,635 , respectively 170,514 190,866 Contract liabilities 47,440 32,028 Lease liability 3,307 3,354 Other current liabilities 26,023 25,783 Total current liabilities 823,656 831,537 Revolving line of credit Long term debt and financing lease obligations, less current portion, net of deferred financing costs of $0 and $261 , respectively 122 160 Contingent liability for accrued earn-out acquisition consideration 2,313 2,298 Contract liabilities 7,805 14,098 Lease liability 6,545 6,612 Deferred tax liability, net 1,150 1,150 Other liabilities 26,053 22,259 Total liabilities 867,644 878,114 Stockholders’ equity: Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at March 31, 2023 and December 31, 2022 — — Series Y Convertible preferred stock, $0.10 par value, 350,000 shares authorized, no shares issued and outstanding at March 31, 2023 and December 31, 2022 — — Common stock, $0.10 par value, 220,000,000 shares authorized, 30,851,314 issued and outstanding, at March 31, 2023, and 30,683,393 issued and outstanding at December 31, 2022 3,085 3,082 Additional paid-in capital 19,417 18,801 Retained earnings 821,854 814,781 Accumulated other comprehensive loss (211,719) (219,439) Total Ebix, Inc. stockholders’ equity 632,637 617,225 Noncontrolling interest 41,269 42,215 Total stockholders’ equity 673,906 659,440 Total liabilities and stockholders’ equity $ 1,541,550 $ 1,537,554
Ebix, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended March 31, 2023 2022 Cash flows from operating activities: Net income attributable to Ebix, Inc. $ 7,073 $ 19,191 Net loss attributable to noncontrolling interest (944 ) (814 ) Adjustments to reconcile net income to net cash provided by operating activities: Amortization and depreciation 5,016 4,364 Provision (benefit) for deferred taxes (9,195 ) (17,583 ) Share-based compensation 644 964 (Benefit) provision for doubtful accounts 435 (360 ) Amortization of right-of-use assets 1,120 892 Amortization of capitalized software development costs — 755 Changes in assets and liabilities, net of effects from acquisitions: Accounts receivable (5,923 ) 901 Receivables from service providers 3,916 (629 ) Payables to service agents (279 ) (1,307 ) Other assets (12,544 ) 3,114 Accounts payable and accrued expenses 6,746 (9,357 ) Accrued payroll and related benefits (633 ) (1,159 ) Contract liabilities 9,033 8,370 Lease liabilities (1,129 ) (813 ) Reserve for potential uncertain income tax return positions — — Other liabilities 3,834 (962 ) Net cash provided by operating activities 7,170 5,567 Cash flows from investing activities: Capitalized software development costs (900 ) (2,666 ) Maturities (purchases) of unrestricted marketable securities, net (100 ) 457 Capital expenditures (2,445 ) (9,303 ) Net cash (used in) provided by investing activities (3,445 ) (11,512 ) Cash flows from financing activities: Prepayments for Debt Refinancing (8,471 ) — Proceeds from term loan — — Principal payments of term loan obligation (25,059 ) (8,402 ) Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested (24 ) (34 ) Dividend payments — (2,318 ) Payments of debt obligations, net (1,548 ) (832 ) (Payments) of/Borrowings under working capital facility, net (3,105 ) (3,707 ) Payments of financing lease obligations, net (47 ) (53 ) Net cash used in financing activities (38,254 ) (15,346 ) Effect of foreign exchange rates on cash 1,333 (1,088 ) Net change in cash and cash equivalents, and restricted cash (33,196 ) (22,379 ) Cash and cash equivalents, and restricted cash at the beginning of the period 124,959 114,764 Cash and cash equivalents, and restricted cash at the end of the period $ 91,763 $ 92,385
