Ebix achieves significant milestones in Q3 2022 Revenues

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 September 30, 2022:

• Revenues of $257.9 million
• GAAP operating income of $30.4 million and Non-GAAP operating income of $33.6 million
• GAAP Diluted EPS of $0.59 and Non-GAAP diluted EPS of $0.70.

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, “On a constant currency basis, our Q3 2022 revenues grew by 43% year-over-year (“YoY”) to $274.8 million. We experienced the largest negative quarterly impact on reported revenues in Q3 2022 that we have seen in more than five years. Despite that reality our worldwide revenues increased 35% YoY and, excluding pre-paid cards, grew 29% YoY in Q3 2022. The main contributors to this strong growth were the Company’s EbixCash travel and foreign exchange/outward remittance revenues that grew a combined 145% YoY, EbixCash payment solutions revenues (primarily prepaid gift cards) growth of 39%, EbixCash BPO revenues YoY growth of 42%, Latin American revenue YoY growth of 55%, US Annuitynet revenue growth of 16% YoY, and e-learning revenue YoY growth of 110%. Our EbixCash exchange revenues, excluding our prepaid gift card business, generated 82% YoY growth in revenues in Q3 2022”

Robin said, “The Company’s RCS channel revenues grew 14% YoY in Q3 2022, while the insurance channel revenues decreased YoY by 2%. However, on a constant currency basis the insurance channel revenues were slightly higher in Q3 2022 YoY. The Company generated GAAP operating income of $30.4 million and EBITDA plus stock-based compensation of $35.8 million in Q3 2022. Year-to-date the Company has generated $107.1 million of EBITDA plus stock-based compensation. I am pleased with these results as they are in spite of the substantial negative effects of currency headwinds on both our revenues and operating income.”

Robin added, “We are confident of addressing the debt maturity and are pursuing a number of avenues to that extent. These avenues include the engagement of a reputed global investment bank in the US to act as our advisor to refinance the debt (name to be announced soon in a separate press release), securing pre-IPO investments in EbixCash through our India investment bankers, active engagement with a few international financial institutions to seek financing in Ebix, active engagement with a few banks to secure loans in India and of course the launch of the EbixCash IPO at the earliest. We have reason to believe that we can succeed on many of these fronts. We are expecting to report progress on a few of these fronts soon. Our goal remains to seek a structure that is in the best interests of all of our stakeholders and to carve a future for Ebix which could require materially reduced debt once the EbixCash IPO is launched and closed.”

Ebix delivered the following results for the third quarter of 2022:

Revenue: Q3 2022 revenue increased 35% to $257.9 million compared to $191.7 million in Q3 2021. On a constant currency basis, Q3 2022 revenues increased 43% year-over-year and would have been $16.9 million higher in the quarter but for foreign currency rate changes.

On a constant currency basis eight of the eleven major geographies worldwide had year-over-year revenue growth in Q3 2022. Insurance Exchanges revenues worldwide decreased year-over-year by 2%, but were slightly higher on a constant currency basis, while Risk Compliance Solutions revenue increased 14% year-over-year in the third quarter of 2022.

Exchanges, including EbixCash and our worldwide insurance exchanges, continued to be Ebix’s largest channel, accounting for 92% of Q3 2022 revenues.

Operating Income and Operating Cash: GAAP Operating income for Q3 2022 of $30.4 million increased 8% year-over-year as compared to $28.1 million in Q3 2021, primarily due to solid revenue growth discussed above, offset in part by lower gross margins (due to material increase in YoY prepaid gift card revenues) and increased general and administrative expenses in Q3 2022 as compared to Q3 2021.

Non-GAAP operating income for Q3 2022 decreased 5% from $33.6 million as compared to $35.3 million in Q3 2021.

Cash generated from operations in Q3 2022 was $23.6 million, as compared to $18.2 million in Q3 2021 and $15.9 million in Q2 2022.

Earnings per Share: Q3 2022 GAAP diluted earnings per share was $0.59 as compared to $0.50 in Q3 2021, an 18% increase year-over-year despite the Company incurring $4.5 million of incremental interest expense in Q3 2022 versus Q3 2021, which equates to $0.15 per diluted share. Non-GAAP diluted earnings per share for Q3 2022 was $0.73.

Net Income: Q3 2022 GAAP net income increased 18% to $18.3 million compared to $15.5 million in Q3 2021. Q3 2022 non-GAAP net income was $22.5 million.

Q3 2022 Diluted Share Count: As of today, Ebix expects its diluted share count at December 31, 2022 to be approximately 30.8 million shares.

Dividend: Ebix paid its regular quarterly dividend of $0.075 per share in Q3 2022 for a total cost of $2.3 million.

Steve Hamil, EVP and Global CFO added, “Despite the highest negative impact from foreign exchange movements we have seen in at least five years, the Company delivered significant growth in revenue and EPS in Q3 2022 and has produced Adjusted EBITDA (EBITDA plus non-cash stock compensation expense) of $107.1 million in the nine months of fiscal 2022. That represents a year-over-year 5% increase year-to-date in 2022. With continued improvement for the solutions and services most negatively impacted by COVID-19 and the stability of our insurance exchanges revenues and growth in our risk compliance solutions revenues, Ebix management is optimistic about the future of the Company and our strong market positions and the diverse nature of our global revenues.”

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.

(1) Adjustments related to amortization of acquired intangibles and stock-based compensation recognized during the periods for GAAP purposes.
(2) Non-recurring non-operating expense that is unrelated to any operating activities.
(3) Non-GAAP adjustment is based on the Q3 2022 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: