Q2 2020 Ebix Inc Earnings Call

[music].

This time up what is reliant on I'll listen only mode. After the speaker presentation. There will be a question and answer session to ask a question, Doug, especially if you only to press star one.

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I would now like to hand, the call first your speaker today.

Joseph Corporate Vice President Investor Relations. Please go ahead Sir.

Thank you.

Welcome everyone Ebix incorporated second quarter 2020 earnings Conference call. Joining me this cost the quarters, Ebix, Chairman, President and CEO Robin Rayna Ebix Global CFO, Steve Hamill, Ebix, North American President Ashanti, followed by remarks, we will open up the call. If your question.

Now let me quickly cover the safe Harbor some of the statements that we make today are forward looking including among others statements regarding it mixes future investments our long term growth and innovation expected performance of our businesses on our use of cash. These statements involve a number of risks and uncertainties that might cause actual results results could differ materially.

From those projected in the forward looking statement. Please note that these forward looking statements reflect our opinions only as of the data. This presentation and we undertake no obligation to revise our publicly released the results of any revisions to these forward looking statements in light of new information or future events.

Additional information concerning factors that could cause actual results may materially differ from those and the forward looking statements made today are available in our house you see filings, which was to more detailed description of the risk factors that may affect our results.

Our press release announcing the second quarter 2020 results was issued this morning. The audio this investor call is also being a webcast live on the web at Www Dot Ebix Dot com forward Slash webcast. You can look at Ebix is financials beyond what has been provided in the release on our website www Dot Ebix dotcom.

The audio and the text transcript of this call will be available on the Investor home page of the Ebix website after four PM eastern time today.

Let me now present, the key metrics is and our second quarter 2020 relates.

Q2 diluted EPS was 76 cents and non-GAAP diluted EPS was 88 cents.

Q2 operating cash flow was 28.8 million was six month year to date operating cash flow of 58.4 million.

Webinars revenues of 111.3 million in constant currency revenues of 117.4 million.

GAAP operating income of 31.9 million and non-GAAP operating income of 35.7 million.

For me the highlight of the quarter were mainly three fat.

One is that despite the impact of Lockdowns foreign currency heads on account of U.S. dollar strengthening and many of our divisions being severely impacted by Cobra 19 across the world. We are still reporting Q2, 2020, EBITDA plus stock based compensation of 36.3 million unimpressed or three 2% of total revenue.

To our strong year to date operating cash flows are 58.4 million.

And three the fact that despite cobot 19, our Q2 worldwide revenues, excluding revenues from area directly impacted by Kobin 19, namely the foreign exchange travel E learning and remittance businesses grew 16% as compared to Q2 2019.

Exchanges, including its cash and our worldwide insurance exchanges continues to be it mixes largest channel accounted for 86% of Q2 2020 revenues.

FX also played a role in the quarter with the U.S. strengthening in light of Cobra 19 on a constant currency basis. You just as Ebix is Q2 2020 revenues would have been 6.1 million higher while the six month year to date revenues would have been 9.8 million higher as compared to the GAAP revenues number number.

As reported.

Either cash or an actual exchange revenues declined by 25.9 million from 79 million in Q2 2019, the 53.1 million in Q2 2020. However, it that decline is understood clearly when one looks at the temporary impact the Pope and 19 on our travel Forex E learning and room.

Mittens businesses that were down by 47 million in Q2, 2020 as compared to Q2 2019.

Excluding travel Forex remittance and the learning businesses you Didnt cash revenues grew 47% in Q2 2020 versus Q2 2019.

Beginning March 2020, our businesses in the area of onsite consulting travel foreign exchange remittance and education, where it had severely because of cobot 19 wants to pandemic led to a global shut down and a virtual human character curfew was imposed in countries like India. The effect of these businesses will be.

Business lines was natural.

Considering that we feel good about the second quarter, 2020 result, and the resilience shown by our employers across the world to allow us to keep supporting our beaded be client.

I will now I'll turn the call over to Steve.

Thanks, Karen.

I want to start by thanking our employees around the world for working together to ensure that Ebix serves its customers as the code in 19 pandemic continues.

Ill get into CFO role for four months and I am as bullish today on the investment strategy of Ebix as I was on day one.

While we continued to be impacted negatively by this global pandemic, the breath and strength of Ebix is solutions drove our solid results in the second quarter.

So my stop at the terms solid results when revenues and EPS are down year over year by double digits on a percentage basis, but I. Thank you Doug.

Ebix is for exchange travel number admittance businesses experienced at approximately 90% decline year over year revenues during the second quarter, Yes. The company delivered adjusted EBITDA of $36.3 billion during the second quarter of 2020.

That level is within 5% of the average quarterly adjusted EBITDA for his body ebix since the beginning of 2019.

This performance was accomplished because ebix has a diverse set of global software solutions and services, a larger occurring repeating revenue base and investment strategy that sound.

Our workforce dedicated to serving gives customers and a management team, but there is proactively addressing our cost structure. So that the company our employees and shareholders will be in the best possible position as Windoor the current global economic people.

I'm excited to be the CFO of Ebix and believe we have a bright future.

Now, let me discuss some specific financial results and metrics.

In order to walk through the revenue results for the quarter I would just add that our worldwide markets also experienced negative impacts during the quarter and consulting revenues due to cope with Nike.

Recurring subscription revenues continued to hold up across the world and is indicative of the strength.

Have you baked in light of current market conditions.

Gross margin in the second quarter of 2020 was 55.9% declined from 64.7% in Q1, 19 and 58.3% in Q1 20.

Ebix cash continued to see strong revenue performance within its payment solutions business in India. During Q2 to 2020 as a result of increased demand for electronic payment products.

Restrictions so movement in India due to covert 19 resulted in higher demand for these products. These revenues have lower margins than other EBIT solutions, and thus diluted our gross margins to some extent versus the prior year.

We expect elevated levels of demand for our payment solutions products in India, wallet, pandemic persists, and possibly longer as consumers and businesses changed or payment habits.

Operating income in Q2, 20 was $31.9 million, a 7% decrease sequentially.

Q1, 20% to 23% year over year decline.

This decline was primarily due to the impact of cobot 19.

The company's foreign exchange traveling remittance business is experiencing cobot 19 related revenue losses are close to $50 million in Q2 20 versus the prior year.

The company took aggressive steps to manage its DNA expenses, including permanent expense reductions in certain business areas and implementing short term expense savings in businesses temporarily impacted by the pandemic.

These steps resulted in year over year Gionee expense reduction in Q2 20 of over 40% and operating income that was outsized versus the revenue declines we experienced in key businesses.

$58 million of operating cash flow produced during the first six months of 2020 is a strong sign of the fundamental strength of our solutions and services.

Solid expense management and sticky notice in our core insurance solutions has helped index increased total cash and short term investments to $117 million. During the first six months of 2020 from $113 million at 12 31 19.

We maintained our cash position for the first half of 2020, while it spending $61 billion of capital for investment purposes, and servicing our obligations, including $29 billion of debt repayment.

$10 million in cash interest and taxes paid five plus million dollars for acquisitions $4.6 million on dividends to our shareholders and $4 million for Capex and capitalized software development.

Working capital is remained flat at approximately $130 million during the first half a 2020, despite our revenue declines in our current ratio of 1.7 times is flat year over year in slightly improved from 1.6 times March 31st 2020.

Ebix is weighted average diluted shares outstanding was 30.7 billion in Q2 2020.

As of today the company expects the diluted share count for Q3, 2020 will be approximately 30.8 billion.

Our recent credit facility of MFS provided the company with ample room to operate through the cobot 19 impacted global pandemic.

Ebix is committed to decreasing its leverage over time through both its operating cash flows and ebix cash IPO.

And that remains strategically important to the company.

With a consolidated leverage ratio of approximately 4.1 times at June Thirtyth.

EBIT.

Should be able to endure cobot 19 impacts that are similar to what we face in Q2 for the remainder of 2020 without running about all of our financial covenants, our net leverage covenant will be five the half times 5.5 times for the next three quarters, beginning September Thirtyth, which we believe provides ample operating flexibility to ebix.

Our syndicated syndicate of banks led by regions Bank has once again showed the support of Ebix through the recent announcement and we thank them for their long term partnership.

In addition to the Ebix cash IPO the company will monitor the debt capital markets closely in the coming months with the goal of having an optimal long term capital structure that provides operating flexibility that aligns with our strategic vision for Ebix.

Finally, ebix is form 10-Q will be filed later today.

While we cannot predict the longevity of this pandemic, we're confident that on the other side of this unprecedented.

President of global economic disjointed us ebix will be poised to recruit the losses, we have sustained and reestablish our leadership in the core EPS traveling remittance business. We will continue to execute on our core strategy of being a global insurance and financial technology leader, we will protect market share in long term core market.

Such as the us in Australia.

And we will be a catalyst to the electronification of international economies.

I would like to now I'll turn the call over to the president of our North American businesses Ash, Sony for his remarks on our quarter.

Thanks, Steven Dyer.

Volume Q2 continues to be a challenging business environment for corporations across the below the corporate 19, the Ebix North American business. During this period state level relative to Q1.

Our foreign exchange is including a new piece, how redflex life underwriting.

Medical certificate tracking continue unabated.

These were offset by certain areas what impact could be recovered 19. These include our non insurance services business.

Certain segments of our Adam business, and our Worksite benefits business.

We continue with the work from home modern in Q2 as get most of our clients.

All I majored exchanges continued put on smoothly and there was no major impact to any of our in flight implementations.

I will now provide a brief not to have underperformance up our core business units in Q2 as well as provided an outlook for the remainder of the.

Our core annuities exchange grew yoda, where Europe in the same period as well as sequentially compared to last quarter.

We saw steady growth and transaction volume in the month of June we saw the highest level off transaction volumes on record.

Back to any month dating back four years.

That trend has continued in the month of July.

In Q1, we announced that we went in late stages of engaging with one of the largest distributors in the country.

We are pleased to report that in Q2, we signed a master agreement with one of the largest banks in the U.S. JP Morgan Chase.

This is a major need that I referenced in my last quarter without providing the name at that time for confidentiality reasons.

We are on track with the implementation to onboard JP Morgan onto the platform by Q4 of Twentytwenty.

Why specifics of this engagement cannot be disclosed due to confidentiality.

On the carriers within the JP Morgan network have been notified.

And we are working closely with them to set up that products on the exchange.

We expect a healthy uptake in transactional revenue once the implementation is completed in Q4.

Meanwhile, we will continue to see our consulting unit benefit from the implementation as we work with the kind of yours.

Also in Q2, 20.8, RBC wealth management deployed the annuity next solution.

We are seeing a steady flow off requests from customers got an open to digitize the order entry process.

On the life illustration exchange, we added Participacoes insurance, our first Canadian side on the platform.

We had in discussions with several other than the market.

We also signed up to Zurich insurance and Fidelity <unk> Guaranty life on the when flex analytics platform.

We have at least another half a dozen got irrs that out in various stages of evaluating our life analytics platform.

Our life underwriting exchange was marginally up in Q2 relative to Q1.

Our outside stayed stable.

Im committed for the long term transformational initiatives, we added Prudential insurance to our life exchange platform.

The insurance and a new piece consulting division, which was in the midst of transformation and realignment pretty exchange division is finally, showing signs of but coming out.

Despite a slow down some clients grew to covert 19. This unit stayed level with Q1 cents to expanding relationships with JP Morgan index and national.

We are pleased with the pipeline that has developed for this unit.

In Q2, we also expanded several of our existing relationships Guardian upgraded to a cloud hosted option for us PRM solution.

Specific life expanded products on the life exchange HSBC expanded their use of our platform to support traditional regulatory requirements.

Jackson National expanded their relationship but that consulting group.

In Q2, we saw strong contributions from our continuing medical education business.

The unit was up approximately 16% compared to Q1.

And level compared to the same period last year. Despite the fact that most conferences, but cancer.

This unit traditionally it relies on conferences to create medical certification content, which is recorded repackaged and sort of physicians.

Even able to adapt to a mark maybe not able to their car and pockets of content remotely.

We have also enhanced our digital marketing efforts and we are working with an outside consulting firm and this endeavor.

I just wanted to show results, both on the topline and bottom line.

I didn't shorten certificated talking business also state study in Q2, Twentytwenty, despite locked down and slow down and several industry groups.

We added 29, new customers this quarter compared to 17 and the last quarter.

The new clients encode donor broadcasting company hobbies, and Rich would corporation.

Our health exchange business was flat relative to Q1 and approximately 7%.

Approximately seven per cent compared to the same period last year.

We did see several deals get delayed due to covert 19, despite that the business unit revenue on a steady path.

On the I don't have side, we saw stood out in some areas. However, we would ever did a new most of our customer contracts.

Partnerships with Eco Nical works remained steady.

We had also in final stages of implementing Adams smartcast with other yamada companies, including Cerner and Allscripts.

Our employee benefits and residents convention relies on employees being at work there.

Therefore, we saw slow down in Q2 as medical screening and orders for various publications must before.

Weve of Seattle, Boston of this business unit was offices stock to reopen and employees up back to what.

In businesses that far susceptible to covert 19 impact.

Measures to hunker down and manage our cost.

These measures have enabled us to stay strong unhealthy and will enable us to tied for the difficult period.

To summarize overall, we continue to hold steady in the most difficult enough environments due to covert 19.

This was possible because of the strategy.

Quality and diversity of our products and customer relationships and the dedication of our employees.

I'd exchanges operate on a subscription and transaction fee basis.

Which integrates option periods like we got in.

In terms of the outlook in our markets, we believe that cloud of uncertainty will persist until the end of the.

But we're also seeing certain trends playing into us certain translating into our stress.

Our customers are reassessing that plants. The focus is on digitizing core processes, particularly customer acquisition underwriting and policy issuance.

These dynamics are favorable to us and it does the reason why we are seeing growth you're not border newbies exchange and separate it off our life and health exchanges.

I've been to see a drive to watch direct to consumer business modern.

This is an area of strength for Ebix, and one where we will continue to grow and invest.

We are engaged with several large clients, while implementing some aspect of our direct to consumer experience.

We are actively looking at acquisitions at strategic partnerships in this area.

We will continue to see a moderate uptake and not board exchanges for the remainder of the year.

Business units definitely impacted by coal will continue to see some softness under businesses startup start getting back to normal.

On an auto we will continue to hold steady for the remainder of the.

Ill now pass Robyn.

Thank fashion.

Thanks to all a few for joining stall I hope that each one of few and your loved ones up keeping safe.

Data, Steve and Ash have presented the auto in quite a bit of detail.

I will first Jeff somebody a few highlights from the quarter for me.

The year to date cash flow.

58.4 million is definitely something that alike, considering the dice the out in that by them.

EBITDA plus SBC stood at 32% for the quarter.

If we excluded payment services from this analysis.

Plus SBC.

Would be more like 46% implying.

That EBITDA, plus SBC and all businesses outside payment. So it has.

Basically came at 46% on the revenue front, we took a hit $47 million in the quarter. It over to you in the corporate affected businesses of travel photic schooled animate.

[music] patient enrollment.

All of the that good income intensive area, though but not far off.

Especially forex dense be do we travel Andy learning, we weren't able to offset a sizable part of the drop by showing 47% growth in ebix cash benefits outside the Golden 19 impacted but nothing of travel Forex remittance and education.

Our high margin international revenue sources in countries like Australia, Brazil, Singapore UK.

Traveler impacted by the strengthening of the U.S. dollar.

That accompanied.

The goal that 19 pandemic it hurt revenue by 6.1 million in the quarter and 9.8 million in the six month period.

That is not what are the at a high percentage of that number would have so to increase that operating income in the quarter and the six month period.

As I speak to you today, most of our employees across the world.

Well functioning from the home.

Traveled to client sites is non existant that breadth and clearly helping out consulting businesses across the globe.

Considering all of this.

I'm very pleased to report out income operating cash and revenue numbers in the quarter.

Let me give you an idea what are locked down means in countries outside the us.

India has been but clean that Dan night, Garfield with all shop closed tool.

Middle of June at present, 30% shops that open and most offices are still not functioning.

For most companies have government guidelines only allow between 15% to 30% attendance in an office anyways that makes it use less the run in office and endanger employees, who anyway I don't want to come to office in a pandemic like live.

If you walking into.

At the end of coffee shop that might be open.

The coffee shop, a lot allow you to go to the counter but will insist that he ordering a coffee yielding go digital money by scanning about going from the table and the fell well below what do you look coffee.

We then promotional travel basically becoming that any of commodity traveling forex.

Have been directly hit.

Quite badly E learning at schools has also been hit the schools completely closed to September I have up now and then within this industry is starting to come back up as money origination.

From concrete.

In the Middle East U.S. and Europe, our inching back up.

And at some semblance of normalcy stops prevailing.

We ought to lead us in many of the that isolated areas like fought extended maintenance as Dvds come back up on numbers have been look that much better.

Let me briefly talk about a few other highlights for me in the quarter.

Last quarter.

Ash talked about a transformational, but let's deal with a lot financial institution.

That he could not name at that point for either on the confidentiality I'm pleased to now named the financial institution JP Morgan.

We have been dipalma contract I see this at a very prestigious then for Ebix, but many exchange submit to the ebix being involved like annuities like speed.

CRM et cetera.

Helping JP Morgan in its endeavor to be even more efficient and growth oriented using a straight through processing technology.

I believe that a few years from now.

The JP Morgan net book could generate upwards of $10 million a year in the cutting revenue.

Just in the form of transactions.

I congratulate ash.

And that and the North American theme for this wonderful when that but the value of the team up but our various divisions in North America.

On the international front.

We have also now to feed that goal ahead from some of the support broke up client applause to commence the implementation of Ebix evolution in many countries over the next few quarters. This implementation lost to commence in Q2, but got delayed because of Golden 19, and is now expected to start soon.

These clients, but then we use that brought an eight global.

Ebix evolution implementation will imply much higher gutting revenue streams from these clients that have driven besides the increase in professional services associated with these implementations.

In Q2, we completed the acquisition or crime mix.

Besides the bus exchange.

In various states Timex provides us with a lot of glass hosting facility that will help us reduce that hosting costs by moving existing outsource hosting in India to this hosting sent though.

We also in had it did a lot decline in the form off the government owned National Information Center and I see that did the caught up in Diaz information superhighway infrastructure.

Covert 19 also made US Lee your line and re look at our strategy, we had to differentiate between onshore some tactical goals and long term objective and still many of them into each other let me give you a few examples.

Big Batesville E learning, where schools out of death are presently close but minimal sources of revenue.

And.

But then plea not inclined to spend any more money.

We created a new products that coolest strategic partnership and created a product named Ebix step up this product that you the artificial intelligence and gaming technology.

Bought Gordon Smith education to students wherever they are across 15000 courses.

The product set you live embedded tools like video conferencing to connect feature than students vial the children get educated.

In a fun oriented manoj sitting at home.

Using gaming and artificial intelligence technology.

India has.

Celebrity icon Mr. Mittal button is today that ambassador to this product set.

We're trying to sell this product directly to students through schools, while creating.

A new revenue school sold for the schools.

The focused attention on technology focused products during the call would beat it and accordingly also identified a few new acquisition targets that could complement that's tremendously.

We focused our attention on improving that cost base permanently whenever we could.

We are but then be looking at reducing our physical off expand by employing just in time technology, and allowing a decent bought off on employee base to work from home.

I can say less substantial costs and improve productivity.

With respect to working from home, we're presently doing a little might view to see whether by the end of 20 2021, we can have at least 40% up what employees functioning from home.

In spite of call it.

We just became.

Reorders largest spot no in India in the field of remittance.

We are already exclusive for Moneygram in India.

And we already own a dominant share of western Union's business in that I mean does business in India.

We are looking on rolling over Moneygram existing distributors on data network at present as that book is fully got it out.

We should see substantial improvement in revenues from Moneygram.

Our biggest company that in Forex outside India Travelex went into bankruptcy.

That potentially could be a big opportunity for us in many countries more on that in coming quarters.

We had broken out in the midst on many large but 16 deals that can be substantial.

And I have great margins, we are hoping to close at least one of them if not more in the third quarter of 2020.

In terms of acquisitions BAFTA present, our priority that absolutely clear.

We have three key financial goals minimize wanted to minimize any lift for ebix in terms of any additional debt the overhang to make an acquisition that can be nicely accretive in the shock don't for our shareholders.

Even if we are using stock at an instrument up a chance still tried to construct films that delayed dilution ideally for many years three dog food companies that does that get us near the people send our higher EBITDA number.

The acquisition of Primex fit it all these threeq idea extremely well with acquisition being made and cash but no stock being issued.

No additional debt being Bacon also it fitted out 30% operating margin profile requirement perfectly.

With regards to what I feel planned for Ebix cash, we think that it is important to let the forward 19th sites has lower and let the markets normalize the board we launched at IPO. Accordingly, we intend to look closely with all our investment bankers through this period and keep ourselves in the ready mode for the IPO Vice.

We made for this pandemic to buff, we're keeping a close launch on the financial markets in India dead on them, but a big ideals plan next year, and we hope that will be one of them.

That brings me to the end up my talk I will now handler.

Back to the operator to open it up for questions. Thank you.

Thank you. Another 900 asked a question we need to press star one on your telephone.

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Please stand by only compounded the DNA roster.

And once again that star one for questions.

My first question since line, Jeff Van Rhee with Craig Hallum May begin.

Great. Thanks for taking my questions. Congrats Robin in the team I mean in a tough environment really impressive to see this level of margins and and loved the cash flow.

Thanks, Ashley the color I think you did a great Calvin the transparency in the U.S. and maybe Robin if you could expand a little bit on the ebix cash.

How you're thinking sequentially I realize we don't have a poor guy, but let me just the puts and takes how each of these lines are likely to behave on a sequential basis.

Going into Q3.

Look I think.

We from an EBITDA cash perspective, we feel pretty comfortable with respect to what we did that Q2 at least repeating that much kinda for performance in Q3, now we would like to seek you'll see to be substantially higher now how could that be higher when that due to the full areas, where we would like to see.

It includes revenue streams, one of them clearly is fortyx. Another one is travel and the power of on is.

Bus exchange.

The the three key areas, where we are starting to see some major opportunities now travel is very right. Now is they are really it yeah people are not really traveling at domestically and internationally. However, there was some major sports events happening from time to time in international.

Countries that have backed up by India, and they will create some new opportunities for us. So we do we are hoping that we can we can basically be a b the traveler provider than some of those large mega events and if that happens then we should have some at least some semblance of revenues from travel a lot more than what we.

Had last quarter.

At Fortyx will automatically accompanied travel we presently know that products is going to be better than what we did in Q2 in Q3 at the same time a lot will depend on how many international flight on opened up both ways into India outside India, and so on because that's a critical element POC fortyk you see edges.

No Remington educational.

Let me turn to the Lady L. Fortyk have also slowed down dramatically simply because.

Schooled on to open in most of the country's abroad and one schooled on to open they have given the leverage to the students to pay them feed on little bit more delayed basis.

So if I oh, the today the eyes bus exchange wedding, we arent, though right up front that in my dog, we out in the midst of some megadeals some daily large deals.

Now those deals may not give us of and the revenue. It all depends on how revenue gets recognized but the good news is all those deals what does that have been very strong cutting revenue streams over the next five years for us and the that large deals we feel very comfortable the other leader in these deals that Brad then we would like to close at least one of them in in.

Q3, not do so I believe that when you take these two three areas.

Those of you should see some increases from from some of these areas.

In the area payment services, our margins are out of low. So there is an upsurge in digital money being used at present in India.

Specially because the example, I gave you up of.

Somebody walking into a coffee shop, and being able to and still having to use digital money in spite of being inside the shop gives you a good insight into how the country's operating because people have any risk of us and because our distancing guideline then stop so having said that we are seeing a pretty good uptake in payment from it.

The month of July was pretty strong in payment services.

So I wouldn't I would think that we would do pretty strongly in the radio payment services in the third quarter. However, remember the payment film itself is not a very high modeling area. It's a very low margin area.

When you're working at 2% to 3% margin, you're pretty much competing with people, who want to lose money and and so it's an area, where we use that as though at a at a foot older as at the footfall you gives us a lot of football it gives us tremendous amount.

Good thing it gives us some mount Demod ended doesn't give us the margin that we would like to see but when you blend all of this into our overall margin structure. We feel good about where do we have had it from a lot of Didnt perspective, So I would like to see some decent in please and Q3 and in terms on revenue.

Someone from the Ebix cash businesses also.

Yeah, and while you're on that Robin on the on the Ebix cash side as you.

Obviously, GE and a lot of long and show that you took very aggressive action.

In the quarter, just how do you think about Q3 did we get full quarter benefit in Q2.

Do you start to sort of shift some of those costs back into investment mode. Just on sequential basis again talk about anything we should be thinking about from an expense standpoint.

[laughter] look if you will not see a major change in terms of southern cost increases and cutesy part of the reason is we didn't just make changes that people are temporary we made we made some temporary changes, but the quantum of that is not as big we made a permanent changes incidently, though that not only in.

Yeah in Ebix Gosh, we did it all across the world. The did build in the U.S. also leap, we gave us an opportunity to kinda rethink bad we on how we are functioning.

I'll give you an opportunity a very simple I talked about rental so yes, gos and if you look at our rental costs across the world at pretty sizeable and if we can somehow.

If we get some almost 40% up an employee base.

The work from home you know that would substantially degree that cost now would that be a good productivity major we actually have come to realize that that's actually a we've done fantastically well in terms of productivity over the last few months our clients that are happy Adam probably see my appia and violate <unk>.

Well then the easiest transformation for us at the same time, it's been a learning process. So we do believe then is there is room for cost improvement as we go into subsequent quarters now that's not going to suddenly come in in Q3, but if you're comparing Q2 Q3 from perspective off.

You know ongoing costs I wouldn't think that they would be major.

We're not if you got to question is that did we.

Did we have food full quarter benefit of something and which won't happen in Q3, either look it's a it's going to its we are presently you will not see major changes in that area.

In Q3 at least.

Okay. That's helpful and then just maybe to others.

One the on the on the BSC JV I Wonder if you would update US there I think you know certainly you've launched in been expanding the breadth of lines Wonder if you could just up the policies and some of the traction you're getting their among along the lines of of ask your comments on on the JP Morgan when I Wonder if you could talk about that.

If there I mean, clearly that had to be a super competitive deal and congratulations on getting it just talk about what you learned in the competitive bake off there.

Let me first of all V S C.

Yes.

As you want to you want to take this go ahead go ahead. Please.

Sorry, yeah.

Yes, thanks on the JP Morgan side, yes, it was a competitive beer.

You know these kind of deals also takes a long time, it's a significant initiative quite frankly for the industry.

The learning obviously was.

You know that Ebix, Phil is a very very strong fair in this market.

Outside of just technology. The reason large distributors like JP Morgan come onto our platform is because of the network that we can offer them.

Typically every large carrier is on our.

A new platform.

So yes, we are excited about this you know me.

Believed that it's going to help the industry, we believe that it's a good step.

Towards Digitization.

Yep.

So Jeff with respect to your question on BSC JV look we're going from central scented. So it's an operationally that go it is not obviously going to help the though the BSC JV in this time simply because our big how RV growing this initiative, our basic growth will happen with respect to how many agent how many thanks.

Hi, This is can we create.

We have to create basically we would like to see it we would like to see closer to 100000 franchises in phase one.

In terms of deep franchises that sell insurance, because that's how the volumes a little coming due to the two bfc ebix venture.

So presently what we're doing is we're presently having people we presently running an aggressive sales program at the same time as you can imagine wouldn't know events being organized it's all happening over the phone and that's not that's easy in countries like India Bad people like to be you know talking bus.

And and stuff like that so having said that the we believe we have them quite value we've taken that opportunity to timing do also deployed new product. So recently the deployed life that was a pretty big step for US. We had deployed held earlier auto early Oh, we have learned apply home next and we're going to expand on life.

Quite a bit are quite a bit of.

In detail, we are presently recruiting for a CEO for the BSC ebix venture.

We're looking for some of these superstars from insurance industry that good luck for us and and take this venture forward for this is going to take some time that says this is not an overnight when Joe. This is of until then we believe we can be the largest game in town in India in children's DTC sector in India, and that's the only them both.

Sites got together BSC, an EBIT, but very pleased right now with bad we what we have done from a product fed perspective first of all the things. We can do nobody else can do writing up a policy in a matter a minute being able to service that policy in a matter a minute those kinds of things and then when you add the net book a B C. N Ebix, we think we.

Very well situated again, we havent, even being able to do a formal launch.

Launch Yeah. Our plan was for example to have a cabinet level, a minister who would come in and integrate this because it's also semi government back because a b C and unfortunately, we haven't even being able to do a simple launch because of coverage. So that's the extent the well how how difficult things that being.

At the same time odd in the short odd, but we are absolutely focused on.

Adding as many franchises as we can I'm Bill we do that you know we have to see to get the volumes on a daily basis, we gotta, how tens of thousands of franchises out there. So that's the plan focusing right now we have and technology guys that obviously focusing at the back on making the broad.

The the best in the market in every way light and from a bit in the functionality technology perspective, and so on so this is it's over the next 12 months. So the strategy. The BSC Big strategy will come out it's not going to be apply it behind the scenes that but it's going to be a venture we had.

We will it will stand on its own feet it'll be a venture which we believe.

Has the opportunity to be mcgavin, too and we will go and market. This venture in in a very strong manner in both the delta advertising as well as in terms of building its own investor base its own strength it's on.

Its own institutional base. So we feel very good about at both sites up very highly committed at the highest level to this venture.

Great.

Sounds good thanks for taking my question.

Thank you.

Thank you and on that once again, that's a star one for question Star one.

One moment for questions.

Once again that star one for questions.

And our next question on South Carolina, Jim like ins from.

Wasatch.

Let me begin.

Thank you you tell us where the B or C. Joint venture resides is that inside of your Ebix cash business and would that be part of the contemplated IPO of Ebix cash business.

Hi, Jim.

Absolutely correct. It is it will be the than the.

Ebix cash venture and it'll be part of the IPO, yes.

Okay perfect. Thank you.

Thank you.

Thank you once again, ladies and gentlemen, that's a one for questions.

And I'm currently showing no questions at this time.

Thank you.

I think since we don't have any more questions I I will close the call now thanks, everyone for joining in the call I hope a each when a few keepitsafe LD and look forward to speaking to you will gain.

At the end of Q3.

Thank you and ticket.

With that I'll end the club.

Ladies and gentlemen delays in todays conference call. Thank.

Thank you for participating you may now disconnect.

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