Q1 2021 Ebix Inc Earnings Call

May 17, 2021

[music].

Ladies and gentlemen, thank you for standing by and welcome to the Ebix incorporated first quarter financial results and Investor.

Conference call at this time, all participants are in listen only mode.

It will be a question and answer session doing later on so to ask a question. During this time you will need to press star one on your telephone keypad.

Also if you require any further assistance please press star zero.

I would now like to hand, the conference over to your Speaker today, Mr. Darren Joseph Corporate Vice President of Ebix. Thank you. Please go ahead.

Thank you.

Welcome everyone to Ebix Incorporated's 2021 first quarter earnings conference call.

Joining me to discuss the quarter is Ebix, chairman and President and CEO Robin Raina, President Insurance services, North America, Ash, Sawhney, and Ebix EVP and CFO, Steve Hamil. Following our remarks, we'll open up the call to your questions.

Let me quickly cover the safe Harbor some of the statements that we make today are forward looking including among others statements regarding ebix as future investments and our long term growth and innovation the expected performance of our businesses and our use of cash.

These statements involve a number of risks and uncertainties that might cause actual results to differ materially from those projected and the forward looking statements.

Please note that these forward looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events.

Additional information concerning factors that could cause actual results to materially differ from those and the forward looking statements made today is contained in our SEC filings, which list and more detailed description of the risk factors that may affect our results.

Our press release announcing the Q1 2021 results was issued this morning. The audio of this investor call is also being webcast live on the web at Www Dot Ebix Dot Com Sports live webcast you can look at Ebix <unk> financials beyond what has been provided and their release on our website www dot EBIT dot com.

The audio and the text transcript of this call will be available on the investor homepage of the Ebix website. After four P M eastern time today.

Let me now discuss the key metrics and our Q1 2020 results released earlier today.

Q1 diluted EPS was <unk> 70 cents.

And non-GAAP diluted EPS was <unk> 84.

Q1 revenues were at a record $290 million and constant currency revenues at $290 7 million Q.

Q1, GAAP operating income was $31 2 million and non-GAAP operating income was $35 6 million.

Revenue in Q1, 'twenty, 'twenty, one and increased to 110% to $290 million from $137 9 million and Q1 and 2020 on a constant currency basis, Q1, and 2021 revenues increased 111% year over year and would have been 600000 more on reported revenues due to the <unk>.

And in Indian rupee, and Brazilian rial offset by pricing.

Aussie dollar.

Sequentially Q1, and 2021 revenues increased 31% over Q4, 2020 revenue $222 1 million <unk>.

Excluding revenues from foreign exchange travel E learning and remittance businesses that were impacted the most by COVID-19, Q1, 2021 revenues grew 187% as compared to Q1 2020.

Exchanges and clearing the EBIT cash and our worldwide insurance exchanges continues to be EBIT, because largest channel accounting for 90%, 95% of Q1 2021 revenues.

The EBIT cash financial exchange reported revenue of $232 6 million and Q1, 2021 and increase of 198% as compared to $77 8 million and Q1 2020 sequentially Ebix cash Q1, 2021 revenues increased by 45% as can.

<unk> to $164 million and Q4 2020.

Beginning in the last few weeks of March 'twenty, and 'twenty, our businesses and the area of onsite consulting travel and foreign exchange remittance and education and we're hit severely.

Because of COVID-19, once the pandemic led to a global shutdown and the virtual human curfew was imposed in countries like India. The effects of these business lines was natural considering and that we feel good about Q1 2021 results and the resilience shown by our employees across the world to keep supporting our clients.

COVID-19 had a downward impact on many of our insurance exchange businesses, and Q1, and 2021 with reduced availability of India based development staff per billable work already awarded to US We had the order base for example, and our life underwriting business, but not enough available resources, the bill out to carry out implementation.

And.

To add to it on site client work related to product implementation came down to almost nothing because of COVID-19.

Also most new deal decisions were delayed due to COVID-19, we.

We have now made arrangements to increase staffing levels to have overlapping staff for the reduced availability of resources and certain geographies. These are extraordinary times and we are trying to make adjustments accordingly.

Our first quarter revenues and operating income are.

<unk> always traditionally lowered and the fourth quarter of the preceding year, primarily because of our continuing medical education business, having a seasonal increase in the fourth quarter.

Q1, 'twenty, one was no different with CMA revenues decreasing by approximately $4 million as compared to Q4 2020 and.

In spite of that headwind and the increased offset effect of COVID-19, and Q1 2021, and many of our businesses. We still managed to grow our overall revenue is 31% sequentially and 110% year over year and Q1 of 2021, I will now turn the call over to Steve.

Thanks Darren.

We have and continue to operate and unprecedented times. The COVID-19, global pandemic continues to stifle economic activity impact our businesses across the globe.

India has been hit by the second wave of the virus and Q1 and 2021 with devastating consequences and impact on the population, while Brazil is getting hit at present and by the third wave of virus infections.

Three countries that today are impacted the most by COVID-19 in terms of deaths.

The us India and Brazil are three of our most important markets.

At Ebix, we have had to deal with our share of pain as well.

But the results that we have produced and the first quarter provide positive evidence that ebix is prepared to survive. This global economic seizure and thrive once our world returns to normal economic rhythms are.

And our top line performance in Q1 with year over year, and sequential revenue growth of 110% and 31% respectively as encouraging.

Our company's diversity of revenues, both by geography, and solutions and services, our customer stickiness and the recurring and repeating nature of a large percentage of our revenue base is the foundation that will allow ebix to endure this crisis and thrive on the other side of COVID-19.

With that I'll turn to some operating results.

Our gross margin in Q1, 2021 was 24% down sequentially from 32% and the fourth quarter of 2020.

And down year over year from 58, 3% and Q1 and 2020.

Our gross margins continued to be diluted by the robust demand, we continue to see and our low margin payment solutions business in India, which had another record quarter of sales increasing 55% sequentially from a record Q4 2020.

Sales base.

GAAP operating income for Q1, and 2021 of $31 $2 million increased 12% sequentially, while declining 9% year over year from $34 $3 million and Q1 and 2020, primarily due to the impact of COVID-19.

Non-GAAP operating income for Q1, and 2021 was $35 6 million.

Our operating margin for the company was 10, 8% and Q1, 'twenty, one, but excluding the payment solutions business in India. We maintained historically solid operating margins of 35% and the first quarter of 2021.

During Q1 2021, we had a major cash uses of approximately $32 million, including $9 $7 million used to pay global taxes.

Seven $5 million per cash interest related to our corporate credit facility.

$5 $6 million used to pay the amortization of principal on our corporate term loan.

And $4 $6 million to reduce our working capital facilities, and India, $2 3 million for dividend payments and a combined $2 million expended on Capex and software development costs.

We funded these initiatives from existing cash plus operating cash flows generated during the quarter.

In spite of these uses of cash Ebix ended the quarter with a strong liquidity position with cash cash equivalents short term investments and restricted cash of $131 million versus $96 million at $3 31 2020.

Our balance sheet remains healthy.

And with a current ratio of two times at March 31, 2021, and working capital of over $180 million.

In closing we are excited about the future and will be a better company as a result of the trials space and the past year or so.

Our global accounting and finance team operated under severely tight timelines timelines recently, given that we thought our 10-K less and three weeks ago.

Their dedication is indicative of the type of people we have throughout the Ebix global footprint and these people will drive our success and a post COVID-19 world.

Many of our teammates and India have shown incredible commitment over the past few weeks in light of the horrific impacts of COVID-19 on our employees and their families and India.

We are grateful for their service to Ebix and we've more on the recent loss of 11 EBIT family members as a result of this pandemic.

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

I'd like to now turn the call over to the President of our North American insurance businesses Ash Sawhney for his remarks on first quarter operations.

Hi, Steve and Darin.

I will provide a summary of the Q1 and North America results and updates on the outlook for full year 2021.

Which was recently discussed during the Q4 2020 release.

Our North America revenue was down by approximately $4 million sequentially.

Compared to Q4, 2020 because of a $4 million seasonal traditional drop and.

The accompanying medical certification business and the first quarter of every year and.

This sequential drop of approximately $1 million and underwriting exchange revenues.

Offset resolve these.

And that has big gains and life and annuity and health exchanges and the remaining business units stayed steady.

The medical certification business is cyclical in nature.

Sure.

And the highest revenue quarter and Q1 the lowest.

Each quarter and the net.

And so we report upward trend sequentially.

We expect to continue that year on year growth for this division for 2021.

All the new initiatives, we announced and the last quarter.

The drop and underwriting exchange revenues is largely attributable to the slowdown and deliveries on projects.

And because of worsening of the COVID-19 situation in India.

While we believe that spilled on this temporary it may take us a few quarters to come back to normal what this business unit and light of the fact that we are still on.

On the midst of the worst COVID-19 crisis and India.

The life and annuity exchange grew 8% sequentially.

And this was a result of broad based increase in transaction and Walgreens.

March transactional volume and AGA and you'll be seeing what the highest we have seen and several yards.

We are seeing this trend continuing in Q.

Two.

We also saw our health exchange.

Grow by 14% sequentially.

And was largely due again on increase in partner revenue during the speed at which can vary from quarter to quarter.

All of the major business line stayed steady during Q1.

The risk compliance and business added 10, new customers and Q1.

And amongst these war rooms to go one of the largest independent furniture retailers.

And we hadn't homes. They are the 10th largest private homebuilder in the U S.

And WH constructors on.

Global project delivery company.

On Tinder Jones.

Largest violently on timber harvesting and primary lumber product and manufacturing company and British Columbia.

We continue to add more clients with Goldman Sachs, and registration platform, including protective life and Ohio Nashville.

We are pleased with the early success.

And collects analytics platform.

On the Ebix artificial intelligence platform.

To add and many more clients.

And 2021.

And we expanded consulting arrangement with Simons Boop and security benefit.

We have also started to build a pipeline for cloud based services with data growth.

We expanded our presence with a quick Jones.

Horton Express and children's products.

And we have built a strong pipeline and quite a lifetime exchange, we expect this to grow even stronger with the Jpmorgan and implementation.

On the P&C exchange, we added coordinates workers' comp UBI carriers, including two tier one carriers.

Also added four new customers for the risk and vision platform.

We saw 14% growth compared to Q1 of 2020 and sustained levels compared to Q4, 2020.

We continue to expand our digital and black and Scott I think from the medical certification business, we hosted key virtual events and we expect the launch several more during the year.

Riding us incremental streams of revenue.

So secured new contracts with University of Pennsylvania on them and having school of dentistry.

In Q1.

Major milestones.

And amongst these are.

Continued build out of the JP Morgan platform part and on.

On target hold on.

And Q2, this is significant with jpmorgan and the industry.

And also increase up on exactly what that means from the platform.

Successful go lives.

Well, the direct to consumer implementation and.

And Navy mutual for the agent driven order entry platform.

We're continuing to build out the navy and consumer solution, which would be ready for launch later this year.

Manny line launch.

AI and different products on the platform.

First of its kind and Canada.

Sunlight added new products will be international platform on the underwriting team.

Finally, an update on the major initiatives for 2021.

Contributing to the growth from the region.

We continue to be ready bullish on our life and will be soon.

Soon.

We are already seeing record levels of transaction and we expect these will ramp up even more and the second half and can.

Stock, we'll see the impact of the JP, Morgan and Scotty and on boarding.

Private will track of ongoing Marvin on the life platform and have an incremental impact from debt move.

We are starting to see our people pipeline on deals on the <unk>.

Right.

And exchanges.

We anticipate total second half, we'll see significant improvements as the impact of COVID-19 and momentum.

It starts to ease up.

We hope, we'll get back to pre COVID-19 levels in terms of revenue by Q4, 2020 one.

Assuming that the situation in India and improve.

The next week and 90 days.

We are working towards on Ebix Enterprise Health exchange on the Azure cloud. We believe this will give us significant exposure and the market could be azure sales network.

We hope to stand up the platform and Q2 and this will coincide with the launch of several marketing and sales campaigns.

We are excited about the Ebix data.

And we are confident of announcing our first joint win in Q2 of 2021 day.

Hope that backs up and more deals by the end of the year. These deals along with several new relationships that you have established on the consulting side.

And we'll move on our consulting business and an upward trajectory.

As the market conditions and pool, and we plan to step up efforts to expand our sales team and separate the regionals or price.

Your line is healthy and growing.

Core life and annuity exchange network is the strongest it has been and then and will expand to record levels before the end of the.

Our investments and new initiatives will accelerate growth.

We are seeing early successes with investing from analytics.

We expect steady on boarding of Italians on this platform, giving us incremental and recurring revenue streams.

And the next phase of our journey debt.

And with consumer initiatives will feature prominently.

It is where the market is headed and we are well positioned to capitalize on that the opportunities like manifest both as exchanges and on.

And to play solutions.

And with the COVID-19 situation has improved significantly in North America, and the hope that India would normalize in the coming months, we remain bullish about the full year performance in 2021.

We are fortunate to have the very best team supporting our industry leading products.

<unk> per employees during the pandemic has been a major factor, allowing.

Allowing us to sustain strong growth.

Very difficult guidance there.

And sacrifices.

Awesome.

I would now pass this along to Robin for his comments.

Good morning, everyone.

I believe that bottom ash and Steve have captured the quarter in detail.

Let me summarize by saying that these are unprecedented times and I'm pleased that Ebix has managed to keep its head high during such times and.

<unk> continues to deliver top line growth and healthy operating income numbers.

It is no easy task to deal with the on slot of issues.

Brought in by COVID-19.

Clients are delaying their new deal just guidance on site consulting related product implementations and basically non existent.

Wrapping availability has been rather challenging.

And a few product line like travel and foreign exchange E learning et cetera.

And I think at 10% or lower levels because of the direct impact of COVID-19.

As I said cash.

Statistical performance numbers to you in terms of EBIT EBITDA.

<unk> performance and the quarter.

And is one thing that no statistical performance can answer Paul.

In the last 30 days and we have lost 11 and young employees prior to.

And to COVID-19, leaving behind their spouses children and parents and dispatch for the rest of day life.

Let me out on email from one on EBIT software architects that GAAP, just a sense of the emotional roller coaster.

Stop on that today dealing with the female moderate and yesterday by one of our colleagues after the passing away.

And one of our senior software professionals. So then.

A few days back to COVID-19 to start the next up from his laptop.

12 years ago.

When I first got and could you just to sit and he was curious and eager and explore every day.

And these are great.

I would never leave him he would always come back and keep it always come with a set of questions scheme to bounce ideas.

And have the flexibility to his mind ready to absorb and adapt.

And he did bring perspective, the short study it evenly applied of mind what.

And what was never adopt NAV and.

And as already to follow the evidence.

I can never fail to remember the broad smile. He bought every time he came on islands, Kathy and I remember if we ever found on with Dolby alone and shop collaborate already to take ownership ready to help out on us.

And that either brought on his perspective on ready to step up ready to lead don't remember anybody ever having one complaint and to make about him. He was a perfect beam and elevating the energy of the team and driving everyone.

And success.

I don't know what went wrong.

No why he is no longer with us.

No why we could not save him from the one travel he got into it should have never happened.

Don't ever let him leave your Hap he was one of our best and brightest leaks and a close friend to so many of US he will be a ringing void I still feel I'd be looking at on for him.

I believe he will not be there anymore and nobody has a number to check on something.

This has been such a hard month for us to see so many of our colleagues across divisions and locations.

And our young lives and full bloom.

And on timely to this wretched malady.

Hearts go out to their families and let's keep a close eye.

On all the others, who may be afflicted and do that.

And do what best we can so that we don't have to lose anyone anymore and even.

And she said then the badly and thank you for all that you did for us.

And court.

And I read this out.

Sometimes they get lost and numbers and don't get a true perspective on the behind the scenes and block that growth into the fundamentals of running an operation and such time and still do.

Delivering <unk>.

Salute.

Each of my employees across the World I don't have large to express my heartfelt condolences to the loved ones on the 11 employees have lost to this pandemic as a company.

We will stand up for each of these families and Toms off some financial help and also the Robin run a foundation has volunteered to fund the cost of educating the children on each of these employees to their graduation studies, we are painfully event and not.

Can we do and ease the pain of these employees in any manner.

I'm quite proud.

On the Q1, 2021 company results.

And feel good about the fundamental drivers that will take ebix to the next level and coming yes.

In the short term, we continue to work through the targeted ideal off on EBIT Scotch business in India and <unk>.

The sharp from steps in that direction.

The appointment of and internationally renowned statutory auditor for the IPO.

The appointment of and internationally renowned investment bank.

For the IPO as the fifth banker.

The appointment of a diverse independent board for Ebix cash comprising and now names from the securities that debt.

Regulatory and banking industry amongst others.

We are at advanced stages on all of these three issues and will make public announcements on each of these fronts at the right time.

Yeah.

We just had on annual earnings call, a few weeks back and which I shared my perspective on the times ahead of us.

I will keep my comments comparatively brief and look forward to giving you a broader perspective during the Q2 2021 investor call.

I'll close the call and if and how did on what does the operator to open it up for questions.

<unk>.

Understood.

At this time I would like to remind everyone in order to answer that question.

You May press Star then the number one on your telephone keypad.

Again, Thats star one on your telephone keypad.

Yeah.

We'll pause for just a moment to compile the Q&A roster.

Your first question comes from the line of from Jeff Van <unk> from Craig Hallum.

Your line is open.

Great. Thanks for taking my questions guys. A couple from me I guess as I look at the Robin as I look at the on the EBIT and cash business.

The payment cards.

Brutal time, and India with COVID-19, what's going on do you have any sense of how that business behaves sequentially, namely I think.

And payments that was running.

And at $30 million and Q3, four maybe bottomed around 17 million and Q2, obviously, we are starting to lift our head here about gonna get hit again does it go as low as it did in Q2 down to 17 or 18 or just any sense on what happens there.

Jeff.

Did you say it is this question related to the payment solutions business or the overall business it's on EBIT.

Ebix cash ex payments, so EBIT and cash extra payments.

Got it.

So if I look at it.

If you take the payments business out Ebix cash actually grew almost 10% sequentially.

With respect to Q4.

At the same time, we are nowhere near we would need to be partly because.

What has happened with the second wave of COVID-19 infections, it's been brutal and India and he is just beyond anything that I have ever seen.

We are at a point, where travel is basically nonexistent right now.

Foreign exchange, so I don't expect any improvements and travel.

In Q2 at least in Q2.

However, I do expect some improvement and the foreign exchange area simply because as vaccinations are starting to happen internationally. The students are going back to school and what that is pumping is educational limiter and says we are a leader and that market essentially account for 30% of educational remittance.

Sales out of India. So we expect a lot of that business to pick up.

In Q2 and on what.

Presently.

Businesses like <unk>.

Countries like Dubai for example, vaccinate.

And we'll see on foreign exchange business pick up and so on because we are we are getting ready to kind of deploy.

Palm and Dubai for example, so I think it is we are clearly presently affected by.

And by COVID-19. So if you take the non payment solutions areas and we expect to do steady state business and the technology businesses, we expect improvements in the bus exchange technology areas.

We expect improvements and the foreign exchange area.

I expect slight downward trend and the travel 80 arena the time, Inc.

And I expect.

Substantial improvements to continue and the payment solutions and arena. So I think that's where we are even in the technology business and what is stopping and what does I think that's a little bit in terms of and we should have shown a lot more growth and the technology business. It but what is starting to happen and the majority of our clients from financial institutions or banks.

So if we already have and auto and deal with them.

And yet and the mixed up and implementation then we can continue clocking revenue on increased revenue. However, non you know think assigning brand new deals on.

And the situation improves because this is not really a big priority for them to start laying down a new and new agenda for the bank. They don't think this is the right time to do it. So so that is clearly impacting us that any new deals all new deals have been put on hold and I'll give you. An example that even in the bus exchange arena.

We have been negotiating really substantial deals that can really move the needle in terms of revenue and profitability.

And many of these things out of it the government of India with state roadways, and undertakings basically deploying let's say a platform and if it could be a bunch of them and we're a platform for let's say that'd be a thousand buses and a particular state just an example, and.

And what has happened is with COVID-19 are coming in that's not anymore on a big priority for the government.

Friday.

And that if buses are going to apply then they believe that system, but right now but is on flying that's not a big priority for them because they don't want to put people and buses.

The reality is those kind of things have been put on hold and these kind of it and the Saturday I saw some of that.

And so there's a little bit complicated because the ground that is at present and there's almost a complete got a few and in India. If you go around and India, Singapore and is now starting to.

And what kind of cliff.

Country and away because they're starting now.

And number of infections have started to increase.

English and Philippines have never come out of the onslaught of COVID-19.

So it is it has impacted all the southeast Asian countries.

Sure on Nations, we don't visit Us and 44 countries from from India, and so it really hasn't impacted our business, but I think the good news and the diversity of the business shows that we have kept most of these businesses I'll take payment solutions a steady state. If you take many clearly travel and thought I'd cut directly related and Ilan.

And I know directly related to COVID-19, and I don't see and imaging solution, even and the E learning area.

I don't see how how how any parent reported get into school, even if look the way that vaccinations jackpot going debt.

Government of India has basically claiming that they will be able to do the first level of close to 2 billion and vaccinations.

And what it means and if they do 1 billion vaccinations by Euro and dollar.

Virtually mean 500 million people vaccinated, because they're calling to vaccination of the two daughters and whatnot.

And they're calling that 1 billion me and 500 million people.

And if you were impacted and 45 per cent of the people and.

So and so having said that.

If however, if they can achieve.

You know, even decent number and even once they start getting to 25% coverage I think it will have a dramatic impact on our business and on all businesses simply because you.

And you know the the the hub if they can even with all the hop on the epicentre of COVID-19, which is in places like Mumbai Places like Daily and then things will change going on today right and all vaccinated.

The day of the daily and vaccinated only it's 10%. However, there is some positive news that has emerged and the last few days out the belly that the positive day rate is coming down.

More availability of bad from it seemed like positive signs, but we are far from a stage, where I could tell you that.

India is starting to conquer the.

The the.

The pandemic.

Mhm.

Great and and just one last from me I think as it relates to the staffing.

Sounds like you know pretty severe staffing issues, just how and how much of a risk is it.

Got some big projects and play at Jpmorgan, and others and it sounded like you were going to do some things to get some people and they're right away just talk a bit more about the staffing.

So Jeff it was mainly in one city when he goes all kinds of reasons on it but mainly and one for the hydro, but we do not have any although the shoes and many of you don't have any immediate issue than any other players and there will be issues, but we've been able to handle them, it's mainly in Hyderabad, but thats, a very large development base for us and we have been making great.

And it's to handle that so we should be able to handle it I do not see that as the other.

And the huge issue it did have an impact on our revenues and in Q1, but hopefully we'll make make up for a decent part of it and go to work for most part of it and go do we have made arrangements for that so I do not I wouldn't read much into it and the staffing levels at least on the.

And mainly of hydro, but we don't have those issues and other development centers across the world on anywhere else and India, we've been able to.

Have you been able to handle all of our hosting facility is up and operational virtually everything it's only being and hybrid about for all kinds of weighted reasons.

Got it that's it from me thanks.

Thank you.

Yeah.

Again for anyone who wants to ask questions excuse me price Sars and the number one on your telephone keypad.

Yeah.

Your next question comes from the line of Chris Sakai from singular Research. Your line is open.

Hi, Robin.

Good morning Heiko.

I had a question regarding.

Ebix cash is M&A opportunities and I wanted to see.

And if you thought this would be a good time and India to gain market share.

Look that's a great question at the same time, frankly, I'll tell you that.

We do not right now we're not planning to do anything.

On them and if I had at least on the Ebix cash site in India now you could see us, possibly do with something you know and.

And the U S, but again, if we do anything we'll think through it.

And a very sensible manner and so on and then they are right now the part of the reason we don't want to we don't want to take our eyes off the after.

After the focus that we have today, we have we are clearly wanting to head towards that IPO and as we head toward that I feel if I make it let's say we'd made on M&A Tonight, what will happen is we need to find a bit choppy, we need to get a number of clear numbers audited and we will have to order it was doing that.

You are on it and once they do the deal on it but we're going to file.

And with analysts and smoking with lawyers.

And we're going to file.

The run heading document and we call it and the U S. D. HRP documents with the Securities and Exchange Commission of India now when you do that when you make any acquisition if somebody gets things a lot because it it changes everything and it does not advisable typically from an investment bankers.

Perspective to do anything and during the time when you were making on acquisition. When you are making filing an IPO. It will complicate things day, there's a lot of different and it will prolong the profit along and the process considerably. So I wouldn't right now while I agree with you that there is the thing and I'll put you on time and it's actually on.

Very good question, Chris because I.

I will tell you what is happening today, if you look at the areas, which are getting badly hit, but just travel and foreign exchange.

The debt.

Market and getting wiped off smaller players are dying.

They they wrap on.

And I think because they're not able to stand up to the on slot them and able to retain their staffing levels and its happening and book travel and foreign exchange. So what is starting to happen is a lot of these blood out there either.

We are trying to do and we're trying to just pick up this business easy button and that's what I mean by that and what it is.

Rather than making an acquisition. We think this is an open opportunity for organic growth organic growth for us. So what can I keeping our eye focused on trying to go off on each of these opportunities really on a particular company is starting to flow.

A lot of companies have approached us and the present time trying to clearly wanting to come under the ebix umbrella, partly but especially in the travel and foreign exchange checked out simply because and unable to.

Fund the working capital fund the employee cost side now so having said that it is it is normally a reasonable opportunity, but we also feel that that what will happen and we come out of the COVID-19.

Companies with a profit of <unk>, who have a profitable business.

On the only ones, who will be able to keep that had high or do you have to be very adequately funded by fantastic institutions. Because bank debt is also becoming difficult for some of these players who are making losses.

Not easy to line up of bank, what do they want to support and that'll play out on a foreign exchange player in times like this so so it does it is an opportune time also but at the same time. Unfortunately, we think that the best way to handle this is simply not making an acquisition.

From an EBIT and cash perspective, but simply trying to organically picked this business up by talking to each of these found on each of these players and seeing maybe the easier way to do this without even on buying the business.

Okay.

And so then I guess after the IPO would there be more opportunities and opportunities for mergers.

There will absolutely be many once you have on IPO and hopefully be.

And if you'll hopefully be able to generate pretty solid amount of money and one of the uses of cash would be to continue to fund our growth both organically and inorganically so absolutely.

Okay, great. Thanks Robin.

Thank you Chris.

Yeah.

Again for anyone who wants to ask question you May Press Star then the number one on your telephone keypad.

Yeah.

There are no more questions at this time for sensors. Please continue.

Thanks, Jeff.

I think that brings us to the end of the call. Thanks, everyone for participating on the call we look forward to.

Talking to each one of few and during.

During the second quarter, 'twenty, 'twenty, one and investor call.

I'll close the call. Thank you.

Yeah.

Ladies and gentlemen, this concludes today's conference call and thank you for your participation you may now disconnect.

Okay.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the ethics incorporated first quarter financial results and Investor.

Conference call at this time, all participants are in listen only mode.

There will be a question and answer session, Joe and layer on so to ask a question. During this time you will need to press star one on your telephone keypad.

Also if you require any further assistance please press star zero.

I would now like to hand, the conference over to your Speaker today, Mr. Darren Joseph Corporate Vice President of Ebix. Thank you. Please go ahead.

Thank you.

Welcome everyone to Ebix, Incorporated's, 2021, and first quarter earnings conference call.

Joining me to discuss the quarter is Ebix, chairman and President and CEO Robin Raina, President and insurance services, North America, Ash Sawhney and even.

And its EVP and CFO, Steve Hamil and following our remarks, we will open up the call for your questions.

Let me quickly cover the safe Harbor and some other statements that we make today are forward looking including among others statements regarding ebix as future investments and our long term growth and innovation the expected performance of our businesses and our use of cash and.

These statements involve a number of risks and uncertainties that might cause actual results to differ materially from those projected and the forward looking statements.

Please note that these forward looking statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise or publicly release the results of any revisions and these forward looking statements in light of new information or future events.

Our press release announcing the Q1 and 2021 results was issued this morning. The audio of this investor call is also being webcast live on the web at Www Dot Ebix dotcom forward swaps webcast you can look at Ebix those financials beyond what has been provided and their release on our website www dot EBIT dot com.

The audio and the text transcript of this call will be available on the industrial homepage of the Ebix website. After four P M eastern time today.

Let me now discuss the key metrics and our Q1 2020 results released earlier today.

Q1 diluted EPS was <unk> 70 cents and non-GAAP diluted EPS was <unk> 84.

Q1 revenues were at a record $290 million and constant currency revenues at $297 million Q.

Q1, GAAP operating income was $31 2 million and non-GAAP operating income was $35 6 million.

Revenue in Q1, 2021, and increased 110% to $290 million from $137 $9 million and Q1 2020 on a constant currency basis, Q1, 2021 revenues increased 111% year over year and would have been 600000 more on reported revenues.

Due to the weakening Indian rupee, and Brazilian rial offset by pricing.

All day.

Sequentially Q1, 2021 revenues increased 31% over Q4, 2020 revenue $222 1 million extra.

Excluding revenues from foreign exchange travel E learning and remittance businesses that were impacted the most by COVID-19, Q1, 2021 revenues grew 187% as compared to Q1 2020.

Exchanges, including the EBIT cash and our worldwide and insurance exchanges continues to be EBIT is largest channel accounting for 90%, 95% on Q1 2021 revenues.

The EBIT and cash financial exchange reported revenue of $232 6 million and Q1, 2021 and increase of 198% as compared to $77 8 million and Q1, and 2020 sequentially EBIT and cash Q1, 2021 revenues increased by 45% as <unk>.

Per day, $164 million, and Q4, 2020.

Beginning in the last few weeks of March 'twenty, and 'twenty, our businesses and the area of onsite consulting travel and foreign exchange Remittance and education were hit severely because of COVID-19, once the pandemic led to a global shutdown and the virtual humor and carry a few was imposed in countries like India. The effects of these business lines was natural considering.

And that we feel good about Q1 2021 results and the resilience shown by our employees across the world to keep supporting our clients.

COVID-19, and had a downward impact on many of our insurance exchange businesses and Q1 2021 with reduced availability of India based development staff per billable work already awarded to US We had the order base for example, and our life underwriting and business, but not enough available resources, the bill out to carry out implementation.

<unk>.

To add to it on site client work related to product implementation came down to almost nothing because of COVID-19.

Also most new deal decisions were delayed due to COVID-19.

We have now made arrangements to increase staffing levels to have overlapping staff for the reduced availability of resource and in certain geographies and these are extraordinary times and we are trying to make adjustments accordingly.

Our first quarter revenues and operating income margin.

Always traditionally lower than the fourth quarter on the preceding year, primarily because of our continuing medical education business, having a seasonal increase in the fourth quarter.

Q1, 'twenty, one was no different with CMA revenues decreased by approximately $4 million as compared to Q4 2020 and.

Spite of that headwind and the increased offset effect of COVID-19, and Q1 2021 on many of our businesses. We still managed to grow our overall revenue was 31% sequentially and 110% year over year, and Q1 or 2021, I will now turn the call over to Steve.

Thanks Darren.

We have and continue to operate and unprecedented times. The COVID-19, global pandemic continues to stifle economic activity impact our businesses across the globe.

The three countries that today are impacted the most by COVID-19 in terms of deaths and the U S, India and Brazil.

Three of our most important markets.

And EBIT, we have had to deal with our share of pain as well.

But the results that we've produced and the first quarter provide positive evidence that ebix is prepared to survive. This global economic seizure and thrive once our world returns to normal economic rhythms are.

Our top line performance in Q1 with year over year, and sequential revenue growth of 110% and 31% respectively as encouraging.

Our company's diversity of revenues growth by geography, and solutions and services, our customer stickiness and the recurring and repeating nature of a large percentage of our revenue base is the foundation that will allow ebix to endure this crisis and thrive on the other side of COVID-19.

With that I will turn to some operating results.

Our gross margin in Q1, 2021 was 24% down sequentially from 32% and the fourth quarter of 2020.

And down year over year from 58, 3% and Q1 and 2020.

Sales base.

GAAP operating income for Q1, 2021 of $31 $2 million increased 12% sequentially, while declining 9% year over year from $34 $3 million and Q1 2020, primarily due to the impact of COVID-19.

Non-GAAP operating income for Q1, 2020, one was $35 6 million.

During Q1 2021, we had a major cash uses of approximately $32 million, including $9 $7 million used to pay global taxes.

Seven $5 million per cash interest related to our corporate credit facility.

$5 $6 million used to pay the amortization of principal on our corporate term loan.

And $4 $6 million to reduce our working capital facilities, and India, $2 3 million for dividend payments and a combined $2 million extended on Capex and software development costs.

We funded these initiatives from existing cash flow operating cash flows generated during the quarter.

In spite of these uses of cash and Ebix ended the quarter with a strong liquidity position with cash cash equivalents short term investments and restricted cash of $131 million versus $96 million at $3 31 2020.

Our balance sheet remains healthy.

And with a current ratio of two times at March 31, 2021, and working capital of over $180 million.

In closing we are excited about the future and will be a better company as a result of the trials space and the past year or so.

Our global accounting and finance team operated under severely tight timelines timelines recently, given that we filed our 10-K less and three weeks ago.

Their dedication is indicative of the type of people we have throughout the EBIT global footprint and these people will drive our success and a post COVID-19 world.

Many of our teammates and India have shown incredible commitment over the past few weeks in light of the horrific impacts of COVID-19 on our employees and their families and India.

We are grateful for their service to Ebix and we more on the recent loss of 11 EBIT family members as a result of this pandemic.

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

I'd like to now turn the call over to the President of our North American insurance businesses Ash Sawhney for his remarks on first quarter operations.

Thanks, Steve and Darren.

I will provide a summary of the Q1 and North America results and updates on the outlook for full year 2021.

Which was recently discussed during the Q4 <unk> release.

Our North America revenue was down by approximately $4 million sequentially.

As compared to Q4, 2020, because that's a $4 million sees the traditional drop and the continuing medical certification business and the first quarter of every year and.

Sequential drop of approximately $1 million and underwriting exchange revenues.

Offset resolve these.

Our healthy gains and life and annuity and health exchanges and the remaining business units stayed steady.

The medical certification business is cyclical in nature.

<unk> tends to be the highest revenue quarter and Q1 the lowest.

Each quarter and the year and tends to report upward trend sequentially.

We expect to continue that year on year growth for this division for 2020 one.

And with all the new initiatives, we announced and the last quarter.

It dropped and underwriting exchange revenues is largely attributable to the slowdown and deliveries on projects due to the worsening of the COVID-19 situation in India.

While we believe that still down and temporarily it may take us a few quarters to come back to normal what this business unit and light of the fact that we are still on.

On the midst of the worst COVID-19 crisis and India.

The life and annuity exchange grew 8% sequentially.

This was the result of broad based increase and transactional volumes.

March transactional volume and a renewed <unk> were the highest we have seen and several yards.

We're seeing this trend continuing in Q2.

We also saw our health exchange.

ROE by 14% sequentially.

We're largely.

On increase in partner revenue during the speed at which can vary from quarter to quarter.

All of the major business line stayed steady during Q1.

The risk compliance and it.

And new customers and Q1.

And then amongst these or rules per BOE, one of the largest independent U S clients and retailers.

Yeah and homes. They are the 10th largest private home builder and the U S.

And the Blue Ridge Constructors on global project delivery company.

On T Jones.

Largest privately on timber harvesting on primary and lumber product and manufacturing company and British Columbia.

We continued to add more clients with a win and loss patient platform, including protective life on Ohio Nashville.

We are pleased with the early success.

And collects analytics platform.

On the genomics artificial intelligence platform.

To add and many more clients.

From in 2020 one we.

And we expanded consulting arrangement with Simons group and security benefit.

We have also started to build a pipeline for cloud based services the data growth.

We expanded our presence with Edward Jones.

Horton Express and children's product.

We have built a strong pipeline and quite a lifestyle exchange, we expect this to grow even stronger with the jpmorgan and implementation.

On the P&C exchange, we added coordinates workers' comp EBIT carriers, including two tier one carriers and.

We also added four new customers for the risk investing platform.

So 14% growth compared to Q1 of 'twenty correct day on sustained levels compared to Q4, 2020.

We continue to expand and digital and black and start I think from the medical certification business.

Hosted virtual events, we expect the law and several more during the year, providing us incremental gains on revenue.

We also secured new contracts with the University of Pennsylvania on them and high school of Dentistry.

In Q1, we achieved major milestones and what would be amongst these are.

And it's built out of the JP Morgan platform before and on target hold on.

In Q2, this is significant with jpmorgan and the industry.

It will also increase up on exactly what that means from.

The platform.

Successful go lives.

Perfect.

The consumer implementation and Navy mutual for the agent driven order entry platform.

We are continuing to build out the navy directly from whom on solution, which will be ready for launch later this year.

Manulife Rong Luo from cloud.

And that's on the block from the crossover.

Signed and Canada.

So on <unk> added new products will be international platform on the underwriting exchange.

Finally, an update on maintenance and insurance, what 2020 one.

The growth and the reason.

We continue to be very bullish on our life on that soon.

And are already seeing record levels of transaction and we expect things will ramp up even more and the second half and.

Stock, we'll see and the impact of the JP, Morgan and Scottie and on boarding.

Private and Jackup ongoing JP Morgan on the Lifelock Com will have an incremental impact on debt levels.

We are starting to see and people pipeline on deals on the on.

And I hope one day.

Moving exchanges.

We anticipate total second half, we'll see significant improvements as the impact of COVID-19 and Michelle.

It starts to ease up.

We hope, we'll get back to pre COVID-19 levels. When it comes on revenue by Q4 2021.

Assuming that the situation in India with and who are the.

About 60 to 90 days.

We are working towards on Ebix Enterprise health exchange on the Azure cloud.

We believe this will give us significant exposure and the market will be azure sales noncore.

Broke the standup of platform and Q2, and this will coincide with the launch of several and marketing and sales and things.

We are excited about the Ebix data cloud offering we are confident of announcing our first joint win in Q2 of 2020, one we hope the backs up and mortgage by the end of the year. These deals along with several new relationships that you have established on the consulting side.

And our consulting business and an upward trajectory.

As the market conditions, and who we plan to step up efforts and expand our sales team and separate the vehicles.

Our pipeline is healthy and growing our core life and annuity exchange network is the strongest it has been and then and will expand to record levels before the end of the.

Our investments and new initiatives will accelerate growth, we are seeing early successes with less friction and analytics.

We expect steady on boarding of carriers on this platform, giving us momentum and recurring revenue streams.

And the next phase of our journey.

Direct to consumer initiatives will feature prominently.

It is where the market is headed and we are well positioned to capitalize on that the opportunities will manifest both as exchanges and on supply solutions.

And with the COVID-19 situation has improved significantly in North America on the hope that India will normalize in the coming months, we remain bullish about the full year performance in 2021.

We are fortunate to have the very best team supporting our industry leading products.

Our commitment on employees during the pandemic has been a major factor and will allow.

Joining us will stay strong growth.

And it's a very difficult times.

Their sacrifices.

And that won't be forgotten.

And now pass this along to Robin and his comments.

Good morning, everyone.

I believe that bottom ash and Steve have captured the quarter and detail.

Let me summarize by saying that these are unprecedented times and I'm pleased that Ebix has managed to keep it that high during such times and.

And can use to deliver top line growth and healthy operating income numbers.

It is no easy task to deal and the onslaught of issues.

Brought in by COVID-19.

Clients are delaying their new deal decisions on site consulting related product implementations and basically non existent.

Wrapping availability has been rather challenging.

And a few product lines like travel and foreign exchange E learning et cetera.

And I think at 10% or lower levels because of the direct impact of COVID-19.

As I said cash reloading statistical performance numbers to you in terms of EBIT and EBIT.

Performance in the quarter.

And is one thing that no statistical performance gone on so far.

And the last 30 days and we have lost 11, and young employees forever to COVID-19, leaving behind their spouses children and parents and the staff for the rest of day life.

Let me read out on email from one on EBIT software I'll get back that GAAP, just a sense of the emotional roller coaster that on.

<unk> is a two day dealing with.

The female about their income yesterday by one of our colleagues after the passing away.

One of our senior software professionals. So then.

A few days back to COVID-19.

Next up from his laptop.

Yeah.

12 years ago.

And then perhaps robin.

And he was curious and eager and explore all day.

And Dave and.

I would never leave him he would always come back and keep it all come with a set of questions scheme to bounce ideas.

And have the flexibility to his mind ready to absorb and adapt.

And he did bring perspective that showed steady evenly applied of mind.

But it was never adopt NAV.

And <unk> already to follow the evidence.

I can never remember the broad smile. He bought every time he came on islands, Kathy and I remember if we ever found always Dolby along the chop collaboration.

And we're ready to take ownership ready to help had us and that either brought on his perspective and ready to step up ready to lead.

Don't remember anybody ever having one complaint and to make about him. He was a perfect day <unk>.

The energy of the team and driving everyone two words.

SaaS.

I don't know what went wrong.

No why he is no longer with us.

While we could not save him from the one travel he got into it should have never happened.

Don't ever let him leave your heart. He was one of our best and brightest colleagues and a close friend to so many of US he will be ringing void I still feel and we're looking at on for him.

And believe he will not be debt anymore mobile and a number to check on something.

This has been such a hot month for us to see so many of our colleagues across divisions and locations.

Our young lives and full bloom, the fab and timely to this wretched malady.

Hearts go out to their families and let's keep a close eye on all the others, who may be afflicted and do best.

And do the best we can so that we don't have to lose anyone anymore.

And in Michigan, and the badly and thank you for all that you did for us and.

<unk>.

I read this out.

Sometimes they get lost and numbers and don't get a true perspective on the behind the scene and blue.

That growth into the fundamentals of running an operation and such time and still do.

Delivering <unk>.

Luke.

Each of my employees across the World I don't have large strokes express my heartfelt underlying sales to the loved ones on the 11 employees. We have lost to this pandemic as a company.

And so stand up for each of these families and Toms off some financial help and also the Robin run a foundation has volunteered to fund the cost of educating the children on each of these employees through their graduation studies, we are painfully event and not.

And we do and ease the pain of these employees in any manner.

I'm quite proud of.

The Q1, 2020 one company results.

And feel good about the fundamental drivers that are big ebix to the next level and coming yes.

In the short term, we continue to work through the targeted IPO offer ebix cash business in India and <unk>.

Excluding sharp from steps in that direction.

The appointment of and internationally renowned statutory auditor for the IPO to the appointment of and internationally renowned investment bank.

Before the IPO as the fifth Banca <unk>.

The appointment of a diverse independent board for Ebix cash comprising and now's names from the securities.

Regulatory and banking industry amongst others.

We are at advanced stages on all of these three issues and will make public announcements on each of these fronts and the lifetime.

Yeah.

We just had on annual earnings call, a few weeks back and which I share my perspective on the times ahead of us.

I will keep my comments comparatively brief and look forward to giving you a broader perspective during the Q2 2021 investor column.

I'll close the call and if and how did on what does the operator to open it up for questions.

And.

Understood.

At this time I would like to remind everyone in order to ask a question.

You May press Star then the number one on your telephone keypad.

Again that star one on your telephone keypad.

Yeah.

Well pause for just a moment to compile the Q&A roster.

Sure.

Yeah.

Your first question comes from the line of Jeff Van <unk> from Craig Hallum. Your.

Your line is open.

Great. Thanks for taking my questions guys. A couple from me I guess as I look at the Robin as I look at the on the Ebix cash business.

And the payment cards.

Brutal time, and India with COVID-19, what's going on do you have any sense of how that business behaves sequentially, namely I think.

<unk> payments that was running.

And at $30 million and Q3, four maybe bottomed around $17 million and Q2, obviously, we are starting to lift our head here, but going to get hit again does it go as low as it did in Q2 down to 17 or 18 or just any sense on what happens there.

Jeff.

And did you say it is this question related to the payment solutions business on the overall business. It's ebix I'd ask just on debt.

EBIT and cash ex payments, so EBIT and cash extra payments.

Got it.

So if I look at it.

If you take the payments business out Ebix cash actually grew almost 10% sequentially.

With respect to Q4.

At the same time, we are nowhere near we would need to be partly because.

What has happened with the second lien of COVID-19 infections, it's been brutal and India and he is just beyond anything that I have ever seen.

We are at a point, where travel is basically nonexistent right now.

Foreign exchange.

Don't expect any improvements and travel.

In Q2 at least in Q2.

However, I do expect some improvement and the foreign exchange area simply because as vaccinations are starting to happen internationally. The students going back to school and what that is bumping is educational limiter and says we ought to leader and that market essentially accounts for 30% educational remittance.

Sales out of India. So we expect a lot of that business to pick up.

In Q2 and on Bud.

Presently.

Businesses like countries like Dubai for example, vaccinate.

She brought and exchange business picked up and so on because we are we are getting ready to kind of deploy on our platform and Dubai. For example, so I think it is we are clearly presently affected by.

And by COVID-19. So if you take the non payment solutions areas and we expect to do steady state business and the technology businesses, we expect improvements and the bus exchange technology areas.

We expect improvements and the foreign exchange area.

And I expect slight downward trend and the travel.

Leading up all the time, Inc.

And I expect.

The substantial improvements to continue and the payment solutions and arena. So I think that's where we are even in the technology business and what they're starting to look and what does I think that's a little bit in terms of and we should have shown a lot more growth and the technology business and but what is starting to happen and the majority of our clients from financial institutions or banks.

So if we already have and auto and deal with them.

And we are in the midst of an implementation and then we can continue blocking revenue on increased revenue. However, no news no bank assigning brand new deals.

We have been negotiating really substantial deals that can really move the needle in terms of revenue and profitability.

And many of these things out of it the government of India with State Road weighted undertakings basically deploying let's say a platform and if it can be a basketball and will be on a platform for let's say that'd be a thousand buses and a particular state and just an example, and.

And what has happened is that go away and are coming in that's not anymore on a big priority for the government.

Friday.

And that is that things are going to apply then they believe that system, but right now, but there's on flying that's not a big priority for them because they don't want to put people and buses.

The reality is those kind of things have been put on hold and these kind of business day to day, so I sort of downplayed a little bit complicated because the ground that is at present and there's almost a complete curfew and.

And in India. If you go around India, Singapore and is now starting to.

And you know kind of cliff.

Country and away because they're starting that now.

And number of infections or started to increase.

Indonesia, and Philippines have never come out of the onslaught of COVID-19.

So it is it has impacted all the southeast Asian countries adopt foundation, we don't visit us and 44 countries from from India. So it clearly has impacted our business, but I think the good news and the diversity of the business shows that we have kept most of these businesses I'll take payments.

Solutions are steady state if you take many clearly travel and forex and directly related and learning.

And the related to COVID-19, and I don't see and imaging solution, even and the E learning area.

I don't see how how how any bearing product get into school even.

Look the way that vaccinations jackpot going debt.

Government of India, and basically claiming that they will be able to do the first level of close to Boolean and vaccinations.

And what it means and if they do 1 billion vaccinations by year and that.

Virtually mean 500 million people vaccinated, because they're calling two vaccinations of two doses is one.

They're calling that 1 billion and 500 million people.

And impacted 45 per cent of the people and.

So having said that.

If however, if they can achieve.

Even a decent number and even once they start getting to 25% coverage I think it will have a dramatic impact on our business and on all businesses simply because and.

And you know the debt if they can even with all the hop on the episodic or off goal.

But did and places like Mumbai places like Daily and then things will change going on today right now vaccinated.

Data is the day use of action. They did only it's 10%. However, there is some positive news that has emerged and the last few days the belly that the positive day rate is coming down and.

And there's more availability of beds, which seemed like positive signs.

We are far from a stage, where I could tell you that the debt.

India is it starting to conquer the debt.

The the.

The pandemic.

Mhm.

Great and and just one last from me I think as it relates to the staffing at Sao.

Like you know pretty severe staffing issues, just how and how much of a risk is it.

You've obviously got some big projects and flight Jpmorgan and others and sounded like you were going to do some things to get some people and they're right away just talk a bit more about the staffing.

So Jeff it was mainly in one city and it has all kinds of reasons, but mainly and one for the hydro, but we do not have any although his shoes.

Don't have any immediate issue than any other players and there will be issues, but we've been able to handle them, it's mainly in Hyderabad, but thats, a very large development base for us and we have been making arrangements to handle that so we should be able to handle it I do not see that as well.

And the huge issue it did have an impact on net revenue than in Q1, but hopefully we will make make up for a decent part of it and due to on for most part of it and can do we have made arrangements for that so I do not I wouldn't read much into it and the staffing levels at least on the it's mainly a hydro, but we don't have those issues.

And other development centers across the world on anywhere else and India, we've been able to do.

<unk> been able to handle all our hosting facilities up and operate.

And on virtually everything it's only being and hybrid about for all kinds of weighted reasons.

Got it and that's it from me thanks.

Thank you.

Yeah.

Again for anyone who wants to ask question you May press Sars and the number one on your telephone keypad.

Yeah.

Your next question comes from the line of Chris Sakai from singular Research. Your line is open.

Hi, Robin.

Good morning Heiko.

I had a question regarding.

Ebix cash is M&A opportunities and I wanted to see.

And if you thought this would be a good time and India to gain market share.

Look that's a great question at the same time, frankly, how do you that.

We do not right now we're not planning to do anything.

On M&A at least on the Ebix cash site in India now you could see us, possibly do something.

And the U S, but again, if we do anything we'll think through it.

And a very sensible manner and so on and then they are right now the part of the reason we don't want to we don't want a day got eyes off the after.

The focus that we have today, we have we are clearly wanting to head toward that IPO and as we head toward that I feel if I'd make and let's say we have made on M&A today, what will happen is we need to find a D. H ought to be we need to get a number three on numbers audited and we will have to order it does doing that.

You are on it and once they do they do a lot it was on a file.

And with analysts and smoking with lawyers and.

And they're gonna filed.

The Red Herring document and we call it in the U S and DH RFP document with the Securities and Exchange Commission of India now when you do that when you make any acquisition it simply gets things a lot because it it changes everything and it does not advisable typically from an investment bankers.

Perspective to do anything and during the time when you are making on acquisition. When you are making filing an IPO. It will complicate things day, there's a lot of different it'll it'll flow.

On the profit along with the process considerably so I wouldn't right now while I agree with you that there is this is an opportune time and it's actually a very good question because I.

How are you what is happening today, if you look at the areas, which are getting badly hit, but just travel and foreign exchange.

The.

Mark and they're getting wiped off smaller players are dying.

Yeah.

They are operating because they're not able to stand up to the on slot and then and able to retain their staffing levels and its happening and book travel and foreign exchange. So what is starting to happen is a lot of these blood about out there either.

We are trying to do and we're trying to just pick up this business easy button and that's what I mean by that and what it rather than making an acquisition. We think this is an open opportunity for organic growth organic growth for us. So what can I keeping our eye focused on trying to go off on each of these opportunities really on a particular company is starting to flow.

A lot of companies have approached us and the present time trying to clearly wanting to come under the ebix umbrella, partly but especially in the travel and foreign exchange factor was simply because and unable to.

Fund the working capital fund the employee cost right now.

Having said that it is it is normally a reasonable opportunity, but we also feel that that what will happen as we come out of the COVID-19.

And companies, what are profitable and who have a profitable business.

On the only ones and who'll be able to keep that had high or do you have to be very adequately funded by fantastic institutions because bank debt is also becoming difficult flow.

Some of these players who are making losses. It is not easy to line up a bank what do they want to support and that'll play out on a foreign exchange player in times like this so so it does and it is an opportune time also but at the same time. Unfortunately, we think that the best way to handle this is simple.

And not making an acquisition.

From an ebix cash perspective, but simply trying to organically picked this business up by talking to each of these found on each of these players and seeing maybe the easier way to do this without even buying the business.

Okay.

And so then I guess after the IPO would there be more opportunities and opportunity for mergers.

There will absolutely be many once you have on IPO and hopefully.

And if you'll hopefully being able to generate pretty solid amount of money and one of the uses of cash would be to continue to fund our growth both organically and inorganically so absolutely.

Okay, great. Thanks Robin.

Thank you Chris.

Yeah.

Again for anyone who wants to ask question you May Press Star then the number one on your telephone keypad.

Yeah.

There are no more questions at this time presenters. Please continue.

Thanks, Jeff.

I think that brings us to the end of the call. Thanks, everyone for participating on the call we look forward to Dr.

Talking to each one of few.

During the second quarter, 'twenty, 'twenty, one and investor call with that I'll close the call. Thank you.

Ladies and gentlemen, this concludes today's conference call and thank you for your participation you may now disconnect.

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