Q4 2021 Ebix, Inc. Earnings Call
Good day and thank you for standing by welcome to <unk> 2021 financial results Investor call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to participate simply press star one on your telephone.
I would now like to hand, the conference over to your Speaker, Darren Joseph Corporate Vice President of Ebix. Please go ahead.
Thank you.
Welcome everyone to Ebix Incorporated's 2021 annual results earnings conference call joining.
Joining me to discuss the quarter is Ebix, chairman, President and CEO Robin Raina, President Insurance services, North America, Ash, Sawhney, and Ebix, EVP and CFO , Steve Hamil.
Following our remarks, we will open up the call for your questions now 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, 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 in the forward looking statement. Please.
Our opinions only as of date of this presentation and we undertake no obligation to revise or publicly really 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 to materially differ from those in the forward looking statements made today is contained in our SEC filings, which list a more detailed description of the risk factors that may affect our results.
Our press release announcing the 2021 full year and Q4 'twenty 'twenty. One results was issued this morning.
Do you have this investor call is also being webcast live on the web at Www Dot Ebix dotcom forward slash webcast.
Look at Ebix as financials beyond what has been provided in the release on our website www Dot Ebix dot com.
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 quarter and the full year Q.
Q4, 2021 revenue increased 39% sequentially as compared to Q3 2021 .
Q4, 2021 revenue increased 20% year over year to $266 8 million versus Q4 2020.
Year over year growth is primarily due to continued strength in the ebix cash payment solution business. However, in Q4 2021 there was year over year growth in some key businesses that have been most negatively impacted by the COVID-19 pandemic, including foreign exchange travel and E learning businesses.
Additionally, ebix cash B P O N I T outsourcing services areas, both experienced year over year growth in Q4, 2021 .
On a constant currency basis, Q4, 2021 revenues increased 22% to $270 1 million versus $222 1 million in 2020.
GAAP revenue for the full year of 2021 increased 59% to $994 9 million as compared to fiscal year 'twenty 'twenty on a constant currency basis, Ebix 2021 revenues increased 58% by $365 8 million to 991.4.
Million versus $625 6 million in 2020 the.
The increase is primarily due to growth in the EBIT cash payment solution business as well as year over year growth in the company's core life and annuity exchange platforms B P. O N I T outsourced services or originating in India Foreign exchange business and growth in revenues and four of the company's seven key geographies.
The company continued to experience negative impact from COVID-19, global pandemic with particular impact on our travel remittance E learning financial technologies and global consulting revenues.
Exchanges, including EBIT cash and the insurance exchanges worldwide continued to be Ebix is largest channel accounting for 93% of our fiscal year 'twenty 'twenty revenues.
Our year over year EBIT cash revenues grew 94% Rcs route revenues grew 16%, while the insurance exchange revenues declined by 2%.
The insurance exchange decline was primarily due to the adverse effects of COVID-19 for 12 months in 2021 versus 10 months in 2020.
Our revenues grew in four of the seven key geographies of our business in 2021 versus 'twenty 'twenty.
India revenues grew by 99% Australia.
So 12% Europe .
Europe , an increase of 25% New Zealand, an increase of 11%, while Singapore had a decline of 2%.
North America revenues had a decline of 6% and Brazil had a decline of 13% primarily because of the adverse effects of COVID-19 for the 12 month period in 2021 2021 versus 10 months in 2020.
Our revenues grew sequentially and most of the geographies of our business North America revenues had a sequential increase of 7% India revenues grew sequentially by 52%, Australia had a sequential increase of 25%, Brazil, a sequential increase of 22% Singapore.
Or a sequential increase of 22%, Indonesia had a sequential increase of 133% the Philippines, a sequential increase of 42% and New Zealand had a sequential increase of 4%. The only geography that had a decline sequentially, whereas the U a E with a sequential dip.
Klein of 67% due to this geography, having an outsized revenue performance in Q3, 2021 versus the other quarters of 2021 .
Despite the devastating effects of COVID-19 on our travel Forex E learning and other businesses. Our EBIT cash grew growth continued in 2021 EBIT.
He was cash grew to 94% in 2020 , one as compared to 2020, while the crew, 134% as compared to 2019.
International revenues in Q4, 2021 accounted for 85% of the total revenues for Ebix exemplifying the tremendous growth we have experienced in our international businesses, primarily due to the EBIT cash financial exchange business.
I will now turn the call over to Steve.
Thanks Darren.
2021 was a year that the world would like to forget and move on from Ebix as 2021 required the company to face many challenges attributable to the COVID-19 global pandemic.
I want to first thank our employees for their incredible dedication to the company during the year. Our team worked to complete four different audits at the company and the Ebix cash business and soon we will successfully complete a comprehensive IPO document for the anticipated public equity offering of our Ebix cash business on the Indian stock exchanges B S.
And then I see.
These were all completed while our families experienced firsthand the ravages of COVID-19.
To say that we are proud of our ebix employees would be an understatement, but I want to offer my sincerest gratitude for all that our employee base has accomplished this past year under stressful conditions.
In spite of the impact of COVID-19 on our consulting travel remittance E learning and financial technologies businesses. In 2021. We are pleased to report that we saw continued rebounding of some of these businesses in Q4 'twenty one.
Year over year, our Ebix cash travel and foreign exchange revenues more than doubled in Q4, 'twenty, one and we saw sequential growth in our financial technologies and E learning businesses in India.
Even with the tremendous negative pressure, we felt from COVID-19 within many of our Ebix cash operations, our 2021 revenues from Ebix cash basically doubled due to strong growth in our payment solutions business as well as growth in our foreign exchange V. P O an it services business lines.
The negative impacts of the tight labor market in India are beginning to subside as we've executed major hiring plans and continue to train and deploy it specific resources for our client base.
COVID-19 challenge this company in many ways and we are still challenged.
<unk> cash revenues in COVID-19 affected areas.
Like travel and foreign exchange remittance consulting learning continue to be materially lower than pre pandemic levels.
We see this reality as an opportunity for Ebix and our stakeholders because as the world returns to normal in 2022 and 2023, we have built and market leadership in these areas, which should return material revenues ebix as the world bounces back.
Our company is armed with solid and predictable revenues from our insurance exchange and Rcs businesses globally that generate substantial cash flow for us as well as a collection of solutions and services and our Ebix cash operations that are market leaders and we will benefit from a long term growth prospects in India and southeast Asia.
I will now discuss some financial metrics for the fourth quarter and year.
Our gross margin in Q4, 2021 was 30% a decrease sequentially from 37% in the third quarter of 'twenty, one and year over year from 32% in Q4 2020.
Our gross margins continued to be diluted by our low margin prepaid gift card revenues from India <unk>.
<unk> the payment solutions business in India, the company's gross margins for Q4, 'twenty, one and fiscal year, 'twenty, one where 77% and 78% respectively. That's flat sequentially from Q3, 21, and an increase from 76% in fiscal year 2020.
GAAP operating income for Q4 'twenty one.
$32 4 million, that's an increase 15% sequentially from $28 $1 million in Q3 21.
And an increase of 17% year over year from $27 7 million in Q4 2020.
non-GAAP operating income for Q4, 'twenty, one was $37 5 million for.
For fiscal 2021, GAAP operating income declined 5% to $119 million from $125 8 million in 2020.
non-GAAP operating income for 2021 was $139 7 million.
In addition to the continuing effects of COVID-19 on our business Ebix had year over year product development personnel cost increases of approximately $4 $7 million in 2021, and G&A cost increases of over $13 million in 2021, mostly related to increased personnel costs and legal and other professional expense.
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Offset in part by lower rent expense and bad debt expense year over year.
Our operating margin was 12, 2% in Q4 2021 declined sequentially from 14, 7% in Q3 dollars 21 for fiscal year 'twenty. One our operating margin was 12% a decline of 800 basis points from 21% for fiscal year 2020.
The growth in low margin payment solutions revenues had the largest impact on the year over year comparison of operating margins excluding.
Excluding the payment solutions business in India, we generated 31, 1% and 32, 1% operating margins in the fourth quarter and fiscal year 2021, both in line with our goal of greater than 30% operating margins for our suite of solutions and services outside of the payment solutions business.
During fiscal year 2021, we had the following major cash uses.
$42 $6 million was used to reduce the principal on our corporate term loan.
$34 million was used for cash interest paid.
We paid $17 $7 million for income related taxes globally.
$11 million.
<unk> was used to reduce our working capital facilities in India, we had $9 $3 million of dividend payments and a combined $13 $2 million extended on Capex and software development costs.
We funded these initiatives from existing cash plus operating cash flows generated during the year.
We ended 2021 with a solid liquidity position, our cash cash equivalents short term investments and restricted cash was $125 $2 million versus $138 6 million at 12 32020.
Our balance sheet remains healthy with a current ratio of 1.79 times at 12 31 21.
Our working capital position as a $161 4 million at year end.
At 12, 31, 21, our total debt is $52 $5 million lower than at year end 2020.
As the IPO process moves forward for Ebix cash with the milestone Dr. HP filing soon.
<unk> has the potential to create value for our shareholders by using proceeds from the IPO to materially reduce our outstanding debt load and to fund future growth of our Ebix cash businesses.
2021 was a difficult year for us all but we believe that we have the kind of company, both our people and our solutions and services that will thrive as we move into the future.
We're a global company with diverse revenue streams, our client list that is unmatched in the industries, we serve and a future that is filled with promise. We thank all the employees that have helped US build this company and the shareholders that have supported us in the past and today.
Finally, ebix <unk>.
<unk> Form 10-K will be filed later today I.
I would like to now turn the call over to the President of our North American insurance businesses Ash Sawhney for his remarks on our fourth quarter and fiscal 'twenty one operations.
Thank you, Steve and Darin.
I will now talk about the North American results and outlook.
Q4, North American revenue was up a healthy 7% sequentially.
This was the third consecutive quarter gain for the North American business.
Driven by strong gains in the medical certification business life health and P&C exchanges as well as the core consulting business.
I will now summarize the performance of the key business units in Q4 as well as their full year performance.
The medical certification business was up 64% compared to Q3 of 2021.
This spike was expected as Q4 cyclically is the best quarter for this business.
This growth would have been even higher by approximately $700000, but for the fact that we have to further revenue for Q1 2022 due to COVID-19 related delay timing off of product shipment.
The product was ready to be shipped in December 2021.
Have to hold back shipments as our partners companion product was delayed due to Covid factors.
The 2021 performance is remarkable also given that the internal board of medicine extended the certification deadline for 2022 was impacted especially several specialties.
In 2021, we continue to see higher digital sales and the continuing medical education business, which now accounts for over 62% of the business.
We also launched several new products, improving the vitality of newness of the product portfolio.
We signed 43, new clients in 2021, and added new accreditation partners, including Spi healthcare and Beth Israel Deaconess.
2021 was a record breaking year for our life and annuity exchanges.
Q4 revenue was up 21% compared to the same quarter last year.
Full year comparison, the 2021 revenue was up 13% compared to 2020.
The life exchange revenue more than doubled in 2020 , one compared to 2020.
There were several noteworthy accomplishments in 2021.
We added several new clients to the annuity in EM platform, including Guardian, NFS suite Terror and Ocean view.
We launched it.
We successfully launched JP Morgan and our carrier partners on the annuity platform and are currently engaged with them to launch the Lifelock com.
Also on the life platform, we added mass mutual investment in Sodom.
The illustration exchange was up 1% in Q4, 2020 , one compared to Q4 2020.
And on a full year basis was up 8%, reaching the highest ever full year revenue.
The growth was attributed to several factors, including new clients on the platform and new product functionality that we'd ordered out in.
In Q4, 2020 , one we added western and southern for the exchange, we also had to Taiwan quoting platform.
In 2020 , one we launched a new analytics platform and we are pleased with the early adoption and the pipeline of prospects.
The P&C business was up 20% compared to the previous quarter, making it two consecutive quarters with over 20% growth.
Overall 2021 compared to 2020 was up by approximately 9%.
Added four new risk management customers in Q4, bringing the total for the year to nine.
We also.
We also added nine new implementations of workers' comp solution in the quarter with.
With a quarter of 19 for the year.
Our health exchange was up 8% in Q4, 2021 compared to the same period in 2020.
And was relatively flat sequentially with Q3, 'twenty, one and for the full year 'twenty corny.
Despite the slowdown in enterprise deals due to COVID-19 related factors.
It stayed resilient in Q4.
G a denver and redirect helps to the platform in 2020 one.
In Q4, we were also engaged and shortlisted by one of the largest global employee benefits brokers in the world.
Pardon enterprise benefits administration deal.
We will be ready to announce an update on this in Q1 2022.
Our core consulting business was up 18% sequentially compared to Q3.
35% compared to Q4 of corn in 'twenty and up 17% for the full year 'twenty, one compared to 2020.
Q4 was the highest revenue quarter going back 12 quarters to Q1 of 2019.
Several client engagements contributed to the success in 'twenty one.
<unk> security benefit JP, Morgan USAA Massmutual and Lincoln.
At the end of 'twenty one would.
B, we're engaged in active consulting services with over 38 clients. Many our tier one clients in the insurance and banking sectors in North America.
The underwriting exchange revenue in Q4 was level with Q3 and showed signs of stabilization.
Overall in 2021.
And you have to face headwinds as work from home and restrictions on foreign cover.
Factored out onsite billing.
On the positive side, several major clients renewed their contracts, including nationwide John Hancock Manulife sunlight.
And Americas, providing us visibility into ongoing revenue.
The CRM unit was down 6% sequentially in Q4, 2021, and roughly down 9% compared to the same quarter last year.
Towards the middle of 'twenty, one we initiated a major restructuring and repositioning initiative for this division.
More than just the CRM system. Our vision is to position. The platform is a comprehensive agency management solution, which will be integrated within essential distributor toolkit comprising of industry, leading components for coating illustration order entry and carrier communication.
We are well on our way in terms of designing and implementing the solution.
Our risk compliance division was marginally up sequentially in Q4 and compared to the same quarter last year.
We added 12, new clients for this division in Q4, including purity life health products set of ammo, Sam construction Fairfield city of Leandro.
The capital Advisors Lawrence investments, yes, the name a few.
The pipeline remains strong.
I will now spend a few minutes, providing an outlook for 2022.
We expect COVID-19 related impacts and restrictions to weather away in 2022, we are starting to hear that most signed offices will reopen by the middle of this year impacts of foreign travel restrictions have started to ease and we expect normalization in the second half.
Our core annuity platform will continue to see upward momentum in 2022, we expect transactional volumes to steadily increase as a result of all of the carriers and distribute because we have added to the platform.
We are launching a new analytics platform for the annuity exchange, which would provide additional revenue streams.
The pipeline for our adjunct annuity maintenance platform called Amp remains strong and we expect an uptick in amp volume in 2022.
The life exchange will continue its strong run.
We have more carriers on the platform than ever in our history and will continue to grow in 2022.
As most as more carriers adopt the platform you get more interest from distributors, such as JP Morgan at Jones and others.
Our restructuring efforts on the CRM platform will start to show positive results.
The platform will have a prominent role as a gateway to enable carriers and distributors to access all of our digital assets.
Successful platform delivery of J P. Morgan can be extended to other large bank distributors.
Our enterprise solutions, including has exchanged an underwriting exchange, we'll see post Covid revival.
We are starting to see a resurgence of deals and opportunities we will have more to announce on this in Q1 'twenty According to reporting.
With the expectation of better post COVID-19 market conditions, we have started to ramp up our sales team.
We are pleased with the talent that we're able to attract.
Our industry, leading products marquee customers and.
And our stellar ebix team or other factors that allow us to attract the best talent.
We expect acquisition efforts, which have taken a back seat for the past few years in North America will get re initiated.
We expect to augment.
Our organic growth.
With these factors.
The past two years, when a challenging period for us beautiful with 19 relate.
Related impacts we lost several associates.
Many of our associates, who lost their family members in February we had to take time off for the evening family members.
Despite such harsh conditions, we stayed resilient and as credit was never broken.
We had it resolved not let our clients down and we lived up to it.
This was all due to the hard work and efforts of thousands of associates worldwide.
That efforts what are extraordinary and we thank them for that.
Yes.
I will now pass this onto Robbins.
Thanks, Josh.
Good morning, everyone.
Let me at the outset acknowledge.
Efforts and sacrifices made by Ebix employees across the world in this pandemic hit.
We lost many of Ebix colleagues to COVID-19 in the year 2021.
Having lost my mother to the disease, and having fun and interactions.
Some of the affected family members. All these employees I am painfully aware of the devastating effect.
With COVID-19 on our staff and their loved ones.
<unk> business continued and that.
Our employees continue to find ways.
To do the best for the company, while making sure that our clients.
Top class uninterrupted service that EBIT is known for.
I am highly indebted to our staff across the world for their dedication and service to the company.
I embarked on a journey.
Build a world class company beginning in 2000.
With annual revenues of $11 million.
And losses of $19 million and 1999.
2021 has been a landmark year.
All of us.
As we got.
<unk> closed the reach.
$1 billion revenue Mark.
And then first quarter 'twenty one delivered.
$167 million of revenue, implying that we are past the one.
1 billion annualized revenue Mark.
In the quarter.
That's about moment for me.
And for all of Us.
As we have done that while delivering 22 years of growth.
And continued profitability in each of the 22 years.
Despite the effects of COVID-19 on our businesses worldwide.
In 2021.
I am pleased to be reporting another great quarter and for Ebix on many fronts.
How does that kind of top line.
$994 9 million and GAAP revenue.
Record quarterly pipeline of $266 8 million in GAAP revenues.
Q4, 2021 revenues grew sequentially, 39% and 20% year over year.
Excluding the payment solutions business in India.
Steve said regenerated.
31, 1% in the fourth quarter and operating margins.
And 32, 1% and operating margins in the fiscal year.
2021 .
These results are.
In spite of our travel foreign exchange E learning.
And consulting business is being impacted severely.
Like COVID-19, besides the overall delay in the pace of new deals being granted by client on account of COVID-19.
Also what will then start to think about fourth quarter 'twenty. One results was the fact that our revenues grew sequentially in most of the geographies of our business.
North America had a few.
We shouldnt see the 7% India revenues grew sequentially by 52%, Australia had a sequential increase of 25%, but we like to think we should be look when he don't want then.
Single point on a sequential increase of 22%, Indonesia, 133%, Philippines, 42%.
And New Zealand had a frequent shouldn't be the full percent.
I also want to convey.
That the company's Indian subsidiary Ebix cash limited.
To file a draft red Herring prospectus.
With the Securities and exchange Board of India.
Imminently in order to offer its equity shares.
And initial public offering.
Under the Indian regulatory guidelines.
Details of the offering and the use of proceeds.
And only be disclosed once the <unk> is filed.
The pre filing process.
He was involved in.
Neither audits by two independent audit firms.
Well thats been built.
Judy India and gave you some money. It is also in the legal diligence by police had suffered any firms sidley Austin just staying in the flow industry section review.
One industry experts, namely by itself.
And finally, the investment bank, namely.
State Bank of India, I see I see I think guarantees multilateral swaddle, yes securities and equities.
It's a highly complex and detailed exercise to say the least.
With a deal that should be expected to be filed soon pass, but Indian rules governing the process I cannot speak much about the ebix cash business.
Will that be at HB is officially file.
Yeah.
We are focused on continuing to reduce our debt and as of December 31, 2020 one.
As Steve already communicated our total debt was $52.5 million lower than at year end 2020.
As of 31st December 2021 we had cumulatively spent $124 1 million on interest payments tax payments done alone payments income taxes dividends, capex payments and reduction of working capital facilities and our.
Our cash cash equivalents short term investments and restricted cash was $125 2 million as of 12 31 21.
It says 138 6 million at March 31, 20 <unk>.
With that and it speaks to the fundamental.
It's really all of our businesses.
And I always like to say good companies do more than just creating great products and great services, they establish integrity transparency and trust as their fine values.
We have always endeavored to do that without shareholders, our customers our partners and our most prized asset.
Our employees.
We are proud of the fact that Ebix has a strong record over the last two decades.
That front.
In closing I want to thank our customers our partners and our employees.
The continued trust in us and for contributing to an outstanding.
Q4, and just an exceptional.
2021 .
Thanks, everyone for that with that I will now pass the call.
To the operator to open it up for questions. Thank you.
Thank you and as a reminder to ask a question simply press star one on your telephone to withdraw the question press the pound or Husky, my mom and while we compile the Q&A roster.
So I have a question from Jeff Van <unk> with Craig Hallum. Your line is open.
Great. Thanks for taking my questions I've got several I'd be remiss, if I didn't at least ask Robyn I realize your hands are somewhat tied at least from from your commentary, but as you talk about the upcoming say be filing an IPO in India.
You know media articles etcetera room ring 345 billion dollar valuations for that business.
But you know details are limited timelines are limited obviously this has been a long process getting here.
You've said imminent I guess open ended I'm wondering if there's anything else you can tell us about you know kind of.
What it means and I doubt it but I'll ask it anyway any comment on that valuation.
Jeff I wish I could tell you what I meant and means but.
Eminent means a minute I'll stop at that so, let's I'm I'm not allowed to say more than that so.
Yes.
[laughter] alright, I'll leave it there looking forward to that eminent filing based on what I see that ought to be a real needle mover. So let me get to the business.
You know the the U S business looks like as a whole they put up the best growth in many years. So congratulations on that I know you've been talking about growing pipelines and actually I don't know if this is for you or for Robin you guys, maybe split it up however, you want but before.
Before I dive into both the insurance exchange segment versus the Rcs can you just talk overall about the expected growth rates for those two businesses and maybe quantify if you can what are you seeing in the pipeline because I know you went way down in the weeds would it be helpful to roll it back up what's the magnitude of the improvement in the pipeline and and how do you think.
Overall growth those two questions.
I will let ash answer the question related to the U S. But before you do that I'll just at a high level talk through the international part though.
The insurance business.
We have a very strong pipeline with respect to the the international business in terms of insurance as you can tell from the numbers that'd be just reported for Australia, meaning we had one of the strongest quarters, we've ever had in history.
That's all in children and said you know and we are we have talked about it in previous calls we talked about some of the super brokers in the world.
One of the Super brokers.
One of the top three are full of broker in the world.
<unk> has decided to move ahead with us with 15 different country implementation that would be talking about large implementations for countries large countries like ranging from Italy to Germany to France kind of countries. So we expect substantial revenue streams coming out of this not only in thumbs up for the card.
Revenue streams, because this is part of our product Ebix evolution, which is basically a document based SaaS a broker systems product, but what we also expect there's a lot of customization with respect to each of these countries and to generate substantial consulting ER revenue.
Associated with those implementations so we feel very good about.
Our international the possibilities that we have but if we even had one of the strongest quarters.
You know in the last two years.
With respect and all of that of insurance, we expect Brazil to continue to go strong Brazil suffered a lot during COVID-19 , but the deal is one of the countries that those you know.
One of the top three countries that got affected by Covid. The most so some I don't know if that's in fact subsides, we expect to do quite well in the in the Brazilian markets I think overall on international.
Revenue stream should continue to look up in 2022 ashwin that ash I'll pass it on deal.
Yeah. Thanks Robin.
Yes.
The U S business.
We are very optimistic.
In 2022 and beyond several factors contributing to that number one.
If you look at our core business and core business being on exchanges.
They have done extremely well over the last 12 to 18 months, we have added several new carriers several new distributors.
This exchange business as you probably know is a self fulfilling prophecy more carriers you add the more distribute because they've got more distributors you are the more carriers you get.
So we are I've got critical mass we have all the key carriers that we need on the platform. We've got some of the largest distributors on the platform.
And these exchanges allow us to generate multiple revenue streams transactional revenue that is ongoing hosting revenue services revenue that's consulting revenue.
We are pleased with where we are in terms of our market presence.
And penetration amongst the large carriers and distributors.
The same I would say applies towards our health exchange our P&C exchange.
So overall, what we define as our core business is stable and the outlook is positive.
Okay. So so maybe you could talk to the Rcs line I mean, obviously big sequential big year over year growth maybe it was in the in the prepared remarks, but maybe just a little more commentary as to what happened there in Q4.
Well it was a combination of many factors, it's a combination of growth.
In North America. It is also a combination of growth in some of the other markets.
India for example.
For example, we recently announced the Punjab National Bank deals that started generating revenue out of India.
Similarly, meaning I think ash in his remarks detailed out how consulting the core consulting business has continued to improve so there's a number of different factors Oh look we have been we've been talking about consulting business is for the auto business for the last few years, we've been talking about Asheville, and if previous dogs he talked up.
How he resetting this whole business how he feels that we can you know we've had declines in previous he is and he talked about how we are making a change in how we handle the business and some of the diversification in terms of attacking certain areas, where we thought we had a more core competence to be able to address.
Those markets better and we did that and with that repositioning we are starting to show results. So I expect that business to continue to grow.
In our in all of these segments and not to forget the certificate tracking business, which is part of that business and we expect that the effects of Covid subsides, we expect that business to be back.
We expect to continue to grow that business.
Okay.
Just one follow up if I could the I think last quarter, you were commenting on that business.
Syed you thought he could grow high single digits I mean, it sounds like the conviction is at least what it was if not accelerated still comfortable at the high single digits.
Yes.
Yes, absolutely listen, we can't predict quarter to quarter, but already in the first quarter of pony pointing to but as we look towards you know full year 'twenty. According to there's no reason why we wouldn't be at those levels.
Yeah, Okay, maybe maybe if I could just shift gears Romney the extent, you're able to comment on what's going on in India related to Ebix cash business and and if you can't comment specifically to the business. Maybe you can just kind of general trends, but I think it would be insightful to hear your words, what's going on in the overall travel environment.
You know kind of what's the backdrop for FX travel.
And as you know you obviously took a big hit and have weathered the storm I guess the question is how quickly do those businesses come back and what are you seeing on the ground right now.
Well look I think that numbers speak for themselves, meaning we icon discuss too much in terms of specifics I'll follow business as of now, but I can talk at a general level. So the travel business is starting to come back.
We had a pretty strong quarter with respect to if you're sequentially looked at it we did quite well we expect this business to do a very strongly the travel business to do quite strongly in the 2022.
Our pipeline remains stronger than ever we are building up back our franchisee channel, which means we don't have to travel stores across the country.
Though we had that.
The largest the most profitable business that box and kings had across the world while the franchisee business. Another gentleman, who ran that business you know, it's basically heading on the franchisee business.
No.
We expect our we expect to do very well in the franchisee travel business, we expect to do quite well in the B to C segment.
Corporate segment, we've always been one of the leaders are events travel we have always been the absolute leader in the market. So we expect the travel business will continue to grow as travel opens up especially in countries like Indonesia and.
Philippines look we are number one in both these places, but the largest won't be a player in both these countries as these countries open out our travel business will automatically come back and they'll go. So we oh, we have a strong pipeline in terms of we have a strong.
You know we are targeting strong revenues in 2020 two.
From the travel industry, the travel industry, starting to open out I think government of India. For example has announced a date to resume all flights I think is March 22nd my 27th actually that they will open up all the international flight. So things are starting to come back you know, it's a gradual process as you all know man.
But I think there is a there is a continued movement companies are starting to do their conference as companies are starting to organize events. You know for example, recently we had one of the largest banks in India, you know hired us to organize a very large events that we.
We will be implementing in the first quarter. So having said that the team is starting to happen nationwide in terms of the travel industry and travel is automatically related to Forex. The moment travel opens the airport for a little bit and we obviously dominate the airport place. So we expect that the PA.
But this will also be directly proportional to the the growth in the products fitness exactly pushed out to the travel growth. So the signs are looking good for that.
Yeah. One last question on that if I could and I'll, let somebody jump on the.
Obviously during Covid you took some pretty quick actions to protect yourselves on the cost front had to let people go obviously generated pretty good cash flows through the downturn. My question is coming out of it and there's always the risk you cut to the bone and inhibited your ability to come out with a real spring in your step in and drive the kind of growth that you were driving coming in.
Yeah, you know give us give us an overview of how you think you're sitting in that regard.
So we actually brought most of our people back we've already done that that's already baked in in our Q4 numbers, we not only brought most of our people back. We also gave them hefty visits right because of the change in vitamins the labor markets in India change. So we had to automatically you know that eight in 10%.
There's one one doing much for anybody and we have to come up with much higher until until we did all of that did is it did it out of any other way to be little over a week.
You haven't brought all the stop back for example to ADL Forex, meaning it does I'll give you a very simple example, well, let's say, there's an airport Coimbatore in Coimbatore has.
International flights and let's say via the and that's a real example, we're the only one player sitting at that airport.
Handling foreign exchange now if flight seven started and I have dedicated employees that I had I had we had to keep them on furloughs, but as airports are opening up we're gradually bringing those people back right to ensure that we don't just driving costs up automatically but good news is we don't have we didn't do that.
My friend, we meaning we need we have brought back everybody that we wanted to bring back into development.
In IP.
In most areas, we have actually done that the only area, where we are still working on bringing more people back in.
His daily all foreign exchange and to some extent do a limited level the franchisee channel in travel, but otherwise we are pretty happy with what we've been able to do in terms of retaining employees, so and bringing them back.
Okay, I lied I may ask one more on the on the IPO process as it relates to Ebix cash I'm, assuming the filing is imminent as you said what is this process look like from you know between whenever that actually files and the IPO and what are the key steps, we need to be thinking about.
So as you know the deep processes to filing a BLA HP with the Securities and exchange Board of India, and once <unk> takes a while to see be approves it.
It becomes then you file in order to be you know again, it's very difficult for me to give you a timeline.
Whether it will take two months three months or four months virtually.
The timeline would be that say, we typically has taken two months, but it doesn't mean anything it can take much longer.
Again.
Once that happens once the approval comes through.
Then you have to follow certain processes and typically depending on you know if we if we get approval by April 20th we will be able to get let's say we file over the next few days a few weeks and we get an approval by sometime before April 20th on April 25th.
And possibly you can have an issue by may 15th, but if you don't if you don't get that approval. By then then you issue accordingly slips by almost a month and so on so that's how it works. So there's a timeline of typically a three to four months from the time you file to get that whole process done and there are many steps in between.
One of the steps for example is the research reports being issued by the banks and so on which are also happens soon I would imagine once the deal that's being filed again look at so you will have more once a day outage being filed its very well.
Within the rules.
It's just impossible for me to say anything beyond what I've already said.
Yeah understood. Thanks for taking my question.
Thank you.
Thank you. Our next question comes from Chris Sakai with singular research your line is open.
Hi, Chris Hi, Robin good morning.
Good morning.
Just a I had a question on.
Indonesia is growth.
You know why why was it 120% what were the drivers there well.
Well the main reason for that 20% was basically that are.
The base was low so Indonesia, because we're talking about a COVID-19 affected period, you're going to see very youre going to see high growth numbers coming out of various countries on in the travel business of any country that is dedicated to travel is going to continue to show strong number as travel comes back now I remember.
We are number one O T a plane travel plant in Indonesia, as we go into subsequent quarters that growth will be that we will have.
Can we come back to the normal levels of what we do in Indonesia, but not far.
Most profitable travel operation, So, it's Philippines, incidentally, and it's a very high growth revenue business for us. So it is because there was almost a very low travel my numbers happening earlier, you know and you know 100 and something percent of nothing there's still nothing candidly. So it does not like.
I believe that we can keep showing decent growth in coming months and coming quarters simply because the base has been lower but at the end of the day that we are the number one player in Indonesia.
So to get back to a normal level, but you just need the market to open out at the travel markets do open up and let me say the big destination and you know for travel because of barley being theyre the.
The oldest civilization, we we.
We have a we have a very large base of agent distribution agents all of our agents have figured that lets you know what it means is the physical that's located in Indonesia is is it tens of thousands of islands that exist in Indonesia are you didn't sell spread across these tent poles.
Dozens of islands in Indonesia, and all of them are digital so they give us the reach of the next door agent travel agent.
And.
And they also provide us that they awful lot, 100% digital using the technology. So that's what we called digital and as the market opens out our growth is should be imminent right. In these places. So that's the reason and I would hope that that growth continues in these countries.
Okay great.
Great and then I had a question on the.
Your I T M S project with with your buses.
You know what what's your growth rate projections there.
What what are the likelihood of other states you know wanting your your technology.
So you if I if I heard you correctly, you talked about the best solution.
Exchange solution.
Right right.
We are already we are the largest player in the market.
From our perspective that we already have clients in 14 states, what I mean by out of the 28 or 14 State roadways Corporation with the government on transport corporations do business with US recently, we announced the the state of West Bengal I think that's a deal you're referring to.
But then again that revenue is not baked enough yet in these numbers because that's a deal. We just did so it'll start coming in that revenue will start coming in.
You know in coming quarters, now, having said that we expect a number of other states.
To join in because the markets have started opening up because earlier because of Covid. The bus undertaking there was very little bus travel happening no bus travel is back in full flow in India. Because this is the only means of probable for an underprivileged or a lower middle class in India doesn't have.
In four.
For intra city travel you don't have trains that would even if it's only the big cities have the metros so nothing.
As the only means of transportation are feasible means of transportation for something.
Something that they can't economically afford if buses in India for the bus travel has typically been growing year over year, 27% in India, and having said that if we if we can be continuing to provide.
Technology at the back and remember that we make money off every pick it off every bus irrespective of who sells the ticket. So we do expect to do quite well in that business. We have a very strong pipeline of deals are we we are.
Hopefully you're going to hear a lot from us in in coming weeks and months on some of the newer deals that we expect to get done in the bus exchange Arena.
Great and then I wanted to ask about them.
Potential acquisition through 2022 is this something on on your agenda.
Look our first priority is to get the IPO done and when we look at the I feel are we.
We wanted to generate what is our goal our goal is to generate substantial amount of cash that and we want to use part of the cash to clearly I think I've said that in the past due to reduce that that size of Italy, and and having said that we would've been a very strong cash position.
We stopped making any meaningful acquisitions or looking at acquisition. So I think a lot of fun.
To give you a very candid answer in order of priority. My first thought it would be our first Friday. The other management team is to reduce that debt to <unk>.
It has a lower level as we can and that's our first priority and then after that we're going to focus on on the acquisitions utilizing the first money we have for acquisitions and so on until their family clearly not thinking we believe that if we can improve our balance sheet it would be great.
A lot of Investor base. We also believe that if we can have a good IPO will have sizable amount of cash to do all of what you. What you were just talking about.
Hey, Robyn.
Great. Thank you.
Let me just add something around the priorities because as we reduce the debt, which is which is a top priority for us and will also enable us to evaluate alternative capital structures and other forms.
Forms of capital for our balance sheet that would provide us with you know long term flexibility around acquisitions and other strategic priorities of the company.
Okay, Alright, great that's good to know things.
Thank you cliff.
Thank you, Sir and I'm not showing any partners.
She is in the queue.
Great.
And we can close the call then thanks, everyone for being on the call. We look forward to speaking to you as soon as we get into the first quarter.
Earnings call.
Thank you and with that ladies and gentlemen, we thank you for participating and you may now disconnect.
Yeah.
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