Q2 2022 Ebix Inc Earnings Call
[music].
The conference will begin shortly to raise your hand during Q&A you can dial star one.
[music].
Hello.
For standing behind walk through the Ebix, Inc. Second quarter 2022 Investor call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one one I would now like to turn the call over to your host Darren Joseph you may begin.
Thank you.
Welcome everyone to Ebix Incorporated's 2022 second quarter earnings Conference call joining me to discuss the quarter is Ebix, chairman, President and CEO Robin Raina Ebix.
<unk> Global CFO , Steve Hamil, and Ebix, North American President Ash Sawhney.
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 <unk> future investments, our long term growth and innovation the expected performance of our businesses and our use of cash.
Shipments involve a number of risks and uncertainties that might cause actual results to differ materially from those projected in the forward looking statement.
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 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 are contained in our SEC filings, which list a more detailed description of the risk factors that may affect our results.
Our press release announcing in the second quarter 2022 results was issued this morning. The audio of this investor calls also being webcast live on the web at Www Dot <unk> Dot com forward Slash webcast you can look at EBIT <unk> financials beyond what has been provided in this release on our website www dot Ebix dot com.
The audio and the text transcript of this call will be available will also be available on the investor homepage of the Ebix website. After four P M eastern time today.
Let me now present, the key metrics is in our Q2 2022 release Q.
Q2 diluted EPS GAAP was 63 cents with 23% year over year growth.
non-GAAP diluted EPS was <unk> 75.
GAAP revenues of $258 million with a 2% year over year growth.
GAAP operating income of $30 $1 million with 10% year over year growth.
non-GAAP operating income of $34 million.
Let me at the outset tell you what we are against in this quarter. The recent worldwide inflationary trends that resulted in the U S strengthening against most currencies, resulting in headwinds of $9 4 million in revenues.
Our bank costs were higher by $1 2 million in the second quarter as compared to the second quarter of 2021, we.
We had substantially elevated costs associated.
With salary increases worldwide, especially in India.
We had a deal with the seasonal drop in prepaid card revenues of $22 2 million, we're still not passed the threshold points and certain COVID-19 affected areas in terms of profits.
Though the sequential revenue trends are quite encouraging.
In spite of all of that we had to deal with our worldwide revenues, excluding the prepaid card business grew 32% year over year. The main contributors to this stellar growth where the company is EBIT cash travel and foreign exchange revenues that grew year over year by 293% EBIT cash Epo revenues that grew year over.
Year by 70% and U S annuity net and life speed combined revenues that grew year over year by 21% <unk>.
<unk> revenues grew year over year by 600% and Latin American revenues that grew year over year by 62%.
On a constant currency basis, our Q2 2022 revenues grew by 6% year over year to $260 1 million nine 4 million more than our reported GAAP revenues.
Accordingly, a portion of these revenues would have resulted in increased income for the company.
Out of out of 10 major geographies worldwide revenues grew year over year and eight regions while declining into on.
On a constant currency basis nine of the 10 geography has experienced year over year revenue growth in Q2, 2022, with Australia have any 1% decline year over year insurance insurance exchanges revenues worldwide increased year over year by 1%, while risk compliance solutions revenue increased 21% year over year in the second.
A 2022.
Exchanges, including Ebix cash on a worldwide insurance exchanges continue to be Ebix is largest channel accounting for 89% of the second quarter of 2022 revenues.
In Q2, 2022, our non-GAAP EBITDA plus stock based compensation was $36 million, while we reported operating cash flows of $21 $4 million, we feel good about that fsp's the fundamental strength of our business.
I will now turn the call over to Steve.
Thanks Darrin.
Ebix has seen the positive impact of a return to normalcy within its COVID-19 impacted businesses.
While we still have work to do to achieve pre COVID-19 operating levels in businesses, such as travel foreign exchange remittance and E learning.
During Q2 2022, the company saw the largest improvement in these businesses in several quarters.
With material growth in travel, which increased 399% year over year and 157% sequentially.
Foreign exchange was up 199% year over year and 38% sequentially.
Our remittance business increased 16% year over year, and 47% sequentially and.
Are you learning business grew 596% year over year and 102% sequentially.
Impressive growth numbers are worldwide revenues, excluding prepaid gift cards increased 32% year over year in the second quarter of 2022.
GAAP revenues increased by 2% year over year, which was driven by growth in the above mentioned businesses as well as year over year growth in Latin America, Canada, and the U S light speed in annuity exchange businesses.
This growth was offset in part by a 14% year over year decline in our low margin prepaid gift card revenues during the second quarter.
On a constant currency basis global revenues increased 6% during the quarter.
Our Latin American business was heavily impacted by COVID-19, but for the second consecutive quarter Latin American revenues have shown material growth, increasing 62% year over year in Q2, 2022, which follows Q1 2022 year over year growth year over year growth of 27%.
<unk> signed an amended pricing agreement with our largest customer in Latin America, which has materially increased pricing currently and prospectively.
In the U S. Our lightspeed and annuity exchange business on a combined basis increased 21% year over year as industry transaction levels increase and we continue to grow revenues from our existing client base. Additionally.
Additionally, our CRM solution generated year over year revenue growth for the second consecutive quarter, increasing 3%.
Our European business, whose technology powers, the front in the London reinsurance and insurance markets.
To perform steadily.
While Q2, 2022, GAAP revenues decreased 4% year over year on a constant currency basis, those revenues increased 7% year over year.
In Australia foreign currency movements had a meaningful negative impact on our results in Q2 2022 Australian revenues decreased 9% year over year on a constant currency basis revenues were down 1% to 2%.
Q2, 2021 revenues in Australia, where the highest revenues for our second quarter. Since COVID-19 emerged globally. So it's Australia had a tough comp this quarter from a revenue standpoint.
EBIT kind of year over year increase in G&A expenses of $8 4 million in Q2 2022.
Driven by increased personnel costs, including travel expenses of approximately $4 7 million.
And an increase in bad debt expense of approximately $2 $8 million year over year.
Due primarily to a 2021 reduction of the allowance for doubtful accounts associated with our EBIT volume joint venture and an increase in bad debt expense.
Related to the Ebix cash travel business during the second quarter of 2022.
During the year to date period of 2022, we had following major cash uses $19 million of cash interest paid.
$24 million for income related taxes paid globally, a combined $14 million extended on Capex and software development costs.
$16 million used to reduce the principal outstanding on our corporate credit facility.
<unk> $4 7 million $1 7 million used to reduce the balances of our working capital facilities in India.
And $4 6 million for dividend payments, we funded these initiatives from existing cash plus operating cash flows generated during the year.
As of June 32022, the company has liquidity on hand, which includes cash cash equivalents short term investments and restricted cash of $96 7 million versus $125 $2 million at $12 $3 21.
For the year to date 2022 period versus the similar period in 2021, Ebix paid an incremental $12 million in cash taxes and $5 million in cash interest.
While also investing an incremental $8 million in the company in the form of capital expenditures and software development costs.
Interest costs will remain higher for the balance of 2022 based on the current rate environment, and our current borrowing spread being 100 basis points higher than in 2021.
Cash taxes for the remainder of 2022 should not be as high as the first half of 2022, while Capex and software development costs will likely not materially different from the second half of 2021, where we expended approximately $8 $2 million to invest in PPD and our software solutions.
Our total debt at June 32022 was $641 million.
A reduction of $33 million from total debt of $674 million as of June 32021.
Ebix is seeing some material improvements in COVID-19 impacted businesses currently and we are optimistic that in the coming quarters, we will reach pre COVID-19 operating levels and these negatively impacted businesses glue.
Globally, we continue to believe that the diversity of our revenues by market positions that we have provided our shareholders with compelling value creation long term.
We believe that our company has the people solutions services and global reach to thrive over the long run.
Want to thank the thousands of employees around the world for all their hard work and allow ebix to provide strong customer experiences globally.
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 our second quarter 2022 operations.
Thank you Dan and Steve.
I'll now talk about the North American results and outlook.
North American revenue in Q2 of 2022 was up approximately 1% compared to Q2 of 2021.
A highlight for the quarter was a strong performance of our core exchanges comprised of life and annuity health BMC illustrations, CRM and risk compliance, which were collectively up 5% compared to the same quarter last year.
Our life and annuity business exchanges comprised of order entry platforms illustration exchange and CRM were up 10% in Q2 of <unk> compared to the same quarter last year.
The strong results from our core business were partially offset with declines in our non core consulting businesses as well as medical certification and health content business.
Back to Q1, the North American revenue was down 1% sequentially in Q2.
This was primarily due to the previously reported onetime revenue deferral and the medical certification business, which was taken in Q1 barring.
Barring that onetime to photo the business would have been up 1% sequentially.
I will now provide a more granular overview of each of the underlying businesses.
The annuity exchange revenues were up approximately 25% compared to the same quarter last year.
And 15% sequentially compared to Q1 off putting pointing to the.
The annuity division now is the largest business unit in the U S. In terms of revenue as compared to all other U S based exchanges.
Transaction volumes were up approximately 32% in Q2 2022 compared to the same quarter last year as well as sequentially compared to Q1.
The growth is attributed to a steady increase in both carriers and distributors on the platform, which now I'll start process 55 carriers and over 100 distributors.
Sajak card to the annuity exchange in Q2.
Other notable accomplishments include products from nationwide mass mutual in banner live successfully going live on our exchange platforms.
Growth is also significantly aided by industry tailwind as a result of higher interest rates compared to 2021.
The illustration exchange was up 1% in Q2 of 2022 compared to the same quarter last year.
And one 5% sequentially.
Over the past several quarters, we have seen a steady increase in transactional volume on the platform.
Also benefiting the platform initiatives, we launched last year, which include analytics and integration with third party pre sales tools such as insight.
CRM revenue was up 3% in Q2 of 2022 compared to the same quarter last year, but down 10% compared to Q1.
In Q1 are typically higher as we see an uptick in revenue from data feeds.
We're continuing to expand the sales team and are instituting programs.
And our relationship with broker dealers.
The P&C exchange was up 13% in Q2 compared to the same quarter last year.
Several times, including a large municipality in Oklahoma, a large supermarket chain in Minneapolis.
And a large tpa in Florida.
The Ebix health exchange was up 6% in Q2 of 2022 compared to the same quarter last year.
And relatively flat sequentially.
Notable accomplishments in the quarter include an expansion of relationship with Cisco and AIG as well as successful implementation of redirect helps blue water into Georgia Dental Association.
We are also actively engaged in implementing Aon, which was a new deal announced previously.
The underwriting exchange revenue, though down two 3% in Q2 compared to the same quarter last year was up <unk>, 5% sequentially.
Core clients remained steady.
Additional products and features were delivered at Americas, Qunar mutual and Indiana Farm Bureau.
The medical certification business in Q2, 2022 was flat relative to the same quarter last year and was down 7% sequentially compared to the previous quarter. The decline was due to the onetime deferral deferred revenue in Q1.
Digital business stayed strong growing 10% year to year compared to last year, we signed credit new cornerstone tracks, including Mount Sinai.
Howard Hospital in the U S CF.
We are also building a new customer segmentation platform, which will allow us to better target new customers and we will have and customer retention.
And the health education, Adam business.
Added credit new clients, including <unk> and John Hopkins University.
The risk compliance business was up 2% in Q2 compared to the same quarter last year and 5% sequentially.
We added eight new clients this quarter, including Luke family farms.
Vineyards and Chicago Atlanta.
Overall, we are pleased that we are back on a growth path this year as compared to previous years. When we saw COVID-19 related declines in our business.
These are there are several factors, we believe that will contribute to ongoing momentum.
God exchanges will continue to show healthy gains we are continuing to add new carriers and distributors on our platform at a good pace.
Each new participants on the platform contributes to a growing base of recurring revenue.
The outlook for the high interest rate environment will continue to be a beneficial product for several of our businesses.
Recent additions in our sales team has had a positive contributing effect.
We're pleased with the talent and caliber of people, we are able to attract to the organization with each new sales remember, bringing their own network to the table. The pipeline is stronger than it has been in recent times.
The steps, we have taken to integrate our sales product and delivery organizations has positioned us to pursue larger digital transformational deals on average deal size has continued to grow as we are able to offer package solutions.
We are continuing to rollout new modules, such as Edison, the DTC plug in and analytics for life and annuities.
We'll be launching a series of Ebix indices that will provide market trends and visibility and will generate opportunities for deeper engagements.
<unk> on customer studies.
Our strategy to more closely align our consulting group with the product groups will generate positive results.
We are now pre packaging, our consulting services with our new product sales.
Provides faster product launches for our clients and it gives us incremental revenue opportunities.
We are starting to see a slight improvement in the hydro conditions and also the attrition rates in the industry are starting to improve.
These factors are businesses that rely heavily on professional services support such as our underwriting exchange.
We are also expanding offices into second tier cities in India to increase capacity. The recent decision to open an office in a few state capitals with a lower cost base, but abundant resources availability is expected to provide relief later this year.
While we are pleased with the positive momentum in organic growth. We also anticipate supplementing this with strategic acquisitions once the India IPO gives us the flexibility.
We expect there to be a shakeout in the market several companies that had mushroom during the past boom years with business models that we're showing heavy losses in exchange of promises of future growth will likely not survive.
<unk> will be in a good position to acquire some of these businesses at distressed valuations.
Sound Ebix business model focused on profitable growth and its strength due to diversity of its businesses are reasons, why ebix will emerge even stronger when the dust settles.
Finally, we are planning a big Ebix Exposition in Q1 of 2023.
Dan.
Will it be attended by top carriers and distributors from the industry. It will allow us to showcase the latest innovation in our future roadmaps of various exchanges.
More on this will follow.
I would like to close by thanking team Ebix.
Truly proud of their work and accomplishments that they have put us on this progressive and position of strength.
I will now pass this along because robbins for his comments.
Yes.
Good morning, everyone.
I want to start by congratulating our team brought an outstanding quarter.
All around performance.
What stood out for me in the quarter.
One that ready to put some growth and mobile revenue, excluding the prepaid card business.
The 6% constant currency revenue growth year over year.
Yes.
The year over year, EBIT cash revenue growth, 56%, excluding the prepaid card business.
Even though you had growth in nine of the 10 geography on a constant currency basis.
All three business channels, namely insurance exchanges, ebix cash and risk compliance solutions channel showing.
On a GAAP and constant currency basis.
Compliance solutions channel showing revenue growth of 21%.
Okay.
Stock based compensation of $36 million in Q2 2022.
Constant currency revenues of $261 million, implying annual revenue run rate not a power.
$1 billion.
This performance has a special meaning when you consider at the time, we live in nowadays.
Recent inflationary downtime.
Steve continued increase in employee costs, the strengthening U S dollar and of course our resource.
Associated with what's going on in the Indian technology level markets.
Let me now discuss our revenue performance and a little bit more detail.
Worldwide insurance exchange revenues grew 1% year over year.
Revenues grew 1% year over year.
CNS revenue grew 21 for San Diego area.
I already talked about the Ebix cash revenue is growing.
36%, excluding the prepaid gift card revenue streams.
Also what was encouraging about Q2 results was the fact.
Revenue grew.
Yes.
And nine of the 10 geography on a constant currency basis on a GAAP basis, our revenues grew year over year and eight of the 10 geographies of our business.
Despite the adverse effect of the U S dollar strengthening strongly after the Ukraine crisis.
U S revenues.
These are 1%.
Canada had a literally an increase of 7%.
Zero.
But he had a increase of 62.
Percent, Singapore had a year over year increase of 11%.
<unk> had a little harder.
<unk> increased 1% Indonesia.
The increase of 450%.
Philippines.
Please.
Percent.
United Arab Emirates grew by a large percentage number also.
Yup.
22 GAAP revenues.
By 40% year over year on account of strengthening of the U S dollar while on a constant currency basis.
European revenues increased 7% year over year.
Q2 of 'twenty two.
Australian Q2, 'twenty do GAAP revenues decreased 9% primarily on account of the strengthening of the U S. Dollar Bill on a constant currency basis revenues were down 12% year over year as Steve explained.
Q2, 'twenty, one revenues in Australia, where the highest revenues for the second quarter since COVID-19 emerged globally.
Iliad competition this quarter.
Despite a 14% decline.
Yes.
Card business.
Cash revenues on a GAAP and constant currency basis.
Higher than the Q2 'twenty one revenues.
We are pleased with the India Ebix cash results for second quarter about 22.
Most negatively impacted businesses from COVID-19.
Slash limited experience.
Following the year over year growth in the second quarter of 2022.
In total.
Our EBIT cash business grew.
During.
The second quarter R 22, excluding the gift card business.
Growth in cattle.
399% and <unk>.
Growth in foreign exchange revenues was 199%.
In learning business showed 596 about some royalty and over to you.
Those business grew 16% year over year.
During the second quarter of 2022 other people.
<unk> business also grew 70% year over year.
Sequentially.
Revenues grew 157% foreign exchange grew.
And that maintenance grew 47% and E learning.
2%.
In Q2, 'twenty, two as compared to Q1 'twenty two we are pleased with that trend.
As <unk> talked in detail about the North American operations and a stellar job the North American staff has done under his leadership.
Our north American operations have shown growth.
On a six month year to date basis in 2022 as compared to the six months year to date beat it in 2021 as also in Q2 of 2022.
102021.
Can you just with that client as also the strikes the exchange businesses have made in the region.
Our Latin American management recently negotiated a large price we.
They don't shut off client, whose network accounts for almost 50% of our revenues in the region.
That will give us.
Consistent increase revenue stream.
Coming quarters in the region.
Ebix cash businesses.
Continued to perform well as discussed earlier.
Simply Ebix guys Government Solutions Group, Inc, new agreements with Bill.
Highly recognized corporate names in India.
One of the agreements buzzard gosh educational services.
<unk> company to provide cash management and collection services using ebix guys digital payments over to the nationwide franchisee network.
With a Pan India network.
100, plus training centers, including good franchises at an annual student count of more than 275000.
Our cash is a leading player in India.
And lastly, our cash flows recently acquired by Jos.
India's largest education company.
That agreement.
That Ebix cash, Inc was with Amazon India.
But various aspects of the agreement that vivo mutually.
Disclose through a press release at the appropriate time.
Amongst other agreements.
Exchange Division has also inked deals.
Two new agreements with state roadways Corporation.
The eastern region of India, we will disclose details of that separately after seeking approval from the two clients.
The Ebix cash travel division.
Daniel.
First COVID-19 momentum.
399% year over year growth and 57% sequential growth what stood out for me in terms of travel statistics for that.
Is that follows.
The signing of 63, new corporate clients in the second quarter of 2022 50.
57% year over year growth in the corporate travel business.
87% year over year growth in cloud.
Travel business.
Great.
774, new travel agents to use our why our cloud platform in the second quarter of 2022.
Florida.
He went to shallow business growing 24%.
Well, they didnt handling 105 groups.
Involving housing.
And then just in terms of event travel in the second quarter of 2022.
Indonesia and Philippines.
Still not fully open in terms of travel restrictions.
Our strong growth in the ASEAN region.
Look in terms of operating margins and market leadership position.
As Indonesia, Philippines open up fully.
COVID-19, we will have some revenue and margin opportunities.
Let me now briefly discuss the foreign exchange segment.
Ebix Gosh is India is dominating leading class.
With the resumption of scheduled commercial flight.
In March 2020, do after a gap of two years the demand for international travel has increased with gradual influx of inbound and outbound outbound passengers, which has resulted in improved growth from foreign exchange business in key segments such as larger.
Thanks, Northern airports segments.
With an increase in the number of Indians students, but assume inc.
Well, let's see the education and supported by the liberalized policy for student VITAS by countries, such as the U S, Canada and United Kingdom.
Outward remittance for CS education is expected to grow exponentially EBIT.
Ebix cash.
The news to dominate major market share and education Remington segment.
Along with that.
Along with the addition of new Investees for direct payment transfer from India, and new alliances with international payment aggregate does.
Student Remittance segment.
To continue to grow.
As part of the business expansion.
New business geographies and student remittance and corporate business.
And so our foreign exchange business, we will be adding seven new branches.
Andre and Telangana Andhra Pradesh.
Good job on job, Mumbai behalf, and Maharashtra region in the third quarter of 2022.
In addition to the education remittance business for New International Airport opportunities are in play at present that.
That would be in lighting bids or tenders with EBIT cash being the single largest airport.
In India.
In terms of foreign exchange.
The new opening of Barclays.
Business travel is expected to continue to grow we recently launched a new ebix cash globetrotter collateral cod.
That will enable us to increase revenues from the corporate business segment in terms of foreign exchange revenues.
The recent global Scott.
That will enable us.
To increase revenues from the corporate business segment in terms of foreign exchange revenues.
Recently Ebix cash was selected by Union Bank of India to get.
So all of their foreign exchange needs across their branch network in India.
Bank of India is one of the leading public sector banks in India, having a network of 9100 plus branches.
The length and breadth of India.
But our Bank Corporation Bank have also been amalgamated into Union Bank of India with effect from April 2000.
<unk>, making it one of India's leading banking networks.
That relationship between Ebix cash and Union Bank is expected to create.
Opportunities for cross selling.
All our product suite across a wide range of Union Bank nationwide network. In addition to the obvious bank notes and Forex.
Business relationship.
We already had on a panel with the Andhra bank to cater to all their products needs through which we have built a relationship.
Read one of India's most visited places, namely total throughput.
Handle all of their foreign currency needs.
<unk> comes through donations in large numbers by devoting his traveling from all over the world.
Under our bank has merged with Union Bank, which will help us maintain our relationship with <unk>.
Recently, Ebix cash Inc.
The business relationship agreements.
That's all part of the ion exchange LLC, UAE and Gotham Plaza.
Private Pte Ltd, Singapore for bank loan business opportunities.
<unk> is the largest aggregator of bank notes in the UAE and this strategic partnership will create new avenues, and the UAE market for our India business, especially on the pricing front for all middle East currencies and other exotic.
Currencies.
We will also get better.
Better proposition towards how do they all currencies, while catering to the hygiene business in India.
<unk> Plaza is that second witness relationship arrangement of Singapore Opex change in from last year.
Ltd.
<unk> is a leading company in banknotes business in Singapore, and this relationship will give us a better room for negotiation in Asian and far eastern currency.
So it will make travel perhaps.
For the Muslim community is being restarted in India.
Such growth in retail and corporate travel related foreign exchange business is expected to propel the wholesale currency market, providing ample opportunities to increase revenues from this large segment.
EBIT cash now I'll first destination foreign currency note of GDP plus.
Countries. The foreign exchange business is poised to continue to grow in coming quarters, both sequentially and year over year.
We are pleased with the 199% year over year growth in the foreign.
In exchange business in Q2 of 'twenty, two and a 38% sequential growth.
In Q2 of 'twenty two.
Q1 of 'twenty two.
The international Remittance business and second quarter of 2002 grew 16% Italy.
While growing 47% sequentially over Q1 of 'twenty do recently, we announced the appointment of Jim One Kashmir bank's entire network spanning how the branches are subagent to facilitate international remittance services for it for Ria money transfer business.
The money class of functionality will be going live on 15th of August 2022, going fighting with India 70, Pet independence day celebrations on that day.
Our strength in the money remittance business can be gauged by what the CEO of the world's second largest remittance company had to say about ebix cash.
In the <unk>.
Second quarter earnings Investor call.
28 July .
2020, do Michael Brown, Chairman, President and CEO of Euro net worldwide, Inc. Had this to say about EBIT, Scott and I caught.
In India, we <unk>.
<unk> a multi currency.
Third platform for Ebix cash.
EBIT Scotch has emerged as India's largest end to end financial exchange, which includes a last mile network of over 650000, physical distribution outlet and then Omnichannel online digital platform EBIT.
EBIT cash plans to issue about $1 million multi currency cards over the next four to five years with an annual lowered.
$600 million.
Issuance of these gods give ebix cash and end to end customer experience across domestic and international money Remittance is foreign exchange data payment solutions.
People travel cards insurance and more.
The addition of EBIT cash coupled with top coupled with the Thomas Cook agreement that we told you about a couple of years ago means that Huron that follows the two largest multi currency prepaid cards in the huge Indian travel market.
Unquote.
We generated 20 $21 4 million in operating cash flows in the second quarter of 2022.
In the six month period ended.
At June 2022, we cumulatively spent $79 3 million on interest payments tax payments.
The payment income taxes dividends, capex payments and reduction of working capital facilities et cetera, and still are.
Cash.
Cash equivalents short term investments and restricted cash.
$96 7 million as of June 30th.
2020, do what it says $125 2 million as of.
31 December 2021.
We are pleased with that as it speaks to the fundamental strength of our businesses lastly.
<unk> asked but Indian rules governing the process I cannot speak much about the IPO timeline.
Until the approval of the day at HB. Once the RFP is approved we will be filing the formal at HP, we will inform the market as soon as we get the formal notification about it with that.
I will now pass the call to the operator.
And open it up for questions.
Thank you ladies.
Ladies and gentlemen, if you have a question or a comment at this time. Please press star one on your telephone keypad.
We will pause for memorial compile the Q&A roster.
Yeah.
One moment for our first question.
Right.
Our first question comes from Jeff Van <unk> with <unk>.
Craig Hallum. Your line is open.
Great. Thanks.
Thanks, guys.
Congrats on the underpinnings here definitely looks like steady improvement obviously, the gift cards are muddying. The waters here and we don't have a lot of clarity as to exactly what that number was but I think.
You gave a ton of content I want to take it back up to a high level if I could robin if you look at the revenue growth. You think you can deliver in FY 'twenty three ex gift card I mean can you put some bounds around how you think about 2003 <unk>.
Excluding gift cards for topline growth.
Excuse me.
Look as you know I hate to talk about any guidance with respect to revenues I feel that.
Numbers speak for themselves right now with respect to meeting this all around growth in revenues across all geographies across all almost all divisions as I detailed out so I just feel very uncomfortable talking about any future guidance.
With respect to <unk>.
Yes.
Thank you once again, ladies and gentlemen, if you have a question or comment at this time. Please press star one on one.
Okay.
Well remember for next question.
Yeah.
And we have a follow up from Jeffrey <unk> with Craig Hallum. Your line is open.
Yes, just just to finish the thought on the on the Ebix cash then Robin is there any way you can sure you gave a lot of color around FX and all of the instruments that are.
In that business remittance et cetera.
When you think about that business getting back to pre pandemic levels ex the gift card is there any.
Any thinking there as a group when you can just at least get back to the pre pandemic levels.
Well I think we believe that in the next six months, we should be back to that to the pre pandemic level and possibly beat that pre pandemic level. We are presently seeing.
Fantastic amount of growth in the market than what has happened post COVID-19 is the a lot of the smaller players basically finished and some of the larger players who I hate the name.
Are struggling and part of it is.
We have been dominating the foreign exchange markets. We have continued to add new corporate clients, we continue to increase.
Positioning with respect to the airport business.
We've added in recent times, we have secured.
New approvals from reserve Bank of India for new cards newer licenses for certain new products, which puts us in a very unique position with respect to some of the FX business. So we feel that we had an extremely strong position with respect to that market with respect to the foreign exchange business.
So I would.
I believe that in six months time, we should be meeting or beating those.
Pre COVID-19 numbers.
Got it that's helpful. Steve.
Balance sheet I know that's been a focus in on.
Plan, a is IPO and I know youre working on that but talk to the credit facility and just what what's at work there to the extent you can share.
Yes, I'll, let Robin also add some color on this.
At the current time, we are in compliance with our financial covenants with the.
With the credit agreement able.
Cable to meet the obligations associated with that we obviously have an impending maturity, which we're trying to navigate.
Strategically handling that in conjunction with not only the IPO, but essentially alternative sources of capital to monetize.
Value within for instance, the EBIT cash business, but Robin can certainly add some color to that.
Thank you Steve.
Thanks.
Jeff.
Jeff This is our number one priority and we're going to handle this when do we have.
Absolutely focused on ensuring.
Ted.
We had an absolute compliance with all our credit lines and the refinancing effort that is.
There's a big effort on well I cannot share any details of the deal because it wouldn't be right.
As you can imagine for me to be discussing any details, but that's shared.
This is our number one priority.
We feel we have a number of parallel the channels that we are working on and we feel that we're going to get there.
And yes, I think I'll stop at that for now simply because anything other than that I have to share details, which I, absolutely I'm not comfortable sharing.
With respect to what.
And what and how what we're.
We are doing.
Okay.
We had the last time it took our credit line.
I said the same stuff until we announced what we did and so we're going to just wait patiently and do the right thing and once we have something to announce we're going to announce it.
And Jeff Let me just add something from a historical perspective, you look at.
R.
Our leverage ratio as defined in our bank agreement, which is publicly available.
We delever.
As of $630 22 in the last year, almost a half a turn.
No.
The combination of those.
Scheduled amortization payments as well as the TTM EBITDA now creeping.
As these businesses that were impacted by Covid are rebounding.
At this time and we believe that over the next couple of quarters Youre going to see that TTM EBITDA number continue to.
Increase as those businesses rebound.
Okay.
That's helpful and maybe one last for me obviously.
The data point that we're most interested in it seems like many of them you are kind of hamstrung here in terms of being able to talk about but assuming the DRP.
Youre able to go active and get the deal done.
Based on everything.
<unk> been able to gather.
The valuation and in particular, the proceeds would be very very material. When you look at those proceeds I think you outlined in the draft or hearing some of the use of proceeds, but I think it might be useful to revisit.
How you think about use of funds if and when you complete that IPO beyond the obvious that was stated in a red herring.
Well I think we already said that we will utilize.
$350 million.
Too often.
IPO proceeds to pay back.
Cash would pay back the U S to the CCD is out.
The CCD, which is open.
And having said that there are a few other things that we expect to do with respect to repayments back to the U S.
Once we put the right deal in place so we feel that the IPO would be.
Would it be.
It could be a material way Op, Inc.
Do you think the.
Paying Ebix, Inc back from Ebix cash and in ton.
Paying back lenders now thats at the same time, that's not our only approach would be a battle approached in place.
That we wanted to pursue badly and we are absolutely focused on on both these battles themes, having said that we continue to be highly bullish about the IPO.
As you can tell once <unk> filed.
It is impossible for us to talk about the details of when and how would that happen because Indian rules are very specific about that that until <unk> has approved it we're not supposed to talk about that and.
So as and when SAPIEN approves that.
Hopefully soon then we will immediately be.
And I will say that to the market than you would in and at that point the process would be that the bank is.
What run a shuttle book they will go out and do some kind of a pre marketing we will decide on a particular valuation.
And and at that point basically will then talk about a specific date, when we would launch site and so on and so this is obviously a material event for us having an ideal but I feel is obviously this is not just another event for us and we want to do it right and we're focused on on doing it the right.
And our bankers are very focused on doing it the right way and we do believe we have a pioneering differentiated story in the market. As you know that there are very few players for the kind of profitability that we have.
In the Indian.
<unk> said that he does the financial market, whether it's a fintech market.
Audit is the on demand markets in India. So we do believe.
And our bankers believe that we have.
Fantastic story to tell so we will just.
Well for now just.
I'll stop at that end.
We'll share more details as well.
Once we have more.
Flexibility to provide more details and hopefully even if he had the approval then we will be able to talk about more about.
The specific timing.
Yep Yep, Okay, well, congrats I mean, obviously U S business Ebix cash ex gift card everything ahead of where we had expected it and unfortunate that gift card stuff, sometimes muddies the water here, but.
From my side.
Congrats on the solid funding fundamental numbers I appreciate it.
Thanks, Jeff.
Again, ladies and gentlemen.
For Thompson I'm. Please press star one on your telephone.
One more.
Questions.
Our next question comes from the cost synergies your line is open.
Hello, It's Robert Maltbie sitting in for Christopher Sakai, Congratulations gentlemen on a.
Good quarter everything considered in the.
Global headwinds and the dollar.
Yes, two questions.
Regarding opportunities.
In insurance with.
Potential acquisitions, you mentioned.
A copy of pricing and a possible shakeout I believe that was just curious what are some of the underlying factors driving.
These.
Opportunities.
What would be maybe a catalyst that is driving that and the second question relates to.
The Indian market.
I have been.
Having follower of.
Of that market.
And the economy.
What what.
Are you feeling in terms of the ongoing recovery of that recon and market over the next 12 months.
Thank you thank.
Thank you.
I think I'll address the second question first Robert first of all always a pleasure talking to you. It's been a long time since I've spoken to you.
Yeah.
Hello, and so I'll try to address the second question first and then ask maybe you can talk about the first one with.
With respect to the Indian economy look into is emerging as one of the largest economies in the world right now they are targeting a five clearly in the economy.
Over the next few years, that's basically the goal if you look at the Indian stock market per se when the U S markets were down 24% year over year Indian markets were down 8%. So the competitive effects in India have been lesser with respect to for example, whats happened on the <unk>.
<unk> got a lot of what has happened on the NYSE.
Other trend that has happened in India is that.
Indian markets have gotten way involved earlier, there was a lot of dependence on foreign institutions.
If you look at in recent time, if you look at the amount and some of the issues that are coming out youre going to see that.
The Indian institutions have stepped up in a.
Very large way a very large part of investments is coming from India and institutions that has something to do with Mr. <unk> vision of making India for the world that'd be called it where Indian institutions have stepped up and started investing in India in Ipos per se.
IP is based around in India, and they see some international opportunities of growth, having said that in.
The government and Dr. Most economists they tend to be very bullish about the Indian economy per se.
In terms of where the economy is headed.
I think thats, primarily it from a technology and from a.
The startup market perspective, the business.
Uh huh.
The markets are starting to come back.
It is the recovery has been actually pretty decent in recent times with respect to the Indian market. If you compare it to the world markets.
Yes.
I think most of them most of the economists that you would talk to 10.
Tend to be highly bullish about the Indian economy overall, having said that ash do you want to try to address the first one.
Yes.
Sure Robin.
Robert Thanks for the question.
What we see happening really is.
And what I mean by that is.
If you look at the last maybe two to three years during the boom.
<unk>.
There were many companies that.
Came to market and they were funded by these vcs and private equity groups and really well.
We believe they have flawed business model continue to show heavy heavy losses with a promise.
Producing.
Stellar growth in future years.
And by the way this is not just in the insurance sector. This is across the board every industry and what we're starting to see is tightening.
The expectations by the investors and some of these companies that have no line of sight.
Running a profitable business in the future I think we'll be hurting and that really draws attention to the strong business model that we have got at Ebix.
Steady ship.
We focus on profitable businesses and as we've done in the past we sit on the sidelines and when we see opportunities to acquire these businesses that are in a distressed state.
Ben.
Remove so I hope that answer your question, it's not just an insurance industry specific dynamics I think.
Across all industries.
It is back to basics, it's back to fundamentally how you run your business and many of these companies are actually not running their businesses effectively.
Thank you ill go back in the queue. Thank you gentlemen.
Okay.
And I'm not showing any further questions. At this time would you like me to repeat the instructions again.
And im not showing any further questions.
Thanks again.
Kevin if there are no other questions, we can close the call.
Right.
Thanks, everyone for participating in the call I look forward to speaking to each one of you in the third quarter.
Mexico.
I'll close the call.
Ladies and gentlemen, this does conclude ladies and gentlemen.
This presentation you may now disconnect and have a wonderful day.
Yeah.
Okay.
You can dial one one.
[music].
Yeah.
Okay.
Okay.
Okay.
Yes.
Okay.
Okay.
Okay.
Okay.
Yes.
Yes.
Yes.
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
Yes.
Yes.
Yes.
Okay.
[music].
[music].
[music].