Ebix(EBIX) - 2021 Q1 - Quarterly Report

Revenue Performance - Total operating revenues for the three months ended March 31, 2021, increased by $152.2 million, or 110%, to $290.1 million compared to $137.9 million in the same period of 2020[185]. - International revenue accounted for 86.9% of total revenue for the three months ended March 31, 2021, up from 69.6% in the same period of 2020[185]. - Revenue from EbixCash Exchanges reached $232.6 million in Q1 2021, a significant increase from $77.9 million in Q1 2020[183]. - Subscription revenue accounted for 14% of total revenue in Q1 2021, down from 31% in Q1 2020, while transaction-based revenue rose to 81% from 52%[183]. - Demand for payment solutions offerings in India increased by more than $180 million year-over-year, representing a growth of over 750%[185]. Cost and Expenses - The cost of services provided increased by $162.9 million, or 284%, to $220.4 million in Q1 2021, with costs as a percentage of total revenues rising to 76.0% from 41.7%[186]. - Product development expenses increased by $0.1 million, or 1%, to $9.5 million in Q1 2021 compared to $9.4 million in Q1 2020[187]. - Sales and marketing expenses remained flat at $3.8 million in Q1 2021 compared to Q1 2020[188]. - General and administrative expenses decreased by $7.9 million, or 27%, to $21.3 million in Q1 2021 from $29.2 million in Q1 2020[189]. - Interest income decreased by $46 thousand, or 85%, to $8 thousand in Q1 2021 compared to $54 thousand in Q1 2020[192]. - Interest expense decreased by $1.2 million, or 13%, to $8.1 million in Q1 2021 from $9.2 million in Q1 2020[193]. Cash Flow and Financial Position - Net cash provided by operating activities was $8.6 million for Q1 2021, down from $29.6 million in Q1 2020[210][211]. - The outstanding balance on the revolving line of credit was $439.4 million at March 31, 2021, with an interest rate of 3.50%[221]. - Cash and cash equivalents were $99.6 million at March 31, 2021, down from $105.0 million at December 31, 2020[199]. - The current ratio increased to 2.03 at March 31, 2021, up from 1.89 at December 31, 2020[202]. - As of March 31, 2021, the Company had $689.2 million in outstanding debt obligations, including a $249.8 million term loan and a $439.4 million balance on its revolving line of credit[264]. Tax and Revenue Recognition - The company expects its full year effective tax rate to be in the range of 2.5% to 3.5%[195]. - The company derives revenues primarily from software subscription and transaction fees, software license fees, financial transaction fees, risk compliance solution services fees, and professional service fees[228]. - EbixCash revenues are primarily derived from the sales of prepaid gift cards and financial transaction services, with a significant majority recognized at a point in time[231]. - EbixCash Travel revenues are derived from commissions and transaction fees from travel providers, recognized at a point in time upon completion of the service[236]. - Revenue from EbixCash's money transfer business is recognized upon completion of the service, which includes several steps such as customer acknowledgment and processing of the transfer[238]. - Insurance Exchanges revenues are primarily derived from SaaS platform fees, with setup and customization services accounted for as a single performance obligation recognized over the contract duration[244]. - Subscription services revenues are recognized ratably over the contract term, typically for an initial three-year period with one-year automatic renewals[248]. - Professional service revenue consists of fees for setup, customization, training, or consulting, recognized as services are rendered or based on the input method[251]. Risk and Controls - The impact of foreign exchange rates on reported revenues was approximately a reduction of $0.6 million for Q1 2021[185]. - The Company reported unrealized foreign currency translation losses of $(3.9) million and $(49.8) million for the three months ended March 31, 2021 and 2020, respectively[263]. - A hypothetical 20% adverse change in foreign currency exchange rates could have reduced pre-tax income by approximately $2.6 million and $3.4 million for the three months ended March 31, 2021 and 2020, respectively[263]. - The Company maintains effective disclosure controls and procedures as evaluated by its Chief Executive Officer and Chief Financial Officer as of March 31, 2021[269]. - The Company has not experienced any material changes to its internal controls over financial reporting despite remote work conditions due to the COVID-19 pandemic[269].