Ebix(US:EBIX)2021-11-08 16:00Revenue Growth - Total operating revenues increased by $37.4 million, or 24%, to $191.7 million for the three months ended September 30, 2021, compared to $154.3 million for the same period in 2020[183]. - International revenue accounted for 80.0% of total revenue for the three months ended September 30, 2021, compared to 74.0% for the same period in 2020[183]. - Revenue from EbixCash exchanges increased to $135.3 million for the three months ended September 30, 2021, up from $96.8 million in the same period of 2020, representing a growth of approximately 40%[181]. - The company's payment solutions offerings in India, particularly prepaid gift cards, increased by more than $33 million year-over-year, or approximately 50%[183]. - Total operating revenues increased by $324.6 million, or 80%, to $728.1 million for the nine months ended September 30, 2021, driven by a significant increase in payment solutions revenues in India[195]. Cost and Expenses - Cost of services provided increased by $34.8 million, or 41%, to $120.8 million in the third quarter of 2021 compared to $86.0 million in the third quarter of 2020[184]. - Cost of services as a percentage of total revenues increased to 63.0% for the three months ended September 30, 2021, compared to 55.7% for the same period in 2020[184]. - Costs of services provided increased by $326.8 million, or 170%, to $519.4 million for the nine months ended September 30, 2021, with costs as a percentage of total revenues rising to 71.3%[196]. - Product development expenses increased by $1.4 million, or 16%, to $10.2 million in Q3 2021 compared to $8.8 million in Q3 2020[185]. - Product development expenses for the nine months ended September 30, 2021 increased by $3.3 million, or 12.5%, to $29.8 million compared to $26.5 million in the same period in 2020[199]. - General and administrative expenses rose by $4.5 million, or 22%, to $25.4 million in Q3 2021 from $20.9 million in Q3 2020, primarily due to increased personnel costs[187]. - Interest expense increased by 47% to $11.0 million in Q3 2021 compared to $7.5 million in Q3 2020, despite a decrease in the average outstanding balance under corporate credit facilities[191]. - Interest expense for the nine months ended September 30, 2021 increased by 23.6% to $29.5 million compared to $23.9 million in the same period in 2020[204]. Foreign Exchange Impact - The company reported a year-over-year impact from foreign exchange rate fluctuations that increased reported revenues by approximately $1.1 million for the three months ended September 30, 2021[183]. - The Company recorded a net foreign currency exchange loss of $776 thousand for the nine months ended September 30, 2021[206]. - The net change in cumulative foreign currency translation for the nine months ended September 30, 2021, was an unrealized loss of $16.6 million[273]. - For the nine months ended September 30, 2021, the net change in the cumulative foreign currency translation account was an unrealized loss of $16.6 million, compared to a loss of $35.9 million for the same period in 2020[273]. - A hypothetical 20% adverse change in foreign currency exchange rates could have resulted in a reduction to pre-tax income of approximately $7.7 million for the nine months ended September 30, 2021[273]. Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2021, was $39.8 million, with a net income of $52.8 million[221]. - Net cash used for investing activities was $2.0 million for the nine months ended September 30, 2021, primarily for software development costs and capital expenditures[224]. - Net cash used in financing activities was $52.9 million for the nine months ended September 30, 2021, including $36.9 million for principal payments on the term loan[226]. - The current ratio increased to 1.97 at September 30, 2021 from 1.89 at December 31, 2020, indicating improved liquidity[215]. - The average cash balances during the nine months ended September 30, 2021 were approximately $127.8 million, with existing cash balances of $87.7 million as of the same date[274]. Debt Obligations - The company had $657.9 million in outstanding debt obligations as of September 30, 2021, with a LIBOR-related interest rate of 5.50%[274]. - As of September 30, 2021, the company had $657.9 million in outstanding debt obligations, including a $218.5 million term loan and a $439.4 million balance drawn on its commercial banking revolving line of credit[274]. - The company's term loan and revolving line of credit carried a leverage-based LIBOR related interest rate of 5.50% as of September 30, 2021[274]. - The outstanding balance on the revolving line of credit was $439.4 million at September 30, 2021, with an interest rate of 5.50%[233]. - The outstanding balance on the Term Loan was $218.5 million at September 30, 2021, with $36.9 million in principal payments made during the nine months[235]. Revenue Recognition - The company’s revenues are primarily derived from software subscription and transaction fees, with a focus on various service channels including EbixCash Exchanges and Insurance Exchanges[241]. - EbixCash revenues are significantly derived from prepaid gift card sales, recognized at a point in time[244]. - The company has end-to-end responsibilities for the gift cards sold, with unredeemed gift cards recorded as deferred revenues[247]. - EbixCash Travel revenue is primarily derived from commissions and transaction fees, recognized at a point in time, including hotel rooms, airline tickets, and ancillary fees[249]. - For corporate MICE packages, EbixCash Travel recognizes revenue at full purchase value upon completion, reporting revenue on a gross basis[250]. - EbixCash Money Transfer recognizes revenue upon completion of the service, which includes a transaction fee and exchange rate differences[251]. - Foreign exchange and payment services revenue is recognized when the performance obligation is fulfilled, typically when payments are made to recipients[252]. - Consumer payment services vary by fee payer and customer relationships, with revenue recognized based on contractual agreements[253]. - Insurance Exchanges revenues are derived from SaaS platform fees, recognized over the contract duration, with consistent transaction volumes[256]. - Software license revenues are recognized at the point in time when the customer obtains control of the license[259]. - Subscription services revenues are recognized ratably over the contract term, typically for an initial three-year period[260]. Internal Controls and Market Risk - The company has not experienced any material changes to its internal controls over financial reporting despite remote work due to the COVID-19 pandemic[279]. - The company is continually monitoring the impact of COVID-19 on the effectiveness of its internal control over financial reporting[279]. - There were no material changes to the company's market risk exposure during the nine months ended September 30, 2021[275]. - The company maintains a system of disclosure controls and procedures to ensure accurate reporting of financial information[277].