Ebix, Inc. (NASDAQ: EBIX ), a leading international supplier of On-Demand software and E-commerce services to the insurance, financial, e-governance and healthcare industries, today reported results for its second quarter ended June 30, 2017 . Ebix will host a conference call to review its results today at 11:00 a.m. EDT (details below).
Ebix delivered the following results for the second quarter of 2017:
Revenues: Q2 2017 revenue rose 20.4% to $87.4 million compared to $72.6 million in Q2 2016 and increased 10.5% over Q1 2017 revenue of $79.1 million . The revenue improvement reflected growth in the Company's Exchange and Risk Compliance channels, with the revenues from the acquisition of ItzCash reflected in the Exchange channel.
On a constant currency basis, Ebix Q2 2017 revenue increased 20% to $87.1 million compared to $72.6 million in Q2 2016. The Exchange channel continued to be Ebix's largest, accounting for 69% of Q2 2017 revenues. Also, on a constant currency basis, year to date revenue increased 15% to $165.5 million as compared to $143.6 million during the same period in 2016.
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(dollar amounts in
thousands)
YTD YTD
Channel Q2 2017 Q2 2016 Change 2017 2016 Change
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Exchanges $ 60,373 $ 49,322 +22% $ 112,987 $ 99,408 +14%
Risk Compliance Solutions
(RCS) 22,663 18,662 +21% 44,515 35,413 +26%
Broker Solutions 3,595 3,885 -7% 7,383 7,097 4%
Carrier Systems 756 705 +7% 1,605 1,722 -7%
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Total Revenue $ 87,387 $ 72,574 +20% $ 166,490 $ 143,640 +16%
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Total Revenue on Constant
Currency Basis $ 87.1M $ 72.6M +20% $ 165.5M $ 143.6M +15%
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Earnings per Share: Q2 2017 diluted earnings per share increased 6% to $0.74 compared to $0.70 in Q2 2016 due to higher net income and the benefit of ongoing share repurchase activity. Ebix's weighted average diluted shares outstanding decreased to 31.6 million in Q2 2017 compared to 33.0 million in Q2 2016 and 32.0 million in Q1 2017.
Operating Income and Margins: Q2 2017 operating margins decreased to 30% as compared to 32% in Q2 2016. Excluding the impact of the recent ItzCash acquisition, Q2 2017 operating margins would have been 33%. Operating income for Q2 2017 rose 13% to $26.5 million compared to $23.6 million in Q2 2016.
Net Income: Q2 2017 net income increased by 2% to $23.4 million , compared to $23.0 million in Q2 2016.
Operating Cash: Cash generated from operations was $15.5 million in Q2 2017 compared to $20.4 million in Q2 2016 and $15.7 million in Q1 2017. The operating cash in Q2 2017 reflected the increased receivables associated with some of the contracts in Brazil , US and India that have longer payment terms.
Share Repurchases: In Q2 2017, Ebix repurchased 93,000 shares of its outstanding common stock for aggregate cash consideration of $5.2 million .
Q3 2017 Diluted Share Count: As of today, Ebix expects its diluted share count for Q3 2017 to be approximately 31.5 million.
Dividend: Ebix paid its regularly quarterly dividend of $0.075 per share in Q2 2017 for a total cost of $2.4 million .
Ebix Chairman, President and CEO Robin Raina said, "These are record results for the Company in terms of top line and we are pleased to get there with 30.4% in operating margins. These operating margins are significant considering that they include operating margins of less than 10% from the recently acquired ItzCash business. As we implement some of our synergetic initiatives related to ItzCash, we expect the ItzCash operating margins to approach 25% in the next 6 months. Once that happens, our operating margins will accordingly go up substantially."
"Over the next few quarters, we expect substantial revenue growth from a number of areas -- principal amongst them are the revenues expected to be generated from the execution of a large contract with one of the largest insurers in Brazil , a large e-governance contract with a public sector undertaking in India , continued growth from our financial exchange initiatives in India , and many new insurance exchange related contracts in US and Australia ."
Robin added, "We would like to be at a quarterly revenue run rate of $100 million by Q1 of 2018, with at least 30% in operating margins. While there are no guarantees that we will achieve this aspirational goal, you can be sure that we will make a strong endeavor to get there."
Sean Donaghy , Ebix CFO, commented, " Ebix continues to deliver strong operating performance and cash generation. During Q2 2017, we invested a total of $74.2 million related to the ItzCash acquisition, $5.2 million on share buybacks, $2.4 million on dividend payments, $2.3 million on CapEx , $3.1 million on principal payments towards the term loan and $1.2 million on tax payments. We funded these initiatives from existing cash plus operating cash flow of $15.5M during Q2 2017, as well as by drawing $20 million from our Bank credit facilities. Ebix ended the quarter with cash, cash equivalents, and short-term investments of $81.3 million , with available cash reserves of approximately $242 million , including the available borrowing capacity and the accordion available to the Company."
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