Ebix (EBIX) Misses Q3 EPS by 5c

Ebix (NASDAQ: EBIX) reported Q3 EPS of $1.03, $0.05 worse than the analyst estimate of $1.08. Revenue for the quarter came in at $147.23 million versus the consensus estimate of $148.36 million.

Ebix Chairman, President and CEO Robin Raina said, “Our revenue momentum continued to be strong in India with EbixCash exchanges growing organically 5% on a constant currency basis, as compared to Q2 2019 and 36% year over year in Q3 2019. Amongst many other new agreements, the Company signed material new agreements with international travel exchanges to deliver millions of airline segments annually for a per segment fee, over a 5-year period. As a part of this agreement, EbixCash collected a cumulative advance of $25 million also.”

“The above revenue performance is in spite of the Company deciding not to pursue any key opportunities in the e-governance arena, due to the recent liquidity issues with BSNL - a Govt. of India public sector unit. While the Government recently decided to sanction a revival package for BSNL and to pay all the BSNL vendors, we conservatively decided to book a bad debt reserve for $12.1 million of our outstanding amount with BSNL. In the short term the booking of the reserve, brought our GAAP operating income down for the quarter. We have been assured that we will fully get paid once BSNL receives the funds from the Government, and accordingly expect to get back this income at that time.”

”We are overall pleased that the basics of our EbixCash business are very strong with key business areas like Remittance, lending technology, travel technology, wealth & asset management technology and e-learning generating 40% plus operating margins. Our B2B travel businesses in the quarter were at 27% margins. The good news is that we know that as we improve the operating margins primarily from our forex, payment solutions and Corporate travel businesses, leveraging our recent contracts and the normal synergies in process, we will be able to convert EbixCash into a strong recurring operating margin business at very high levels like our insurance businesses worldwide.”

Robin added, “We are presently focused on our EbixCash IPO efforts, working with our investment bankers. We will be adding one more international banker soon to the list. We have a number of material key initiatives that are expected to add substantially to our EbixCash revenue and income streams – UAE airport forex, Trimax bus exchange acquisition, recent material wins in multiple areas, new realignments in remittance arena, Yatra acquisition, business transfer of Cox & Kings, new travel exchange deals etc. EbixCash performance is particularly noteworthy when you compare it to its key competitors with high valuations, who collectively lost a billion dollars last year in the Indian markets and delivered much less top line growth than EbixCash.”

“In spite of our insurance exchange businesses worldwide getting effected by Brexit, currency variations, and the drops in our ADAM health content and the health TPA business, yet our worldwide Insurance Exchange revenue grew 6% year over year in Q3 2019 to $51.2 million,” Ash Sawhney, President North America, Insurance operations said. “The US exchange revenue grew 4% in Q3 2019 as compared to Q3 2018. Our insurance business pipeline in the US today, is the best that it has ever been We are encouraged by a few material wins both in international markets and in the US, that coupled with our pipeline is targeted to put us back on the 8 to 10% growth path in 2020 as compared to 2019.”

For earnings history and earnings-related data on Ebix (EBIX) click here.

You May Also Be Interested In

• Genco rejects Diana Shipping takeover bid as undervalued
• Optimum Communications gets NYSE non-compliance notice over stock price
• Vivos Therapeutics posts 35% revenue gain but widens net loss