Description of Business and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Prospective Adoption of New Accounting Pronouncements [Table Text Block]

Impact of New Revenue Recognition Standard on Financial Statement Line Items

The cumulative effect of applying Topic 606 to all contracts was recorded as an adjustment to retained earnings as of the adoption date. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to accounts on the condensed consolidated balance sheet as of January 1, 2018:



	Impact of Change in Accounting Policy
(In thousands)	As Reported December 31, 2017		Adjustments			Adjusted January 1, 2018
Other Current Assets	$	33,532	$	898		$	34,430
Current Assets	252,932		898			253,830
Deferred tax asset, net	43,529		2,843			46,372
Other Assets	11,720		1,502			13,222
Total Assets	1,113,013		5,243			1,118,256
Current Deferred Revenue	22,562		5,124			27,686
Current Liabilities	146,932		5,124			152,056
Long Term Deferred Revenue	1,423		8,921			10,344
Total Liabilities	579,254		14,045			593,299
Retained Earnings	510,975		(8,802		)	502,173

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

The following tables present the impact of adopting Topic 606 on the Company’s unaudited consolidated financial statements as of and for the three and six months ended June 30, 2018:



	Impact of Change in Accounting Policy
	As Reported Three Months Ended June 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Statement of Income	(In thousands)
Operating Revenue	$	124,626		$	(1	)	$	124,625
Costs of Services Provided	43,559			19			43,578
Total Operating Expenses	86,311			19			86,330
Operating Income	38,315			(20		)	38,295
Income before income taxes	31,293			(20		)	31,273
Income tax (expense) benefit	(2,222		)	5			(2,217		)



Net income including non-controlling interest	29,071			(15		)	29,056
Net income attributable to Ebix, Inc.	29,180			(15		)	29,165
Basic earnings per common share attributable to Ebix, Inc.	0.93			—			0.93
Diluted Earnings per common share attributable to Ebix, Inc.	0.92			—			0.92


	As Reported Six Months Ended June 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Statement of Income	(In thousands)
Operating Revenue	$	232,856		$	(624	)	$	232,232
Costs of Services Provided	83,150			(120		)	83,030
Total Operating Expenses	160,645			(120		)	160,525
Operating Income	72,211			(504		)	71,707
Income before income taxes	59,875			(504		)	59,371
Income tax (expense) benefit	(4,348		)	123			(4,225		)
Net income including non-controlling interest	55,527			(381		)	55,146
Net income attributable to Ebix, Inc.	55,388			(381		)	55,007
Basic earnings per common share attributable to Ebix, Inc.	1.76			(0.01		)	1.75
Diluted Earnings per common share attributable to Ebix, Inc.	1.75			(0.01		)	1.74

	As Reported June 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Balance Sheet	(In thousands)
Other current assets	$	33,205		$	(848	)	$	32,357
Total current assets	328,229			(848		)	327,381
Deferred tax asset, net	46,819			(2,309		)	44,510
Other assets	22,710			(1,312		)	21,398
Total assets	1,357,577			(4,469		)	1,353,108
Current Deferred Revenue	31,011			(4,618		)	26,393
Total current liabilities	194,077			(4,618		)	189,459
Long Term Deferred Revenue	7,152			(6,951		)	201
Total liabilities	809,675			(11,569		)	798,106
Retained earnings	550,480			7,100			557,580

	As Reported Six Months Ended June 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Statement of Cash Flows	(In thousands)
Net income attributable to Ebix, Inc.	$	55,388		$	(381	)	$	55,007
Other assets	(40		)	(120		)	(160		)
Deferred Revenue	(5,544		)	2,476			(3,068		)
Net cash provided by operating activities	39,893			1,975			41,868

Revenue from External Customers by Geographic Areas [Table Text Block]

Disaggregation of Revenue

The following tables present revenue disaggregated by primary geographical regions and product channels for the three months and six months ended June 30, 2018:



	Three Months Ended June 30,				Six Months Ended June 30,
	(In thousands)				(In thousands)
Revenue:	2018		2017⁽¹⁾		2018		2017⁽¹⁾
United States	48,400		52,900		$	98,302	$	105,079
Canada	1,456		2,034		3,056		4,142
Latin America	5,161		4,319		10,555		8,218
Australia	8,740		7,617		18,227		16,516
Singapore	1,924		1,394		4,140		3,125
New Zealand	526		543		1,013		1,023
India	51,351		14,379		83,354		19,999
Europe	3,841		4,201		7,872		8,388
Dubai	—		—		4		—
Indonesia	1,828		—		3,369		—
Philippines	1,245		—		2,593		—
United Arab Emirates	154		—		371		—
	$	124,626	$	87,387	$	232,856	$	166,490

See Note 7 for additional geographic information

Schedule of Revenue by Product/Service Groups



	Three Months Ended				Three Months Ended
	June 30				June 30
(In thousands)	2018		2017⁽¹⁾		2018		2017
Exchanges	$	101,581	$	60,373	$	183,439	$	112,987
Broker Systems	3,696		3,595		7,306		7,383
RCS	19,007		22,663		41,274		44,515
Carrier Systems	342		756		837		1,605
Totals	$	124,626	$	87,387	$	232,856	$	166,490

(1) Prior period amounts have not been adjusted under the modified retrospective method.

Presented in the table below is the breakout of our revenue streams for each of those product/service channels for the three months ended June 30, 2018 and 2017.



	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2018		2017		2018		2017
Exchanges	$	101,581	$	60,373	$	183,439	$	112,987
Broker Systems	3,696		3,595		7,306		7,383
Risk Compliance Solutions (“RCS”)	19,007		22,663		41,274		44,515
Carrier Systems	342		756		837		1,605
Totals	$	124,626	$	87,387	$	232,856	$	166,490

Capitalized Contract Cost [Table Text Block]

Costs to Obtain and Fulfill a Contract

The Company capitalizes certain costs in order to maintain the ability to obtain and fulfill new contracts and contract renewals. These costs are primarily related to the setup and customization of our SaaS based platforms and such costs are amortized over the benefit period. Under our treatment prior to implementing Topic 606, these costs were expensed as incurred. As of June 30, 2018, the Company had $848 thousand of contract costs in “Other current assets” and $1.3 million in “Other Assets” on the Company's Condensed Consolidated Balance Sheets.



(In thousands)	June 30, 2018
Balance, beginning of period	$	—
Topic 606 adjustment	2,401
Adjusted beginning balance	$	2,401
Costs recognized from adjusted beginning balance	(469		)
Additions, net of costs recognized	228
Balance, end of period	$	2,160

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Additional information regarding the Company's assets and liabilities that are measured at fair value on a recurring basis is presented in the following tables:



	Fair Values at Reporting Date Using*
Descriptions	Balance, June 30, 2018		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets
Commercial bank certificates of deposits ($4.71 million is recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	$	25,968	$	25,968	$	—	$	—
Mutual Funds ($857 thousand recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	857		857		—		—
Total assets measured at fair value	$	26,825	$	26,825	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	21,608	$	—	$	—	$	21,608
Total liabilities measured at fair value	$	21,608	$	—	$	—	$	21,608

(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected cash flows, rate of return, and probability assessments.
* During the three and six months ended June 30, 2018 there were no transfers between fair value Levels 1, 2 or 3.



	Fair Values at Reporting Date Using*
Descriptions	Balance, December 31, 2017		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets
Commercial bank certificates of deposits ($2.19 million is recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	$	22,293	22,293		$	—	$	—
Mutual Funds ($785 thousand recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	6,278		6,278		—		—
Total assets measured at fair value	$	28,571	$	28,571	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	37,096	$	—	$	—	$	37,096
Total liabilities measured at fair value	$	37,096	$	—	$	—	$	37,096

(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected cash flows, rate of return, and probability assessments.
* During the twelve months ended December 31, 2017 there were no transfers between fair value Levels 1, 2 or 3.

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the six months ended June 30, 2018 and during the year ended December 31, 2017:



Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration	June 30, 2018			December 31, 2017
	(In thousands)

Beginning balance	$	37,096		$	8,510

Total remeasurement adjustments:
Gains included in earnings **	—			(164		)
Reductions recorded against goodwill	(13,718		)	(4,007		)
Foreign currency translation adjustments ***	(1,770		)	522

Acquisitions and settlements
Business acquisitions	—			34,156
Settlement payments	—			(1,921		)

Ending balance	$	21,608		$	37,096

The amount of total (gains) losses for the period included in earnings or changes to net assets, attributable to changes in unrealized gains relating to assets or liabilities still held at period-end.	$	—		$	—

** recorded as a reduction to reported general and administrative expenses
*** recorded as a component of other comprehensive income within stockholders' equity

Quantitative Information about Level 3 Fair Value Measurements

The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows:

Schedule of Goodwill

Changes in the carrying amount of goodwill for the six months ended June 30, 2018 and the year ended December 31, 2017 are reflected in the following table.



	June 30, 2018			December 31, 2017
	(Unaudited)
	(In thousands)
Beginning Balance	$	666,863		$	441,404
Additions (see Note 3)	192,271			233,095
Purchase accounting adjustments	(13,071		)	(12,158		)
Foreign currency translation adjustments	(20,537		)	4,522
Ending Balance	$	825,526		$	666,863

Schedule of Finite-Lived Intangible Assets by Major Class, Estimated Useful Lives

We amortize these intangible assets on a straight-line basis over their estimated useful lives, as follows:



Category		Life (yrs)
Customer relationships		7–20
Developed technology		3–12
Dealer networks		15-20
Trademarks		3–15
Non-compete agreements		5
Backlog		1.2
Database		10

Schedule of Intangible Assets, Excluding Goodwill

The carrying value of finite-lived and indefinite-lived intangible assets at June 30, 2018 and December 31, 2017 are as follows:



	June 30, 2018			December 31, 2017
	(Unaudited)
	(In thousands)
Finite-lived intangible assets:
Customer relationships	$	72,870		$	73,725
Developed technology	16,157			15,076
Dealer network	9,871			10,581
Trademarks	2,690			2,698
Non-compete agreements	764			764
Backlog	140			140
Database	212			212
Total intangibles	102,704			103,196
Accumulated amortization	(60,662		)	(57,485		)
Finite-lived intangibles, net	$	42,042		$	45,711

Indefinite-lived intangibles:
Customer/territorial relationships	$	42,055		$	42,055

Deferred Revenue Disclosure [Text Block]

Deferred Revenue

The Company records deferred revenue when it receives payments or invoices in advance of the performance of services. A significant portion of this balance relates to contracts where the customer has paid in advance for the use of our SaaS platforms over a specified period of time. This portion is recognized as the related performance obligation is fulfilled (generally less than one year). The remaining portion of the deferred revenue balance consists primarily of customer-specific customizations that are not distinct from related performance obligations that transfer over time. This portion is recognized over the expected useful life of the customizations.



(In thousands)	June 30, 2018
Balance, beginning of period	$	23,985
Topic 606 adjustment	14,045
Adjusted beginning balance	$	38,030
Revenue recognized from adjusted beginning balance	(22,887		)
Additions from business acquisitions	6,366
Additions, net of revenue recognized and currency translation	16,654
Balance, end of period	$	38,163

(In thousands)

Fair Value at June 30, 2018

Valuation Technique

Significant Unobservable
Input

Contingent acquisition consideration:
(Wdev and ItzCash acquisition)

Discounted cash flow

Projected revenue and probability of achievement