QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification No.) | ||||||||||
organization) | |||||||||||
(Address of principal executive offices) | (Zip Code) |
Securities registered pursuant to Section 12(b) of the Act: | ||||||||
Title of each class | Trading symbols | Name of each exchange on which registered | ||||||
☑ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Exhibit 101 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Operating revenue | $ | $ | $ | $ | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Cost of services provided | |||||||||||||||||||||||
Product development | |||||||||||||||||||||||
Sales and marketing | |||||||||||||||||||||||
General and administrative, net | |||||||||||||||||||||||
Amortization and depreciation | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Non-operating (loss) income | ( | ||||||||||||||||||||||
Non-operating expense - litigation settlement | ( | ||||||||||||||||||||||
Foreign currency exchange (loss) gain | ( | ( | ( | ||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax (expense) benefit | ( | ||||||||||||||||||||||
Net income including noncontrolling interest | |||||||||||||||||||||||
Net loss attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to Ebix, Inc. | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings per common share attributable to Ebix, Inc. | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share attributable to Ebix, Inc. | $ | $ | $ | $ | |||||||||||||||||||
Basic weighted average shares outstanding | |||||||||||||||||||||||
Diluted weighted average shares outstanding |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income including noncontrolling interest | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
Total other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Comprehensive income (loss) | ( | ||||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interest | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive income attributable to Ebix, Inc. | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | (Unaudited) | ||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Receivables from service providers | |||||||||||
Short-term investments | |||||||||||
Restricted cash | |||||||||||
Fiduciary funds - restricted | |||||||||||
Trade accounts receivable, less allowances of $ | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangibles, net | |||||||||||
Indefinite-lived intangibles | |||||||||||
Capitalized software development costs, net | |||||||||||
Deferred tax asset, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | $ | |||||||||
Payables to service agents | |||||||||||
Accrued payroll and related benefits | |||||||||||
Working capital facility | |||||||||||
Fiduciary funds - restricted | |||||||||||
Short-term debt | |||||||||||
Contingent liability for accrued earn-out acquisition consideration | |||||||||||
Current portion of long term debt and financing lease obligations, net of deferred financing costs of $ | |||||||||||
Contract liabilities | |||||||||||
Lease liability | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Revolving line of credit | |||||||||||
Long term debt and financing lease obligations, less current portion, net of deferred financing costs of $ | |||||||||||
Contingent liability for accrued earn-out acquisition consideration | |||||||||||
Contract liabilities | |||||||||||
Lease liability | |||||||||||
Deferred tax liability, net | |||||||||||
Other liabilities | |||||||||||
Total liabilities |
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Series Y Convertible preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total Ebix, Inc. stockholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Common Stock | |||||||||||||||||||||||||||||||||||||||||
Issued Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling interest | Total | |||||||||||||||||||||||||||||||||||
Balance, July 1, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Net income attributable to Ebix, Inc. | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Vesting of restricted stock | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Common stock dividends paid, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||||||||
Issued Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling interest | Total | |||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Net income attributable to Ebix, Inc. | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | ||||||||||||||||||||||||||||||||||||||
Share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested | ( | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Common stock dividends paid, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | $ | ( | $ | $ |
Common Stock | |||||||||||||||||||||||||||||||||||||||||
Issued Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling interest | Total | |||||||||||||||||||||||||||||||||||
Balance, July 1, 2019 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Net income attributable to Ebix, Inc. | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Repurchase and retirement of commons stock | ( | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Vesting of restricted stock | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Noncontrolling interest | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Common stock dividends paid, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | ( | $ | $ |
Common Stock | |||||||||||||||||||||||||||||||||||||||||
Issued Shares | Amount | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling interest | Total | |||||||||||||||||||||||||||||||||||
Balance, January 1, 2019 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Net income attributable to Ebix, Inc. | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Repurchase and retirement of common stock | ( | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||
Vesting of restricted stock | ( | — | — | — | |||||||||||||||||||||||||||||||||||||
Share based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Noncontrolling interest | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
Common stock dividends paid, $ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | $ | ( | $ | $ |
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income attributable to Ebix, Inc. | $ | $ | |||||||||
Net loss attributable to noncontrolling interest | ( | ( | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Amortization and depreciation | |||||||||||
Provision (benefit) for deferred taxes | ( | ||||||||||
Share based compensation | |||||||||||
Benefit for doubtful accounts | |||||||||||
Amortization of right-of-use assets | |||||||||||
Unrealized foreign exchange loss | |||||||||||
Amortization of capitalized software development costs | |||||||||||
Reduction of acquisition accruals | ( | ( | |||||||||
Cash paid for acquisition earn-out | ( | ||||||||||
Changes in assets and liabilities, net of effects from acquisitions: | |||||||||||
Accounts receivable | ( | ||||||||||
Receivables from service providers | |||||||||||
Payables to service agents | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Accounts payable and accrued expenses | ( | ( | |||||||||
Accrued payroll and related benefits | ( | ||||||||||
Contract liabilities | ( | ( | |||||||||
Lease liabilities | ( | ( | |||||||||
Other liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Cash paid for acquisitions, net of cash acquired | ( | ( | |||||||||
Cash paid to from Paul Merchants for | ( | ||||||||||
Capitalized software development costs | ( | ( | |||||||||
(Purchases) maturities of marketable securities | ( | ||||||||||
Capital expenditures | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from revolving line of credit, net | |||||||||||
Principal payments of term loan obligation | ( | ( | |||||||||
Repurchases of common stock | ( | ||||||||||
Proceeds from the exercise of stock options | |||||||||||
Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested | ( | ( | |||||||||
Dividend payments | ( | ( | |||||||||
Payments on short-term notes, net | |||||||||||
Proceeds (payments) of debt obligations | ( | ||||||||||
(Payments) proceeds of working capital facility, net | ( | ||||||||||
Payments of financing lease obligations | ( | ( | |||||||||
Net cash (used) provided by financing activities | ( | ||||||||||
Effect of foreign exchange rates on cash | ( | ( | |||||||||
Net change in cash and cash equivalents, and restricted cash | ( | ( | |||||||||
Cash and cash equivalents, and restricted cash at the beginning of the period | |||||||||||
Cash and cash equivalents, and restricted cash at the end of the period | $ | $ | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Interest paid | $ | $ | |||||||||
Income taxes paid | $ | $ |
Nine Months Ended | |||||||||||
September 30, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Restricted cash included in other long-term assets | |||||||||||
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows | $ | $ |
Fair Values at Reporting Date Using* | |||||||||||||||||
Descriptions | Balance, September 30, 2020 | Quoted Prices in Active Markets for Identical Assets or Liabilitie (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
(In thousands) | |||||||||||||||||
Assets | |||||||||||||||||
Commercial bank certificates of deposits ($ term asset section of the Condensed Consolidated Balance Sheets in "Other Assets") | $ | $ | $ | — | $ | — | |||||||||||
Mutual funds (recorded in the long term asset section of the Condensed Consolidated Balance Sheets in "Other Assets") | — | — | |||||||||||||||
Total assets measured at fair value | $ | $ | $ | — | $ | — | |||||||||||
Liabilities | |||||||||||||||||
Contingent accrued earn-out acquisition consideration (a) | $ | $ | — | $ | — | $ | |||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||
(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected revenues and cash flows, rate of return, and probability assessments. | |||||||||||||||||
* During the nine months ended September 30, 2020, there were no transfers between fair value Levels 1, 2 or 3. |
Fair Values at Reporting Date Using* | |||||||||||||||||
Descriptions | Balance, December 31, 2019 | 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 ($ | $ | $ | — | $ | — | ||||||||||||
Mutual funds | — | — | |||||||||||||||
Total assets measured at fair value | $ | $ | $ | — | $ | — | |||||||||||
Liabilities | |||||||||||||||||
Contingent accrued earn-out acquisition consideration (a) | $ | $ | — | $ | — | $ | |||||||||||
Total liabilities measured at fair value | $ | $ | $ | $ | |||||||||||||
(a) The income valuation approach is applied and the valuation inputs include the contingent payment arrangement terms, projected revenues and cash flows, rate of return, and probability assessments. | |||||||||||||||||
* During the year ended December 31, 2019, there were no transfers between fair value Levels 1, 2 or 3. |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||
Contingent Liability for Accrued Earn-out Acquisition Consideration | September 30, 2020 | December 31, 2019 | ||||||||||||
(In thousands) | ||||||||||||||
Beginning balance | $ | $ | ||||||||||||
Total remeasurement adjustments: | ||||||||||||||
Gains included in earnings ** | ( | ( | ||||||||||||
Foreign currency translation adjustments *** | ( | ( | ||||||||||||
Acquisitions and settlements | ||||||||||||||
Business settlements | ( | |||||||||||||
Ending balance | $ | $ | ||||||||||||
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 general and administrative expenses | ||||||||||||||
*** recorded as a component of other comprehensive income within stockholders' equity |
(In thousands) | Fair Value at September 30, 2020 | Valuation Technique | Significant Unobservable Input | |||||||||||||||||
Contingent acquisition consideration: (Miles acquisition) | $ | Discounted cash flow | Projected revenue and probability of achievement |
(In thousands) | Fair Value at December 31, 2019 | Valuation Technique | Significant Unobservable Input | |||||||||||||||||
Contingent acquisition consideration: (Wdev, Miles, Zillious, and Essel acquisition) | $ | Discounted cash flow | Projected revenue and probability of achievement |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
Revenue: | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
India* | $ | $ | $ | $ | ||||||||||||||||||||||
United States | ||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||
Latin America | ||||||||||||||||||||||||||
Europe | ||||||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
Singapore* | ||||||||||||||||||||||||||
Indonesia* | ||||||||||||||||||||||||||
United Arab Emirates* | ||||||||||||||||||||||||||
Philippines* | ||||||||||||||||||||||||||
New Zealand | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
*Primarily India led businesses for which total revenue was $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
EbixCash Exchanges | $ | $ | |||||||||||||||||||||
Insurance Exchanges | |||||||||||||||||||||||
Risk Compliance Solutions | |||||||||||||||||||||||
Totals | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
(In thousands) | |||||||||||
Balance, beginning of period | $ | $ | |||||||||
Costs recognized from the beginning balance | ( | ( | |||||||||
Additions, net of costs recognized | |||||||||||
Balance, end of period | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
(In thousands) | |||||||||||
Balance, beginning of period | $ | $ | |||||||||
Revenue recognized from beginning balance | ( | ( | |||||||||
Additions from business acquisitions | |||||||||||
Additions, net of revenue recognized and currency translation | |||||||||||
Balance, end of period | $ | $ |
Category | Life (yrs) | |||||||
Airport contracts | ||||||||
Backlog | ||||||||
Brand | ||||||||
Customer relationships | ||||||||
Database | ||||||||
Dealer networks | ||||||||
Developed technology | ||||||||
Non-compete agreements | ||||||||
Store networks | ||||||||
Trademarks |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||
Net income attributable to Ebix, Inc. | $ | $ | $ | $ | |||||||||||||||||||
Basic weighted average shares outstanding | |||||||||||||||||||||||
Dilutive effect of stock options and restricted stock awards | |||||||||||||||||||||||
Diluted weighted average shares outstanding | |||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ |
Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||
As Reported | Pro Forma | As Reported | Pro Forma | As Reported | Pro Forma | As Reported | Pro Forma | ||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Net Income attributable to Ebix, Inc. | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Basic EPS | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Diluted EPS | $ | $ | $ | $ | $ | $ | $ |
Nine Months Ended | As of | Nine Months Ended | As of | |||||||||||||||||||||||
September 30, 2020 | September 30, 2020 | September 30, 2019 | December 31, 2019 | |||||||||||||||||||||||
External Revenues | Long-lived assets | External Revenues | Long-lived assets | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
India* | $ | $ | $ | $ | ||||||||||||||||||||||
United States | ||||||||||||||||||||||||||
Australia | ||||||||||||||||||||||||||
Latin America | ||||||||||||||||||||||||||
Europe | ||||||||||||||||||||||||||
Indonesia* | ||||||||||||||||||||||||||
Singapore* | ||||||||||||||||||||||||||
Philippines* | ||||||||||||||||||||||||||
Canada | ||||||||||||||||||||||||||
New Zealand | ||||||||||||||||||||||||||
United Arab Emirates* | ||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||
*Primarily India led businesses for which total revenue was $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
(In thousands) | |||||||||||
Beginning Balance | $ | $ | |||||||||
Additions | |||||||||||
Purchase accounting adjustments | |||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||
Ending Balance | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
(In thousands) | |||||||||||
Finite-lived intangible assets: | |||||||||||
Customer relationships | $ | $ | |||||||||
Developed technology | |||||||||||
Dealer network | |||||||||||
Airport contracts | |||||||||||
Trademarks | |||||||||||
Store networks | |||||||||||
Brand | |||||||||||
Non-compete agreements | |||||||||||
Database | |||||||||||
Backlog | |||||||||||
Total intangibles | |||||||||||
Accumulated amortization | ( | ( | |||||||||
Finite-lived intangibles, net | $ | $ | |||||||||
Indefinite-lived intangibles: | |||||||||||
Customer/territorial relationships | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
(In thousands) | |||||||||||
Prepaid expenses | $ | $ | |||||||||
Sales taxes receivable from customers | |||||||||||
Other third party receivables | |||||||||||
Credit card merchant account balance receivable | |||||||||||
Short term portion of capitalized costs to obtain and fulfill contracts | |||||||||||
Accrued interest receivable | |||||||||||
Other | |||||||||||
Total | $ | $ |
Year | Operating Leases | Financing Leases | Total | |||||||||||||||||
(in thousands) | ||||||||||||||||||||
2020 (Remaining six months) | $ | $ | $ | |||||||||||||||||
2021 | ||||||||||||||||||||
2022 | ||||||||||||||||||||
2023 | ||||||||||||||||||||
2024 | ||||||||||||||||||||
Thereafter | ||||||||||||||||||||
Total | ||||||||||||||||||||
Less: present value discount* | ( | ( | ( | |||||||||||||||||
Present value of lease liabilities | ||||||||||||||||||||
Less: current portion of lease liabilities | ( | ( | ( | |||||||||||||||||
Total long-term lease liabilities | $ | $ | $ | |||||||||||||||||
* The discount rate used was the incremental borrowing rates respective to the country where the assets are located. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||
Operating Lease Cost | $ | $ | $ | $ | |||||||||||||||||||
Finance Lease Cost: | |||||||||||||||||||||||
Amortization of Lease Assets | |||||||||||||||||||||||
Interest on Lease liabilities | |||||||||||||||||||||||
Finance Lease Cost | |||||||||||||||||||||||
Sublease Income | ( | ( | ( | ( | |||||||||||||||||||
Total Net Lease Cost | $ | $ | $ | $ |
September 30, 2020 | |||||
Weighted Average Lease Term - Operating Leases | |||||
Weighted Average Lease Term - Finance Leases | |||||
Weighted Average Discount Rate - Operating Leases | % | ||||
Weighted Average Discount Rate - Finance Leases | % |
Year | Commitments | |||||||
(in thousands) | ||||||||
2020 (Remaining six months) | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
Thereafter | ||||||||
Total | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
(In thousands) | |||||||||||
Customer advances (deposits) | $ | $ | |||||||||
Acquisition obligations (upfront purchase and contingent consideration) | |||||||||||
Total | $ | $ |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
EbixCash Exchanges | $ | 96,772 | $ | 82,085 | $ | 227,867 | $ | 238,770 | ||||||||||||||||||
Insurance Exchanges | 42,382 | 47,385 | 129,342 | 141,993 | ||||||||||||||||||||||
Risk Compliance Solutions | 15,151 | 17,763 | 46,284 | 53,669 | ||||||||||||||||||||||
Totals | $ | 154,305 | $ | 147,233 | $ | 403,493 | $ | 434,432 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Subscription | 26 | % | 30 | % | 31 | % | 31 | % | ||||||||||||||||||
Transaction-Based | 63 | % | 53 | % | 54 | % | 53 | % | ||||||||||||||||||
Professional Services/Consulting/Other | 11 | % | 17 | % | 15 | % | 16 | % |
Country/Region | Cash, Restricted Cash and ST investments | |||||||
(In thousands) | ||||||||
India | $ | 72,524 | ||||||
United States | 17,801 | |||||||
Australia | 15,370 | |||||||
Philippines | 7,535 | |||||||
Europe | 3,149 | |||||||
Singapore | 2,330 | |||||||
Canada | 1,698 | |||||||
Latin America | 1,492 | |||||||
New Zealand | 1,186 | |||||||
United Arab Emirates | 1,045 | |||||||
Indonesia | 587 | |||||||
Mauritius | 10 | |||||||
Total | $ | 124,727 |
Exhibits | ||||||||
101.INS* | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH* | XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* Filed herewith |
Ebix, Inc. | |||||||||||||||||
Date: | November 9, 2020 | By: | /s/ Robin Raina | ||||||||||||||
Robin Raina | |||||||||||||||||
Chief Executive Officer (Principal Executive Officer) | |||||||||||||||||
Date: | November 9, 2020 | By: | /s/ Steven M. Hamil | ||||||||||||||
Steven M. Hamil | |||||||||||||||||
Global Chief Financial Officer (Principal Financial and Accounting Officer) |
Date: | November 9, 2020 | /s/ Robin Raina | |||||||||||||||
Robin Raina | |||||||||||||||||
Chief Executive Officer |
Date: | November 9, 2020 | /s/ Steven M. Hamil | |||||||||||||||
Steven M. Hamil | |||||||||||||||||
Chief Financial Officer |
(1) | I am the Chief Executive Officer of Ebix, Inc. (the “Registrant”). | ||||||||||||||||
(2) | In connection with the Quarterly Report of the Registrant on Form 10-Q for the quarter ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented. |
By: | /s/ Robin Raina | |||||||
Name: Robin Raina | ||||||||
Chief Executive Officer | ||||||||
November 9, 2020 |
(1) | I am the Global Chief Financial Officer of Ebix, Inc. (the “Registrant”). | ||||||||||||||||
(2) | In connection with the Quarterly Report of the Registrant on Form 10-Q for the quarter ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Report containing financial statements fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant as of, and for, the periods presented. |
By: | /s/ Steven M. Hamil | |||||||
Name: Steven M. Hamil | ||||||||
Global Chief Financial Officer | ||||||||
November 9, 2020 |
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income including noncontrolling interest | $ 23,984 | $ 15,064 | $ 71,693 | $ 68,453 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 18,174 | (18,752) | (35,897) | (10,859) |
Total other comprehensive income (loss) | 18,174 | (18,752) | (35,897) | (10,859) |
Comprehensive income (loss) | 42,158 | (3,688) | 35,796 | 57,594 |
Comprehensive loss attributable to noncontrolling interest | (698) | (5,445) | (1,187) | (6,617) |
Comprehensive income attributable to Ebix, Inc. | $ 42,856 | $ 1,757 | $ 36,983 | $ 64,211 |
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Common stock dividends paid (in dollars per share) | $ 0.075 | $ 0.075 | $ 0.225 | $ 0.225 |
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2018 |
|
Business Acquisition [Line Items] | ||
Common stock repurchase not settled (in shares) | 200,000 | |
Common Stock Repurchase not settled, Value | $ 8.8 | |
Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested | $ (1.8) | |
PMLJV | ||
Business Acquisition [Line Items] | ||
Percentage of membership interest in joint venture by other party | 10.00% | |
Common Stock | ||
Business Acquisition [Line Items] | ||
Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested (in shares) | (55,526) |
Description of Business and Summary of Significant Accounting Policies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business and Summary of Significant Accounting Policies | Description of Business and Summary of Significant Accounting Policies Description of Business— Ebix, Inc., and its subsidiaries, (“Ebix” or the “Company”) is a leading international supplier of on-demand infrastructure exchanges to the insurance, financial, travel, payment remittances, and healthcare industries. In the insurance sector, the Company’s main focus is to develop and deploy a wide variety of insurance and reinsurance exchanges on an on-demand basis using software-as-a-service ("SaaS") enterprise solutions in the areas of customer relationship management ("CRM"), front-end and back-end systems, and outsourced administrative and risk compliance. The Company's products feature fully customizable and scalable software solutions designed to streamline the way insurance and financial industry professionals manage distribution, marketing, sales, customer service, and accounting activities. With a "Phygital” strategy that combines physical distribution outlets in many Association of Southeast Asian Nations ("ASEAN") countries to an Omni-channel online digital platform, the Company’s EbixCash Financial exchange portfolio of software and services encompasses domestic and international money remittance, foreign exchange ("Forex"), travel, pre-paid gift cards, utility payments, lending, and wealth management in India and other Southeast Asian markets. The Company has its headquarters in Johns Creek, Georgia and also conducts operating activities in Australia, Canada, India, New Zealand, Singapore, the United Kingdom, Brazil, Philippines, Indonesia, Thailand and United Arab Emirates. International revenue accounted for 69.3% and 68.7% of the Company’s total revenue for the nine months ended September 30, 2020 and 2019, respectively. Summary of Significant Accounting Policies Basis of Presentation—The accompanying unaudited condensed consolidated financial statements and these notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") with the effect of inter-company balances and transactions eliminated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP and SEC rules have been condensed or omitted as permitted by and pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements contain adjustments (consisting only of normal recurring items) necessary to fairly present the consolidated financial position of the Company and its consolidated results of operations and cash flows. Operating results for the three and nine months ended September 30, 2020 and 2019 are not necessarily indicative of the results that may be expected for future quarters or the full year of 2020. The condensed consolidated December 31, 2019 balance sheet included in this interim period filing has been derived from the audited financial statements at that date, but does not necessarily include all of the information and related notes required by GAAP for complete financial statements. These condensed interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Reclassification - There were certain prior year amounts that have been reclassified to be consistent with current year presentation within our financial statements, specifically with respect to the presentation of receivables from service providers and payables to service agents. Restricted Cash - The carrying value of our restricted cash in current assets was $7.9 million and $35.1 million at September 30, 2020 and December 31, 2019, respectively. The September 30, 2020 balance consists of fixed deposits (many in the form of certificates of deposit) pledged with banks for issuance of bank guarantees and letters of credit related to its India operations. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated statement of financial position to the amounts shown in the Condensed Consolidated Statement of Cash Flows:
Advertising—Advertising costs amounted to $0.8 million and $3.4 million for the three and nine month periods ended September 30, 2020, respectively, and $2.0 million and $7.6 million for three and nine month periods ended September 30, 2019, respectively. The costs are included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Income. The Company expenses advertising costs as incurred. Fair Value of Financial Instruments—Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction. This guidance establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The hierarchy reflects the degree to which objective data from external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. The classifications are as follows: •Level 1 Inputs - Unadjusted quoted prices available in active markets for identical investments to the reporting entity at the measurement date. •Level 2 Inputs - Other than quoted prices included in Level 1 inputs, which are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. •Level 3 Inputs - Unobservable inputs, which are used to the extent that observable inputs are not available. Unobservable inputs, are used in situations where there is little or no market activity for the asset or liability and wherein the reporting entity makes estimates and assumptions related to the pricing of the asset or liability, including assumptions regarding risk. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. As of September 30, 2020, the Company had the following financial instruments to which it had to both consider fair values and make fair value assessments: •Short-term investments (commercial bank certificates of deposits and mutual funds), for which the fair values are measured as a Level 1 instrument. •Contingent accrued earn-out business acquisition consideration liabilities, for which fair values are measured as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are re-measured quarterly based on the then assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3. Other financial instruments not measured at fair value on the Company's unaudited Condensed Consolidated Balance Sheet at September 30, 2020 that require disclosure of fair values include: cash and cash equivalents, restricted cash, fiduciary funds, accounts receivable, receivables from service providers, accounts payable and accrued expenses, accrued payroll and related benefits, payables to service agents, finance lease obligations, working capital facilities, the revolving line of credit and term loan debt. The Company believes that the estimated fair value of such instruments at September 30, 2020 and December 31, 2019 approximates their carrying value as reported on the unaudited Condensed Consolidated Balance Sheet. 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:
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 nine months ended September 30, 2020 and during the year ended December 31, 2019:
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:
Sensitivity to Changes in Significant Unobservable Inputs As presented in the table above, the significant unobservable inputs used in the fair value measurement of contingent consideration related to business acquisitions are projected revenue forecasts, as developed by the relevant members of Company's management team and considers the probability of achievement of those revenue forecasts. The Company applies these inputs in its calculation and determination of the fair value of contingent earn-out liabilities for purchased businesses. During 2019 and the nine months ended September 30, 2020, certain of the Company's contingent earn-out liabilities were adjusted because of changes to anticipated future revenues from these acquired businesses, or as a result of finalizing purchase price allocations that were previously preliminary. The Company paid $2.5 million in September 2020 and $3.6 million in October 2020 to satisfy the Miles earn-out liability. Revenue Recognition and Contract Liabilities—The Company derives its revenues primarily from software subscription and transaction fees, software license fees, financial transaction fees, risk compliance solution services fees, and professional service fees, including associated fees for consulting, implementation, training, and project management provided to customers with installed systems and applications. Sales and value-added taxes are not included in revenues, but rather are recorded as a liability until the taxes assessed are remitted to the respective taxing authorities. The Company determines revenue recognition by applying the following steps: •identification of the contract, or contracts, with a customer; •identification of the performance obligations in the contract; •determination of the transaction price; •allocation of the transaction price to the performance obligations in the contract; and •recognition of revenue when, or as, we satisfy a performance obligation. The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Additionally, certain services exist in multiple channels. As Ebix derives revenues from three product/service channels, EbixCash Exchanges, Insurance Exchanges, and Risk Compliance Solutions, for policy disclosure purposes, contracts are discussed in conjunction with the channel to which they are most significant. The Company assesses the terms of customer contracts, including termination rights, penalties (implied or explicit), and renewal rights. EbixCash Exchanges ("EbixCash") EbixCash revenues are primarily derived from consideration paid by customers for financial transaction (foreign exchange, remittance, other payment solutions) and travel transaction services. The significant majority of EbixCash revenue is for a single performance obligation and is recognized at a point in time. These revenues vary by transaction based upon channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and speed of service, as applicable. EbixCash also offers other services, including payment services and ticketing and travel services, for which revenue is impacted by various factors. EbixCash acts as the principal in most transactions and reports revenue on a gross basis, as EbixCash controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The main services from which EbixCash derives revenue are as follow: EbixCash Travel Exchanges EbixCash Travel revenues are primarily derived from commissions and transaction fees received from various travel providers and international exchanges involved in the sale of travel to the consumer. EbixCash Travel revenue is for a single performance obligation and is recognized at a point in time. Travel revenues include reservation commissions, segment fees from global travel exchange providers, and transaction net revenues (i.e., the amount charged to travelers less the amount owed to travel service providers) in connection with our reservation services; ancillary fees, including travel insurance-related revenues and certain reservation booking fees; and credit card processing rebates and customer processing fees. EbixCash Travel services include the sale of hotel rooms, airline tickets, bus tickets and train tickets. EbixCash’s Travel revenue is also derived from ticket sales, wherein the commissions payable to EbixCash Travel, along with any transaction fees paid by travel providers and travel exchanges, is recognized as revenue after completion of the service. The transaction price on such services is agreed upon at the time of the purchase. EbixCash Travel revenue for the corporate MICE (Meetings, Incentives, Conferences, and Exhibitions) packages is recognized at full purchase value at the completion of the obligation with the corresponding costs recorded under direct expenses. For MICE revenues, EbixCash Travel acts as the principal in transactions and, accordingly, reports revenue on a gross basis. EbixCash Travel controls the service at all times prior to transfer to the customer, is responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. EbixCash Money Transfer For the EbixCash money transfer business, EbixCash has one performance obligation whereupon the customer engages EbixCash to perform one integrated service. This typically occurs instantaneously when the beneficiary entitled to receive the money transferred by the sender visits the EbixCash outlet and collects the money. Accordingly, EbixCash recognizes revenue upon completion of the following: 1) the customer’s acknowledgment of EbixCash’s terms and conditions and the receipt of payment information, 2) the money transfer has been processed, 3) the customer has received a unique transaction identification number, and 4) funds are available to be picked up by the beneficiary. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by EbixCash to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated. Foreign Exchange and Payment Services For EbixCash’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with EbixCash to provide payment services on the customer’s behalf. In the majority of EbixCash’s foreign exchange and payment services transactions, EbixCash makes payments to the recipient to satisfy its performance obligation to the customer, and, therefore, EbixCash recognizes revenue on foreign exchange and payment when this performance obligation has been fulfilled. Consumer Payment Services EbixCash offers several different bill payment services that vary by considerations such as: 1) who pays the fee to EbixCash (consumer or biller), 2) whether or not the service is offered to all consumers, 3) whether the service is restricted to existing biller relationship of EbixCash, and 4) whether the service utilizes a physical agent network offered for consumers’ convenience, among other factors. The determination of which party is EbixCash’s customer for revenue recognition purposes is based on these considerations for each of EbixCash’s bill payment services. For all transactions, EbixCash’s customers agree to EbixCash’s terms and conditions, either at the time of initiating a transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a contract with EbixCash to provide services on the biller’s behalf (where the biller is determined to be the customer for revenue recognition purposes). As with consumer money transfers, customers engage EbixCash to perform one integrated service, collect money from the consumer and process the bill payment transaction, thereby providing the billers real-time or near real-time information regarding their customers’ payments and, thus, simplifying the billers’ collection efforts. EbixCash’s revenues from bill payment services are generated from contracts to process transactions at any time during the duration of the contract. The transaction price on bill payment services is contractual and determinable. Certain biller agreements may include per-transaction or fixed periodic rebates, which EbixCash records as a reduction to revenue. Gift Cards EbixCash sells gift cards to corporate clients and consumers that can be later redeemed at various merchants. A majority of gift card sales are virtual card sales versus physical card sales. EbixCash acts a principal in the gift card sales transactions. The Company has the risk of loss, the ability to set transaction prices and end-to-end customer care responsibilities from the time of the sale to the utliization of the gift cards by the end user. Gift card revenue is recognized at the full purchase value at the time of sale with the corresponding cost of vouchers recorded as cost of services provided. Unredeemed gift cards at September 30, 2020 are not significant to the financial results of the Company. EbixCash Technology Services EbixCash also offers on-demand technology to various providers in the area of lending, wealth & asset management, travel and logistics across the world. Insurance Exchanges Insurance Exchanges revenues are primarily derived from consideration paid by customers related to the Company's SaaS platforms, related services, and the licensing of software. A typical contract for a SaaS platform will also include services for setup, customization, transaction processing, maintenance, and/or hosting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgment. Set-up and customization services related to SaaS platforms are not considered to be distinct from the usage fees associated with the SaaS platform and, accordingly, are accounted for as a single performance obligation. These services, along with the usage or transaction fees, are recognized over the contract duration, which considers the significance of the upfront fees in the context of the contract and which may, therefore, exceed the initial contracted term. A customer's transaction volume tends to remain fairly consistent during the contract period without significant fluctuations. The invoiced amount is a reasonable approximation of the revenue that would be allocated to the related period under the variable consideration guidelines in ASC 606-10-32-40. To the extent that a SaaS contract includes subscription services or professional services, apart from the upfront customization, these are considered separate performance obligations. The Company also has separate software licensing (on premise/perpetual), unrelated to the SasS platforms, which is recognized at a point in time when the license is transferred to the customer. Contracts generally do not contain a right of return or refund provisions. The contracts often do contain overage fees, contingent fees, or service level penalties that are accounted for as variable consideration. Revenue accounted for as variable consideration is recognized using the “right to invoice” practical expedient when the invoiced amount equals the value provided to the customer. Software-as-a-Service ("SaaS") The Company allocates the transaction price to each distinct performance obligation using the relative stand-alone selling price. Determining the stand-alone selling price may require significant judgment. The stand-alone selling price is the price at which an entity has sold or would sell a promised good or service separately to a customer. The Company determines the stand-alone selling price based on the observable price of products or services sold separately in comparable circumstances, when such observable prices are available. When standalone selling price is not directly observable, the Company estimates the stand-alone selling price using the market assessment approach by considering historical pricing and other market factors. Software Licenses Software license revenues attributable to a software license that is a separate performance obligation are recognized at the point in time that the customer obtains control of the license. Subscription Services Subscription services revenues are associated with performance obligations that are satisfied over specific time periods and primarily consist of post-contract support services. Revenue is generally recognized ratably over the contract term. The Company's subscription contracts are generally for an initial three-year period with subsequent one-year automatic renewals. Transaction Fees Transaction revenue is comprised of fees applied to the volume of transactions that are processed through SaaS platforms. These fees are typically based on a per-transaction rate and are invoiced for the same period in which the transactions were processed and as the performance obligation is satisfied. The amount invoiced generally equals the value provided to the customer, and revenue is typically recognized when invoiced using the as-invoiced practical expedient. Professional Services Professional service revenue primarily consists of fees for setup, customization, training, or consulting services. Professional service fees are generally on either a time and materials basis or a fixed fee basis. Revenues for time and materials are recognized as such services are rendered, while fixed fee revenues are recognized based on the input method that is driven by the expected hours to complete the project measured against the actual hours completed to date. Professional services, particularly related to SaaS platforms, may have significant dependencies on the related licensed software and may not be considered a distinct performance obligation. Risk Compliance Solutions ("RCS") RCS revenues consist of two revenue streams - Certificates of Insurance (COI) and Consulting Services. COI revenues are derived from consideration paid by customers for the creation and tracking of certificates of insurance. These are transactional-based revenues. Consulting Services revenues are driven by distinct consulting service engagements rendered to customers, for which revenues are recognized using the output method on a time and material basis as the services are performed. COI Creation and Tracking The Company provides services to issue and track certificates of insurance in the United States and Australian markets. Revenue is derived from transaction fees for each certificate issued or tracked. The Company recognizes revenue at the issuance of each certificate or over the period the certificate is being tracked. Consulting Services The Company provides consulting services to clients around the world for project management and development. Consulting services fees are generally on either a time and materials basis or a fixed fee basis. Revenues for time and materials are recognized using an output method as the services are rendered, while fixed fee revenues are recognized based on the input method that is driven by the expected hours to complete the project measured against the actual hours completed to date. Disaggregation of Revenue The following tables present revenue disaggregated by primary geographical regions and product/service channels for the three and nine months ended September 30, 2020 and 2019:
The Company’s revenues are derived from three product/service channels: EbixCash Exchanges, Insurance Exchanges, and Risk Compliance Solutions ("RCS"). Presented in the table below is the breakout of our revenue streams for each of those product/service channels for the three and nine months ended September 30, 2020 and 2019.
Costs to Obtain and Fulfill a Contract The Company’s capitalized costs are primarily derived from the fulfillment of SaaS-related setup and customizations, from which the customer receives benefit through continued access to and use of the SaaS product platforms. In accordance with the guidance in ASC 340-40-25-5, we capitalize the costs directly related to the setup and development of these customizations, which satisfy the Company’s performance obligation with respect to access to the Company’s underlying product platforms. The capitalized costs primarily consist of the salaries of the developers directly involved in fulfilling the project and are solely based on the time spent on that project. The Company amortizes the capitalized costs ratably over the expected useful life of the related customizations, matching our treatment for the related revenue, and the capitalized costs are recoverable from profit margin included in the contract. At September 30, 2020 and December 31, 2019, the Company had $664 thousand and $734 thousand, respectively, of contract costs in “Other current assets” and $1.0 million and $1.2 million, respectively, in “Other assets” on the Company's Condensed Consolidated Balance Sheets.
Contract Liabilities Contract liabilities include payments or billings that have been received or made prior to performance. In certain cases, cash collections pertain to maintenance and support fees, initial setup or registration fees under hosting agreements, software license fees received in advance of delivery and acceptance, and software development fees paid in advance of completion and delivery. Approximately $6.2 million and $6.4 million of contract liabilities were included in billed accounts receivable as of September 30, 2020 and December 31, 2019, respectively. The Company records contract liabilities 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 the Company's SaaS platforms over a specified period of time. These advanced payments are recognized as the related performance obligation is fulfilled (generally less than one year). Part of the Company's performance obligation for these contracts consists of the requirement to provide customers with continued access to, and use of the SaaS platforms and associated customizations. Without continued access to the SaaS platform, the customizations have no separate benefit to the customer. Customers simultaneously receive and consume the benefits as we provide access over time. The remaining portion of the contract liabilities 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.
Accounts Receivable and the Allowance for Doubtful Accounts—As of September 30, 2020, reported accounts receivable of $132.1 million (net of $21.9 million allowance for doubtful accounts receivable) includes $38.7 million of contract assets. As of December 31, 2019, reported accounts receivable of $153.6 million (net of $21.7 million allowance for doubtful accounts receivable) includes $35.3 million of contract assets. The Company records a contract asset when revenue recognized on a contract exceeds the billings. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional. These contract assets are primarily related to project based revenue where we recognize revenue using the input method calculated using expected hours to complete the project measured against the actual hours completed to date. The Company recognized bad debt provision for doubtful accounts in the amount of $474 thousand and $424 thousand for the three and nine month periods ended September 30, 2020, respectively, and $11.9 million and $10.6 million for the three and nine month periods ended September 30, 2019, respectively. Management specifically analyzes accounts receivable, historical bad debts, write-offs, customer concentrations, customer credit-worthiness, current economic trends and changes in our customer payment terms when evaluating the adequacy of the allowance for doubtful accounts. During the third quarter of 2019, the Company recorded a $12.1 million provision for doubtful account against the receivables due from a public sector entity, BSNL, in India. Goodwill and Indefinite-Lived Intangible Assets—Goodwill represents the cost in excess of the fair value of the identifiable net assets from the businesses that we acquire. In accordance with ASC 350, “Goodwill and Other Intangible Assets" and ASU No. 2011-08, “Testing Goodwill for Impairment”, goodwill is tested for impairment at the reporting unit level on an annual basis or on an interim basis if an event occurred or circumstances change that would indicate that fair value of our reporting unit decreased below its carrying value. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, customer retention and the sale or disposition of a significant portion of the business. The Company applies the accounting guidance concerning goodwill impairment evaluation, whereby the Company first assesses certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of a reporting unit was less than its carrying amount. If after assessing the totality of events and circumstances, we were to determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we would perform quantitative impairment testing. We perform our annual goodwill impairment evaluation and testing as of October 1st of each year or, when events or circumstances dictate, more frequently. No goodwill impairments have occurred nor recognized in 2019 or through September 30, 2020. The Company has considered the guidance within ASC 350 “Goodwill and Other Intangible Assets” and ASC 280 “Segment Reporting” in concluding that Ebix effectively operates as one operating and reportable segment and one reporting unit. The Company’s indefinite-lived assets are primarily associated with the estimated fair value of the contractual customer relationships existing with the property and casualty insurance carriers in Australia using the Company's property and casualty ("P&C") data exchange. Indefinite-lived intangible assets are not amortized, but rather are tested for impairment annually and tested on an interim basis if a triggering event has occurred. Capitalized Software Development Costs—In accordance with the relevant FASB accounting guidance regarding the development of software to be sold, leased or marketed, the Company expenses such costs as they are incurred until technological feasibility has been established, at and after which time those costs are capitalized until the product is available for general release to customers. Costs incurred to enhance our software products, after general market release of the services using the products, are expensed in the period they are incurred. See Note 10 "Capitalized Software Development Costs" for further details. Finite-lived Intangible Assets—Purchased intangible assets represent the estimated acquisition date fair value of customer relationships, developed technology, trademarks and non-compete agreements obtained in connection with the businesses we acquire. We amortize these intangible assets on a straight-line basis over their estimated useful lives, as follows:
Foreign Currency Translation—The functional currency is the U.S. Dollar for the Company's foreign subsidiaries in Dubai and Singapore, because the intellectual property research and development activities provided by its Dubai and Singapore subsidiaries are in support of the Company's operating divisions across the world, which are primarily transacted in U.S. Dollars. During the three months ended September 30, 2020, the net change in the cumulative foreign currency translation account, which is a component of accumulated other comprehensive loss within stockholders’ equity, was an unrealized gain of $18.2 million, of which $16.6 million was caused by the 2.2% strengthening of the Indian rupee. During the nine months ended September 30, 2020, the net change in the cumulative foreign currency translation account, which is a component of accumulated other comprehensive loss within stockholders’ equity, was an unrealized loss of $35.9 million, of which $29.6 million was caused by the 2.9% weakening of the Indian rupee. The functional currency of the Company's other foreign subsidiaries is the local currency of the country in which the subsidiary operates. The assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at the rates of exchange at the balance sheet dates. Income and expense accounts are translated at the average exchange rates in effect during the period. Gains and losses resulting from translation adjustments are included as a component of accumulated other comprehensive income in the accompanying Condensed Consolidated Balance Sheets, and are included in the Condensed Consolidated Statements of Comprehensive Income. Foreign exchange transaction gains and losses that are derived from transactions denominated in a currency other than the subsidiary's functional currency are included in the determination of net income. Income Taxes—Deferred income taxes are recorded to reflect the estimated future tax effects of differences between the financial statement and tax basis of assets, liabilities, operating losses, and tax credit carry forwards using the tax rates expected to be in effect when the temporary differences reverse. Valuation allowances, if any, are recorded to reduce deferred tax assets to the amount management considers more likely than not to be realized. Such valuation allowances are recorded for the portion of the deferred tax assets that are not expected to be realized based on the levels of historical taxable income and projections for future taxable income over the periods in which the temporary differences will be deductible. The Company applies the relevant FASB accounting guidance on accounting for uncertainty in income taxes positions. This guidance clarifies the accounting for uncertainty in income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. In this regard we recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Recent Relevant Accounting Pronouncements—The following is a brief discussion of recently released accounting pronouncements that are pertinent to the Company's business: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): “Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 was issued in response to concerns about structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), Regulators around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The amendments in this update provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects) of reference rate reform on financial reporting. The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update are elective and are effective upon issuance for all entities. The adoption of this pronouncement is not expected to have a material impact on the Company’s operations. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes". ASU 2019-12 is expected to reduce the cost and complexity related to the accounting for income taxes by eliminating the need for an entity to analyze whether the following apply to a given reporting period: • Exception to the incremental approach for intra period tax allocation; • Exceptions to accounting for basis differences when there are ownership changes in foreign investments; and • Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is in the process of assessing the impact of ASU 2019-12 on its operations. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 is intended to improve the effectiveness of ASC 820’s disclosure requirements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The ASU resulted in the following changes: •Removed the disclosure to report the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; •Removed the disclosure of the policy for timing of transfers between levels; •Added a disclosure for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value; and •Added a disclosure for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurement. The adoption of ASU 2018-13 has not had a material impact on the Company’s operations. The Company will continue to periodically assess the impact of this new pronouncement on its ongoing operations. In June 2016, the FASB issued ASU 2016-13. Financial Instruments - Credit Losses (Topic 326). The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of ASU 2016-13 has not had a material impact on the Company’s operations. The Company continues to periodically assess the impact of this new pronouncement on its ongoing operations.
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Earnings Per Share | Earnings per Share A reconciliation between basic and diluted earnings per share is as follows:
The number of potential issuable shares with respect to stock options, which could dilute EPS in the future but which were excluded from the diluted EPS calculation because presently their effect is anti-dilutive for the three and nine months ended September 30, 2020 and 2019 were 181,875 and 181,875, respectively and 145,875 and 145,875, respectively.
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Business Combinations | Business Combinations The Company seeks to execute accretive business acquisitions (which primarily targets businesses that are complementary to Ebix's existing products and services), in combination with organic growth initiatives, as part of its comprehensive business growth and expansion strategy. During the nine months ending September 30, 2020, the Company completed one business acquisition. Effective May 4, 2020, Ebix acquired India-based Trimax IT Infrastructure & Services Ltd ("Trimax"), which provides IT and integration services to state-owned transport corporations, operates data centers, and is an IT infrastructure solution provider, for approximately $9.9 million of upfront consideration. The valuation and purchase price allocation remains preliminary and will be finalized in the fourth quarter. During the twelve months ended December 31, 2019, the Company completed three business acquisitions, as follows: Effective August 23, 2019, Ebix acquired Canada based Wall Street Finance (Canada) Ltd. ("Wallstreet Canada") foreign exchange and outward remittance markets for approximately $2.1 million of upfront consideration plus net working capital. Effective January 1, 2019, Ebix acquired the assets of India based Essel Forex Limited ("Essel Forex"), for approximately $8.7 million, plus possible future contingent earn-out payments of up to $721 thousand based on earned revenues. Ebix funded the entire transaction in cash using its internal cash reserves. Essel Forex is a large provider of foreign exchange services in India with a wide spectrum of related products including sales of all major currencies, travelers’ checks, demand drafts, remittances, money transfers and prepaid cards primarily for corporate clients. The earn-out period expired on December 31, 2019 and the acquired business did not meet the requisite revenue target, so no earnout payment was due or paid. Effective January 1, 2019, Ebix acquired an 80% controlling stake in India based Zillious Solutions Private Limited ("Zillious") for $10.1 million plus possible future contingent earn-out payments of up to $2.2 million based on agreed-upon milestones in the acquisition agreement. Zillious is an on-demand SaaS travel technology solution in the corporate travel segment in India. The Company has determined that the fair value of the contingent earn-out consideration is zero as of September 30, 2020. A significant component of the purchase price consideration for many of the Company's business acquisitions is a potential subsequent cash earn-out payment based on reaching certain specified future revenue targets. The terms for the contingent earn- out payments in most of the Company's business acquisitions typically address the GAAP recognizable revenues achieved by the acquired entity over a one-, two-, and/or three-year period subsequent to the effective date of their acquisition by Ebix. These terms typically establish a minimum threshold revenue target with achievement of revenues recognized over that target being awarded in the form of a specified cash earn-out payment. The Company applies these terms in its calculation and determination of the fair value of contingent earn-out liabilities for purchased businesses as part of the related valuation and purchase price allocation exercise for the corresponding acquired assets and liabilities. The Company recognizes these potential obligations as contingent liabilities and are reported as such on its Condensed Consolidated Balance Sheets. As discussed in more detail in Note 1, these contingent consideration liabilities are recorded at fair value on the acquisition date and are remeasured quarterly based on the then assessed fair value and adjusted if necessary. During the three and nine months ended September 30, 2020, these aggregate contingent accrued earn-out business acquisition consideration liabilities were reduced by $0.0 and $3.3 million. During the three and nine month periods ended September 30, 2019, these aggregate contingent accrued earn-out business acquisition consideration liabilities were reduced by $0.0 and $17.1 million, respectively. These adjustments were due to remeasurements based on the then assessed fair value and changes in anticipated future revenue levels, with the offset being a reduction to general and administrative expenses as reported on the Condensed Consolidated Statements of Income. As of September 30, 2020, the total of these contingent liabilities was $3.4 million, of which zero is reported in long-term liabilities and $3.4 million is included in current liabilities in the Company's Condensed Consolidated Balance Sheet. As of December 31, 2019, the total of these contingent liabilities was $10.1 million, of which $1.5 million was reported in long-term liabilities and $8.6 million was included in current liabilities in the Company's Condensed Consolidated Balance Sheet. Consideration paid by the Company for the businesses it purchases is allocated to the assets and liabilities acquired based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair values of assets acquired (including identified intangible assets acquired) and liabilities assumed is recorded as goodwill. In the table below the aggregated unaudited pro forma financial information pertains to all of the Company's acquisitions that have an impact on the financial results for the nine months ended September 30, 2020 and September 30, 2019, which includes the acquisitions Wallstreet Canada (acquired August 2019), and Trimax (acquired May 2020) and is provided for informational purposes only and is not a projection of the Company's expected results of operations for any future period. No effect has been given in this pro forma information for future synergistic benefits that may still be realized as a result of combining these companies or costs that may yet be incurred in integrating their operations. The 2020 and 2019 pro forma financial information below assumes that all business acquisitions made during this period were made on January 1, 2019, whereas the Company's reported financial statements for the nine months ended September 30, 2020 and 2019 only include the operating results from these businesses since the effective date that they were acquired by Ebix.
The above referenced unaudited pro forma information and the relative comparative changes in pro forma and reported revenues are based on the following premises: •2020 and 2019 pro forma revenue contains actual revenue of the acquired entities before the acquisition date, as reported by the sellers, as well as actual revenue of the acquired entities after acquisition, whereas the reported growth in revenues of the acquired entities after the acquisition date are only reflected for the period after their acquisition. •Revenue billed to existing clients from the cross selling of acquired products has been assigned to the acquired section of our business. •Any existing products sold to new customers obtained through a newly acquired customer base are assigned to the acquired section of our business. •Pro formas do not include post acquisition revenue reductions as a result of discontinuation of any product lines and/or customer projects by Ebix in line with the Company's initiatives to maximize profitability. •The impact from fluctuations of the exchange rates for the foreign currencies in the countries in which we conduct operations also partially affected reported revenues. During the three and nine months ending September 30, 2020, the change in foreign currency exchange rates decreased consolidated operating revenues by $5.9 million and $15.9 million, respectively.
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Debt |
9 Months Ended |
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Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt On May 7, 2020, Ebix entered into the Tenth Amendment (the “Amendment”) to the Regions Secured Credit Facility, dated August 5, 2014, among the Company, Regions Bank as Administrative and Collateral Agent (“Regions”) and certain other lenders party thereto (as amended, the “Credit Agreement”). The Amendment provides for, among other things, increased flexibility under financial maintenance covenants, which the Company sought in part due to the unforeseen negative effects of the COVID-19 pandemic. On March 30, 2020, the Company and certain of its subsidiaries entered into the Waiver related to the Credit Facility. The Waiver provides that so long as the Company’s leverage ratio is below 5.0 to 1.0 for the Company’s fiscal quarter ending March 31, 2020 pursuant to the terms of its compliance certificate required by the Credit Facility, the existing leverage ratio requirement of 3.50 to 1.0 will be waived. On September 27, 2019, the Company and certain of its subsidiaries entered into the Ninth Amendment (the “Ninth Amendment”) to the Credit Agreement which amended the definitions of “Consolidated EBITDA" to add back the derivative legal settlement, “Indebtedness” to disqualify equity interests to be issued regarding the Yatra Online acquisition, and modified the maximum consolidated net debt leverage ratio allowed. At September 30, 2020, the Company's Condensed Consolidated Balance Sheets include $5.5 million of remaining deferred financing costs in connection with this Credit Agreement, which are being amortized as a component of interest expense over the five-year term of the financing agreement. In regards to these deferred financing costs, $3.3 million pertains to the revolving line of credit component of the Credit Agreement, and $2.2 million pertains to the term loan component of the Credit Agreement, of which $920 thousand is netted against the current portion and $1.3 million is netted against the long-term portions of the term loan as reported on the Condensed Consolidated Balance Sheets. At December 31, 2019, the Company's Condensed Consolidated Balance Sheets included $5.2 million of remaining deferred financing costs with $3.1 million pertaining to the revolving line of credit component of the Credit Agreement, and $2.1 million pertaining to the term loan component of the Credit Agreement, of which $575 thousand was netted against the current portion and $1.5 million was netted against the long-term portions of the term loan as reported on the Condensed Consolidated Balance Sheets. At September 30, 2020, the outstanding balance on the revolving line of credit under the Credit Agreement was $439.4 million and the facility carried an interest rate of 3.50%. During the nine months ended September 30, 2020, the Company drew $1.4 million from its revolving credit facility. The revolving line of credit balance is included in the long-term liabilities section of the Condensed Consolidated Balance Sheets. During the three and nine months ended September 30, 2020, the average and maximum outstanding balances of the revolving line of credit component of the credit facility were $439.4 million and 439.4 million, respectively, and $438.8 million, and $439.4 million, respectively. At December 31, 2019, the outstanding balance on the revolving line of credit with Regions was $438.0 million and the facility carried an interest rate of 4.25%. This balance was included in the long-term liabilities section of the Condensed Consolidated Balance Sheets. During 2019, the average and maximum outstanding balances on the revolving line of credit were $437.2 million and $438.0 million, respectively. At September 30, 2020, the outstanding balance on the term loan was $261.1 million, of which $22.6 million is due within the next twelve months. $5.6 million and $15.1 million of scheduled amortization payments were made during the three and nine months ended September 30, 2020, respectively. This term loan also carried an interest rate of 3.5% . The current and long-term portions of the term loan are included in the respective current and long-term sections of the Condensed Consolidated Balance Sheets, the amounts of which were $22.6 million and $238.5 million, respectively at September 30, 2020. At December 31, 2019, the outstanding balance on the term loan was $276.2 million, of which $20.7 million was due within twelve months. This term loan also carried an interest rate of 4.25%. The Company maintains working capital debt facilities with banks in India for working capital funding requirements to support our foreign exchange and payment remittance businesses. We are required to extend short term credits to franchisee networks (B2B) and corporate customers. Additionally we are required to maintain minimum levels of foreign currency inventory across branches and airport operations. Typically, these facilities carry interest rates of 6.75% to 9.45%, are rupee-denominated working capital lines, and are collateralized against the receivables of these businesses and existing foreign currency inventory on hand. As of September 30, 2020 and December 31, 2019, the total of these working capital facilities was $7.5 million and $28.4 million, respectively, and is included in current liabilities in the Company's Condensed Consolidated Balance Sheets.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Contingencies— On July 16, 2019, Yatra Online, Inc. ("Yatra"), Ebix, Inc. ("Ebix"), and EbixCash Travels, Inc. ("Merger Sub") entered into a Merger Agreement. On May 14, 2020, Yatra entered into an agreement with Ebix and Merger Sub extending the outside date of the Merger Agreement (the "Extension Agreement"). On June 5, 2020, Yatra terminated the Merger Agreement and filed a complaint in the Delaware Court of Chancery against Ebix and Merger Sub (the "Complaint"). On September 25, 2020, Yatra amended the Complaint and added as a defendant each financial institution (each, a “Defendant Lender”) party to that certain credit facility between them and Ebix, most recently amended on May 7, 2020 (the “Credit Facility”). The Complaint, as amended, alleges that Ebix and Merger Sub breached certain representations, warranties, and covenants contained in the Merger Agreement and the Extension Agreement and that Ebix negotiated in bad faith. The amended Complaint also alleges fraudulent actions by Ebix and the Defendant Lenders arising from certain terms of the Credit Agreement and tortious interference with the closing of the Merger Agreement by Ebix and the Defendant Lenders. The Complaint seeks, among other relief, damages, pre-judgment and post-judgment interest, and attorneys' fees and costs. Ebix and Merger Sub deny any liability and intend to defend the action vigorously. On May 12, 2017, Ebix Software India Pvt. Ltd. (“Ebixcash”) entered into several agreements with the most prominent shareholders of Itz Cash Card Limited (“Itz”), the most relevant among these a stock purchase agreement (the “SPA”), to purchase a majority ownership stake in Itz. Further, as part of the overall purchase of Itz, a share purchase agreement between Ebixcash and individual ESOP holders of Itz was entered into on July 7, 2017 (the “ESOP SPA”) (with the SPA, the ESOP SPA and the other purchase documents, collectively, the “Transaction Documents”). Part of the consideration for Ebixcash’s purchase of Itz consisted of two individual potential earn-out payments, the first for the period for the year ended March 31, 2019 (the “First Earn-Out”) and the second for the following year, ending on March 31, 2020 (the “Second Earn-Out”). Neither the First Earn-Out nor the Second Earn-Out were achieved pursuant to the terms of the SPA. After correspondence between the parties between September 2019 and May 2020, the former shareholders of Itz (“Sellers”) sent Ebixcash notices of arbitration (“NOAs”) under which they were availing themselves of the arbitration dispute provisions set forth in the Transaction Documents. Apart from the amounts claimed owed under the earn-out provisions, the Sellers also alleged in the NOAs other violations of the terms of the Transaction Documents, including, certain non-competition and restricted matter approval violations. Presently, the parties are in the process of selecting arbitrators. The Company believes that each of the Sellers claims is without merit and continues to defend its position vigorously. The Company believes that Ebixcash has several viable counterclaims related to improper termination of the Transaction Documents and violation non-compete provisions. As the Company previously disclosed, in May 2013, twelve putative class action complaints were filed in the Delaware Court of Chancery against the Company and its board of directors challenging a proposed merger between the Company and an affiliate of Goldman Sachs & Co. On June 10, 2013, the Court entered an Order of Consolidation and Appointment of Lead Plaintiffs and a Leadership Structure consolidating the twelve actions and appointing lead plaintiffs (“Plaintiffs”) and lead counsel in the litigation, captioned In re Ebix, Inc. Stockholder Litigation, Consol. C.A. No. 8526-VCS (the “Litigation”). In connection with the Litigation, on January 23, 2019, the parties entered into a Stipulation and Agreement of Settlement (the “Settlement Agreement”) pursuant to which the parties agreed, subject to approval by the Delaware Court of Chancery, to settle and resolve the Litigation pursuant to the terms set forth in the Settlement Agreement (the “Litigation Settlement”). On April 5, 2019, the Delaware Court of Chancery determined that the Litigation Settlement was fair, reasonable, adequate and in the best interest of the plaintiffs, the class and the Company and awarded to plaintiffs’ counsel attorneys’ fees and expenses in the sum of $19.65 million, which was paid on May 2, 2019, and entered an Order and Final Judgment (the “Order”) approving the Litigation Settlement. The Order provided for full settlement, satisfaction, compromise and release of all claims that were asserted or could have been asserted in the Litigation, whether on behalf of the class or the Company. The Settlement contains no admission of wrongdoing or liability, and may not be deemed to be a presumption as to the validity of any claims, causes of action or other issues. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded a net income tax benefit of $0.2 million (0.64%) and net income tax expense of $2.8 million (3.77%) during the three and nine months ended September 30, 2020, respectively, which included discrete items. Tax benefit of $2.4 million and $1.9 million resulted from certain discrete items related to stock compensation, return to provision adjustments and uncertain tax positions during the three and nine months ended September 30, 2020, respectively. The income tax expense, exclusive of discrete items, was $2.2 million (9.23%) and $4.7 million (6.31%) during the three and nine months ended September 30, 2020, respectively. The Company expects its full year effective tax rate to be in the range of 6% to 7%. As of September 30, 2020 and December 31, 2019 a liability of $8.0 million and $9.2 million for uncertain tax positions is included in other long-term liabilities of the Company's Condensed Consolidated Balance Sheets. The Company decreased this liability reserve during the three and nine months ended September 30, 2020 by $1.4 million and $1.2 million, respectively. For the three and nine month periods ended September 30, 2019 there were no reductions to the liability. The Company recognizes interest accrued and penalties related to unrecognized tax benefits as part of income tax expense. Subsequent to February 29, 2020, the Coronavirus Aid, Relief and Economic Security Act ("CARES ACT") was signed into law on March 27, 2020. the CARES Act includes income and payroll tax provisions that we are continuing to analyze to determine the financial impact on our condensed financial statements.
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Geographic Information |
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Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Geographic Information | Geographic Information The Company operates within one reportable segment whose results are regularly reviewed by the Company's CEO, its chief operating decision maker as to performance and allocation of resources. External customer revenues in the tables below are attributed to a particular country based on whether the customer had a direct contract with the Company which was executed in that particular country for the sale of the Company's products/services from an Ebix subsidiary located in that country. The following enterprise-wide information relates to the Company's geographic locations, with almost all geographies being impacted in varying degrees by the COVID-19 pandemic:
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Investment in Joint Ventures |
9 Months Ended |
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Sep. 30, 2020 | |
Investment in Joint Ventures [Abstract] | |
Investment in Joint Ventures | Investment in Joint Ventures Effective February 2016, Ebix and Vayam Technologies Ltd ("Vayam") formed a joint venture named Ebix Vayam Limited JV. This joint venture was established to carry out IT projects in the government sector of the country of India, particularly in regards to the implementation of e-governance projects in the areas of education and healthcare. Ebix has a 51% equity interest in the joint venture, and Vayam has a 49% equity interest in the joint venture. Ebix is fully consolidating the operations of the Ebix Vayam Limited JV into the Company's financial statements and separately reporting the Vayam minority, non-controlling interest in the joint venture's net income and equity. Vayam is also a customer of the Ebix Vayam Limited JV, and during the three and nine months ended September 30, 2020 the Ebix Vayam Limited JV recognized $0 and $397 thousand of revenue from Vayam, respectively. During the three and six months ended September 30, 2019 the Ebix Vayam Limited JV recognized $198 thousand and $444 thousand of revenue from Vayam, respectively. As of September 30, 2020, the Ebix Vayam Limited JV had $18.1 million of accounts receivable with Vayam, net of the estimated allowance for doubtful accounts receivable in the amount of $11.6 million. As of December 31, 2019, the Ebix Vayam Limited JV had $22.8 million of accounts receivable with Vayam, net of the estimated allowance for doubtful accounts receivable in the amount of $12.1 million, this provision for doubtful account against receivables due from a public sector entity, BSNL, in India. Effective September 2015, Ebix and IHC formed the joint venture EbixHealth JV. This joint venture was primarily established to promote and market an administrative data exchange for health insurance lines of business nationally. Ebix has a 51% equity interest in the joint venture and IHC has a 49% equity interest the joint venture. Ebix is fully consolidating the operations of the EbixHealth JV into the Company's financial statements and separately reporting the EbixHealth JV non-controlling interest in the joint venture's net income and equity. IHC is also a customer of the EbixHealth JV, and during the three and nine months ended September 30, 2020 the EbixHealth JV recognized $462 thousand and $1.5 million, respectively, of revenue from IHC. During the three and nine months ended September 30, 2019 the EbixHealth JV recognized $660 thousand and $2.2 million, respectively, of revenue from IHC. As of September 30, 2020 and December 31, 2019, the EbixHealth JV had $260 thousand and $335 thousand of accounts receivable from IHC, respectively. Furthermore, as a related party, IHC also has been and continues to be a customer of Ebix, and during the three and nine months ended September 30, 2020 the Company recognized $29 thousand and $101 thousand revenue from IHC, respectively. During the three and nine months ended September 30, 2019 the Company recognized $20 thousand and $58 thousand revenue from IHC, respectively. As of September 30, 2020 and December 31, 2019, IHC had $17 thousand and $8 thousand of accounts receivable with Ebix. The EbixHealth JV has a $1.8 million note due to IHC. Additionally, based on the final purchase price allocation valuation report for the EbixHealth JV it was concluded that the customer relationship with IHC, our joint venture partner, to be by its nature, an indefinite-lived customer relationship, and is recorded at a value of $11.2 million.
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Goodwill, Finite-Lived, and Indefinite-Lived Intangibles |
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Goodwill Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, Finite-Lived, and Indefinite-Lived Intangibles | Goodwill, Finite-Lived, and Indefinite-Lived Intangibles Changes in the carrying amount of goodwill for the nine months ended September 30, 2020 and the year ended December 31, 2019 are reflected in the following table.
The carrying value of finite-lived and indefinite-lived intangible assets at September 30, 2020 and December 31, 2019 are as follows:
As a part of the 2009 acquisition of E-Z Data Ebix recognized a $14.2 million indefinite-lived intangible asset associated with acquired corporate customer relationships. During the third quarter 2020, the Company identified a potential indicator of impairment and performed a quantitative analysis to test for impairment. The Company determined the fair value of the intangible assets exceeded its carrying value, however the Company determined that the intangible asset no longer had an indefinite life. The Company has reclassified the $14.2 million to finite-lived and will amortize the value of this intangible over an estimated remaining useful life of 15 years. In the third quarter of 2020 and each quarter subsequent, Ebix will recognize approximately $237 thousand of amortization related to the E-Z Data corporate customer relationships acquired. Amortization expense recognized in connection with acquired intangible assets was $2.4 million and $7.1 million for the three and nine month periods ended September 30, 2020, respectively and $2.7 million and $7.9 million for the three and nine month periods ended September 30, 2019.
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Capitalized Software Development Costs |
9 Months Ended |
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Sep. 30, 2020 | |
Capitalized Software Development Costs Disclosure [Abstract] | |
Capitalized Software Development Costs | Capitalized Software Development Costs In accordance with ASC 350-40 “Internal-Use Software” and/or ASC 350-985 “Software”, the Company capitalizes certain qualifying software and product related development costs associated with the Company’s continuing medical education service offerings, development of the Property and Casualty underwriting insurance data exchange platform servicing the London markets, development of EbixCash’s SaaS-based Asset Management and Collection platforms, development of EbixCash’s single sign on agent and customer portal (including mobile application) and content development work related to the E-Learning business of EbixCash. During the three and nine months ended September 30, 2020 the Company capitalized $1.4 million and $4.6 million, respectively, and $1.5 million and $4.1 million for the three and nine month periods ended September 30, 2019, respectively, of such development costs. At September 30, 2020 and December 31, 2019, a total of $20.4 million and $19.2 million of remaining unamortized development costs are reported on the Company’s Condensed Consolidated Balance Sheets, respectively. During the three months ended September 30, 2020 and 2019, the Company recognized $823 thousand and $688 thousand, respectively, of amortization expense with regards to these capitalized software development costs, which is included in costs of services provided in the Company’s Condensed Consolidated Statements of Income. During the three and nine months ended September 30, 2020, the Company recognized $823 thousand and $2.5 million, respectively, of amortization expense with regards to these capitalized software development costs, which is included in costs of services provided in the Company’s Condensed Consolidated Statements of Income. During the three and nine month periods ended September 30, 2019, related amortization expense was $688 thousand and $1.9 million, respectively. The capitalized continuing medical education product costs are being amortized using a three-year to five-year straight-line methodology. The capitalized software development costs for the property and casualty underwriting insurance data exchange platform are being amortized over a period of five years. The capitalized software development costs related to EbixCash products are being amortized over a period of five years as and when the platforms/products are launched into the marketplace.
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Other Current Assets |
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Other Current Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Assets | Other Current Assets Other current assets at September 30, 2020 and December 31, 2019 consisted of the following:
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has operating and finance leases for office space, retail, data centers and certain office equipment with expiration dates ranging through 2028, with various renewal options. Only renewal options that were reasonably assured to be exercised are included in the lease liability. At September 30, 2020, the maturity of lease liabilities under Topic 842 "Leases" are as follows:
The Company's net assets recorded under operating and finance leases were $13.6 million and $19.5 million as of September 30, 2020, and December 31, 2019, respectively. The lease cost is recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative and is summarized as follows:
Other information about lease amounts recognized in our Condensed Consolidated Statement of Income is summarized as follows:
At September 30, 2020, our lease liability of $14.0 million does not include certain arrangements, which are primarily airport leases, that do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $70.0 million as follows:
Finance leases range from to five years and are primarily for office equipment. Rental expense for office and airport facilities and certain equipment subject to operating leases for the nine months ended September 30, 2020 and 2019 was $11.2 million and $28.0 million, respectively. During the third quarter of 2020, each of these airport leases remains subject to force majeure provisions resulting from COVID-19 and the cessation of the Company's airport operations. These monthly rent payments have been temporarily waived until the Company restarts airport operations. It remains uncertain when and under what conditions each payment abatement will end.
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Leases | Leases The Company has operating and finance leases for office space, retail, data centers and certain office equipment with expiration dates ranging through 2028, with various renewal options. Only renewal options that were reasonably assured to be exercised are included in the lease liability. At September 30, 2020, the maturity of lease liabilities under Topic 842 "Leases" are as follows:
The Company's net assets recorded under operating and finance leases were $13.6 million and $19.5 million as of September 30, 2020, and December 31, 2019, respectively. The lease cost is recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative and is summarized as follows:
Other information about lease amounts recognized in our Condensed Consolidated Statement of Income is summarized as follows:
At September 30, 2020, our lease liability of $14.0 million does not include certain arrangements, which are primarily airport leases, that do not meet the definition of a lease under Topic 842. Such arrangements represent further commitments of approximately $70.0 million as follows:
Finance leases range from to five years and are primarily for office equipment. Rental expense for office and airport facilities and certain equipment subject to operating leases for the nine months ended September 30, 2020 and 2019 was $11.2 million and $28.0 million, respectively. During the third quarter of 2020, each of these airport leases remains subject to force majeure provisions resulting from COVID-19 and the cessation of the Company's airport operations. These monthly rent payments have been temporarily waived until the Company restarts airport operations. It remains uncertain when and under what conditions each payment abatement will end.
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Concentrations of Credit Risk |
9 Months Ended |
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Sep. 30, 2020 | |
Concentrations of Credit Risk [Abstract] | |
Concentrations of Credit Risk | Concentrations of Credit Risk The Company is potentially subject to concentrations of credit risk in its accounts receivable. Credit risk is the risk of an unexpected loss if a customer fails to meet its contractual obligations. The Company can be directly affected by the financial condition of its customers, the loss or substantial reduction in business activity with its customers, or the inability of customers to pay its invoices. While customer activity and financial condition could have a material impact on the Company’s financial statements, management does not believe significant credit risk exists at September 30, 2020. |
Other Current Liabilities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities | Other Current Liabilities Other current liabilities at September 30, 2020 and December 31, 2019 consisted of the following:
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Description of Business and Summary of Significant Accounting Policies (Policies) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation—The accompanying unaudited condensed consolidated financial statements and these notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") with the effect of inter-company balances and transactions eliminated. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP and SEC rules have been condensed or omitted as permitted by and pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements contain adjustments (consisting only of normal recurring items) necessary to fairly present the consolidated financial position of the Company and its consolidated results of operations and cash flows. Operating results for the three and nine months ended September 30, 2020 and 2019 are not necessarily indicative of the results that may be expected for future quarters or the full year of 2020. The condensed consolidated December 31, 2019 balance sheet included in this interim period filing has been derived from the audited financial statements at that date, but does not necessarily include all of the information and related notes required by GAAP for complete financial statements. These condensed interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclassification | Reclassification - There were certain prior year amounts that have been reclassified to be consistent with current year presentation within our financial statements, specifically with respect to the presentation of receivables from service providers and payables to service agents. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted Cash | Restricted Cash - The carrying value of our restricted cash in current assets was $7.9 million and $35.1 million at September 30, 2020 and December 31, 2019, respectively. The September 30, 2020 balance consists of fixed deposits (many in the form of certificates of deposit) pledged with banks for issuance of bank guarantees and letters of credit related to its India operations. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Cost | Advertising—Advertising costs amounted to $0.8 million and $3.4 million for the three and nine month periods ended September 30, 2020, respectively, and $2.0 million and $7.6 million for three and nine month periods ended September 30, 2019, respectively. The costs are included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Income. The Company expenses advertising costs as incurred. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments—Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction. This guidance establishes a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The hierarchy reflects the degree to which objective data from external active markets are available to measure fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used for measurement are observable or unobservable. The classifications are as follows: •Level 1 Inputs - Unadjusted quoted prices available in active markets for identical investments to the reporting entity at the measurement date. •Level 2 Inputs - Other than quoted prices included in Level 1 inputs, which are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. •Level 3 Inputs - Unobservable inputs, which are used to the extent that observable inputs are not available. Unobservable inputs, are used in situations where there is little or no market activity for the asset or liability and wherein the reporting entity makes estimates and assumptions related to the pricing of the asset or liability, including assumptions regarding risk. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. As of September 30, 2020, the Company had the following financial instruments to which it had to both consider fair values and make fair value assessments: •Short-term investments (commercial bank certificates of deposits and mutual funds), for which the fair values are measured as a Level 1 instrument. •Contingent accrued earn-out business acquisition consideration liabilities, for which fair values are measured as Level 3 instruments. These contingent consideration liabilities were recorded at fair value on the acquisition date and are re-measured quarterly based on the then assessed fair value and adjusted if necessary. The increases or decreases in the fair value of contingent consideration can result from changes in anticipated revenue levels and changes in assumed discount periods and rates. As the fair value measure is based on significant inputs that are not observable in the market, they are categorized as Level 3.
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Revenue Recognition and Contract Liabilities | Revenue Recognition and Contract Liabilities—The Company derives its revenues primarily from software subscription and transaction fees, software license fees, financial transaction fees, risk compliance solution services fees, and professional service fees, including associated fees for consulting, implementation, training, and project management provided to customers with installed systems and applications. Sales and value-added taxes are not included in revenues, but rather are recorded as a liability until the taxes assessed are remitted to the respective taxing authorities. The Company determines revenue recognition by applying the following steps: •identification of the contract, or contracts, with a customer; •identification of the performance obligations in the contract; •determination of the transaction price; •allocation of the transaction price to the performance obligations in the contract; and •recognition of revenue when, or as, we satisfy a performance obligation. The Company analyzes its different services individually to determine the appropriate basis for revenue recognition, as further described below. Additionally, certain services exist in multiple channels. As Ebix derives revenues from three product/service channels, EbixCash Exchanges, Insurance Exchanges, and Risk Compliance Solutions, for policy disclosure purposes, contracts are discussed in conjunction with the channel to which they are most significant. The Company assesses the terms of customer contracts, including termination rights, penalties (implied or explicit), and renewal rights. EbixCash Exchanges ("EbixCash") EbixCash revenues are primarily derived from consideration paid by customers for financial transaction (foreign exchange, remittance, other payment solutions) and travel transaction services. The significant majority of EbixCash revenue is for a single performance obligation and is recognized at a point in time. These revenues vary by transaction based upon channel, send and receive locations, the principal amount sent, whether the money transfer involves different send and receive currencies, and speed of service, as applicable. EbixCash also offers other services, including payment services and ticketing and travel services, for which revenue is impacted by various factors. EbixCash acts as the principal in most transactions and reports revenue on a gross basis, as EbixCash controls the service at all times prior to transfer to the customer, is primarily responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. The main services from which EbixCash derives revenue are as follow: EbixCash Travel Exchanges EbixCash Travel revenues are primarily derived from commissions and transaction fees received from various travel providers and international exchanges involved in the sale of travel to the consumer. EbixCash Travel revenue is for a single performance obligation and is recognized at a point in time. Travel revenues include reservation commissions, segment fees from global travel exchange providers, and transaction net revenues (i.e., the amount charged to travelers less the amount owed to travel service providers) in connection with our reservation services; ancillary fees, including travel insurance-related revenues and certain reservation booking fees; and credit card processing rebates and customer processing fees. EbixCash Travel services include the sale of hotel rooms, airline tickets, bus tickets and train tickets. EbixCash’s Travel revenue is also derived from ticket sales, wherein the commissions payable to EbixCash Travel, along with any transaction fees paid by travel providers and travel exchanges, is recognized as revenue after completion of the service. The transaction price on such services is agreed upon at the time of the purchase. EbixCash Travel revenue for the corporate MICE (Meetings, Incentives, Conferences, and Exhibitions) packages is recognized at full purchase value at the completion of the obligation with the corresponding costs recorded under direct expenses. For MICE revenues, EbixCash Travel acts as the principal in transactions and, accordingly, reports revenue on a gross basis. EbixCash Travel controls the service at all times prior to transfer to the customer, is responsible for fulfilling the customer contracts, has the risk of loss, and has the ability to establish transaction prices. EbixCash Money Transfer For the EbixCash money transfer business, EbixCash has one performance obligation whereupon the customer engages EbixCash to perform one integrated service. This typically occurs instantaneously when the beneficiary entitled to receive the money transferred by the sender visits the EbixCash outlet and collects the money. Accordingly, EbixCash recognizes revenue upon completion of the following: 1) the customer’s acknowledgment of EbixCash’s terms and conditions and the receipt of payment information, 2) the money transfer has been processed, 3) the customer has received a unique transaction identification number, and 4) funds are available to be picked up by the beneficiary. The transaction price is comprised of a transaction fee and the difference between the exchange rate set by EbixCash to the customer and the rate available in the wholesale foreign exchange market, as applicable, both of which are readily determinable at the time the transaction is initiated. Foreign Exchange and Payment Services For EbixCash’s foreign exchange and payment services, customers agree to terms and conditions for all transactions, either at the time of initiating a transaction or signing a contract with EbixCash to provide payment services on the customer’s behalf. In the majority of EbixCash’s foreign exchange and payment services transactions, EbixCash makes payments to the recipient to satisfy its performance obligation to the customer, and, therefore, EbixCash recognizes revenue on foreign exchange and payment when this performance obligation has been fulfilled. Consumer Payment Services EbixCash offers several different bill payment services that vary by considerations such as: 1) who pays the fee to EbixCash (consumer or biller), 2) whether or not the service is offered to all consumers, 3) whether the service is restricted to existing biller relationship of EbixCash, and 4) whether the service utilizes a physical agent network offered for consumers’ convenience, among other factors. The determination of which party is EbixCash’s customer for revenue recognition purposes is based on these considerations for each of EbixCash’s bill payment services. For all transactions, EbixCash’s customers agree to EbixCash’s terms and conditions, either at the time of initiating a transaction (where the consumer is determined to be the customer for revenue recognition purposes) or upon signing a contract with EbixCash to provide services on the biller’s behalf (where the biller is determined to be the customer for revenue recognition purposes). As with consumer money transfers, customers engage EbixCash to perform one integrated service, collect money from the consumer and process the bill payment transaction, thereby providing the billers real-time or near real-time information regarding their customers’ payments and, thus, simplifying the billers’ collection efforts. EbixCash’s revenues from bill payment services are generated from contracts to process transactions at any time during the duration of the contract. The transaction price on bill payment services is contractual and determinable. Certain biller agreements may include per-transaction or fixed periodic rebates, which EbixCash records as a reduction to revenue. Gift Cards EbixCash sells gift cards to corporate clients and consumers that can be later redeemed at various merchants. A majority of gift card sales are virtual card sales versus physical card sales. EbixCash acts a principal in the gift card sales transactions. The Company has the risk of loss, the ability to set transaction prices and end-to-end customer care responsibilities from the time of the sale to the utliization of the gift cards by the end user. Gift card revenue is recognized at the full purchase value at the time of sale with the corresponding cost of vouchers recorded as cost of services provided. Unredeemed gift cards at September 30, 2020 are not significant to the financial results of the Company. EbixCash Technology Services EbixCash also offers on-demand technology to various providers in the area of lending, wealth & asset management, travel and logistics across the world. Insurance Exchanges Insurance Exchanges revenues are primarily derived from consideration paid by customers related to the Company's SaaS platforms, related services, and the licensing of software. A typical contract for a SaaS platform will also include services for setup, customization, transaction processing, maintenance, and/or hosting. Determining whether products and services are considered distinct performance obligations that should be accounted for separately may require significant judgment. Set-up and customization services related to SaaS platforms are not considered to be distinct from the usage fees associated with the SaaS platform and, accordingly, are accounted for as a single performance obligation. These services, along with the usage or transaction fees, are recognized over the contract duration, which considers the significance of the upfront fees in the context of the contract and which may, therefore, exceed the initial contracted term. A customer's transaction volume tends to remain fairly consistent during the contract period without significant fluctuations. The invoiced amount is a reasonable approximation of the revenue that would be allocated to the related period under the variable consideration guidelines in ASC 606-10-32-40. To the extent that a SaaS contract includes subscription services or professional services, apart from the upfront customization, these are considered separate performance obligations. The Company also has separate software licensing (on premise/perpetual), unrelated to the SasS platforms, which is recognized at a point in time when the license is transferred to the customer. Contracts generally do not contain a right of return or refund provisions. The contracts often do contain overage fees, contingent fees, or service level penalties that are accounted for as variable consideration. Revenue accounted for as variable consideration is recognized using the “right to invoice” practical expedient when the invoiced amount equals the value provided to the customer. Software-as-a-Service ("SaaS") The Company allocates the transaction price to each distinct performance obligation using the relative stand-alone selling price. Determining the stand-alone selling price may require significant judgment. The stand-alone selling price is the price at which an entity has sold or would sell a promised good or service separately to a customer. The Company determines the stand-alone selling price based on the observable price of products or services sold separately in comparable circumstances, when such observable prices are available. When standalone selling price is not directly observable, the Company estimates the stand-alone selling price using the market assessment approach by considering historical pricing and other market factors. Software Licenses Software license revenues attributable to a software license that is a separate performance obligation are recognized at the point in time that the customer obtains control of the license. Subscription Services Subscription services revenues are associated with performance obligations that are satisfied over specific time periods and primarily consist of post-contract support services. Revenue is generally recognized ratably over the contract term. The Company's subscription contracts are generally for an initial three-year period with subsequent one-year automatic renewals. Transaction Fees Transaction revenue is comprised of fees applied to the volume of transactions that are processed through SaaS platforms. These fees are typically based on a per-transaction rate and are invoiced for the same period in which the transactions were processed and as the performance obligation is satisfied. The amount invoiced generally equals the value provided to the customer, and revenue is typically recognized when invoiced using the as-invoiced practical expedient. Professional Services Professional service revenue primarily consists of fees for setup, customization, training, or consulting services. Professional service fees are generally on either a time and materials basis or a fixed fee basis. Revenues for time and materials are recognized as such services are rendered, while fixed fee revenues are recognized based on the input method that is driven by the expected hours to complete the project measured against the actual hours completed to date. Professional services, particularly related to SaaS platforms, may have significant dependencies on the related licensed software and may not be considered a distinct performance obligation. Risk Compliance Solutions ("RCS") RCS revenues consist of two revenue streams - Certificates of Insurance (COI) and Consulting Services. COI revenues are derived from consideration paid by customers for the creation and tracking of certificates of insurance. These are transactional-based revenues. Consulting Services revenues are driven by distinct consulting service engagements rendered to customers, for which revenues are recognized using the output method on a time and material basis as the services are performed. COI Creation and Tracking The Company provides services to issue and track certificates of insurance in the United States and Australian markets. Revenue is derived from transaction fees for each certificate issued or tracked. The Company recognizes revenue at the issuance of each certificate or over the period the certificate is being tracked. Consulting Services The Company provides consulting services to clients around the world for project management and development. Consulting services fees are generally on either a time and materials basis or a fixed fee basis. Revenues for time and materials are recognized using an output method as the services are rendered, while fixed fee revenues are recognized based on the input method that is driven by the expected hours to complete the project measured against the actual hours completed to date. Disaggregation of Revenue The following tables present revenue disaggregated by primary geographical regions and product/service channels for the three and nine months ended September 30, 2020 and 2019:
The Company’s revenues are derived from three product/service channels: EbixCash Exchanges, Insurance Exchanges, and Risk Compliance Solutions ("RCS"). Presented in the table below is the breakout of our revenue streams for each of those product/service channels for the three and nine months ended September 30, 2020 and 2019.
Costs to Obtain and Fulfill a Contract The Company’s capitalized costs are primarily derived from the fulfillment of SaaS-related setup and customizations, from which the customer receives benefit through continued access to and use of the SaaS product platforms. In accordance with the guidance in ASC 340-40-25-5, we capitalize the costs directly related to the setup and development of these customizations, which satisfy the Company’s performance obligation with respect to access to the Company’s underlying product platforms. The capitalized costs primarily consist of the salaries of the developers directly involved in fulfilling the project and are solely based on the time spent on that project. The Company amortizes the capitalized costs ratably over the expected useful life of the related customizations, matching our treatment for the related revenue, and the capitalized costs are recoverable from profit margin included in the contract. At September 30, 2020 and December 31, 2019, the Company had $664 thousand and $734 thousand, respectively, of contract costs in “Other current assets” and $1.0 million and $1.2 million, respectively, in “Other assets” on the Company's Condensed Consolidated Balance Sheets.
Contract Liabilities Contract liabilities include payments or billings that have been received or made prior to performance. In certain cases, cash collections pertain to maintenance and support fees, initial setup or registration fees under hosting agreements, software license fees received in advance of delivery and acceptance, and software development fees paid in advance of completion and delivery. Approximately $6.2 million and $6.4 million of contract liabilities were included in billed accounts receivable as of September 30, 2020 and December 31, 2019, respectively. The Company records contract liabilities 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 the Company's SaaS platforms over a specified period of time. These advanced payments are recognized as the related performance obligation is fulfilled (generally less than one year). Part of the Company's performance obligation for these contracts consists of the requirement to provide customers with continued access to, and use of the SaaS platforms and associated customizations. Without continued access to the SaaS platform, the customizations have no separate benefit to the customer. Customers simultaneously receive and consume the benefits as we provide access over time. The remaining portion of the contract liabilities 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.
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Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets—Goodwill represents the cost in excess of the fair value of the identifiable net assets from the businesses that we acquire. In accordance with ASC 350, “Goodwill and Other Intangible Assets" and ASU No. 2011-08, “Testing Goodwill for Impairment”, goodwill is tested for impairment at the reporting unit level on an annual basis or on an interim basis if an event occurred or circumstances change that would indicate that fair value of our reporting unit decreased below its carrying value. Potential impairment indicators include a significant change in the business climate, legal factors, operating performance indicators, competition, customer retention and the sale or disposition of a significant portion of the business. The Company applies the accounting guidance concerning goodwill impairment evaluation, whereby the Company first assesses certain qualitative factors to determine whether the existence of events or circumstances would indicate that it is more likely than not that the fair value of a reporting unit was less than its carrying amount. If after assessing the totality of events and circumstances, we were to determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we would perform quantitative impairment testing. We perform our annual goodwill impairment evaluation and testing as of October 1st of each year or, when events or circumstances dictate, more frequently. No goodwill impairments have occurred nor recognized in 2019 or through September 30, 2020. The Company has considered the guidance within ASC 350 “Goodwill and Other Intangible Assets” and ASC 280 “Segment Reporting” in concluding that Ebix effectively operates as one operating and reportable segment and one reporting unit. The Company’s indefinite-lived assets are primarily associated with the estimated fair value of the contractual customer relationships existing with the property and casualty insurance carriers in Australia using the Company's property and casualty ("P&C") data exchange. Indefinite-lived intangible assets are not amortized, but rather are tested for impairment annually and tested on an interim basis if a triggering event has occurred.
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Capitalized Software Development Costs | Capitalized Software Development Costs—In accordance with the relevant FASB accounting guidance regarding the development of software to be sold, leased or marketed, the Company expenses such costs as they are incurred until technological feasibility has been established, at and after which time those costs are capitalized until the product is available for general release to customers. Costs incurred to enhance our software products, after general market release of the services using the products, are expensed in the period they are incurred. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finite-lived Intangible Assets | Finite-lived Intangible Assets—Purchased intangible assets represent the estimated acquisition date fair value of customer relationships, developed technology, trademarks and non-compete agreements obtained in connection with the businesses we acquire. We amortize these intangible assets on a straight-line basis over their estimated useful lives, as follows:
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Foreign Currency Translation | Foreign Currency Translation—The functional currency is the U.S. Dollar for the Company's foreign subsidiaries in Dubai and Singapore, because the intellectual property research and development activities provided by its Dubai and Singapore subsidiaries are in support of the Company's operating divisions across the world, which are primarily transacted in U.S. Dollars. During the three months ended September 30, 2020, the net change in the cumulative foreign currency translation account, which is a component of accumulated other comprehensive loss within stockholders’ equity, was an unrealized gain of $18.2 million, of which $16.6 million was caused by the 2.2% strengthening of the Indian rupee. During the nine months ended September 30, 2020, the net change in the cumulative foreign currency translation account, which is a component of accumulated other comprehensive loss within stockholders’ equity, was an unrealized loss of $35.9 million, of which $29.6 million was caused by the 2.9% weakening of the Indian rupee. The functional currency of the Company's other foreign subsidiaries is the local currency of the country in which the subsidiary operates. The assets and liabilities of these foreign subsidiaries are translated into U.S. dollars at the rates of exchange at the balance sheet dates. Income and expense accounts are translated at the average exchange rates in effect during the period. Gains and losses resulting from translation adjustments are included as a component of accumulated other comprehensive income in the accompanying Condensed Consolidated Balance Sheets, and are included in the Condensed Consolidated Statements of Comprehensive Income. Foreign exchange transaction gains and losses that are derived from transactions denominated in a currency other than the subsidiary's functional currency are included in the determination of net income.
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Income Taxes | Income Taxes—Deferred income taxes are recorded to reflect the estimated future tax effects of differences between the financial statement and tax basis of assets, liabilities, operating losses, and tax credit carry forwards using the tax rates expected to be in effect when the temporary differences reverse. Valuation allowances, if any, are recorded to reduce deferred tax assets to the amount management considers more likely than not to be realized. Such valuation allowances are recorded for the portion of the deferred tax assets that are not expected to be realized based on the levels of historical taxable income and projections for future taxable income over the periods in which the temporary differences will be deductible. The Company applies the relevant FASB accounting guidance on accounting for uncertainty in income taxes positions. This guidance clarifies the accounting for uncertainty in income taxes by prescribing the minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. In this regard we recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Recent Relevant Accounting Pronouncements | Recent Relevant Accounting Pronouncements—The following is a brief discussion of recently released accounting pronouncements that are pertinent to the Company's business: In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): “Facilitation of the Effects of Reference Rate Reform on Financial Reporting”. ASU 2020-04 was issued in response to concerns about structural risks of interbank offered rates (IBORs), and, particularly, the risk of cessation of the London Interbank Offered Rate (LIBOR), Regulators around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The amendments in this update provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects) of reference rate reform on financial reporting. The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update are elective and are effective upon issuance for all entities. The adoption of this pronouncement is not expected to have a material impact on the Company’s operations. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): "Simplifying the Accounting for Income Taxes". ASU 2019-12 is expected to reduce the cost and complexity related to the accounting for income taxes by eliminating the need for an entity to analyze whether the following apply to a given reporting period: • Exception to the incremental approach for intra period tax allocation; • Exceptions to accounting for basis differences when there are ownership changes in foreign investments; and • Exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company is in the process of assessing the impact of ASU 2019-12 on its operations. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 is intended to improve the effectiveness of ASC 820’s disclosure requirements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within that fiscal year. The ASU resulted in the following changes: •Removed the disclosure to report the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; •Removed the disclosure of the policy for timing of transfers between levels; •Added a disclosure for the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value; and •Added a disclosure for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurement. The adoption of ASU 2018-13 has not had a material impact on the Company’s operations. The Company will continue to periodically assess the impact of this new pronouncement on its ongoing operations. In June 2016, the FASB issued ASU 2016-13. Financial Instruments - Credit Losses (Topic 326). The main objective of this ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The adoption of ASU 2016-13 has not had a material impact on the Company’s operations. The Company continues to periodically assess the impact of this new pronouncement on its ongoing operations.
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Description of Business and Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated statement of financial position to the amounts shown in the Condensed Consolidated Statement of Cash Flows:
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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:
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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 nine months ended September 30, 2020 and during the year ended December 31, 2019:
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Fair Value, Significant Unobservable Inputs Used in Measurement of Contingent Consideration Liabilities | The significant unobservable inputs used in the fair value measurement of the Company's contingent consideration liabilities designated as Level 3 are as follows:
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Schedule of Disaggregation of Revenue | Disaggregation of Revenue The following tables present revenue disaggregated by primary geographical regions and product/service channels for the three and nine months ended September 30, 2020 and 2019:
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Schedule of Revenue by Product/Service Groups | Presented in the table below is the breakout of our revenue streams for each of those product/service channels for the three and nine months ended September 30, 2020 and 2019.
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Contract with Customer, Asset and Liability | At September 30, 2020 and December 31, 2019, the Company had $664 thousand and $734 thousand, respectively, of contract costs in “Other current assets” and $1.0 million and $1.2 million, respectively, in “Other assets” on the Company's Condensed Consolidated Balance Sheets.
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Schedule of Contract Liabilities | The Company records contract liabilities 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 the Company's SaaS platforms over a specified period of time. These advanced payments are recognized as the related performance obligation is fulfilled (generally less than one year). Part of the Company's performance obligation for these contracts consists of the requirement to provide customers with continued access to, and use of the SaaS platforms and associated customizations. Without continued access to the SaaS platform, the customizations have no separate benefit to the customer. Customers simultaneously receive and consume the benefits as we provide access over time. The remaining portion of the contract liabilities 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.
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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:
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Earnings per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation Between Basic and Diluted Earnings Per Share | A reconciliation between basic and diluted earnings per share is as follows:
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Business Combinations (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information |
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Geographic Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue by Geographic Locations | The following enterprise-wide information relates to the Company's geographic locations, with almost all geographies being impacted in varying degrees by the COVID-19 pandemic:
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Goodwill, Finite-Lived, and Indefinite-Lived Intangibles (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Changes in the carrying amount of goodwill for the nine months ended September 30, 2020 and the year ended December 31, 2019 are reflected in the following table.
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Schedule of Finite-Lived and Indefinite-Lived Intangible Assets, Excluding Goodwill | The carrying value of finite-lived and indefinite-lived intangible assets at September 30, 2020 and December 31, 2019 are as follows:
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Other Current Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets | Other current assets at September 30, 2020 and December 31, 2019 consisted of the following:
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Leases (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturity of Finance Lease Liability | At September 30, 2020, the maturity of lease liabilities under Topic 842 "Leases" are as follows:
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Schedule of Maturity of Operating Lease Liability | At September 30, 2020, the maturity of lease liabilities under Topic 842 "Leases" are as follows:
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Schedule of Lease, Cost | The lease cost is recognized in our Condensed Consolidated Statement of Income in the category of General and Administrative and is summarized as follows:
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Other Operating and Finance Lease Information | Other information about lease amounts recognized in our Condensed Consolidated Statement of Income is summarized as follows:
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Schedule of Other Commitments | Such arrangements represent further commitments of approximately $70.0 million as follows:
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Other Current Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Liabilities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Liabilities | Other current liabilities at September 30, 2020 and December 31, 2019 consisted of the following:
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Description of Business and Summary of Significant Accounting Policies (Description of Business Segment Reporting) (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
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Accounting Policies [Abstract] | ||
Total revenue, international percentage | 69.30% | 68.70% |
Description of Business and Summary of Significant Accounting Policies (Restricted Cash Narrative) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
---|---|---|---|
Accounting Policies [Abstract] | |||
Restricted cash | $ 7,902 | $ 35,051 | $ 18,240 |
Description of Business and Summary of Significant Accounting Policies (Cash, Cash Equivalents, and Restricted Cash Shown in the Statement of Cash Flows) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 88,023 | $ 73,228 | $ 107,698 | |
Restricted cash | 7,902 | 35,051 | 18,240 | |
Restricted cash included in other long-term assets | 6,073 | 6,566 | ||
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows | $ 101,998 | $ 111,369 | $ 132,504 | $ 149,681 |
Description of Business and Summary of Significant Accounting Policies (Advertising Costs) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Accounting Policies [Abstract] | ||||
Advertising expense | $ 0.8 | $ 2.0 | $ 3.4 | $ 7.6 |
Description of Business and Summary of Significant Accounting Policies (Assets and Liabilities Measured at Fair Value on a Recurring Basis using Significant Unobservable Inputs) (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
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Contingent Liability for Accrued Earn-out Acquisition Consideration | ||
Beginning balance | $ 10,095 | $ 24,976 |
Gains included in earnings | (3,308) | (16,543) |
Foreign currency translation adjustments | (554) | (260) |
Business settlements | (2,881) | |
Business settlements | 1,922 | |
Ending balance | 3,352 | 10,095 |
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. | $ (3,308) | $ (16,543) |
Description of Business and Summary of Significant Accounting Policies (Quantitative Information about Level 3 Fair Value Measurements) (Details) - USD ($) $ in Thousands |
1 Months Ended | |||
---|---|---|---|---|
Oct. 31, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
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Derivative [Line Items] | ||||
Contingent liability | $ 3,352 | $ 10,095 | $ 24,976 | |
Miles Acquisition | ||||
Derivative [Line Items] | ||||
Payment for contingent consideration liability | $ 2,500 | |||
Subsequent Event | Miles Acquisition | ||||
Derivative [Line Items] | ||||
Payment for contingent consideration liability | $ 3,600 |
Description of Business and Summary of Significant Accounting Policies (Costs to Obtain and Fulfill a Contract) (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
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Accounting Policies [Abstract] | ||
Capitalized contract costs, net, current | $ 664 | $ 734 |
Capitalized contract costs, net, noncurrent | 1,000 | 1,200 |
Deferred Contract Costs [Roll Forward] | ||
Balance, beginning of period | 1,897 | 2,238 |
Costs recognized from the beginning balance | (576) | (708) |
Additions, net of costs recognized | 327 | 367 |
Balance, end of period | $ 1,648 | $ 1,897 |
Description of Business and Summary of Significant Accounting Policies (Contract Liabilities) (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
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Accounting Policies [Abstract] | ||
Deferred revenue included in accounts receivables | $ 6,200 | $ 6,400 |
Change in Contract Liabilities | ||
Balance, beginning of period | 37,253 | 44,660 |
Revenue recognized from beginning balance | (28,164) | (31,507) |
Additions from business acquisitions | 0 | 769 |
Additions, net of revenue recognized and currency translation | 26,192 | 23,331 |
Balance, end of period | $ 35,281 | $ 37,253 |
Description of Business and Summary of Significant Accounting Policies (Accounts Receivables and Allowances) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
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Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable | $ 132,089 | $ 132,089 | $ 153,565 | ||
Allowance for doubtful accounts | 21,908 | 21,908 | 21,696 | ||
Provision for doubtful accounts | 474 | $ 11,900 | 424 | $ 10,580 | |
Ebix Vayam JV | Vayam | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Allowance for doubtful accounts | 11,600 | $ 12,100 | 11,600 | $ 12,100 | 12,100 |
Billed Revenues | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable | 132,100 | 132,100 | 153,600 | ||
Unbilled Revenues | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable | $ 38,700 | $ 38,700 | $ 35,300 |
Description of Business and Summary of Significant Accounting Policies (Foreign Currency Translation) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Intercompany Foreign Currency Balance [Line Items] | ||||
Cumulative translation adjustment | $ 18,174 | $ (18,752) | $ (35,897) | $ (10,859) |
India | ||||
Intercompany Foreign Currency Balance [Line Items] | ||||
Cumulative translation adjustment | $ 16,600 | $ (29,600) | ||
Foreign currency rate change percent | 2.20% | (2.90%) |
Earnings per Share (Reconciliation between Basic and Diluted Earnings per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Net income attributable to Ebix, Inc. | $ 24,682 | $ 20,509 | $ 72,880 | $ 75,070 |
Basic weighted average shares outstanding (in shares) | 30,525,000 | 30,501,000 | 30,502,000 | 30,517,000 |
Dilutive effect of stock options and restricted stock awards (in shares) | 328,000 | 132,000 | 246,000 | 81,000 |
Diluted weighted average shares outstanding (in shares) | 30,853,000 | 30,633,000 | 30,748,000 | 30,598,000 |
Basic earnings per common share (in dollars per share) | $ 0.81 | $ 0.67 | $ 2.39 | $ 2.46 |
Diluted earnings per common share (in dollars per share) | $ 0.80 | $ 0.67 | $ 2.37 | $ 2.45 |
Potentially issuable shares with respect to stock option (in shares) | 181,875 | 145,875 | 181,875 | 145,875 |
Business Combinations (Pro Forma) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Business Acquisition, Pro Forma Information | ||||
Revenue | $ 154,305 | $ 147,233 | $ 403,493 | $ 434,432 |
Net income attributable to Ebix, Inc. | $ 24,682 | $ 20,509 | $ 72,880 | $ 75,070 |
Basic EPS (in dollars per share) | $ 0.81 | $ 0.67 | $ 2.39 | $ 2.46 |
Diluted EPS (in dollars per share) | $ 0.80 | $ 0.67 | $ 2.37 | $ 2.45 |
Wallstreet Canada and Trimax | ||||
Business Acquisition, Pro Forma Information | ||||
Revenue, pro forma | $ 154,305 | $ 151,128 | $ 408,071 | $ 448,462 |
Net Income attributable to Ebix, Inc., pro forma | $ 24,682 | $ 16,056 | $ 66,810 | $ 80,987 |
Basic EPS, pro forma (in dollars per share) | $ 0.81 | $ 0.53 | $ 2.19 | $ 2.65 |
Diluted EPS, pro forma (in dollars per share) | $ 0.80 | $ 0.52 | $ 2.17 | $ 2.65 |
Commitments and Contingencies (Narrative) (Details) |
1 Months Ended | |||||
---|---|---|---|---|---|---|
Apr. 05, 2019
USD ($)
|
Jun. 10, 2013
complaint
|
May 31, 2013
complaint
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Commitments and Contingencies [Line Items] | ||||||
Loss contingency, number of complaints filled | complaint | 12 | 12 | ||||
Contingent liability | $ 3,352,000 | $ 10,095,000 | $ 24,976,000 | |||
Contingent liability for accrued earn-out acquisition consideration | 0 | 1,474,000 | ||||
Contingent liability, current | 3,352,000 | 8,621,000 | ||||
Contingent Accrued Earn-out Acquisition Consideration | ||||||
Commitments and Contingencies [Line Items] | ||||||
Contingent liability | 3,400,000 | 10,100,000 | ||||
Business combination, contingent long term liability | 0 | 1,500,000 | ||||
Contingent liability for accrued earn-out acquisition consideration | $ 3,400,000 | $ 8,600,000 | ||||
Settled Litigation | ||||||
Commitments and Contingencies [Line Items] | ||||||
Loss contingency, legal expenses sought to be paid | $ 19,650,000 |
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Operating Loss Carryforwards [Line Items] | ||||||
Income tax expense (benefit) | $ (152) | $ (217) | $ 2,809 | $ (297) | ||
Effective income tax rate percent | 0.64% | 3.77% | ||||
Income tax benefit discrete items | $ 2,400 | $ 1,900 | ||||
Income tax expense before discrete items | $ 2,200 | $ 4,700 | ||||
Effective income tax rate excluding discrete items percent | 9.23% | 6.31% | ||||
Unrecognized tax benefits | $ 8,000 | $ 8,000 | $ 9,200 | |||
Additions for tax positions related to current year | $ 1,400 | $ 1,200 | ||||
Minimum | Forecast | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Effective income tax rate percent | 6.00% | |||||
Maximum | Forecast | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Effective income tax rate percent | 7.00% |
Goodwill, Finite-Lived, and Indefinite-Lived Intangibles (Goodwill) (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Goodwill [Roll Forward] | ||
Beginning Balance | $ 952,404 | $ 946,685 |
Additions | 7,563 | 17,931 |
Purchase accounting adjustments | 726 | 741 |
Foreign currency translation adjustments | (22,013) | (12,953) |
Ending Balance | $ 938,680 | $ 952,404 |
Other Current Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Current Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 52,918 | $ 51,021 |
Sales taxes receivable from customers | 7,588 | 6,499 |
Other third party receivables | 3,422 | 4,785 |
Credit card merchant account balance receivable | 1,251 | 796 |
Short term portion of capitalized costs to obtain and fulfill contracts | 664 | 734 |
Accrued interest receivable | 352 | 176 |
Other | 3,722 | 3,063 |
Total | $ 69,917 | $ 67,074 |
Leases (Narrative) (Details) - USD ($) $ in Thousands |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 13,604 | $ 19,544 | |
Present value of lease liabilities | 14,036 | ||
Other commitment | 69,997 | ||
Operating lease, rent expense | $ 11,200 | $ 28,000 | |
Minimum | Computer Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 3 years | ||
Maximum | Computer Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Lease term | 5 years |
Leases (Lease Costs) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Operating Lease Cost | $ 1,622 | $ 2,016 | $ 5,472 | $ 6,265 |
Finance lease cost, amortization of lease assets | 41 | 32 | 128 | 76 |
Finance lease cost, Interest on lease liabilities | 9 | 9 | 30 | 24 |
Finance Lease Cost | 50 | 41 | 158 | 100 |
Sublease Income | (113) | (99) | (338) | (521) |
Total Net Lease Cost | $ 1,559 | $ 1,958 | $ 5,292 | $ 5,844 |
Leases (Other Operating and Finance Lease Information) (Details) |
Sep. 30, 2020 |
---|---|
Other Operating and Finance Lease Information (Details) [Abstract] | |
Weighted Average Lease Term - Operating Leases | 3 years 8 months 12 days |
Weighted Average Lease Term - Finance Leases | 3 years 4 months 24 days |
Weighted Average Discount Rate - Operating Leases | 8.20% |
Weighted Average Discount Rate - Finance Leases | 7.20% |
Leases (Non lease Arrangements Future Commitments) (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
2020 (Remaining six months) | $ 6,084 |
2021 | 22,784 |
2022 | 20,821 |
2023 | 20,308 |
Thereafter | 0 |
Total | $ 69,997 |
Other Current Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Other Current Liabilities [Abstract] | ||
Customer advances (deposits) | $ 26,155 | $ 22,573 |
Acquisition obligations (upfront purchase and contingent consideration) | 3,186 | 6,762 |
Total | $ 29,341 | $ 29,335 |
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