Ebix Inc. (EBIX)
Q2 2010 Earnings Call
August 9, 2010 11:00 a.m. ET
Neil van Helden - Corporate Manager, Marketing Communications & Media
Robin Raina - President & CEO
Robert Kerris – CFO
Mike Latimore - Northland Capital
Harry Long – Contrarian Industries
Gregory Wilbur – Bay Area Micro Cap
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Good day ladies and gentlemen, and welcome to the Ebix Inc. second quarter 2010 investor call. [Operator Instructions] I'd now like to hand the conference over to Mr. Neil van Helden, corporate manager, marketing. Sir, you may begin.
Neil van Helden
Good morning everyone, and welcome to Ebix's second quarter 2010 earnings conference call. Joining me to discuss the quarter is Ebix's chairman, president and CEO, Robin Raina. Robin is participating in this call from one our offices in Delhi, India.
Following Robin's remarks today, we will open up the call for your questions to be addressed by Robin and the Ebix CFO, Robert Kerris. I want to take this time to remind you that the primary purpose of today's call is to provide you with information regarding our second quarter fiscal year 2010 performance.
However, some of our discussion or responses to your questions may contain forward-looking statements. These statements are subject to risks, uncertainties and assumptions. Should any of the risks or uncertainties materialize, or should have assumptions prove incorrect, actual company results could differ materially from these forward-looking statements.
All these risks, uncertainties, and assumptions, as well as other information on potential factors that could affect our financial results, are included in our report filed with the SEC including our most recently reported Form 10-K for the year ended 31st of December 2009, particularly under the heading "risk factors".
At times in our prepared remarks or in response to your questions today, we may offer certain additional metrics to provide a greater understanding of our business or quarterly results. Please be advised that we may or may not update these additional metrics in future calls.
Our press release announcing the record second quarter results was issued a few hours back. The audio of this investor call is also being web cast live on the web at www.ebix.com\webcast. You can look at Ebix’s financials beyond what has been provided in the release on our web site www.ebix.com The audio and the text transcript of this call will be available on the investor homepage of the Ebix website after 2:00 p.m. EDT With that, let me turn you over to Ebix CEO and President, Robin Raina.
Thank you, Neil. Good morning. I’m joining into this call from one of our buildings in Noida. We have five offices spread across three cities in India and I’m presently dialing in from our new 50,000 square feet campus building in Noida.
Our second quarter 2010 results were record results again for Ebix in terms of revenues, net income, earnings, and cash flows. I feel that it is befitting these record results that I’m doing this call from India, which has been at the center of our research and development efforts to get to this point in our journey. India is a fascinating power today that in another few years will have one of the youngest populations in the world.
Imagine a country where in a few years from now approximately 840 million people will be below the age of 35 years. Incidentally, that is approximately three times the population of the United States. Add to this mix India’s strong focus on education and technology excellence, the restless desire of the youth to succeed, and the result is a highly diligent work force willing to learn, adapt, and then lead.
At Ebix’s own facilities here in India, the average age of an employee is 25 years old, and 83% of our staff has an engineering degree. It is presently 8:40 pm here in India, and the majority of our staff from the day shift is here in the office, still working. That exemplifies to me the spirit of the new youthful India in general, and our offices here in particular.
Before I get into a discussion of our quarterly results, I want to take this opportunity to salute the efforts of this fantastic workforce in Ebix India that has contributed strongly to Ebix becoming a state of the art world class player that has a close to zero customer attrition rate worldwide.
We reported today the strongest quarter in Ebix’s history on many fronts. I’m going to take this opportunity to discuss these results on the financial and qualitative fronts, while giving you an insight into where Ebix would like to go from a future vision perspective.
On the financial front, we’re extremely pleased with these results. Our press release today morning deepens these results, so I’ll concentrate on talking about just a few financial metrics. Revenue this quarter increased 44% from a year ago to $32.2 million. Six month cumulative revenues at the end of June 30, 2010 increased by 48% to $63.8 million as compared to the same period a year ago. Our exchange business grew 73% year over year to become 71% of our total revenue this quarter.
Nothing speaks more to the operating strength of a company than its continued strong cash generation abilities. Cash from operations totaled $16 million in the quarter, an increase of more than 107% from a year ago. This translates into more than $0.40 per share of operating cash flow in a single quarter, which is incidentally reasonably close to our diluted EPS in the entire first half of our last fiscal year. At the end of June 2010 we had already recovered 90% of our six month net income in positive operating cash flows, That, to me, sums up the financial strength of Ebix today.