© Reuters.
JOHNS CREEK, GA – Ebix (NASDAQ:), Inc., a global software and e-commerce services provider, disclosed its financial results for the third quarter of 2023 today, indicating a slight year-over-year revenue decline alongside a net loss. The company reported GAAP revenues of $119.2 million for Q3 2023, down 1.1% from the $120.5 million achieved in the same period last year. Despite this, constant currency GAAP Revenues saw an uptick of 0.8% to $121.8 million.
The firm’s financial exchanges, which are a significant part of its business accounting for 83.2% of Q3 revenues, were not enough to prevent a decrease in operating income and a shift to net loss for the quarter. Operating income fell sharply to $20.5 million in Q3 2023 from $30.4 million in Q3 2022, attributed mainly to increased expenses related to the initial public offering (IPO) of EbixCash, its subsidiary, as well as costs for credit agreement, advisors, compensation, and restructuring debts.
Ebix’s net loss stood at $10.3 million for the quarter, compared to a net income of $18.3 million in the previous year’s quarter. This loss was driven by heightened non-operating costs including interest expenses of $28.2 million, foreign exchange differential losses of $2.5 million, and debt restructuring costs amounting to $4.4 million. Consequently, diluted earnings per share plunged to ($0.33) from the prior year’s $0.59.
In light of these financial challenges, CFO Amit Kumar Garg highlighted the company’s robust liquidity position with cash and equivalents reported at $99.2 million. He also noted that EBITDA plus noncash stock compensation represented approximately 23.7% of global revenues during the quarter.
Despite the downturns, CEO Robin Raina expressed satisfaction with the company’s performance after adjusting for one-time items and pointed out that revenues grew 13% year-over-year on a year-to-date constant currency basis while Q3 revenues increased marginally.
EbixCash Limited has moved forward with its IPO process by filing a draft red herring prospectus with India’s Securities and Exchange Board, although financial details included in Ebix’s consolidated statements are preliminary for the six months ended June 30, 2023.
InvestingPro Insights
In the light of recent financial results, it’s worth considering some insights from InvestingPro. Despite the downturns, EBIX’s strong earnings have allowed the management to maintain dividend payments for 12 consecutive years, which is a significant return to shareholders. The company’s stock is currently trading at a low Price/Book multiple and a low earnings multiple, suggesting potential value for investors.
InvestingPro’s real-time data reveals that EBIX has a market cap of $104.6M and a P/E ratio of 3.1 as of Q2 2023. The company reported revenue of $874.3M and a gross profit of $342.73M over the last twelve months. Despite a revenue decline of 12.18% over the same period, the company remains profitable.
There are several additional InvestingPro Tips available that provide deeper insights into the company’s performance and potential investment strategies. Investors are encouraged to explore these tips to make informed decisions.
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