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

9 Months Ended

Sep. 30, 2018

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

Impact of New Revenue Recognition Standard on Financial Statement Line Items

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



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

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

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



	Impact of Change in Accounting Policy
	As Reported Three Months Ended September 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Statement of Income	(In thousands)
Operating Revenue	$	128,643		$	32		$	128,675
Costs of Services Provided	42,963			(2		)	42,961
Total Operating Expenses	89,405			(2		)	89,403
Operating Income	39,238			34			39,272
Income before income taxes	30,960			34			30,994
Income tax (expense) benefit	(1,679		)	(8		)	(1,687		)
Net income including non-controlling interest	29,281			26			29,307
Net income attributable to Ebix, Inc.	29,242			26			29,268
Basic earnings per common share attributable to Ebix, Inc.	0.93			—			0.93
Diluted Earnings per common share attributable to Ebix, Inc.	0.92			—			0.92



	As Reported Nine Months Ended September 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Statement of Income	(In thousands)
Operating Revenue	$	361,499		$	(592	)	$	360,907
Costs of Services Provided	126,113			(122		)	125,991
Total Operating Expenses	250,050			(122		)	249,928
Operating Income	111,449			(470		)	110,979
Income before income taxes	90,835			(470		)	90,365
Income tax (expense) benefit	(6,027		)	115			(5,912		)
Net income including non-controlling interest	84,808			(355		)	84,453
Net income attributable to Ebix, Inc.	84,630			(355		)	84,275
Basic earnings per common share attributable to Ebix, Inc.	2.69			(0.01		)	2.68
Diluted Earnings per common share attributable to Ebix, Inc.	2.67			(0.01		)	2.66

	As Reported September 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Balance Sheet	(In thousands)
Other current assets	$	32,799		$	(843	)	$	31,956
Total current assets	348,692			(843		)	347,849
Deferred tax asset, net	44,656			(2,056		)	42,600
Other assets	30,546			(1,273		)	29,273
Total assets	1,428,895			(4,172		)	1,424,723
Current Deferred Revenue	30,174			(4,618		)	25,556
Total current liabilities	222,912			(4,618		)	218,294
Long Term Deferred Revenue	8,153			(6,866		)	1,287
Total liabilities	887,305			(11,484		)	875,821
Retained earnings	577,353			7,312			584,665

	As Reported Nine Months Ended September 30, 2018			Adjustments			Balances without adoption of Topic 606
Condensed Consolidated Statement of Cash Flows	(In thousands)
Net income attributable to Ebix, Inc.	$	84,630		$	(355	)	$	84,275
Other assets	(655		)	(122		)	(777		)
Deferred Revenue	(10,772		)	2,561			(8,211		)
Net cash provided by operating activities	74,165			2,084			76,249

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

Disaggregation of Revenue

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



	Three Months Ended September 30,				Nine Months Ended September 30,
	(In thousands)				(In thousands)
Revenue:	2018		2017⁽¹⁾		2018		2017⁽¹⁾
United States	48,395		52,603		$	146,697	$	157,682
Canada	1,267		1,827		4,323		5,969
Latin America	4,586		6,268		15,141		14,486
Australia	8,576		8,575		26,803		25,091
Singapore*	1,731		1,368		5,871		4,493
New Zealand	454		462		1,467		1,485
India*	56,631		17,509		139,985		37,508
Europe	3,854		4,188		11,726		12,576
United Arab Emirates*	319		—		694		—
Indonesia*	1,683		—		5,052		—
Philippines*	1,147		—		3,740		—
	$	128,643	$	92,800	$	361,499	$	259,290

*India led businesses, except for portion of Singapore which is not part of EbixCash. Total revenue

in the third quarter of 2018 was $60.3 million. See Note 7 for additional geographic information

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 months ended September 30, 2018 and 2017.



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In thousands)	2018		2017		2018		2017
Exchanges	$	106,853	$	64,130	$	290,292	$	177,117
Broker Systems	3,414		3,715		10,720		11,098
Risk Compliance Solutions (“RCS”)	18,066		24,265		59,340		68,780
Carrier Systems	310		690		1,147		2,295
Totals	$	128,643	$	92,800	$	361,499	$	259,290



	Three Months Ended				Nine Months Ended
	September 30				September 30
(In thousands)	2018		2017⁽¹⁾		2018		2017
Exchanges	$	106,853	$	64,130	$	290,292	$	177,117
Broker Systems	3,414		3,715		10,720		11,098
RCS	18,066		24,265		59,340		68,780
Carrier Systems	310		690		1,147		2,295
Totals	$	128,643	$	92,800	$	361,499	$	259,290

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

Capitalized Contract Cost [Table Text Block]

Costs to Obtain and Fulfill a Contract

The Company capitalizes certain costs in order to maintain the ability to obtain and fulfill new contracts and contract renewals. These costs are primarily related to the setup and customization of our SaaS based platforms and such costs are amortized over the benefit period. Under our treatment prior to implementing Topic 606, these costs were expensed as incurred. As of September 30, 2018, the Company had $844 thousand of contract costs in “Other current assets” and $1.3 million in “Other Assets” on the Company's Condensed Consolidated Balance Sheets.



(In thousands)	September 30, 2018
Balance, beginning of period	$	—
Topic 606 adjustment	2,401
Adjusted beginning balance	$	2,401
Costs recognized from adjusted beginning balance	(686		)
Additions, net of costs recognized	402
Balance, end of period	$	2,117

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

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



	Fair Values at Reporting Date Using*
Descriptions	Balance, September 30, 2018		Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In thousands)
Assets
Commercial bank certificates of deposits ($2.86 million is recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	$	23,342	$	23,342	$	—	$	—
Mutual Funds (recorded in the long term asset section of the consolidated balance sheets in "Other Assets")	9,668		9,668		—		—
Total assets measured at fair value	$	33,010	$	33,010	$	—	$	—

Liabilities
Derivatives:
Contingent accrued earn-out acquisition consideration (a)	$	29,285	$	—	$	—	$	29,285
Total liabilities measured at fair value	$	29,285	$	—	$	—	$	29,285

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



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

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

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

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

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



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

Beginning balance	$	37,096		$	8,510

Total remeasurement adjustments:
Gains included in earnings **	(645		)	(164		)
Reductions recorded against goodwill	(13,718		)	(4,007		)
Foreign currency translation adjustments ***	(2,843		)	522

Acquisitions and settlements
Business acquisitions	13,226			34,156
Settlement payments	(3,831		)	(1,921		)

Ending balance	$	29,285		$	37,096

The amount of total (gains) losses for the period included in earnings or changes to net assets, attributable to changes in unrealized gains relating to assets or liabilities still held at period-end.	$	(645	)	$	—

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

Quantitative Information about Level 3 Fair Value Measurements

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

Schedule of Goodwill

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



	September 30, 2018			December 31, 2017
	(Unaudited)
	(In thousands)
Beginning Balance	$	666,863		$	441,404
Additions (see Note 3)	261,428			233,095
Purchase accounting adjustments	(12,745		)	(12,158		)
Foreign currency translation adjustments	(45,235		)	4,522
Ending Balance	$	870,311		$	666,863

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

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



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

Schedule of Intangible Assets, Excluding Goodwill

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



	September 30, 2018			December 31, 2017
	(Unaudited)
	(In thousands)
Finite-lived intangible assets:
Customer relationships	$	72,665		$	73,725
Developed technology	16,613			15,076
Dealer network	5,496			10,581
Trademarks	3,169			2,698
Non-compete agreements	764			764
Backlog	140			140
Database	212			212
Total intangibles	99,059			103,196
Accumulated amortization	(62,111		)	(57,485		)
Finite-lived intangibles, net	$	36,948		$	45,711

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

Deferred Revenue Disclosure [Text Block]

Deferred Revenue

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



(In thousands)	September 30, 2018
Balance, beginning of period	$	23,985
Topic 606 adjustment	14,045
Adjusted beginning balance	$	38,030
Revenue recognized from adjusted beginning balance	(26,902		)
Additions from business acquisitions	12,223
Additions, net of revenue recognized and currency translation	14,976
Balance, end of period	$	38,327

(In thousands)

Fair Value at September 30, 2018

Valuation Technique

Significant Unobservable
Input

Contingent acquisition consideration:
(Wdev, ItzCash, Indus, and Miles acquisition)

Discounted cash flow

Projected revenue and probability of achievement