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

3 Months Ended

Mar. 31, 2020

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

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

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/service channels for the three months ended March 31, 2020 and 2019:



	Three Months Ended March 31,
Revenue:	2020		2019
	(In thousands)
India*	$	73,915	$	72,908
United States	41,912		46,075
Australia	8,186		8,625
Latin America	4,237		4,022
Europe	3,281		3,787
Indonesia*	2,142		2,545
Singapore*	1,253		2,129
Philippines*	1,276		1,150
Canada	1,114		1,051
New Zealand	435		522
United Arab Emirates*	125		110
	$	137,876	$	142,924

*Primarily India led businesses for which total revenue was $77.9 million and $77.7 million for the three months ended March 31, 2020 and 2019, respectively.

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 March 31, 2020 and 2019.



	Three Months Ended
	March 31,
	2020		2019
	(In thousands)
EbixCash Exchanges	77,855		77,737
Insurance Exchanges	44,001		48,015
Risk Compliance Solutions	16,020		17,172
Totals	$	137,876	$	142,924

Capitalized Contract Cost [Table Text Block]

At March 31, 2020 and December 31, 2019, the Company had $710 thousand and $734 thousand, respectively, of contract costs in “Other current assets” and $1.1 million and $1.2 million, respectively, in “Other Assets” on the Company's Condensed Consolidated Balance Sheets.



	March 31, 2020			December 31, 2019
	(Unaudited)
	(In thousands)
Balance, beginning of period	$	1,897		$	2,238
Costs recognized from the beginning balance	(202		)	(708		)
Additions, net of costs recognized	103			367
Balance, end of period	$	1,798		$	1,897

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 our 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 our performance obligation for these contracts consists of the requirement to provide our customers with continued access to, and use of, our SaaS platforms and associated customizations. Without continued access to the SaaS platform, the customizations have no separate benefit to the customer. Our 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.



	March 31, 2020			December 31, 2019
	(Unaudited)
	(In thousands)
Balance, beginning of period	$	37,253		$	44,660
Revenue recognized from beginning balance	(12,539		)	(31,507		)
Additions from business acquisitions	—			769
Additions, net of revenue recognized and currency translation	13,749			23,331
Balance, end of period	$	38,463		$	37,253

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, March 31, 2020		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 ($163 thousand is recorded in the long term asset section of the Condensed Consolidated Balance Sheets in "Other Assets")	$	9,399	$	9,399	$	—	$	—
Mutual funds (recorded in the long term asset section of the Condensed Consolidated Balance Sheets in "Other Assets")	565		565		—		—
Total assets measured at fair value	$	9,964	$	9,964	$	—	$	—

Liabilities
Contingent accrued earn-out acquisition consideration (a)	$	9,516	$	—	$	—	$	9,516
Total liabilities measured at fair value	$	9,516	$	—	$	—	$	9,516

(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 three months ended March 31, 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 ($50 thousand is recorded in the long term asset section of the Condensed Consolidated Balance Sheets in "Other Assets")	$	4,493	4,493		$	—	$	—
Mutual funds	1,058		1,058		—		—
Total assets measured at fair value	$	5,551	$	5,551	$	—	$	—

Liabilities
Contingent accrued earn-out acquisition consideration (a)	$	10,095	$	—	$	—	$	10,095
Total liabilities measured at fair value	$	10,095	$	—	$	—	$	10,095

(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, 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 three months ended March 31, 2020 and during the year ended December 31, 2019:



Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration	March 31, 2020			December 31, 2019
	(In thousands)

Beginning balance	$	10,095		$	24,976

Total remeasurement adjustments:
Gains included in earnings **	—			(16,543		)
Foreign currency translation adjustments ***	(579		)	(260		)

Acquisitions and settlements
Business acquisitions	—			1,922

Ending balance	$	9,516		$	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.	$	—		$	(16,543	)

** recorded as a reduction to 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

Goodwill

Changes in the carrying amount of goodwill for the three months ended March 31, 2020 and the year ended December 31, 2019 are reflected in the following table.



	March 31, 2020			December 31, 2019
	(Unaudited)
	(In thousands)
Beginning Balance	$	952,404		$	946,685
Additions	—			17,931
Purchase accounting adjustments	—			741
Foreign currency translation adjustments	(31,037		)	(12,953		)
Ending Balance	$	921,367		$	952,404

At March 31, 2020, the Company concluded that a triggering event had occurred that would require Ebix to review its goodwill for impairment. The triggering event occurred both as a result of price volatility in Ebix common stock over the past few months, and also the pronounced volatility that occurred in the overall equity capital markets as a result of the COVID-19 global pandemic and the impact that had on the Company’s public valuation.

The Company undertook a qualitative assessment that also considered certain quantitative factors in evaluating any potential impairment of goodwill at March 31, 2020. Qualitatively, the Company’s financial results in the recent past would not indicate a material change in the fair value of the net assets of the entity. Similarly, the Company is not aware of any other qualitative factors, apart from the COVID-19 global pandemic, that would lead to a conclusion that impairment was more likely than not to have occurred as of March 31, 2020. The Company also considered quantitative factors that include a discounted cash flow analysis, comparable public company valuations and precedent acquisition transactions. Based on the factors considered above, the Company has concluded that at March 31, 2020 there was no goodwill impairment.

Likewise, the Company also considered its indefinite-lived intangible assets in the above analysis and concluded there was no impairment at March 31, 2020.

Given the uncertainty surrounding the COVID-19 global pandemic and the timing and magnitude of its negative impact on global economic conditions, the Company will continue to monitor the impact of COVID-19 on the overall operations of Ebix and any future impact on the fair value of the Company’s goodwill and indefinite-lived intangible assets.

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)
Airport contracts		9
Backlog		1.2
Brand		15
Customer relationships		7–20
Database		10
Dealer networks		15-20
Developed technology		3–12
Non-compete agreements		5
Store networks		5
Trademarks		3–15

Schedule of Intangible Assets, Excluding Goodwill

The carrying value of finite-lived and indefinite-lived intangible assets at March 31, 2020 and December 31, 2019 are as follows:



	March 31, 2020			December 31, 2019
	(Unaudited)
	(In thousands)
Finite-lived intangible assets:
Customer relationships	$	81,142		$	83,012
Developed technology	19,606			19,979
Dealer network	6,407			6,726
Airport contracts	4,415			4,635
Trademarks	2,664			2,689
Store networks	2,382			2,500
Brand	875			918
Non-compete agreements	754			764
Database	212			212
Backlog	140			140
Total intangibles	118,597			121,575
Accumulated amortization	(75,848		)	(74,620		)
Finite-lived intangibles, net	$	42,749		$	46,955

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

(In thousands)

Fair Value at March 31, 2020

Valuation Technique

Significant Unobservable
Input

Contingent acquisition consideration:
(Wdev, Miles, and Zillious acquisition)

Discounted cash flow

Projected revenue and probability of achievement