UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-15946

Ebix, Inc.

(Exact name of registrant as specified in its charter)

Delaware		77-0021975
(State or other jurisdiction of incorporation or		(I.R.S. Employer Identification No.)
organization)
1 Ebix Way
Johns Creek,	Georgia	30097
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 678-281-2020

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading symbols	Name of each exchange on which registered
Common stock, $0.10 par value per share	EBIX	Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☑

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of November 8, 2023 the number of shares of common stock outstanding was 30,901,440.

“The Registrant’s subsidiary, EbixCash Limited has filed a draft red herring prospectus with the Securities and Exchange Board of India and is in the process of executing an initial public offering of its equity shares, subject to market conditions and regulatory approvals. The financial information of EbixCash Limited consolidated into our financial statements as of and for the nine months ended September 30, 2023 is summary, indicative and not final. Further such financial information has not been audited or reviewed by the auditors of such company.”

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2023

INDEX

PART I — FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)	2
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022 (unaudited)	3
Condensed Consolidated Balance Sheets at September 30, 2023 (unaudited) and December 31, 2022	4
Condensed Consolidated Statement of Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022 (unaudited)	6
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022 (unaudited)	8
Notes to Condensed Consolidated Financial Statements (unaudited)	10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
Item 3. Quantitative and Qualitative Disclosures About Market Risk	49
Item 4. Controls and Procedures	50
PART II — OTHER INFORMATION
Item 1. Legal Proceedings	50
Item 1A. Risk Factors	54
Item 2. Repurchases of Equity Securities	55
Item 3. Defaults upon Senior Securities	55
Item 4. Mine Safety Disclosures	56
Item 5. Other Information	56
Item 6. Exhibits	56
EXHIBITS INDEX	57
SIGNATURES	58
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 101

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)

	Three Months Ended1				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating revenue	$	119,228	$	257,904	$	480,419	$	794,938
Operating expenses:
Cost of services provided	32,658		174,265		222,894		554,438
Product development	11,020		10,483		31,950		30,964
Sales and marketing	4,996		3,973		11,909		12,249
General and administrative, net	43,869		34,400		117,446		93,049
Amortization and depreciation	6,152		4,422		16,061		13,660
Total operating expenses	98,695		227,543		400,260		704,360
Operating income	20,533		30,361		80,159		90,578
Interest income	53		68		186		196
Interest expense	(28,175)		(15,467)		(75,052)		(37,382)
Non-operating (loss) income	(605)		(438)		(971)		(1,580)
Non-operating expense-debt restructuring expenses	(4,430)		—		(8,041)		—
Foreign currency exchange gain (loss)	2,409		4,928		349		9,051
Income before income taxes	(10,215)		19,452		(3,370)		60,863
Income tax (expense) benefit	(514)		(1,926)		(1,301)		(6,108)
Net income including noncontrolling interest	(10,729)		17,526		(4,671)		54,755
Net loss attributable to noncontrolling interest	(433)		(724)		(1,756)		(2,029)
Net income attributable to Ebix, Inc.	$	(10,296)	$	18,250	$	(2,915)	$	56,784
Basic earnings per common share attributable to Ebix, Inc.	$	(0.33)	$	0.59	$	(0.09)	$	1.85
Diluted earnings per common share attributable to Ebix, Inc.	$	(0.33)	$	0.59	$	(0.09)	$	1.85
Basic weighted average shares outstanding	30,866		30,777		30,854		30,745
Diluted weighted average shares outstanding	30,877		30,783		30,861		30,748

See accompanying notes to the condensed consolidated financial statements.

1 Beginning April 1, 2023 Prepaid card revenues are presented on a net basis (based on contractual changes as further described in the “Ebix Cash Exchanges Gift Cards” Section) while periods preceding April 1, 2023 reflect prepaid card revenues on a gross basis. Please see (non- GAAP financials) table with both periods recast on a net basis, for comparison purposes under heading "Condensed Consolidated Statements of Income prepared on Net Basis for Comparative Purposes Only (Non GAAP)".

Table of Contents

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Income prepared on Net Basis for Comparative Purposes Only (Non GAAP)

(In thousands, except per share data)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Operating revenue	$	119,228	$	120,499	$	353,731	$	334,942
Operating expenses:
Cost of services provided	32,658		36,860		96,207		94,442
Product development	11,020		10,483		31,951		30,964
Sales and marketing	4,996		3,973		11,909		12,249
General and administrative, net	43,869		34,400		117,445		93,049
Amortization and depreciation	6,152		4,422		16,060		13,660
Total operating expenses	98,695		90,138		273,572		244,364
Operating income	20,533		30,361		80,159		90,578
Interest income	53		68		186		196
Interest expense	(28,175)		(15,467)		(75,054)		(37,382)
Non-operating (loss) income	(605)		(439)		(971)		(1,580)
Non-operating expense-debt restructuring expenses	(4,430)		—		(8,041)		—
Foreign currency exchange gain (loss)	2,409		4,928		349		9,051
Income before income taxes	(10,215)		19,451		(3,372)		60,863
Income tax (expense) benefit	(514)		(1,926)		(1,301)		(6,108)
Net income including noncontrolling interest	(10,729)		17,525		(4,673)		54,755
Net loss attributable to noncontrolling interest	(433)		(724)		(1,756)		(2,029)
Net income attributable to Ebix, Inc.	(10,296)		18,249		(2,917)		56,784
Basic earnings per common share attributable to Ebix, Inc.	$	(0.33)	$	0.59	$	(0.09)	$	1.85
Diluted earnings per common share attributable to Ebix, Inc.	$	(0.33)	$	0.59	$	(0.09)	$	1.85
Basic weighted average shares outstanding	30,866		30,777		30,854		30,745
Diluted weighted average shares outstanding	30,877		30,783		30,861		30,748

2

Table of Contents

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
Net income including noncontrolling interest	$	(10,729)	$	17,526	$	(4,671)	$	54,755
Other comprehensive income (loss):
Foreign currency translation adjustments	(14,902)		(35,499)		(4,789)		(90,126)
Total other comprehensive income (loss)	(14,902)		(35,499)		(4,789)		(90,126)
Comprehensive income	(25,631)		(17,973)		(9,460)		(35,371)
Comprehensive loss attributable to noncontrolling interest	(433)		(724)		(1,756)		(2,029)
Comprehensive income attributable to Ebix, Inc.	$	(25,198)	$	(17,249)	$	(7,704)	$	(33,342)

See accompanying notes to the condensed consolidated financial statements.

3

Table of Contents

Ebix, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

	September 30, 2023		December 31, 2022
ASSETS	(Unaudited)
Current assets:
Cash and cash equivalents	$	71,162	$	110,637
Receivables from service providers	8,523		4,223
Short-term investments	17,526		17,438
Restricted cash	10,465		8,210
Fiduciary funds - restricted	1,835		2,092
Trade accounts receivable, less allowances of $13,971 and $18,167, respectively	156,302		154,533
Other current assets	93,068		87,387
Total current assets	358,881		384,520
Property and equipment, net	53,154		52,448
Right-of-use assets	7,720		9,636
Goodwill	879,254		881,676
Intangibles, net	45,085		50,900
Indefinite-lived intangibles	16,647		16,647
Capitalized software development costs, net	16,184		15,342
Non Current Accounts receivable, less allowance	10,512		—
Deferred tax asset, net	123,887		96,290
Other assets	50,667		30,096
Total assets	$	1,561,991	$	1,537,555
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	116,080	$	99,194
Payables to service agents	31,479		11,299
Accrued payroll and related benefits	16,537		10,651
Working capital facility	15,341		3,367
Fiduciary funds - restricted	1,835		2,092
Revolving line of credit	444,902		449,902
Short-term debt	991		3,000
Current portion of long term debt and financing lease obligations, net of deferred financing costs of $3,287 and $469, respectively	170,502		190,866
Contract liabilities	40,832		32,028
Lease liability	2,739		3,354
Other current liabilities	24,113		25,784
Total current liabilities	865,351		831,537
Revolving line of credit	—		—
Long term debt and financing lease obligations, less current portion, net of deferred financing costs of $0 and $0, respectively	47		160
Contingent liability for accrued earn-out acquisition consideration	2,285		2,299
Contract liabilities	7,261		14,098
Lease liability	5,287		6,612
Deferred tax liability, net	1,150		1,150

4

Table of Contents

Other liabilities	29,066		22,259
Total liabilities	910,447		878,115
Stockholders’ equity:
Preferred stock, $0.10 par value, 500,000 shares authorized, no shares issued and outstanding at September 30, 2023 and December 31, 2022	—		—
Series Y Convertible preferred stock, $0.10 par value, 350,000 shares authorized, no shares issued and outstanding at September 30, 2023 and December 31, 2022	—		—
Common stock, $0.10 par value, 220,000,000 shares authorized, 30,899,335 issued and outstanding, at September 30, 2023, and 30,819,533 issued and outstanding at December 31, 2022	3,090		3,082
Additional paid-in capital	20,355		18,800
Retained earnings	811,866		814,780
Accumulated other comprehensive loss	(224,226)		(219,437)
Total Ebix, Inc. stockholders’ equity	611,085		617,225
Noncontrolling interest	40,459		42,215
Total stockholders’ equity	651,544		659,440
Total liabilities and stockholders’ equity	$	1,561,991	$	1,537,555

-

See accompanying notes to the condensed consolidated financial statements.

5

Table of Contents

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(unaudited)

(In thousands except for share figures)

	Common Stock
	Issued Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling interest		Total
Balance, July 1, 2023	30,877,258	$	3,088	$	20,041	$	822,162	$	(209,324)	$	40,892	$	676,859
Net income attributable to Ebix, Inc.	—	—		—		(10,296)		—		—		(10,296)
Net loss attributable to noncontrolling interest	—	—		—		—		—		(433)		(433)
Cumulative translation adjustment	—	—		—		—		(14,902)		—		(14,902)
Vesting of restricted stock	22,077	2		(2)		—		—		—		—
Share based compensation	—	—		316		—		—		—		316
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, $0.000 per share	—	—		—		—		—		—		—
Balance, September 30, 2023	30,899,335	$	3,090	$	20,355	$	811,866	$	(224,226)	$	40,459	$	651,544

	Common Stock
	Issued Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling interest		Total
Balance, January 1, 2023	30,819,533	3,082		18,800		814,780		(219,437)		42,215		$	659,440
Net income attributable to Ebix, Inc.	—	—		—		(2,915)		—		—		(2,915)
Net loss attributable to noncontrolling interest	—	—		—		—		—		(1,756)		(1,756)
Cumulative translation adjustment	—	—		—		—		(4,789)		—		(4,789)
Vesting of restricted stock	82,084	8		(8)		—		—		—		—
Share based compensation	—	—		1,604		—		—		—		1,604
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested	(2,282)	—		(42)		—		—		—		(42)
Common stock dividends paid, $0.000 per share	—	—		—		—		—		—		—
Balance, September 30, 2023	30,899,335	$	3,090	$	20,355	$	811,866	$	(224,226)	$	40,459	$	651,544

6

Table of Contents

	Common Stock
	Issued Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling interest		Total
Balance, July 1, 2022	30,755,500	3,075		$	16,931	$	793,106	$	(176,649)	$	42,927	$	679,390
Net income attributable to Ebix, Inc.	—	—		—		18,250		—		—		18,250
Net loss attributable to noncontrolling interest	—	—		—		—		—		(724)		(724)
Cumulative translation adjustment	—	—		—		—		(35,499)		—		(35,499)
Repurchase and retirement of common stock	—	—		—		—		—		—		—
Vesting of restricted stock	33,952	4		(4)		—		—		—		—
Exercise of stock options	—	—		—		—		—		—		—
Share based compensation	—	—		971		—		—		—		971
Forfeiture of certain shares to satisfy exercise costs and the recipients income tax obligations related to stock options exercised and restricted stock vested	(1,857)	—		(43)		—		—		—		(43)
Noncontrolling interest	—	—		—		—		—		—		—
Common stock dividends paid, $0.075 per share	—	—		—		(2,319)		—		—		(2,319)
Balance, September 30, 2022	30,787,595	$	3,079	$	17,855	$	809,037	$	(212,148)	$	42,203	$	660,026

	Common Stock
	Issued Shares	Amount		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling interest		Total
Balance, January 1, 2022	30,683.393	$	3,068	$	15,068	$	759,208	$	(122,022)	$	44,232	$	699,554
Net income attributable to Ebix, Inc.	—	—		—		56,784		—		—		56,784
Net loss attributable to noncontrolling interest	—	—		—		—		—		(2,029)		(2,029)
Cumulative translation adjustment	—	—		—		—		(90,126)		—		(90,126)
Vesting of restricted stock	108,116	11		(11)		—		—		—		—
Share based compensation	—	—		2,905		—		—		—		2,905
Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested	(3,914)	—		(107)		—		—		—		(107)
Common stock dividends paid, $0.075 per share	—	—		—		(6,955)		—		—		(6,955)
Balance, September 30, 2022	30,787,595	$	3,079	$	17,855	$	809,037	$	(212,148)	$	42,203	$	660,026

See accompanying notes to the condensed consolidated financial statements.

7

Table of Contents

Ebix, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Nine Months Ended
	September 30,
	2023		2022
Cash flows from operating activities:
Net income attributable to Ebix, Inc.	$	(2,915)	$	56,784
Net loss attributable to noncontrolling interest	(1,756)		(2,029)
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation	16,061		13,660
Provision (benefit) for deferred taxes	(28,130)		(25,361)
Share-based compensation	1,604		2,905
(Benefit) provision for doubtful accounts	3,104		1,687
Amortization of right-of-use assets	2,894		2,633
Amortization of capitalized software development costs	131		2,246
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable	(16,473)		(15,994)
Receivables from service providers	(4,300)		(104)
Payables to service agents	20,180		7,330
Other assets	(23,155)		1,577
Accounts payable and accrued expenses	25,901		(3,195)
Accrued payroll and related benefits	6,005		(736)
Contract liabilities	2,023		2,415
Lease liabilities	(2,944)		(2,532)
Reserve for potential uncertain income tax return positions	—		—
Other liabilities	5,200		3,807
Net cash provided by operating activities	3,430		45,093
Cash flows from investing activities:
Capitalized software development costs	(1,057)		(5,676)
Maturities (purchases) of unrestricted marketable securities, net	(507)		(4,518)
Capital expenditures	(11,076)		(12,671)
Net cash (used in) provided by investing activities	(12,640)		(22,865)
Cash flows from financing activities:
Prepayments related to Debt Refinancing	(6,341)		—
Proceeds from term loan	—		—
Principal payments of term loan obligation	(30,527)		(23,464)
Forfeiture of certain shares to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vested	(42)		(107)
Dividend payments	—		(6,954)
Payments of debt obligations, net	(1,997)		(1,953)
(Payments) of/Borrowings under working capital facility, net	12,018		868
Payments of financing lease obligations, net	(120)		(147)
Net cash used in financing activities	(27,009)		(31,757)
Effect of foreign exchange rates on cash	(1,644)		(21,252)
Net change in cash and cash equivalents, and restricted cash	(37,863)		(30,781)
Cash and cash equivalents, and restricted cash at the beginning of the period	124,959		114,764
Cash and cash equivalents, and restricted cash at the end of the period	$	87,096	$	83,983
Supplemental disclosures of cash flow information:
Interest paid	$	58,861	$	32,989
Income taxes paid	$	31,123	$	28,875

See accompanying notes to the condensed consolidated financial statements.

8

Table of Contents

Supplemental schedule of noncash financing activities:

During the nine months ended September 30, 2023, there were 2,282 shares, totaling $42 thousand, used to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vesting.

    During the nine months ended September 30, 2022, there were 3,914 shares, totaling $107 thousand, used to satisfy exercise costs and the recipients' income tax obligations related to stock options exercised and restricted stock vesting.

9

Table of Contents

Ebix, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

Note 1: Description of Business and Summary of Significant Accounting Policies

    Description of Business — Ebix, Inc., and its subsidiaries, (“Ebix” or the “Company”, "we", "us", and "our") is a leading international supplier of on-demand infrastructure exchanges to the insurance, financial services, travel, and healthcare industries. In the insurance industry, 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 India and 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 ASEAN markets. The Company has its headquarters in Johns Creek, Georgia and also conducts operating activities in Australia, Brazil, Canada, India, Indonesia, New Zealand, the Philippines, Singapore, the United Arab Emirates, and the United Kingdom. International revenue accounted for 76.1% and 85.1% of the Company’s total revenue for the nine months ended September 30, 2023 and 2022, 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, 2023 and 2022 are not necessarily indicative of the results that may be expected for future quarters or the full year of 2023. The condensed consolidated December 31, 2022 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, 2022.

Going Concern — As required by Accounting Standard Codification ("ASC") ASC Topic 205-40, Presentation of Financial Statements - Going Concern, management assesses the Company's ability to continue as a going concern for one year from the financial statement issuance at each annual and interim reporting period.

As of September 30, 2023, our current liabilities exceeded our current assets by $506.5 million. The Company’s Credit Facility (as defined in Note 4 below) matured on September 30, 2023 and thus the Company is in default under the Credit Facility and does not have the resources to pay the $616.8 million outstanding balance due. The Company is also subject to certain provisions of the Credit facility (as defined in Note 4 below) which will require mandatory prepayments of its outstanding loans and certain minimums for its Fixed Charge Coverage Ratio (as defined in the Credit Facility). As of September 30, 2023, the Company did not meet the required consolidated Fixed Charge Coverage Ratio. However, pursuant to the Forbearance Agreement (as defined in Note 4 below), the Credit Facility Agents and Lenders forbear from exercising any of their respective rights and remedies with respect to the failure of the Company to comply with the Fixed Charge Coverage Ratio for the fiscal quarter ending September 30, 2023 during the forbearance period.

Our high level of indebtedness could: (i) limit our ability to obtain additional financing; (ii) limit our flexibility in planning for, or reacting to, changes in our business and the industry; (iii) render us more vulnerable to general adverse economic and industry conditions, including those resulting from a decline in the overall economy, and the current rising interest rate environment, and (iv) require us to dedicate a substantial portion of our cash flow to service our debt. The Company has the limited cash resources to meet reasonably its operational obligations for the next twelve months, except to service or repay its outstanding Credit Facility indebtedness obligations, which matured on September 30, 2023.

10

Table of Contents

The Company expects to have ongoing requirements for capital investment or debt to implement its business plan. These factors, among others, raise substantial doubt that the Company will be able to continue as a going concern for a reasonable period of time. The ability of the Company to continue as a going concern is dependent upon, among other things, the ability to (i) enter into a new credit facility, (ii) raise additional capital, or (iii) sell a sufficient amount of assets of the Company. Management is working to accomplish some or all of the above in order to provide the additional cash needed to meet the Company’s obligations as they become due and meet the requirements set forth in the Forbearance Agreement (as defined in Note 4 below). There can be no assurance, however, that the Company will be successful in accomplishing its objectives through these or any other measures. If the Company is unsuccessful, then the value of the Company’s outstanding stock is likely to be materially adversely affected.

The accompanying consolidated condensed financial statements have been prepared assuming the Company will continue as a going concern. However, as noted above, the Company’s Credit Facility matured on September 30, 2023 and an alternate financing arrangement has yet to be executed. This condition raises substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Use of Estimates — The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and reported amounts of revenue and expenses during those reporting periods. Management has made material estimates primarily with respect to revenue recognition and contract liabilities, accounts receivable, acquired intangible assets, annual impairment reviews of goodwill and indefinite-lived intangible assets, contingent earn out liabilities in connection with business acquisitions, and the provision for income taxes. Actual results may be different from those estimates.

    Reclassification — Certain prior year amounts have been reclassified to be consistent with current year presentation within our financial statements.

Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturity of three months or less at the time of purchase to be cash equivalents. Such investments are stated at cost, which approximates fair value. The Company does maintain cash balances in banking institutions in excess of federally insured amounts and therefore is exposed to the related potential credit risk associated with such cash deposits.

Short-Term Investments — The Company's primary short-term investments consist of certificates of deposit with established commercial banking institutions in international markets that have readily determinable fair values. Ebix accounts for such investments that are reasonably expected to be realized in cash, sold, or consumed during the year as short-term investments that are available-for-sale. The carrying amount of investments in marketable securities approximates their fair value. The carrying value of short-term investments was $17.5 million and $17.4 million at September 30, 2023 and December 31, 2022, respectively.

Restricted Cash — The carrying value of our restricted cash in current assets was $10.5 million and $8.2 million at September 30, 2023 and December 31, 2022, respectively. The September 30, 2023 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 our international operations for our working capital facilities.

    The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:

	As of
	September 30,
	2023		2022
	(In thousands)
Cash and cash equivalents	$	71,162	$	70,977
Restricted cash	10,465		7,990
Restricted cash included in other long-term assets	$	5,469	$	5,016
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statement of cash flows	$	87,096	$	83,983

11

Table of Contents

Fiduciary Funds - Restricted — Due to EbixHealth JV being a third party administrator ("TPA"), the Company collects premiums from insureds and, after deducting its fees, remits these premiums to insurance companies. Unremitted insurance premiums and/or claim funds established for the benefit for various carriers are held in a fiduciary capacity until disbursed by the Company. The use of premiums collected from insureds but not yet remitted to insurance companies is restricted by law in certain states. The total assets held on behalf of others, $1.8 million and $2.1 million at September 30, 2023 and December 31, 2022, respectively, are recorded as an asset and offsetting fiduciary funds - restricted liability.

    Advertising — Advertising costs amounted to $3.1 million and $6.3 million for the three and nine month period ended September 30, 2023, respectively, and $2.4 million and $6.7 million for the three and nine month period ended September 30, 2022, 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 — The Company follows the relevant GAAP guidance regarding the determination and measurement of the fair value of assets/liabilities in which 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 valuation hierarchy, which requires and entity to maximize the use of observable inputs when measuring fair value. 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, and 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, 2023, the Company had the following financial instruments to which it had to consider both 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 for mutual funds and a Level 2 instrument for certificates of deposit.

•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, 2023 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, 2023 and December 31, 2022 approximates their carrying value as reported on the Company's condensed consolidated balance sheets.

    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:

12

Table of Contents

	Fair Values at Reporting Date Using*
Descriptions	Balance, September 30, 2023		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 ($6.2 million is recorded in the long term asset section of the condensed consolidated balance sheets in "Other assets")	$	25,425	$	—	$	25,425	$	—
Mutual funds (recorded in the long term asset section of the condensed consolidated balance sheets in "Other assets")	115		115		—		—
Total assets measured at fair value	$	25,540	$	115	$	25,425	$	—
Liabilities
Contingent accrued earn-out acquisition consideration (a)	$	2,285	$	—	$	—	$	2,285
Total liabilities measured at fair value	$	2,285	$	—	$	—	$	2,285
(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, 2023, there were no transfers between fair value Levels 1, 2, or 3.

13

Table of Contents

	Fair Values at Reporting Date Using*
Descriptions	Balance, December 31, 2022		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 ($6.4 million is recorded in the long term asset section of the condensed consolidated balance sheets in "Other assets")	$	37,434	$	—	$	37,434	$	—
Mutual funds	$	98	$	98	$	—	$	—
Total assets measured at fair value	$	37,532	$	98	$	37,434	$	—
Liabilities
Contingent accrued earn-out acquisition consideration (a)	$	2,299	$	—	$	—	$	2,299
Total liabilities measured at fair value	$	2,299	$	—	$	—	$	2,299
(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, 2021, there were no transfers between fair value Levels 1, 2, or 3.

    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, 2023 and during the year ended December 31, 2022:

14

Table of Contents

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Contingent Liability for Accrued Earn-out Acquisition Consideration	September 30, 2023		December 31, 2022
	(In thousands)
Beginning balance	$	2,298	$	2,557
Total remeasurement adjustments:
Remeasurement against goodwill	—		—
Foreign currency translation adjustments **	(13)		(259)
Acquisitions and settlements
Business settlements	—		—
Ending balance	$	2,285	$	2,298
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 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:

(In thousands)	Fair Value at September 30, 2023	Valuation Technique	Significant Unobservable Input
Contingent acquisition consideration:	$2,285	Discounted cash flow	Projected revenue and probability of achievement

(In thousands)	Fair Value at December 31, 2022	Valuation Technique	Significant Unobservable Input
Contingent acquisition consideration:	$2,298	Discounted cash flow	Projected revenue and probability of achievement

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 2022, 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.

15

Table of Contents

    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 two product/service channels, Exchanges - EbixCash and Insurance, 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 revenues are primarily derived from the sales of prepaid gift cards and consideration paid by customers for financial transaction services, including services for transferring or exchanging money. 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.

Gift Cards

    EbixCash sells general purpose prepaid gift cards to corporate customers and consumers that can be later redeemed at various merchants. The gift cards are co-branded between EbixCash and its card-issuing banking partners and are affiliated with major payment associations such as VISA, MasterCard, and Rupay. The gift cards are sold to a diversified set of corporate customers from various industries. The gift cards are used by corporate customers to disburse incentives to the end users, which are primarily their employees, agents, and business associates. The gift cards sold by EbixCash are not reloadable, cannot be used at ATMs or for any other cash-out or funds transfer transactions, and are subject to maximum limits per card (currently INR10,000 or approximately $122). Gift cards issued by EbixCash are valid for a period of fifteen months from the date of issuance for virtual cards and three years for physical cards. EbixCash has entered into arrangements with banks and financial institutions to settle payments to merchants based on utilization of the gift cards.

The Company subsidiary Ebix Payment Services Private Limited ("Ebix Payment Services") received "a letter of displeasure" from Reserve Bank of India ("RBI") dated March 21, 2023 (‘RBI Letter’), regarding certain of its co-branding arrangements in which RBI observed that the role of Ebix Payment Services as the non-bank entity exceeded the activities permitted under the Master Directions on Issuance and Operation of Prepaid Payment Instruments dated October 11, 2017 and Master Directions on Prepaid Payment Instruments dated August 27, 2021 (collectively, “MD-PPI”). Further, RBI issued a circular on April 19, 2023 to all approved/authorized PPI Issuers (as defined below), that noted the contractual arrangements between the banks ("PPI Issuer") and non-bank entities, where the non-bank entities are inter-alia responsible for funds management, handling of KYC processes, transaction settlement, risk management, liabilities arising out of fraudulent transaction, and all types of cards liabilities from customer, etc., which exceeds the activities permitted under the MD-PPI applicable for co-branding arrangements. As per the MD-PPI, the role of Ebix Payment Services is limited to marketing and distribution of the prepaid payment instruments or providing prepaid payment instrument holders with access to services. Therefore, Ebix Payment Services Private Limited has been asked by RBI to suitably amend the co-branding arrangements/ agreements with the banks within one month of the aforesaid communications and strictly comply with the provisions of MD-PPI. Based on its assessment of the RBI letter, Company management is of the view that there will be no material financial impact of the modifications proposed by the RBI on the financial statements for the year ended December 31, 2023.

16

Table of Contents

As a result of prospective amendments made/proposed to Ebix Payment Services' co-branding arrangements, the Ebix Payment Services would cease to be a principal under the amended arrangements and would act as an agent for the banks and PPI Issuers. As a result, the revenue to be recognized for services provided by the EbixCash group after such amendments would be recognized on net basis in the financial statements. Further, adjustments arising on recognition of revenue on net basis has been considered while presenting consolidated financial information. There is no impact on profits earned

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: (i) 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; (ii) ancillary fees, including travel insurance-related revenues and certain reservation booking fees; and (iii) 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 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 meetings, incentives, conferences, and exhibitions ("MICE") packages is recognized at full purchase value at the completion of the obligation, with the corresponding costs recorded under cost of services provided. 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: (i) the customer’s acknowledgment of EbixCash’s terms and conditions and the receipt of payment information; (ii) the money transfer has been processed; (iii) the customer has received a unique transaction identification number; and (iv) 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 Outward Remittance 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, including among other factors: (i) who pays the fee to EbixCash (consumer or biller); (ii) whether the service is offered to all consumers; (iii) whether the service is restricted to existing biller relationships of EbixCash; and (iv) whether the service utilizes a physical agent network offered for consumers’ convenience. 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 - collecting money from the consumer and processing the bill payment transaction. This service provides the billers real-time or near real-time information regarding their customers’ payments and simplifies the billers’ collection efforts. The transaction price on bill payment services is contractual and

17

Table of Contents

determinable. Certain biller agreements may include per-transaction or fixed periodic rebates, which EbixCash records as a reduction to revenue.

EbixCash Technology Services

    EbixCash also offers on-demand technology to various providers in the area of lending, wealth and asset management, and travel across the world. Additionally, EbixCash provides IT and call center outsourcing services to companies in a variety of industries, both in India and globally. The EbixCash technology software solutions are generally delivered on a SaaS subscription and/or transaction based pricing model. Please see below under "Insurance Exchanges" a description of revenue recognition policies for SaaS, Subscription, and Transaction Fees, which are similar to how EbixCash technology software solutions revenues are recognized. For IT and call center outsourcing services provided by EbixCash businesses, revenues are generally recognized on a time and materials or 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 driven by the expected hours to complete the project measured against the actual hours completed to date.    

Insurance Exchanges

    Insurance Exchanges revenues are primarily derived from consideration paid by customers related to our SaaS platforms, related services, and the licensing of software. A typical contract for our 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 our 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 SaaS 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. Our contracts often contain overage fees, contingent fees, or service level penalties which are accounted for as variable consideration. Revenue accounted for as variable consideration is immaterial and is recognized using the “right to invoice” practical expedient when the invoiced amount equals the value provided to the customer.

Software-as-a-Service

    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 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. Our subscription contracts are generally for an initial three-year period with subsequent one-year automatic renewals.

Transaction Fees

18

Table of Contents

    Transaction revenue is comprised of fees applied to the volume of transactions that are processed through our 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 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 revenues are transaction-based. 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 U.S. 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 earned on 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, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
Revenue:	2023		2022		2023		2022
	(In thousands)
North America	38,067		38,934		114,657		118,605
International	81,161		218,970		365,762		676,333
	$	119,228	$	257,904	$	480,419	$	794,938

The reported figures have been summarized for better understanding of the quantum of business undertaken in the North America versus other countries. Further, the product/service channels, EbixCash Exchange and Insurance Exchange have been combined in the line item "Exchange".

19

Table of Contents

Geographical regions on net basis for comparative purposes (Non GAAP) for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,		Nine Months Ended September 30,
Revenue:	2023	2022	2023	2022
	(In thousands)
North America	38,067	38,934	114,657	118,605
International	81,161	81,565	239,074	216,337
	119,228	120,499	353,731	334,942

The Company’s revenues are derived from two product/service groups: (i) Exchanges and (ii) Risk Compliance Solutions.

    Presented in the table below is the breakout of our revenue groups for each of those product/service channels for the three and nine months ended September 30, 2023 and 2022.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(In thousands)
Exchanges	99,291		237,396		419,235		736,255
Risk Compliance Solutions	19,937		20,508		61,184		58,683
Totals	$	119,228	$	257,904	$	480,419	$	794,938

Product/Services channels on net basis for Comparative purposes (Non GAAP) for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(In thousands)
Exchanges	99,291		99,991		292,547		276,259
Risk Compliance Solutions	19,937		20,508		61,184		58,683
Totals	$	119,228	$	120,499	$	353,731	$	334,942

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

20

Table of Contents

recoverable from profit margin included in the contract. At September 30, 2023 and December 31, 2022, the Company had $451 thousand and $486 thousand, respectively, of contract costs in “Other current assets” and $708 thousand and $797 thousand, respectively, in “Other assets” on the Company's condensed consolidated balance sheets.

	September 30, 2023		December 31, 2022
	(Unaudited)
	(In thousands)
Balance, beginning of period	$	1,284	$	1,822
Costs recognized from the beginning balance	(389)		(968)
Additions, net of costs recognized	264		430
Balance, end of period	$	1,159	$	1,284

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 $10.9 million and $8.0 million of contract liabilities were included in billed accounts receivable as of September 30, 2023 and December 31, 2022, 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. This portion is 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.

	September 30, 2023		December 31, 2022
	(Unaudited)
	(In thousands)
Balance, beginning of period	$	46,126	$	41,357
Revenue recognized from beginning balance	(39,062)		(30,460)
Additions, net of revenue recognized and currency translation	41,028		35,229
Balance, end of period	$	48,092	$	46,126

Accounts Receivable and the Allowance for Doubtful Accounts — As of September 30, 2023, reported accounts receivable of $156.3 million (net of $14.0 million allowance for doubtful accounts receivable) includes $54.1 million of contract assets. As of December 31, 2022, reported accounts receivable of $154.5 million (net of $18.2 million allowance for doubtful accounts receivable) includes $55.2 million of contract assets. As of September 30, 2023, the Company reported $10.5 million of non-current accounts receivable (net of $5.6 million allowance for doubtful accounts receivable). 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. 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. The Company recognized bad debt expense (recovery) in the amount of $1.3 million and $3.1 million for the three and nine month period ended September 30, 2023 and $0.0 million and $1.7 million for the three and nine month period ended September 30, 2022.

21

Table of Contents

Capitalized Software Development Costs — In accordance with ASC 350-40 "Internal-Use Software" and ASC 350-985 "Software" the Company expenses 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. The periodic expense for the amortization of previously capitalized software development costs is included in cost of services provided. See Note 10 "Capitalized Software Development Costs" for further details.

Cost of Services Provided — Cost of services provided consist of data processing costs, customer support costs (including personnel costs to maintain our proprietary databases), costs to provide customer call center support, hardware and software expense associated with transaction processing systems and exchanges, telecommunication and computer network expense, and occupancy costs associated with facilities where these functions are performed. Cost of services provided also includes the direct expenses associated with our services businesses, including the cost of prepaid gift cards, the cost of travel services provided and the cost of foreign exchange and remittance transactions. Depreciation expense is not included in cost of services provided.

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 occurred or were recognized in the year ended December 31, 2022 or in the nine months ended September 30, 2023.

    The Company 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 ("P&C") insurance carriers in Australia using the Company's 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. 

    Finite-lived Intangible Assets — Purchased intangible assets represent the estimated acquisition date fair value of customer relationships, developed technology, trademarks, non-compete agreements, and other intangibles described below 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:

Category	Life (yrs)
Airport contracts	4 - 20
Brand	3 - 15
Customer relationships	9
Database	5
Dealer networks	15 - 20
Developed technology	3 - 15
Non-compete agreements	3 - 15
Store networks	5 - 7
Trademarks	10

22

Table of Contents

    Foreign Currency Translation — The functional currency is the U.S. Dollar for the Company's foreign subsidiaries in Dubai and Singapore.

    During the three months ended September 30, 2023, 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 $14.9 million, which was primarily caused by the strengthening of the international currencies.

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 Financial Accounting Standards Board ("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 — Since December 31, 2022 there have not been any new released accounting pronouncements that are material to our unaudited condensed consolidated financial statements, or are expected to have a material impact on our business.

Note 2: Earnings per Share

A reconciliation between basic and diluted earnings per share ("EPS") is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Net income attributable to Ebix, Inc.	$	(10,296)	$	18,250	$	(2,915)	$	56,784
Basic weighted average shares outstanding	30,866		30,777		30,854		30,745
Dilutive effect of stock options and restricted stock awards	11		6		7		3
Diluted weighted average shares outstanding	30,877		30,783		30,861		30,748
Basic earnings per common share	$	(0.33)	$	0.59	$	(0.09)	$	1.85
Diluted earnings per common share	$	(0.33)	$	0.59	$	(0.09)	$	1.85

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 month period ended September 30, 2023 were 180,000 and for the three and nine month period ended September 30, 2022 were 180,000.

Note 3: Business Combinations

23

Table of Contents

As part of its comprehensive business growth and expansion strategy, the Company seeks to execute accretive business acquisitions that are, in most cases, complementary to Ebix's existing products and services.

    During the nine months ending September 30, 2023, the Company completed no business acquisitions.    

    During the twelve months ended December 31, 2022, the Company completed no business acquisitions.

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 to achieve over the agreed upon period post acquisition to earn the 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. As of both September 30, 2023 and December 31, 2022, the total of these contingent consideration liabilities was $2.3 million.

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.    

Note 4: Debt

The Company maintains a senior secured syndicated credit facility, dated August 5, 2014, among Ebix, Inc., as borrower, certain subsidiaries party thereto from time to time as guarantors, Regions Bank (as administrative agent and collateral agent) and the lenders party thereto from time to time (collectively with Regions Bank, the "Credit Facility Agents and Lenders") (as amended from time to time, the "Credit Facility") that provides a $450 million revolving line of credit (the "Revolver") as well as a term loan (the "Term Loan"), which at September 30, 2023 had a balance of $171.9 million. The Credit Facility was set to mature in February 2023; however, in February 2023, the Company entered into Amendment No. 13 to its Credit Facility, which among other things provided for an extension of the maturity date to May 2023, and subsequently the Company entered into Amendment No. 14 to its Credit Facility, which provided for, among other things, an extension of the maturity date from May 23, 2023 to September 30, 2023 ("Credit Facility Maturity Date"), as discussed in more details below. The Credit Facility matured on September 30, 2023, and $616.8 million, was classified as a current liability.

The Company entered into a Forbearance Agreement, dated as of September 29, 2023 (the “Forbearance Agreement”), with the Credit Facility Agents and Lenders pursuant to which the Credit Facility Agents and Lenders agreed to forbear, for a limited period of time, from exercising any of their other rights and remedies under the Credit Facility with respect to the Specified Defaults (as defined and further described in the Forbearance Agreement). The Forbearance Agreement expires on the earlier of (i) November 15, 2023 and (ii) the occurrence of a "Forbearance Termination Event" (as defined and further described in the Forbearance Agreement). A Forbearance Termination Event under the Forbearance Agreement consists of, among other things, failure by the Company to perform or observe any covenants or agreements in the Forbearance Agreement, failure to pay when due any mandatory prepayments of principal under the Credit Facility, occurrence of any Event of Default under the Credit Facility, failure to meet any Milestone (as hereinafter defined), termination of the engagement of Jefferies LLC for any reason, termination of the engagement of Alix Partners LLP for any reason or entry of any Lien against any Credit Party (as defined and further described in the Credit Facility). The Company is in process of negotiating with the Credit Facility Agents and Lenders for an amendment to the Forbearance Agreement extending the expiration of the Forbearance Agreement to the earlier of (i) December 17, 2023 and (ii) the occurrence of a Forbearance Termination Event. No assurances can be given that such an amendment will be completed, if at all, or if it will be completed on terms acceptable to the Company. In addition, the Forbearance Agreement provides past due amounts will accrue interest at the Default Rate based on the Base Rate (each as defined in the Credit Facility).

Pursuant to the Forbearance Agreement, the Company agreed that, among other things, on or prior to October 31, 2023, (a) the Company would agree in writing with the Credit Facility Agents and Lenders on the terms of either (i) an amendment to the Credit Facility, in form and substance acceptable to the applicable Credit Facility Agents and Lenders or (ii) an agreement to implement an alternative transaction or transactions which shall provide for repayment of the loans and other obligations under the Credit Facility in form and substance satisfactory to the applicable Credit Facility Agents and Lenders

24

Table of Contents

holding at least 66.67% of the Total Credit Exposure (as defined and further described in the Credit Facility) (the “Payment Path Milestone”) and (b) the Company would deliver to the applicable Credit Facility Agents and Lenders a model transition service agreement and a carve-out plan (each reasonably acceptable to the applicable Credit Facility Agents and Lenders) in connection with the sale of certain U.S. assets or a combination of U.S. asset sales through an outbound process (collectively, the “Sale”), and such model transition service agreement and a carve-out plan shall each be contemporaneously posted into the data room which has been created in connection with the Sale and is available to potential purchasers (the “Sale Milestone”, and the Payment Path Milestone and the Sale Milestone collectively, the “Milestones”). Additionally pursuant to the Forbearance Agreement, the Company agreed to cause Ebix Europe Limited and Ebix Singapore to execute and deliver to Regions Bank each of the deliverables required under Section 7.15(d) of the Credit Facility on or prior to October 31, 2023, which Ebix has delivered. The Company has provided the necessary materials to the Credit Facility Agents and Lenders pursuant to the Sale Milestone. The Credit Facility Agents and Lenders extended the due date of the Payment Path Milestone from October 31, 2023 to November 15, 2023 pursuant to written communications to the Company. The Company was not able to reach an agreement with the Lenders on an amendment to the Credit Facility providing for an extension of the Credit Facility Maturity Date by October 31, 2023.

The Company is also subject to certain provisions of the Credit Facility, which will require mandatory prepayments of its outstanding loans and certain minimums for its Fixed Charge Coverage Ratio, as defined in the Credit Facility. As of September 30, 2023, the Company did not meet the required consolidated Fixed Charge Coverage Ratio. However, pursuant to the Forbearance Agreement, the Credit Facility Agents and Lenders forbear from exercising any of their respective rights and remedies with respect to the failure of the Company to comply with the Fixed Charge Coverage Ratio for the fiscal quarter ending September 30, 2023 during the Forbearance period.

At September 30, 2023 the outstanding balance of the Credit Facility, $616.8 million, was classified as a current liability. Further, at September 30, 2023 the Credit Facility Maturity Date has not been extended past September 30, 2023 and anticipated IPO of EbixCash, has not yet been resolved, as further described within Item 2 "Management's Discussion and Analysis of Financial Conditions and Results of Operations - Liquidity and Capital Resources". The refinancing of the Credit Facility will require the Company to successfully access the debt and/or equity capital markets in the U.S. or internationally. However, there are no assurances that such financing will be available in amounts or on terms acceptable to us, if at all, or that the proceeds received by Ebix, Inc. from the IPO of EbixCash will be in the amount currently expected. Further, no assurances can be given when the IPO will be completed, if at all, or if it will be completed on terms acceptable to the Company.

On July 21, 2023, the Company entered into an amendment ("Amendment No. 15") that specifically provided for, among other things, the deletion of the event of default deadline for the mandatory public opening of subscription to investors of the shares of the Company’s subsidiary EbixCash on the Indian stock market on or by prior to July 31, 2023. The mandatory public offering did not occur by July 31, 2023. Also, Amendment 15 that changed the possible additional amendment fee (the “Amendment Fee”) that had been included as part of Amendment No. 14, as discussed below, from an amount equal to 1.50% of the aggregate principal amount of the outstanding term loan (the “Term Loan") and the lenders’ commitments under the revolving line of credit (the “Revolver”), whether or not utilized, to 2% of the aggregate principal amount of the outstanding aggregate loan. The Amendment Fee was to waived if all of the Revolver has been terminated and the Term Loan and all other obligations due the lenders are fully repaid on or before August 31, 2023. However, the aggregate loan was not paid on August 31, 2023.

On May 23, 2023, the Company signed an amendment (“Amendment No. 14”) to its existing Credit Facility, extending the maturity date to September 30, 2023. Amendment No. 14 provided for, among other things, an extension of the maturity date for both the Revolver and the term loan the Term Loan, each as existing under the Credit Facility. It was conditioned, among other things, upon the Company (i) making a $5,000,000 payment of the Term Loan by June 30, 2023 and (ii) paying a customary consent fee which will be payable over time and partially waived if certain conditions are met.

Amendment No. 14 also specifically provided for the application of a certain percentage of the proceeds from certain liquidity events towards payment of outstanding principal and interest obligations at that time. These events would have included the public listing of the shares of the Company’s subsidiary EbixCash on the Indian stock market by July 31, 2023, the proceeds from the issuance of any additional debt and/or securities if raised by the Company and the proceeds from the monetization of any asset sale, if carried out by the Company. The mandatory public offering did not occur on July 31, 2023.

Amendment No. 14 (i) increased the applicable margin for the facilities under the Credit Facility to (x) 7.50% per annum for SOFR loans and letter of credit fees, (y) 6.50% per annum for base rate loans, and (ii) further increases the applicable margin for the facilities under the Credit Facility on August 31, 2023 to (x) 8.00% per annum for SOFR loans and letter of credits fees, and (y) 7.00% per annum for base rate loans. Amendment 14 also included the Amendment Fee of 1.50%.

25

Table of Contents

On February 21, 2023, the company entered into Amendment No. 13 to its Credit Facility, which provides for, among other things, an extension of the Credit Facility Maturity Date from February 21, 2023 to May 23, 2023. Amendment No. 13 to the Credit Facility required the Company to make a $5 million prepayment of the Revolver on February, 21, 2023 and a $5 million amortization payment on the Term Loan on March 31, 2023. Any repayments under the Revolver will be accompanied by a corresponding reduction in the aggregate revolving commitments. Lastly, amendment No. 13 modified certain other provisions within the Credit Facility and has resulted in an approximately 1% per annum interest rate increase beginning February 21, 2023.

On April 9, 2021, The Company entered into Amendment No. 12 to its Credit Facility. Amendment No. 12 provided for, among other things, a waiver of any potential event of default arising under the Credit Facility from the failure to timely deliver the Company's audited financial consolidated financial statements and related compliance certificate for the year ended December 31, 2020, provided that there is no good faith determination by the requisite lenders under the Credit Facility of a "Material Circumstance" (as defined and further described in Amendment No. 12), which determination (if any) may only be made within a specified period described in Amendment No. 12 and is subject to certain cure rights of the Company. Amendment No. 12 also modified the applicable margin that applies from the date of the amendment forward, modified certain mandatory prepayment provisions, as well as certain other covenants related to restricted payments, investments and certain reporting requirements.

On March 31, 2021, Ebix entered into Amendment No. 11 to the Credit Facility. Amendment No. 11 provided, for, among other things, a limited waiver through April 10, 2021, of any potential event of default arising under the Credit Facility from failure to deliver the Company's audited consolidated financial statements and related compliance certificate for the year ended December 31, 2020. Amendment No. 11 also modified certain covenants contained in the Credit Facility, including with respect to certain permitted restricted payments and investments.

As of September 30, 2023, the Company's condensed consolidated balance sheets include $8.2 million of remaining deferred financing costs in connection with the Credit Facility, which were being amortized as a component of interest expense through the Credit Facility Maturity Date. $4.9 million of such deferred financing costs pertain to the Revolver, and $3.3 million pertains to the Term Loan, which is netted against the current portion of the Term Loan as reported on the condensed consolidated balance sheets. At December 31, 2022, the Company's Consolidated Balance Sheets included $1.2 million of remaining deferred financing costs in connection with the Credit Facility, with $0.7 million pertaining to the Revolver, and $0.5 million pertaining to the Term Loan, of which $0.5 million was netted against the current portion of the Term Loan.