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Ebix, Inc. (EBIX)
Q1 2010 Earnings Call
May 7, 2010 11:00 a.m. ET
Neil van Helden - Corporate Manager, Marketing Communications & Media
Robin Raina - President & CEO
Robert Kerris - CFO
Nick Phillips - Holden Asset Management
Mike Latimore - Northland Capital
John Bates - Individual Investor
Simon Baruch - Private Investor
Mark Rye - Singular Research
Mark Lemke - Wells Fargo
Vincent Coppazi - Kovack Securities
Neil van Helden
Good morning everyone, and welcome to Ebix's Inc's first quarter 2010 earnings conference call. Joining me to discuss the quarter is Ebix's President and CEO, Robin Raina. Following Robin's remarks, we will open up the call for your questions to be addressed by Robin and Ebix CFO, Robert Kerris. Now let me take this time to remind you that the primary purpose of today's call is to provide you with information regarding our first quarter fiscal 2010 performance.
However, some of our discussion or responses to your questions may contain forward-looking statements. These statements are subject to risks, uncertainties and assumptions. Should any of the risks or uncertainties or materialize or should have assumptions prove incorrect, actual Company results could differ materially from these forward-looking statements. All these risks, uncertainties, and assumptions as well as other information on potential factors that could affect our financial results are included in our report filed with the SEC included our most recently reported Form 10-K for the year ended 31st of December 2009 particularly under the heading risk factors.
Our press release announcing our outstanding first quarter results was issued a few hours back. You can look at Ebix Financials beyond what has been provided in the release on our website at www.ebix.com. The audio and the text transcript of this call will be available also on the investor home page of the Ebix website after 2:00 p.m. EDT With that, let me turn you over to Ebix, CEO and President, Robin Raina.
Thank you, Neil. Good morning gentlemen. We announced our first quarter 2010 results a few hours back, and I'm delighted to be able to share with you today our outstanding results. We started that year by delivering the biggest financial quarter in our history.
First quarter revenue rose 53% to $31.6 million, as compared to the first quarter of 2009. GAAP diluted EPS of $0.32 increased from $0.23 a year ago. That's an increase of 38% year-over-year. These are record results and mark the highest revenue net income and diluted EPS in anyone quarter that the Company has reported in its 34 year young history. First quarter net income was $12.4 million, an increase of 49% on a year-over-year basis, as compared to net income of $8.3 million in the first quarter of 2009.
To put these numbers in perspective, let me remind you that the net income of $12.4 million in the first quarter of 2010 is approximately equivalent to the net income of Ebix for the full year of 2007. For those of us who have been associated with Ebix for sometime this net income comparison of our quarterly results to the full year income results just two years back has a lot of special meaning.
This is also the first quarter where our U.S. income was taxed at an average rate of 33.2% due to partial NOI valuation allowance release in the fourth quarter of 2009. Our consolidated worldwide tax rate benefits from the majority of our manufacturing base and income being in low tax jurisdictions across the world. The exchange segment continued to be a largest revenue generator with 72% of our revenues coming from at this quarter.
11% of our revenues came from the BPO channel, 9% from the P&C back end systems broker channel and 8% from the P&C back end systems insurance company channel. The exchange channel grew 90% year-over-year. The BPO channel grew 4% year-over-year and the broker channel grew 19% year-over-year. The carrier channel dropped 17% year-over-year because of the relative freezing of IT budgets by insurance companies in 2009 in the area of procuring back end systems.
The insurance company market has since improved quite a bit in 2010, and we expect to get our carrier revenue going back again soon. in the first quarter of 2010, the Company continued its focus on organic growth by signing key named accounts like Sun Life, Universal Life, U.S. Bank Ameriprise, American General Life, National Western Life, Principal Financial Group, MetLife, Bechtel, Sea World, Lockton, Hillard Lyons, Port Authority of New York-New Jersey, and Avis amongst others etcetera.
This list of names is just a sample presentation of contract signed by the Company in the first quarter of 2010 with large accounts easily recognizable to the investor community and is by no means a comprehensive list of contract signed by Ebix in the first quarter of 2010.
Some of the other material contract signed previously in 2009 are still in implementation mode, and thus did not generate any transaction exchange revenue in the first quarter of 2010.