EBIX INC: MANAGEMENT REPORT ON FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-Q)

As used herein, the terms "Ebix," "the Company," "we," "our," and "us" refer
to Ebix, Inc., a Delaware corporation, and its consolidated subsidiaries as a
combined entity, except where it is clear that the terms mean only Ebix, Inc.

  Safe Harbor for Forward-Looking Statements - This Form 10-Q and certain
information incorporated herein by reference contains forward-looking statements
and information within the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. This information includes
assumptions made by, and information currently available to management,
including statements regarding future economic performance and financial
condition, liquidity and capital resources, acceptance of the Company's products
by the market, and management's plans and objectives. In addition, certain
statements included in this and our future filings with the SEC, in press
releases, and in oral and written statements made by us or with our approval,
which are not statements of historical fact, are forward-looking statements.
Words such as "may," "could," "should," "would," "believe," "expect,"
"anticipate," "estimate," "intend," "seeks," "plan," "project," "continue,"
"predict," "will," and other words or expressions of similar meaning are
intended by the Company to identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
forward-looking statements are found at various places throughout this report
and in the documents incorporated herein by reference. These statements are
based on our current expectations about future events or results and information
that is currently available to us, involve assumptions, risks, and
uncertainties, and speak only as of the date on which such statements are made.

  Our actual results may differ materially from those expressed or implied in
these forward-looking statements. Factors that may cause such a difference
include, but are not limited to, those discussed in   Part I, Item 1A, "Risk
Factors" in our Form 10-K for the year ended December 31, 2021 which is
incorporated by reference herein  , and in Part II, Item 1A "Risk Factors" in
this Form 10-Q, including but not limited to: the willingness of independent
insurance agencies to outsource their computer and other processing needs to
third parties; pricing and other competitive pressures and the Company's ability
to gain or maintain share of sales as a result of actions by competitors and
others; changes in estimates in critical accounting judgments; changes in or
failure to comply with laws and regulations, including accounting standards,
taxation requirements (including tax rate changes, new tax laws and revised tax
interpretations) in domestic or foreign jurisdictions; exchange rate
fluctuations and other risks associated with investments and operations in
foreign countries (particularly in India, Australia, Asia, Latin America, and
Europe wherein we have significant and/or growing operations); fluctuations in
the equity markets, including market disruptions and significant interest rate
fluctuations, which may impede our access to, or increase the cost of, external
financing; the impacts of the COVID-19 global pandemic on our operating
performance; ability to secure additional financing to support capital
requirements; the ability to refinance the Credit Facility by maturity as well
as Credit Facility provisions that could materially restrict our business; costs
and effects of litigation, investigations, or similar matters that could affect
our business, operating results and financial condition; and international
conflict, including terrorist acts. The Company undertakes no obligation to
update any such factors, or to publicly announce the results of, or changes to
any of the forward-looking statements contained herein to reflect future events,
developments, changed circumstances, or for any other reason.

  Other important factors that could cause actual results to differ materially
from those in our specific forward-looking statements included in this Form 10-Q
include, but are not limited to, the following:

•our future liquidity needs discussed under "Liquidity and Financial Condition"
regarding our ability to replace our Credit Facility prior to or at maturity,
generate cash from operating activities and any declines in our credit ratings
or financial condition which could restrict our access to the capital markets or
materially increase our financing costs (refer to Note 4 of the Condensed Notes
to these Condensed Consolidated Financial Statements in this Form 10-Q, "Debt");
•uncertainties pertaining to the actual ultimate cost of our legal contingencies
(refer to Note 5 of the Condensed Notes to these Condensed Consolidated
Financial Statements in this Form 10-Q, "Commitments and Contingencies", and
"Contractual Obligations" in Management's Discussion and Analysis of Financial
Condition and Results of Operation ("MD&A")); and
•the MD&A and the analysis of the six-month revenue trends regarding actual
realized level of demand for our products during the immediately foreseeable
future, and fluctuations thereof

  Readers should carefully review the disclosures and the risk factors described
in this and other documents we file from time to time with the SEC, including
future reports on Forms 10-Q and 8-K, and any amendments thereto. You may obtain
our SEC filings at our website, www.ebix.com under the "Investor Information"
section, or over the Internet at the SEC's website, www.sec.gov.
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Contents

  The following information should be read in conjunction with the unaudited
condensed consolidated financial statements and the notes thereto included in
Part 1, Item 1 of this Quarterly Report, and the audited consolidated financial
statements and notes thereto and MD&A contained in the Company's Annual Report
on Form 10-K for the year ended December 31, 2021.

Company presentation

  Ebix is a leading international supplier of on-demand infrastructure software
exchanges and e-commerce services to the insurance, financial, travel, cash
remittances, and healthcare industries. In the insurance sector, the Company's
main focus is to develop and deploy a wide variety of insurance and reinsurance
exchanges on an on-demand basis using SaaS enterprise solutions in the areas of
CRM, front-end and back-end systems, and outsourced administrative and risk
compliance. The Company's products feature fully customizable and scalable
on-demand software 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 over 650,000
physical distribution outlets in India and many 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, Forex, travel, pre-paid gift cards, utility payments, lending, and
wealth management in India and other primarily Southeast Asian 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 85.7% and 85.9% of the Company's total
revenue for the six months ended June 30, 2022 and 2021, respectively.

Ebix's goal is to be a leading facilitator of insurance and financial
transactions in the world. The Company's technology vision is to focus on the
convergence of all channels, processes and entities in a manner such that data
seamlessly flows once a data entry has initially been made. Ebix strives to work
collaboratively with clients to develop innovative technology strategies and
solutions that address specific business challenges and requirements. Ebix
combines the newest technologies with its capabilities in consulting, systems
design and integration, IT and business process outsourcing, application
software, and web and application hosting to meet the individual needs of
organizations.

Offices and geographical information

  The Company's corporate headquarters, including substantially all of our
corporate administration functions, is located in Johns Creek, Georgia, where we
own a commercial office building and campus facility. Additionally, the Company
leases office space in New Zealand, Australia, Singapore, Dubai, Brazil, Canada,
Indonesia, the Philippines, and the United Kingdom for support, operations and
sales offices. The Company also leases approximately 85 facilities across India,
while owning six facilities in India.

Effects of COVID-19 and other world events

In December 2019COVID-19 has been reported and spread around the world, including all states in the WE On March 11, 2020the World Health Organization
declared COVID-19 a pandemic, and the March 13, 2020the WE the government has declared a national emergency with respect to COVID-19.

  In response to the COVID-19 pandemic, many state, local, and foreign
governments implemented travel restrictions, quarantines, shelter-in-place
orders, and similar government orders and restrictions, in an attempt to control
the spread of the disease. Such restrictions or orders, or the perception that
such restrictions or orders could be implemented, resulted in business closures,
work stoppages, slowdowns and delays, work-from-home policies, and the
cancellation or postponement of events.

  Beginning in March 2020, in an effort to protect our employees and comply with
applicable government orders, we restricted non-essential employee travel and
transitioned our employees to a remote work environment. During 2021 and 2022
the Company transitioned to a hybrid model of remote/on site work at many of its
locations. The ongoing effects of the COVID-19 pandemic on our operational and
financial performance will depend on the duration and spread of COVID-19 and its
variants.

  During the fiscal year ended December 31, 2020, particularly beginning in
March, we experienced a decrease in demand for certain of our solutions and
services, particularly those related to the Company's travel, foreign exchange,
remittance, e-learning, and consulting business areas, after certain government
restrictions were implemented. This decreased demand continued throughout 2020
and 2021 in varying degrees for each business area, and even persists through
the date of this filing for all of the above mentioned business areas, but most
notably in the remittance, e-learning and travel businesses. We expect that
demand variability for our products and services will continue as a result of
the COVID-19 pandemic, and we cannot predict with any certainty when demand for
these solutions/services will return to pre-COVID-19 levels.

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We continue to monitor developments related to COVID-19 and remain flexible in
our response to the challenges presented by the pandemic. Along with the
measures mentioned above to protect the health and safety of our employees, we
took steps to strengthen our financial position in 2020 to mitigate the adverse
impact that COVID-19 has had or may have on our business and operations,
including amending our Credit Facility, reducing salaries for certain employees,
furloughing employees in the most negatively impacted business areas,
eliminating certain employee positions, and eliminating, reducing, or deferring
non-essential expenditures. In 2021 we largely returned salaries to pre-COVID-19
levels and, in the case of certain IT professionals, increased wages in reaction
to a tightening labor market in India. Additionally, we have ceased our share
repurchase program until business conditions improve globally.

We also continue to evaluate the potential effects on our business from other
economic conditions and global events, including the situation in Ukraine and
Russia that began in February 2022. In response to the invasion of Ukraine by
Russia, economic sanctions were imposed on individuals in Russia, including
financial institutions, by governments around the world, including the U.S. and
the European Union. We have no employees or operations in either Ukraine or
Russia. However, the invasion of Ukraine by Russia and the sanctions and other
measures imposed in response to this situation have increased the level of
economic and political uncertainty in Russia and other areas of the world. Risks
associated with heightened geopolitical economic instability include, among
others, reduction in consumer, government or corporate spending, international
sanctions, embargoes, heightened inflation, volatility in global financial
markets and foreign currency rates, increased cyber disruptions and higher
supply chain costs. The duration and extent of the effects of the invasion of
Ukraine by Russia on the global economy and our operations is difficult to
predict. However, a significant escalation or expansion of the scope or of the
related economic disruption could have an adverse effect on our business and
financial results.

  Our reported results for the six-month period ended June 30, 2022 may not be
reflective of current market conditions, or of our results for any future
periods, which may be negatively impacted by the COVID-19 pandemic or other
global events or economic conditions to a greater extent than the reported
period. The impact of the COVID-19 pandemic and other global events mentioned
above may also exacerbate other risks discussed in this Quarterly Report. Refer
to Item 1A, "Risk Factors" in our Form 10-K for the year ended December 31, 2021
for a complete description of the material risks that the Company currently
faces.

Results of Operations

Operating Revenue

  The Company derives its revenues primarily from subscription and transaction
fees pertaining to products or services delivered over our exchanges or from our
application service provider ("ASP") platforms, fees for business process
outsourcing services, and fees for software development projects, including fees
for consulting, implementation, training, and project management provided to
customers with installed systems, e-governance solutions to governmental
agencies in the health and education sectors, as well as foreign exchange,
remittance (both inward and outward), and travel services from our financial
exchanges.

  Ebix's revenue streams are derived from three product/service channels.
Presented in the table below is the breakout of our revenues for each of those
product/service channels for the three and six months ended June 30, 2022 and
2021:

                                             Three Months Ended             Six Months Ended
                                                  June 30,                      June 30,
                                            2022           2021           2022           2021
                                                              (In thousands)
         EbixCash Exchanges              $ 188,641      $ 187,957        412,793        418,305
         Insurance Exchanges                42,302         41,916         86,066         84,686
         Risk Compliance Solutions          19,838         16,449         38,175         33,384
         Totals                          $ 250,781      $ 246,322      $ 537,034      $ 536,375


The table below provides an approximation (as a % of total revenue) of software subscription and maintenance revenue, transaction revenue, and professional services revenue and consulting fees:

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                                                  Three Months Ended               Six Months Ended
                                                       June 30,                        June 30,
                                                    2022             2021           2022            2021
Subscription                                               15  %     16  %                14  %     15  %
Transaction-Based                                          80  %     78  %                81  %     80  %
Professional Services/Consulting/Other                      5  %      6  %                 5  %      5  %



Results of operations – Quarters ended June 30, 2022 and 2021

Operating revenue

  During the three months ended June 30, 2022, our total operating revenues
increased $4.5 million, or 2%, to $250.8 million as compared to $246.3 million
during the second quarter of 2021. On March 11, 2020, COVID-19 was declared a
global pandemic by the World Health Organization. Across the U.S. and the world,
governments and municipalities instituted measures in an effort to control the
spread of COVID-19, including quarantines, shelter-in-place orders, school
closings, travel restrictions, and the closure of non-essential businesses. Our
travel, foreign exchange, remittance, e-learning, and financial technologies
businesses continue to generate revenues below pre-COVID 19 operating levels,
but the Company is seeing a material rebound in these businesses during 2022
year-to-date. Total revenues increased year-over-year during the second fiscal
quarter of 2022 due primarily to year-over-year increases in the Company's
travel and foreign exchange revenues (a combined greater than $22 million
increase, or 293%, over the second quarter of 2021), BPO revenues in India (70%
increase), e-learning revenues (approximately 600% increase), Latin America
revenues (62% increase), and U.S. annuity exchange revenues (21% increase).
These increases were offset, in part, by a decline in the EbixCash payment
solutions revenues in India (primarily prepaid gift cards), which decreased by
approximately $22.3 million, or 13.8%. Reported revenues were negatively
impacted by the weakening of foreign exchange rates in our operating geographies
during the second quarter ended June 30, 2022. The largest negative impact due
to exchange rate movements was in the Indian rupee and Australian dollar.
Specifically, the year-over-year impact from fluctuations of exchange rates in
the countries that we operate, in the aggregate, decreased reported revenues by
approximately $9.4 million for the three months ended June 30, 2022.
International revenue accounted for 84.9% and 84.7% of the Company's total
revenue for the three months ended June 30, 2022 and 2021, respectively.

Cost of services provided

  Cost of services provided, which includes costs associated with customer
support, consulting, implementation, and training services, decreased $8.9
million, or 5%, to $169.3 million in the second quarter of 2022 as compared to
$178.2 million in the second quarter of 2021. For the three months ended
June 30, 2022, cost of services as a percentage of total revenues decreased to
67.5% of total revenues as compared to 72.3% for the three months ended June 30,
2021. The decrease in the Company's cost of services provided as a percentage of
total revenues is primarily due to revenue mix changes year over year,
particularly the decrease in payment solutions revenue within the EbixCash
operations (primarily gift cards). Payment solutions revenues decreased by
approximately 13.8% year-over-year in the second quarter ended June 30, 2022 and
carry lower gross margins relative to other solutions/services offered by the
Company.

Product Development Expenses

  The Company's product development efforts are focused on the development of
new technologies for insurance carriers, brokers, and agents, the development of
new data exchanges for use in domestic and international insurance markets, as
well as the Forex and travel sectors. Product development expenses increased
$0.1 million, or 1%, to $10.2 million during the second quarter of 2022 as
compared to $10.1 million during the second quarter of 2021. The year-over-year
increase in product development expenses in the second quarter of 2022 was
driven by increased labor costs primarily in India.

Sales and marketing expenses

  Sales and marketing expenses of $4.5 million in the second quarter of 2022
increased compared to $3.4 million in the second quarter of 2021. The increase
was driven by increased marketing/advertising expenditures, primarily related to
the EbixCash businesses.

General and administrative expenses

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  General and administrative expenses increased $8.4 million, or 36%, to $31.7
million in the second quarter of 2022 as compared to $23.3 million in the second
quarter of 2021. The year-over-year increase is primarily due to increased
personnel costs, including travel expenses, of approximately $4.7 million, and
an increase in bad debt expense of approximately $2.8 million in the second
quarter of 2022 versus the comparable prior year period. The increase in bad
debt expense results from a combination of a reduction of the Ebix Vayam
allowance for doubtful accounts in the second quarter of 2021 and an increase in
bad debt expenses within the EbixCash travel business in the second quarter of
2022.

Amortization and depreciation charges

  Amortization and depreciation expenses increased $0.9 million, or 22%, to $4.9
million in the second quarter of 2022 as compared to $4.0 million in the second
quarter of 2021, primarily due to the impact from increased capital expenditures
over the past several quarters, and certain reclassifications and useful life
adjustments made by the Company in the first quarter of 2022 that were not
material to the overall financial condition of the Company.

interest income

  Interest income increased $49 thousand, or 288%, to $66 thousand in the second
quarter of 2022 as compared to $17 thousand in the second quarter of 2021. The
increase resulted from higher amounts of interest-bearing short term investments
and restricted cash balances in the comparable period in 2022 versus 2021.

Interest charges

  Interest expense of $11.7 million in the second quarter of 2022 increased 11%
as compared to $10.5 million in the second quarter of 2021. While the average
outstanding balance under the Company's corporate credit facilities decreased
year-over-year by $27.3 million from approximately $671.2 million to
approximately $643.9 million, the Company's interest rate increased by
approximately 1.7% year-over-year, resulting in increased interest expense
year-over-year of over $1.6 million. Offsetting the increased interest expense
from the corporate credit facilities was a year over year decrease in interest
expense from the Company's working capital facilities in India. The average
balance of our working capital facilities declined year-over-year by in excess
of $8.0 million.

Non-Operating (Loss)/Income

Non-operating loss in the second quarter of 2022 decreased to $0.4 million as
compared to $1.3 million in the prior year. These 2022 losses are attributable
to non-operating expenses in our India operations, primarily related to
corporate social responsibility programs that are intended to benefit the
welfare of the Indian society as a whole.

Foreign exchange gain (loss)

  The Company recorded a net foreign currency exchange gain for the three months
ended June 30, 2022 in the amount of $3.2 million which consisted of net gains
realized and unrealized upon the settlement of receivables or payables and
re-measurement of cash balances denominated in currencies other than the
functional currency of the respective operating division recording the
instrument.

Income taxes

  The Company recorded net income tax expense of $2.5 million (11.62%) during
the three months ended June 30, 2022, which included tax expense of $0.3 million
from certain discrete items related to stock compensation and uncertain tax
positions. The income tax expense, exclusive of discrete items, was $2.2 million
(10.09%) during the three months ended June 30, 2022. The Company expects its
full year effective tax rate to be in the range of 9% to 10%.

Results of operations – Half-year ended June 30, 2022 and 2021

Operating revenue

  During the six months ended June 30, 2022, our total operating revenues
increased $0.7 million, to $537.0 million as compared to 536.4 during the six
months ended June 30, 2021. The year over year increase in revenues for the
year-to-date period ended June 30, 2022 was due primarily to a year-over-year
increase in the Company's travel and foreign exchange revenues (a combined
approximately $30 million increase, or 194%, over the year-to-date period in
2021), BPO revenues in India (52% increase), e-learning revenues (325%
increase), India IT Services revenues (54% increase), Latin America revenues
(45% increase), U.S. annuity exchange revenues (21% increase), and continuing
medical education revenues (9% increase). These increases were offset by a
decrease in the Company's payment solutions offerings in India (primarily
prepaid gift cards),
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which decreased by approximately $35.9 million, or 9.8%. Reported revenues were
negatively impacted by the weakening of foreign exchange rates in our operating
geographies during the year-to-date period ended June 30, 2022. The largest
negative impact due to exchange rate movements was in the Indian rupee and
Australian dollar. Specifically, the year-over-year impact from fluctuations of
exchange rates in the countries that we operate, in the aggregate, decreased
reported revenues by approximately $16.9 million for the six months ended
June 30, 2022. International revenue accounted for 85.7% and 85.9% of the
Company's total revenue for the six months ended June 30, 2022 and 2021,
respectively.

Cost of services provided

  Cost of services provided, which includes costs associated with customer
support, consulting, implementation, and training services, decreased
$18.4 million, or 5%, to $380.2 million in the six months ended June 30, 2022 as
compared to $398.6 million in the six months ended June 30, 2021. For the six
months ended June 30, 2022, cost of services as a percentage of total revenues
decreased to 70.8% of total revenues as compared to 74.3% for the six months
ended June 30, 2021. The decrease in the Company's cost of services provided as
a percentage of total revenues is primarily due to revenue mix changes year over
year, particularly the decrease in payment solutions revenue within the EbixCash
operations (primarily gift cards), offset, in part, by an increase in cost of
services related to revenue increases in the Company's travel and foreign
exchange businesses. Payment solutions revenues decreased by approximately 9.8%
year-over-year in the six months ended June 30, 2022 and carry lower gross
margins relative to other solutions/services offered by the Company, while
revenues for the Company's travel and foreign exchange businesses increased 194%
year-over-year for the same period in 2022.

Product development expenses

  The Company's product development efforts are focused on the development of
new technologies for insurance carriers, brokers, and agents, the development of
new data exchanges for use in domestic and international insurance markets, as
well as the Forex and travel sectors. Product development expenses increased
0.8, or 4%, to $20.5 million for the six months ended June 30, 2022 as compared
to $19.7 million for the comparable period in 2021. The year-over-year increase
in product development expenses was driven by increased personnel costs
primarily in India.

Sales and marketing expenses

Sales and marketing expenses of $8.3 million for the six months ended June 30, 2022 increased compared to $7.2 million in 2021. The increase is due to higher marketing/advertising expenses, mainly in India.

General and administrative expenses

  General and administrative expenses increased $14.0 million, or 31%, to
$58.6 million during the six months ended June 30, 2022 as compared to
$44.7 million for the same period in 2021. The year-over-year increase is
primarily due to increased personnel costs, including travel expenses, of
approximately $7.5 million, an increase in bad debt expense of approximately
$4.5 million versus the comparable prior year period, as well as an
approximately $1.1 million increase in rent expense, primarily related to the
Company's foreign exchange operations in India as travel becomes more robust
from the COVID-19 impacted lows. The bad debt expense increase is due to a
reduction in the allowance for doubtful accounts associated with the Ebix Vayam
joint venture in the year-to-date period in 2021 of approximately $2.8 million
that relates to receivables from a government-owned customer in India, BSNL.
During the year-to-date period in 2022 the allowance for doubtful accounts was
increased by approximately $0.4 million.

Amortization and depreciation charges

  Amortization and depreciation expenses increased $1.5 million, or 19%, to $9.2
million in the six months ended June 30, 2022 as compared to $7.8 million in the
comparable period of 2021, primarily due to the impact from increased capital
expenditures over the past several quarters, and certain reclassifications and
useful life adjustments made by the Company in the first quarter of 2022 that
were not material to the overall financial condition of the Company.

interest income

  Interest income increased $103.0 thousand to $128.0 thousand for the six
months ended June 30, 2022 as compared to $25.0 thousand for the comparable
period in 2021. The increase resulted from higher amounts of interest-bearing
short term investments and restricted cash balances in the comparable period in
2022 versus 2021.

Interest Expense
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  Interest expense of $21.9 million in the six months ended June 30, 2022
increased 18% as compared to $18.5 million in the for the same period in 2021.
While the average outstanding balance under the Company's corporate credit
facilities decreased year-over-year by approximately $35.0 million from
$682.9 million to $647.9 million, the Company's interest rate increased by
approximately 1.9% year-over-year, resulting in increased interest expense
year-over-year of greater than $5.0 million. Offsetting the increased interest
expense from the corporate credit facilities was a year over year decrease in
interest expense from the Company's working capital facilities in India. The
average balance of our working capital facilities declined year-over-year by
over $8.5 million.

Non-Operating (Loss)/Income

Non-operating loss during the six months ended June 30, 2022 decreased to
$1.1 million compared to $1.3 million in the previous year. The losses are attributable to the non-operating expenses of our India operations, mainly related to corporate social responsibility programs which aim to benefit the welfare of the Indian society as a whole.

Foreign exchange gain (loss)

  The Company recorded a net foreign currency exchange gain for the six months
ended June 30, 2022 in the amount of $4.1 million as compared to a foreign
exchange loss of $(0.6) million in the comparable prior year period. These gains
and losses consisted of net gains/losses realized and unrealized upon the
settlement of receivables or payables and re-measurement of cash balances
denominated in currencies other than the functional currency of the respective
operating division recording the instrument.

Income taxes

  The Company recorded net income tax expense of $4.2 million (10.10%) during
the six months ended June 30, 2022, which included tax expense of $0.6 million
from certain discrete items related to stock compensation and uncertain tax
positions. The income tax expense, exclusive of discrete items, was $3.5 million
(8.57%) during the six months ended June 30, 2022. The Company expects its full
year effective tax rate to be in the range of 9% to 10%.


Cash and capital resources

  Our principal sources of liquidity are the cash flows provided by our
operating activities and cash and cash equivalents on hand. The Company's Credit
Facility is due to mature in February 2023 and, as a result, at June 30, 2022
the outstanding balance of the Credit Facility, $636.3 million, was classified
as a current liability. The Company has a negative working capital position of
$473.1 as of June 30, 2022. The Company expects to refinance the Credit Facility
during 2022, and intends to do so in conjunction with the resolution of the
anticipated IPO of EbixCash Limited described below. 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 described below will be in the amount currently expected.

The Company's Indian subsidiary, EbixCash Limited, filed a Draft Red Herring
Prospectus (DRHP) with the Securities and Exchange Board of India on March 9,
2022, for an initial public offering aggregating up to ?60,000 million or $787
million (the "IPO"). Of the IPO proceeds, approximately $350 million is proposed
to be utilized towards purchase of outstanding compulsorily convertible
debentures from Ebix Asia Holdings Inc, Mauritius and in turn payment to Ebix,
Inc., which is proposed to be used towards reduction of Ebix Inc.'s outstanding
debt. Approximately $130 million is proposed to be utilized for working capital
requirements of EbixCash Limited and its subsidiaries. The remaining proceeds
would be utilized towards, inter alia, growth-related initiatives of EbixCash
Limited, including acquisitions and other investments. 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.

Our current ratio decreased to 0.43 at June 30, 2022 from 1.79 at December 31,
2021 and our working capital position decreased to $(473.1) million at June 30,
2022 from $161.4 million at December 31, 2021 due to the classification of the
Credit Facility as a current liability at June 30, 2022. Our current ratio and
working capital position, net of the impact of the classification of debt as
current liabilities and assuming similar current maturities of debt as at
December 31, 2021, would have been approximately 1.6 and $130.2 million,
respectively.

We believe that the anticipated cash flows provided by our operating activities,
together with current cash balances, will be sufficient to meet our projected
cash requirements through January 2023. However, there can be no assurance that
additional capital will not be required sooner. Any projections of future cash
needs, cash flows, and the general market conditions for debt and equity
securities is subject to substantial uncertainty.
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Our cash and cash equivalents were $67.5 million and $99.6 million at June 30,
2022 and December 31, 2021, respectively. The Company holds material cash and
cash equivalent balances overseas in foreign jurisdictions. The free flow of
cash from certain countries where we hold such balances may be subject to
repatriation tax effects and other restrictions. Furthermore, the repatriation
of earnings from some of our foreign subsidiaries would result in the
application of withholding taxes at the foreign source and taxation at the U.S.
parent level upon receipt of the repatriation amounts.

The approximate balances of cash, cash equivalents, restricted cash and short-term investments held in our WE operations and each of our foreign subsidiaries from August 1, 2022 are shown in the table below:

         Country/Region          Cash, Restricted Cash and Short-Term Investments
                                                  (In thousands)
     India                      $                                         59,991
     United States                                                         8,511
     Philippines                                                           6,650
     Australia                                                             2,762
     Indonesia                                                             1,720
     Latin America                                                         2,468
     Singapore                                                             1,803
     New Zealand                                                             662
     United Arab Emirates                                                    951
     Canada                                                                2,897
     Europe                                                                  732
     Mauritius                                                                13

     Total                      $                                         89,160



  To the extent we have available capital, we intend to continue to utilize cash
flows generated by our ongoing operating activities and the refinancing of our
Credit Facility, in combinations with the possible issuance of additional debt
or equity, to fund organic growth initiatives and capital expenditures, to make
strategic business acquisitions, to retire outstanding indebtedness, and to
repurchase shares of our common stock if and as market and operating conditions
warrant. However, the maturity of the Credit Facility as well as the covenants
in that Credit Facility could adversely affect our ability to make strategic
acquisitions, fund investments, repurchase shares of our common stock, or engage
in other business activities that could be in the Company's interest.

Business combinations

  The Company seeks to execute accretive business acquisitions in combination
with organic growth initiatives as part of its comprehensive business growth and
expansion strategy. The Company looks to acquire businesses that are
complementary to Ebix's existing products and services.

In the six months ending June 30, 2022the Company has not made any business acquisitions.

In the twelve months ended December 31, 2021the Company has not made any 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
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obligations as contingent liabilities and are reported as such on its condensed
consolidated balance sheets. As discussed in more detail in Note 1 of the
Condensed Notes to the Condensed Consolidated Financial Statements in this Form
10-Q, 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 June 30, 2022, the total of these
contingent liabilities was $2.4 million, while at December 31, 2021, the total
of these contingent consideration liabilities was $2.6 million.

Operational activities

  Net cash provided by our operating activities was $21.4 million for the six
months ended June 30, 2022. The primary components of the cash provided by our
operating activities during the six-month period consisted of net income of
$38.5 million, $9.2 million of depreciation and amortization, $1.9 million of
non-cash share-based compensation, $1.8 million of right-of-use assets
amortization, $1.5 million of amortization of capitalized software development
costs, an $8.8 million increase in contract liabilities, a $(24.4) million
impact from the provision for deferred taxes, and $13.0 million of working
capital requirements, primarily due to an increase in accounts receivable and
other assets, offset in part by an increase in accounts payable. During the six
months ended June 30, 2022, the Company made $24.2 million of tax payments.

  Net cash provided by our operating activities was $21.7 million for the six
months ended June 30, 2021. The primary components of the cash provided by our
operating activities during the six-month period consisted of net income of
$37.3 million, $7.8 million of depreciation and amortization, $2.7 million of
non-cash share-based compensation, $2.5 million of right-of-use assets
amortization, $1.6 million of amortization of capitalized software development
costs, and $(28.3) million of working capital requirements, primarily due to
decreased accounts payable and accrued expenses, an increase in the other assets
during the year-to-date period, and an increase in receivables from service
providers. During the six months ended June 30, 2021, the Company made $12.1
million of tax payments.

Investing Activities

Net cash used for investing activities during the six months ended June 30, 2022 has been $17.0 millionand consisted mainly of $9.6 million for capital expenditures and $4.2 million for software development costs that have been capitalized.

  Net cash used for investing activities during the six months ended June 30,
2021 was $6.4 million, and consisted primarily of $3.1 million for software
development costs that were capitalized, $1.7 million for capital expenditures,
and decreases in marketable securities of $11.3 million (specifically bank
certificates of deposit).

Fundraising activities

  During the six months ended June 30, 2022, net cash used in financing
activities was $24.1 million, which consisted primarily of $15.9 million used to
make principal payments on the existing term loan, a $1.7 million reduction in
EbixCash working capital facilities in India, a $1.7 million reduction in other
debt outside the corporation credit facilities and the working capital
facilities, and $4.6 million of quarterly dividends to our common stockholders.

  During the six months ended June 30, 2021, net cash used in financing
activities was $43.1 million, which consisted primarily of a $6.9 million
reduction in EbixCash working capital facilities in India, $31.3 million used to
make scheduled payments on the existing term loan and $4.6 million of quarterly
dividends to our common stockholders.

Credit facility

The Company's Credit Facility provides a $450 million revolving line of credit
(the "Revolver") as well as a term loan (the "Term Loan"), which at June 30,
2022 had a balance of $196.9 million. The Credit Facility matures in February
2023. As a result of the impending maturity within the next twelve months from
the June 30, 2022 financial statements date herein, the outstanding balance of
the Credit Facility, $636.3 million, is classified as a current liability within
the Condensed Consolidated Balance Sheets. Because of this classification of the
Credit Facility as a current liability, the Company has a negative working
capital position of $473.1 million.

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.
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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.

At June 30, 2022, the outstanding balance on the Revolver was $439.4 million and
the Revolver carried an interest rate of 7.25% at June 30, 2022. The balance on
the Revolver is included in the current liabilities section of the condensed
consolidated balance sheets. During the six months ended June 30, 2022, the
average and maximum outstanding balances of the Revolver were both $439.4
million. At December 31, 2021, the outstanding balance on the Revolver was
$439.4 million and the Revolver carried an interest rate of 5.50%. This balance
was included in the long-term liabilities section of the condensed consolidated
balance sheets. During 2021, the average and maximum outstanding balances on the
Revolver were both $439.4 million.

  At June 30, 2022, the outstanding balance on the Term Loan was $196.9 million,
of which $196.9 million is due within the next twelve months. $15.9 million of
principal payments were made during the six months ended June 30, 2022, of which
$13.2 million were scheduled amortization payments. This Term Loan also carried
an interest rate of 7.25% at June 30, 2022, subject to the same above mentioned
increase in interest rate as the Revolver. The Term Loan is included in the
current liabilities section of the condensed consolidated balance sheets. At
December 31, 2021, the outstanding balance on the Term Loan was $212.9 million,
of which $28.2 million was due within twelve months. The Term Loan also carried
an interest rate of 5.50% at December 31, 2021.

Contractual obligations

  For a presentation regarding material changes outside the ordinary course of
business to the Company's contractual obligations please refer to Notes 4 and 5
of the Condensed Notes to Condensed Consolidated Financial Statements in this
Form 10-Q.

Off-balance sheet arrangements

We do not engage in off-balance sheet financing arrangements.

Recent accounting pronouncements

  For information about new accounting pronouncements and the potential impact
on our Consolidated Financial Statements, see Note 1 of the Condensed Notes to
the Condensed Consolidated Financial Statements in this Form 10-Q and Note 1 of
the Notes to Consolidated Financial Statements in our 2021 Form 10-K.

Significant Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP, as promulgated
in the U.S., requires our management to make significant estimates and
assumptions that affect the reported amounts of assets and liabilities, revenues
and expenses and related disclosures in our Condensed Consolidated Financial
Statements and accompanying notes. We believe the most complex and sensitive
judgments, because of their significance to the Condensed Consolidated Financial
Statements, result primarily from the need to make estimates and assumptions
about the effects of matters that are inherently uncertain. These accounting
policies involve the use of "critical accounting estimates" because they are
particularly dependent on estimates and assumptions made by management about
matters that are uncertain at the time the accounting estimates are made. In
addition, while we have used our best estimates based on facts and circumstances
available to us at the time, different estimates reasonably could have been used
in the current period, and changes in the accounting estimates that we used are
reasonably likely to occur from period to period both of which may have a
material impact on our financial condition and results of operations. For
additional information about these policies, see Note 1 of the Condensed Notes
to the Condensed Consolidated Financial Statements in this Form 10-Q. Although
we believe that our estimates, assumptions and judgments are reasonable, they
are limited based upon information presently available. Actual results may
differ significantly from these estimates under different assumptions, judgments
or conditions.

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  COVID-19 and other global events, such as other global economic conditions and
the invasion of Ukraine by Russia beginning in February 2022, has created and
may continue to create significant uncertainty in global financial markets,
which may reduce demand for our services, impact the productivity of our
workforce, reduce our access to capital, and harm our business and results of
operations. As of the date of our Condensed Consolidated Financial Statements,
we are not aware of any specific event or circumstance that would require us to
update our estimates or judgments, or to revise the carrying value of our assets
or liabilities. However, these estimates may change as new events occur and
additional information is obtained, which may result in changes being recognized
in our consolidated financial statements in future periods. While we considered
the effects of COVID-19, other global events and economic conditions in our
estimates and assumptions, due to the current level of uncertainty over the
longevity of the economic and operational impacts of COVID-19 and other global
events on our business, there may be other judgments and assumptions that were
not currently considered. Such judgments and assumptions could result in a
meaningful impact to our financial statements in future periods. Actual results
could differ from those estimates and any such differences may have a material
impact on our financial statements.

There have been no significant changes to our critical accounting policies and
estimates from the information provided in Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," included in the
Annual Report on Form 10-K for the fiscal year ended December 31, 2021.



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