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This came at the end of RR's opening remarks but it is so important I moved it up to the top. Seems like the market missed it.

Let me add that we are seriously contemplating the possibility of a public IPO for our Indian operations 12 months from now, wherein Ebix, Inc. will hold a large stake. We see that as a possible multibagger opportunity for the shareholders of Ebix, Inc., as all other financial exchange sector companies in India with billions of dollars in valuation do not have the strong financial metrics that our operation in India have.

I excerpted a lot maybe more than I should have so I did not go into the Q&A. You can read it at the above link, it is worth the time or play the CC while you are in traffic or cooking. He has a lot going on, if they succeed at half of this.....

Aspirational goals past and present.

While speaking to you as regard the 2016 financial results in March 2017, I had set an aspirational goal for Ebix to be at $100 million quarterly run rate by Q1 of 2018.

With 30% or more in operating margins, we not only beat that aspirational goal by achieving $104.7 million in revenues with 32% operating margins, but we also got there a quarter earlier that’s incredible.

The new aspirational goal for Ebix is to be at an annualized run rate of $0.5 billion by Q4 of 2018. We would like to get there with at least 32% in operating margins. That is a lofty aspiration for a company not guaranteed by any means, but very achievable.

......As of December 31, 2017, India was basically running at a run rate of approximately $127 million, ....... India could be at a run rate north of $200 million in revenues, with profitability levels that will be north of 30%. Even though we have not finished all the acquisition, integration and efficiency-related measures, our profitability levels in India are still beyond 30% today.

New e-learning venture?

We have been lately in the news as a bidder in the bankruptcy court for India's leading e-learning company Educomp. Educomp is by far the dominant leading player in India's e-learning market. We believe that e-learning businesses have the potential of giving us as much as $60 million of revenues a year in recurring revenues.

The company has debt of around $550 million, with 45-plus banks and foreign institutions and is in resolution courts at present. 15 bidders have been involved in the process, and as of yesterday, we were the only ones in contention, with an approximate bid of $67 million.

Our resolution proposal asks for the court to hand over a 100% debt-free company to us, free of all liabilities in any form. What we like about Educomp is its reach across the country, the breadth of exposure, its leadership in the market, and the fact that the e-learning sector has tremendous support from the government of India in terms of mandating e-learning in India's hundreds of thousands of government schools.

The company's debt is linked to a number of mistakes 3 to 5 years back in terms of overstretching its bank debt and trying to grow for the sake of growth by getting into sub-prime schools and buying disparate companies all across the globe. The basics of their business can be very solid once the debt is taken out by the court.

EBIX is in the process of creating a electronic wallet.

EBIX has over 230,000 phygital outlets. RR has a lot of ways they plan to expand the EbixCash brand to consumers.

RR plans to create new B2C and B2B exchanges,

We also see Ebix creating lending exchanges, both in the B2C and B2B arena. In B2B sector, our goal would be to power the technology of banks and lenders in terms of CRM, loan creation, loan management, loan servicing, et cetera, and making money, while charging for transactions, as also for custom services provided to the lenders.

In the B2C sector, we would like to use the power of our 231,500-plus distribution outlets and the new EbixCash app to provide microfinance lending to consumers in every nook and corner of the country in minutes. We will be creating the marketplace, bringing the consumer, powering the technology of lenders and not taking any risk on the transaction, while making money on each transaction that happened on the platform.

We will give the lenders something. All of them aspire for the last mile reach and access to a consumer in the remotest corners of the country

Regarding the platform they built for PPL,

In U.S. and Canada, we believe that the single biggest technology opportunity in insurance is in the area of underwriting. It's a highly complex area, but an evergreen area for an underwriting insurance lender, with its consistently-changing needs for each and every carrier.

Irrespective of who the carrier is, they have to adjust their underwriting needs regularly, at times weekly if need be. An insurance carrier can never be content or done in the underwriting area, as you have to evolve the platform continually to cater to all the risk analysis.

Over the last few years, we have tried to put a lot of focus in this area. We sensed an opportunity, especially in the area of creating an enterprise underwriting platform that can be a system of choice for all large carriers. Our thinking was and is that once we have all the large carriers, the smaller ones will follow, [indiscernible] to have the same agility and flexibility as the larger carriers.

I'm pleased to say that our efforts have continued to give us great results. We win 9 out of 10 such deals in which we get involved today. In the last one week itself, we won 2 large deals with highly-coveted clients, Allstate and Gen Re.

Data Mining?

In recent times, we have also created some highly automated data mining and statistical and trending tools that can be highly powerful for our carriers. With tens of billions of dollars of transactions happening on our platform across hundreds of thousands of agents, we have a tremendous repository of insurance data and trends and analytical insight.

We can slice and dice that data and provide incredible insight into consumer behavior, underwriting successes and failures, footfall analysis, et cetera, that can be a new revenue source for us.

And there is more! No seeming end to the swings RR wants to take.

In 2017, we bought a 51% stake in a U.S. third-party administrator owned by an insurance company, IHC, named EHAE, Ebix Health Administration Exchange, this TPA was losing money before we took a majority interest in it. Today, not only is it back on the path of strong profitability, but we also see tremendous growth opportunities in this sector. We knew that a successful TPA needs efficient technology and high-quality manpower at sensible prices.

We invested in our own Ebix enterprise technology to power the TPA, and also invested in creating a high-quality learning center in India, with highly-focused niche employee base in the form of doctors, medical examiners, claim specialists, et cetera, to process insurance. That has been a great success, and we see that now being multiplied to power the technology and manpower of other TPAs in the U.S.

We believe that we can aggregate a number of TPAs in the U.S. at low valuations, since they tend to typically have low or no profitability and then plug in our technology and India processing base in the midst of it to convert them into highly healthy assets. That's a great opportunity, and we intend to pursue within 2018 itself.

Indian insurance markets.

With respect to India's insurance markets, we think that we are up to something big. That's why we created this unique Ebix Bombay Stock Exchange joint venture in India. We are endeavoring to do something that has never been done earlier in any part of the world.

Traditionally, across the world, insurance is only sold by insurance agents, brokers or directly by carrier salespeople who have to be licensed agents. We want to do something completely different. We want insurance to be sold in every nook and corner of India through distribution outlets that, for example, could be a grocery shop or a mobile phone outlet or a financial distribution outlet or a travel distribution outlet, et cetera. Basically, we want to sell insurance through any distribution outlet that has a relationship with the consumer and the last-mile reach, even if they have never sold insurance.

.......and we have three key ingredients all ready for it to succeed. One, the backing of our joint venture partner, Bombay Stock Exchange, with their reach of 300,000 terminals and financial broker institutions all across the country who can now sell insurance.

Two, EbixCash already has an existing outlet base of 231,500-plus distribution outlets across more than 3,000 towns ready to sell insurance, as it gives these outlets a new tool to maximize their income. Three, insurance technology and functionality is Ebix's core strength and an integral part of our DNA helical structure. We are presently working diligently towards launching this, while seeking all regulatory approvals to do so. This could be a very large opportunity in itself for Ebix and BSE.

Uh oh...growing pains...Material Weaknesses!! Maybe why it was down so much mid-day Friday? Probably not. It had been trending down prior to the 11AM call hitting bottom by the time he got to this.

..... a few growing pains associated with all these growth initiatives and the recent U.S. government tax initiative. We made approximately 6 acquisitions in 9 months in 2017, and it created quite a few new challenges in terms of business integration, employee integration, efficiency challenges, and timeliness challenges on us and our partners.

For the most part, I believe that we handled the challenge extremely well. However, as a part of our control evaluation process, we recognize material weaknesses in two areas that fortunately, did not have any numerical effect on our past and present results. On a qualitative basis, one weakness identified was in the company's effective internal control over the preparation of income tax provision and the contemporaneous documentation of significant acquisition-related transactions.

Our tax provisioning, documentation, tax filing, tax advice work in 2017 was handled by Ernst & Young tax team, and we feel that the weakness is mainly highlighted by our recent spurt of acquisitions and can be remediated over a few quarters. We intend to work closely with Ernst & Young tax partners towards that extent. The other material weakness identified was in the area of business combinations.

.....The good news is that none of this had any restatement associated with it, and both these weaknesses were primarily associated with our recent spurt of acquisitions. And in both areas, we have two Big 5 firms already associated with us. Let me also confirm that there were no disagreements with our auditors, and the auditor issued an unqualified opinion without any restatements or numerical revisions involved for any period, past or present.
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