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Executives

Steve Barlow – Vice President of Investor Relations.

Robin Raina – Chairman, President and Chief Executive Officer

Robert Kerris – Senior Vice President and Chief Financial Officer

Analysts

Jeff Van Rhee – Craig-Hallum Capital Group LLC

Mark Rye – Singular Research

Ebix Inc (EBIX) Q2 2012 Earnings Call August 7, 2012 11:00 AM ET

Operator

Good day, ladies and gentlemen, and welcome to the Ebix Inc. Second Quarter 2012 Investor Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions). As a reminder, today’s conference is being recorded.

I would now like to discuss this conference call, Steven Barlow. You may proceed, sir.

Steve Barlow

Thank you, Kevin. Welcome everyone to Ebix’s second quarter 2012 earnings conference call. Joining me to discuss this quarter is Ebix Chairman, President and CEO, Robin Raina, and Ebix Senior Vice President and CFO, Robert Kerris. Following our remarks we will open up the call to your questions.

Let me remind you that the primary purpose of today’s call is to provide you with information regarding our second quarter 2012 performance. However, some of our discussion and responses to your questions may contain forward-looking statements. These statements are subject to risks, uncertainties, and assumptions. Should any of these risks or uncertainties materialize or should our assumptions prove incorrect, actual company results could differ materially from these forward-looking statements. All of these risks, uncertainties, and assumptions as well as other information on potential factors that could affect our financial results, are included on our reports filed with the SEC, including our most recently reported Form 10-K for the year ended 31st, December 2011, particularly under the heading Risk Factors.

During the course of this call we may reference historical non-GAAP financial measures to provide a greater understanding of our business or financial results. Management at times may review certain non-GAAP financial information and metrics in evaluating the company’s historical and projected financial performance, and believe it may assist investors in assessing it’s ongoing operations.

The presentation of this additional information is not meant to be considered in isolation or as a substitute for or superior to measures of financial performance prepared in accordance with GAAP. Please be advised we may or may not update these metrics in future calls. Our press release announcing the second quarter 2012 results was issued a few hours ago.

The audio of this investor call is also being webcast live on the web at www.ebix.com/webcast. You can also look at Ebix’s financials beyond what has been provided in the release, on our website, www.ebix.com. The audio and text transcript of this call will be available also on the Investor homepage after 3 pm today.

We reported today significant revenue and strong cash flow growth for the second quarter, following Ebix’ strong performance in 2011. Bob and I will talk about the company from a financial perspective, and Robin will address the business in the quarter, and our recent acquisitions and our contract pipeline.

Revenue in Q2 increased by 13% from a year ago to $47.7 million. There were several drivers of revenue growth in Q2, most notably our exchange business in Q2 of 2012 grew 18.5% over Q2 of 2011 to become 80% of our total revenue this quarter, compared to 76% in Q2 of 2011.

The Broker channel decreased revenue by 8% and our BPO channel was up 4%. This is the first increase in our year-over-year BPO revenue since 1Q 2011. Sequentially, carrier system revenue was up 43% over 1Q 2012. The Carrier Channel was down 17% as compared to a year ago.

Looking at expenses and margins year-over-year, the company’s operating margin for Q2 2012 was 37% as compared to 44% in Q2 2011. In Q2 2011, above the operating margin line we recorded a one-time gain of $1.9 million related to the reduction of certain contingent earn out accrued liabilities related to acquisitions made in 2010.

Excluding the gain, our operating margins in Q2 2011 would have been 39.6%. The acquisitions we made in the second quarter added nicely to our revenue, but it takes several months to streamline the operations, which had short-term negative effect on our operating margins until all synergies are fully realized.

Q2 2012 net income grew 14% to $18.1 million as compared to Q2 2011 net income of $13.9 million, after excluding the one-time non-recurring gain items totaling $6.5 million in Q2 of 2011, related to a $4.6 million benefit from the release of valuation allowances held against deferred tax assets, associated with tax net operating loss carry-forwards and the reversal of a $1.9 million contingent earn out liabilities.

Q2 2012 GAAP and net income was $18.1 million as compared to Q2 2011 net income of $22.3 million. Q2 2012 diluted earnings per share rose 24% year-over-year to $0.47, as compared to $0.37 in the second quarter of 2011, after excluding the non-recurring items in Q2 2011 that I just mentioned, amounting to $0.16 of diluted earnings per share. Q2 2012 GAAP diluted earnings per share fell 13% year-over-year to $0.47 as compared to $0.33 in the second quarter of 2011.

I will now turn the call over to Bob.

Robert Kerris

Good morning, all, and welcome to our second quarter investor conference call. The second quarter is concentrated with several major milestones for the company. In Q2, operating cash flow was $21 million, which represents a 7% annual improvement over Q2 2011. Through Q2 all of the company’s net income has been converted into positive operating cash flow. Our sustained strong operating cash flows enabled Ebix to return capital to our shareholders during the quarter with $9.5 million of share repurchases, and a $1.8 million quarterly cash dividend.

Furthermore, during the quarter, the company continued to invest in the growth of the business with $46.7 million of accretive business acquisitions and strategic investments, and $402,000 of capital expenditures. Our internally generated cash, plus the availability of our recently executed $100 million term loan and revolver facility with three major banks, which we signed in April, allowed Ebix to make several strategic acquisitions during the quarter.

Our balance sheet remains strong, though with aggregated cash, cash equivalence, and short-term cash deposit investments totaling $26.8 million as of June 30, and working capital of $11.2 million, as well as a current ratio of 1.19. With our combined aggregated cash reserves and available financing from our bank financing facility, the company presently has access to approximately $49 million of readily available funds to continue to grow our business. Our accounts receivable DSOs sit at 37 days at June 30th and continue an improving trend, as this reflects reduction of seven days from year end 2011 and 14 days from a year earlier of June 30th last year.

Through June 20th this year, we have repurchased a total of 707,518 shares of our common stock. Our aggregated cash consideration in the amount of $15.2 million and at an average price of $19.24 per share. Finally, our next quarterly dividend payment of $0.05 per share will be paid on August 31st this month to shareholders of record on August 15th. Ebix’s Form 10-Q will be filed this Thursday August 9th and we appreciate your support and continued interest in our company.

At this point, I’ll turn the call over to Robin.

Robin Raina

Thank you, Bob. Good morning everyone, and thank you for joining us today. We reported today a strong quarter on many fronts. From a revenue perspective, we reported record revenues of $47.7 million in second quarter of 2012. This was a sequential increase of 9% over Q1 2012 revenues and a 13% increase over second quarter 2011 revenues.

During the six months ended June 30th, 2012 revenue increased 11% to $91.5 million, compared to $82.3 million during the same period in 2011. Second quarter 2012 results include only one-month of revenue from two of our recent acquisitions, PlanetSoft and Fintechnix, implying that Ebix is well set to cross the $50 quarterly revenue run rate soon. We are focused on growing our revenue substantially over the next 12 months.

While doing so, we intend to ensure that our operating margins remain in the 40% range plus or minus a few percentage points. We’re not interested in emulating some of the so-called success stories from the fast world. Companies that have grown revenue substantially while producing extremely low non-GAAP profits. We intend creating our own benchmark by growing revenue substantially while not compromising on our operating margins.

We announced a number of contracts in June. Ebix typically does not announce signing of new deals. The intent behind those specific announcements was simply to convey that our efforts in the carrier and Broker channel are starting to bear some fruit. However, I don’t want to give you the impression that those are the only deals we signed in the second quarter of 2012. The size of our sales effort has continued to grow, as our expense grows, so do the number of deals that we sign every quarter.

For example, in the second quarter of 2012, we signed more than 200 new deals. We do not announce new contracts unless they’re highly material to our future in terms of size, or unless we have a contractual obligation to announce a contract signing. Investors often ask me to as to what is the least understood fact about Ebix. The answer is that investors tend to compare our revenue growth to some of the so-called high growth companies that have a higher revenue component coming from perpetual life and sales. The comparison does not make sense, since our revenue base tends to based primarily on recurring revenue streams, with an extremely low or negligible perpetual revenue component. This allows these companies to pick up revenues in one quarter that we are possibly going to pick up over a few years.

All investors who follow Ebix need to understand this basic difference in how Ebix generates revenue versus how some of the other companies get revenue. Once investors understand this basic difference then Ebix revenue growth becomes a lot more appreciable. For example about 200 new deals have given us in revenue this quarter could be achieved by many of these companies in one quarter by possibly signing a few deals of the same size, simply because they would sell them at perpetual licenses and does recognize the revenues a lot faster than Ebix.

Also while these companies book perpetual revenue immediately and professional services as they deploy the platform, Ebix has to wait for 12 months to get an exchange client up and running, and then another 12 months to get the client to give first full year of transaction revenues, implying that Ebix generates one full year of revenue from the client at times after two years. All of this implies that Ebix has to sign up a lot more deals than our competitors to move the revenue substantially.

Our effort has already been to set up a business with strong recurring revenue stream from a highly diversified customer base with minimal revenue concentration. Why is that good? The answers are obvious. But to underscore the fact, let’s just look at one basic comparable statistic. Ebix largest customer today accounts for 2.5% of our annual revenues, while in case of other insurance specific software companies sometimes five customers account for more than 50% of the revenue.

You would also notice that any of these perpetual plays have low operating margins that are not comparable to Ebix high margins. That happens because of the longevity and the recurring nature of our customer relationships, wherein Ebix always owns the intellectual property. We are pleased with our recent acquisitions and the pace of integration. We’re quite excited about the opportunities these acquisitions are for us in terms of new markets.

For example, amongst other things, the acquisition of PlanetSoft offers us the ability to offer banks, the ability to sell a life insurance policy within five to 10-minute without a medical examination. We have the majority of the top 50 banks in the United Banks as users of our annuity exchange. We want to cross-sell them the ability to sell life insurance in each branch in minute, something that banks have always wanted to do. The acquisition of Fintechnix in Sydney offers us the business logic behind a SaaS base life insurance company policy administration system, an ability that we did not have earlier.

On the technology front, we continue to be focused on a simple philosophy of being a few years ahead of our competition at all times. Today, Ebix does not sell any legacy platform or service in any part of the world. All our services are being delivered on cutting edge software platforms with the latest architecture. Our recent acquisitions in Q2 of 2012 also adhered to this basic technology mantra.

I’m pleased that we reported strong operating margins in second quarter of 2012. As we integrate these acquisitions tightly, we expect increased synergies coming out in terms of improved margins for the company. Nothing speaks more to the operating stance of a company than its continued strong cash generation abilities.

Cash from operations totaled $21 million in the quarter. This translates into more than $0.54 of operating cash flow in a single quarter. Also, at the end of June 2012, we had already recovered 103% of our six-month net income in positive operating cash flows. That to me sums up the financial strength of Ebix today.

As Bob mentioned, the company presently has access to approximately $49 million of readily available funds to continue to grow our business. We intend to use this cash and our continued cash generation ability to make a few more accretive acquisitions this year in different geographies.

Our focus is primarily on growing our exchange business across the world and become a local player in each country. I’m pleased to report that we’re continuing to invest in growing our infrastructure and manpower. As of June 30, 2012, we had approximately 2,000 employees across the world, with approximately 1,150 employees based in India. We intend to keep investing in our infrastructure, staff, and quality effort.

On that note, I would like to close my talk today and request the operator to open the call for questions. Thank you.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Jeff Van Rhee with Craig-Hallum.

Jeff Van Rhee – Craig-Hallum Capital Group LLC

Great, thanks. Congrats. Great cash flow there. It looks like a pretty solid quarter. A number of questions. Maybe, Rob, just high level first to start. As you talk about, in particular, the exchanges, what are the barriers to accelerating organic growth? I know you’ve been building out sales capacity. Certainly, you’re at the leading edges of adoption in terms of people wanting to process electronically straight through, and you’re also obviously still building out the capabilities through acquisitions and home grown, so three factors there that might be part of the gating in terms of why it’s not accelerated yet. But just talk about where we are in the evolution of the exchanges and how each of those come to bear in terms of our search for faster organic growth in the exchanges?

Robin Raina

Jeff, thank you for your question. I think one of the things to be understood is that actually Ebix’s sales cycle, Ebix’s sales has accelerated considerably in terms of exchanges. However, a number of things that will happen, first of all, in terms of exchanges, if the same client has not been generating higher number of transactions as compared to previous years, and that is purely because of where the economy is.

Now, having said that, one of the challenges, and that’s what I tried to define in my revenue discussion today, one of the challenges we have is that when we sign an exchange client, an exchange client that we sign in 2010, ultimately starts getting life sometime towards the end of 2011. And this is the real cycle of some of the larger clients that we have dealt with because that’s the cycle they follow. So once they go live in 2011, it takes us another 12 months to get one full year of revenue. And mind it, that one full year of revenue that we got from them is really not, we should be getting a lot more revenue than that. The first year of revenue is going to be ramped up because they might decide another carrier.

I’m going to first put 5,000 of my elite brokers on the platform. Then in the next year as it becomes successful, they say let me add another $10,000 or another $7,000 and so it’s a ramp up time and ultimately what is happening is that Ebix is continuing to, on one side, we’re continuing to add more to our exchanges in terms of new sales. I think we’re basically, if you look at our client base, that is pending implementation or pending to go live. It’s a pretty long list and when you look at that long list, we’re talking about recurring revenues of a pretty good number, let’s put it at that way. We’re talking in excess of $5 million or $6 million recurring revenues just coming out simple annuity exchanges.

And again, well, I’m just right now referring to the annuity exchanges alone then you look at the health platform, you look at our life exchanges and you’ll find the same story there. So that’s your cycle. And in the meanwhile, the needle moves even, Ebix as it makes an acquisition the base revenue moves all the time. And so that we have to, it is a cycle and I think part of it is the revenue recognition of how we handle revenue because we’re selling intellectual, we’re always keeping intellectual properties with ourselves, always selling things in a recurring manner.

We don’t have any, we rarely have perpetual licenses involved. It ends up, our revenue recognition at the end of the day takes a bit longer than most companies. So in terms of barriers to adoption to go back to your question, the barriers to adoption mainly is where the economy is today. I think we do feel that things have started improving as we have added more sales people. Our reach has improved where we’re trying to use the present time by convincing carriers, by convincing the large brokers. We’re trying to explain to them that if the economy hasn’t improved, it makes all the more sense for them to become more efficient to keep the margins intact.

So having said that, I think that’s the single biggest stumbling block, but we do believe we can overcome that stumbling block by sheer number, by sheer reach. By reaching out the more clients, by signing a lot more clients and that’s what we’re doing today.

Jeff Van Rhee – Craig-Hallum Capital Group LLC

Can you, would you expand that? I know you’ve been investing and talked a fair amount about the expansion of the sales reach. Can you quantify it on where you are now on quarter outsources three, six, nine months ago to give us a sense? And then just any update in terms of the folks that have been long enough, a feel for their productivity ramp. How's that going?

Robin Raina

Well, we’re pretty happy with the productivity ramp with respect to our people, meaning there’s a cycle as I’ve always said and I think we’re at a point where all these sales guys are what are the basic goals with these sales guys, meaning our basic goal that we get these guys to generate large enterprise deals. And to generate a large enterprise deal, first you have to be a player in that large enterprise deal. And this is what precisely these new sales people have done. They have landed or they have brought us into the midst of deal there, where we weren’t there earlier. Many of you know we’re now in the midst of much larger CRM deals. We’re winning deals. We’re beating salesforce in different places in large carrier accounts. So having said that, we believe that our efforts are starting to bear

I think in terms of with respect to their quotas, I couldn't give you a specific answer on that as to how exactly each guy has done but on an average, I will tell you that our older sales people, people who we have had in the past have continue to perform. The newer guys are taking, there’s a ramp up time, but I think when we look at the prospect base that these new sales people have generated, we feel pretty good about it. Have they started closing large deals as of yet, the newer guys? No, they have not, some of them might have closed a few deals but they haven’t closed larger deals, but having said that we do know the cycle to those larger deals. So we feel pretty good about what these guys have been able to achieve till now.

Jeff Van Rhee – Craig-Hallum Capital Group LLC

Okay and one last one. And in terms of the acquisitions, it was a flurry of activity I guess in the last quarter. As you look through these deals, can you help us both current quarter and maybe some sense going forward the revenue impact that those deals had, specifically for this quarter. So we can get to a sense of what the accrual was? And then any thoughts on what you think the contribution of these businesses that were just added this quarter might have over the four and twelve months?

Robin Raina

I think it’s a bit futuristic for me to be able to give you some revenue numbers out of this and I don’t want to be very specific. Part of it is because it all depends on, these will be all hypothetical numbers. In our way of business, first a client has to go live then the client has to ramp up and then the revenues stat happening. And so having said that, if I took a guess at some of these numbers, it will be hypothetical because the numbers can vary all so much dramatically, a carrier going live with 500 brokers versus a carrier going live with 10,000 brokers can be a dramatically different answer. So I hesitate to give you a reply on that. I can tell you in terms of sheer number of deals, we’re signing a lot more deals than we ever have. And I think I will stop at that with in terms of that question.

Jeff Van Rhee – Craig-Hallum Capital Group LLC

Okay, I’ll come back. Thank you.

Robin Raina

Thank you.

Operator

Our next question comes from Mark Rye with Singular Research.

Mark Rye – Singular Research

Good morning gentlemen.

Robin Raina

Good morning.

Mark Rye – Singular Research

I wondered if you could talk a little bit more about your future organic growth potentials based on your new integrated software products from these acquisitions that you’ve been making. For example, what do you see as the three to five primary product drivers for organic growth?

Robin Raina

Well, I think first of all many in terms of growing our business our primary drivers are always going to be exchanges. And when you look at CRM system that’s clearly going to be one of the big drivers in terms of future growth from perspective. So having said that, in terms of what those numbers will be, but you know Ebix doesn’t have a tendency of offering future guidance in respect to growth in anyway. I think we’ll just have to wait and watch all we’re doing right now is we’re focusing pretty heavily on cross-selling on increasing our sales reach and like I said the number of deals have increased.

As we start reporting numbers, you’ll start getting a better handle on where our growth is leading to. We feel quite good about it. We now have a multinational accounts strategy in place. So to give you an example, if we are selling a CRM system to a large carrier in the U.S., now we have a team in place, so that we can sell them the system in Japan and Mexico and Brazil. And that’s what our sales effort is trying to do. And I think those kinds of efforts are starting to bear fruit. And as we go forward with reporting numbers, you will get a better sense of where the growth is coming out of.

Mark Rye – Singular Research

And in the health exchange area, can you comment on that activity with the Supreme Court’s latest ruling? Are you seeing more opportunities to get on there?

Robin Raina

Well, I don’t know whether you see more or less opportunity. You see health exchanges are here to stay Mark, meaning whether when you when the Supreme Court ruling have come in, our new elections are coming in. We don’t know which way the election is going to head, but having said that whichever way a new administration comes in and whether they go positively in favor of public exchanges or negatively against those exchanges. I think the bottom line what we have discovered is, what we’re pretty sure now about is exchanges are here to stay.

Whether those are public or private, meaning one of them I mean private exchanges are here to stay. For example, meaning, large carriers by itself are trying to build private exchanges per se and some of the carriers are not ecstatic about public exchanges, especially the large health carriers, but they might not have a choice and that’s something we’ll see over a period of time and how it comes through. So I don’t see the ruling have increased the momentum or decreased the momentum really meaning I think it’s going to be a long relay with respect to exchanges.

Right now the state administrations are going in and signing X different kind of deals today. And as they deploy, as they start understating what they truly want, the nature of these exchanges are going to dramatically evolve most of the state governments when we land up in meetings, don’t really know what they really are seeking. And that’s one of the challenges that’s happening. So I think these are the beginning stages of health exchanges. This topic, I promise you is going to stay here for the next two decades. The exchanges are not going anywhere in terms of health arena, irrespective of what happens in the courts or in the political phase.

Mark Rye – Singular Research

Okay, thanks for that. And looking at the carrier systems product line, you had talked in the past that transitioning to the recurring revenue model has had an impact there. And with the recent quote this quarter, do you see that you may have turned the corner in that respect?

Robin Raina

Well, I don’t know whether I could say we would turn the corner, but I would say we’re very encouraged by our sales efforts in the carrier business. As you see to be straightforward on this, Mark, the carrier revenue that we have today is not as large. So even if we start showing 50% growth, 50% of nothing is still nothing. So I wouldn’t be ecstatic about it, meaning, just because we reported 50% growth on revenues. Let’s say meaning as we go forward. So I think we know the challenges cut out for us in terms of carrier revenues.

We finally are very happy with the quality of sales effort that is going in, in the carrier arena across the world. We feel we are gaining traction. We feel we’re starting to become a real player, because part of it is we are a new comer to the carrier business, when you are a few years old in the carrier business you are basically a new comer. And on top of it we are starting new trend in the industry, I think those new trends are starting to get us traction, the SaaS based technology, the cloud-based technology. The ability to provide a mid-size carrier or a small carrier, the ability to basically allow us to hold the system or allow us to completely provide the survey from end-to-end and reducing their amount of money they have to pay us, and so on.

So but in this model what we realize also is that no one deal will give us the large amount of revenue, because our revenue model is different. We want a recurring revenue models. So net result is we need to sign a lots of carrier deal. And that’s what we are trying to do. So I think this quarter was encouraging, quite encouraging to the extent that it was starting to sign. We are starting to sign carriers. We are starting to get traction. We’re in the midst of a lot of deals today. And deals that we implemented in the past have become greater reference clients. So that’s all helping us. So I think we’re encouraged, but I wouldn’t say that I’m ecstatic about where our carrier revenues are as of at least as on date.

Mark Rye – Singular Research

Okay. Just one last question on the annuity net three, annuity servicing products where you’ve mentioned on the last quarter that you were doing additional testing on those. Can you [comment] on the launch of those products?

Robin Raina

Well, we haven’t yet launched those. We’ll be soon launching those meaning AN3 and AMP are two different products. We’ve kind of now differentiated between the two and from a perspective of, there finally expansion of the same annuity exchange. AN3 the newer version of an existing annuity exchange, which incidentally is quite cutting edge. In AN3 all we’re doing differently. And we’re offering a little bit more functionality, but the key to it is that in AN3 we’re offering the ability to – we’re offering the flexibility of customization to our clients rather than us customizing the platform.

And that’s a big deal. So AN3 is, today as we stand here, we are right now focused on making sure that our existing annuity net clients can, that we can – we have a lot of work that we can do on our existing annuity net product, which is already contracted to us. So our intent first is to finish that work on the existing platform and not hurry up AN3. So AN3 probably will go live beginning of 2013 now. AMP will go live sometime this year and as it goes live, we should see substantial recurring revenues flowing out of that AMP platform. And there is a long list of carriers and a long list of large brokers who have signed up on the AMP platform and this is revenue waiting to happen, as long as we can get them up in running. And to get them up in running there is a lot of to and fro that goes on between us and those players, and that’s what we are in the mid stuff. Thank you.

Mark Rye – Singular Research

Thank you. That’s all I have.

Operator

(Operator Instructions) Our next question comes from Jeff Van Rhee with Craig-Hallum.

Jeff Van Rhee – Craig-Hallum Capital Group LLC

I got a couple follow-ups if I could. One just housekeeping on the buyback obviously, you’ve continued to bang vague picking up stock in that market. Where are you in terms of remaining and when or what do you intend to get a larger authorization?

Robin Raina

Bob, would you take this question please?

Robert Kerris

Yes, we have approximately $8 million left on our current buyback authorization, when the [need arises] will be speaking to the board, but having new authorization continue to buyback shares want to do so, as market conditions across the capital dictates.

Jeff Van Rhee – Craig-Hallum Capital Group LLC

Okay. Okay and then just Robin back to the exchanges for a second. Curious in terms of more mature customers that have been with you for a while, if you look at the activity levels on the exchanges, help us understand that somebody who’s been on knows your capabilities, what the activity levels that have kept trended like in terms of policies processed and also the number of capabilities in a particular exchange that they’re consuming, you’ve obviously added a lot of functionality to each of the exchanges, but historically seemingly people were dipping (inaudible) in the water using some functionality, but clearly not taking everything. Can you just talk to those two usage both volumes and features?

Robin Raina

If we are talking about clients who have been with us for sometime and have been our clients, I think the level of usage is extremely high. They tend to use almost each and every function that the system today has. In terms of all these people they have, most of these people, when you look at the big brokers, the MGAs or the broker dealers, or the banks, if they went on a platform of few years back. Today they basically have put all their business on our exchanges. So they are not using it as one of the ways of doing business. So I would say the usage levels are very high, the functionality usage levels are extremely high. We have a pretty good long list of things that these clients have asked us to do and they’ve fund those development incidentally and they pay for them. And we have a pretty long list of works that we’ve been contracted to do by these clients to increase the functionality even further as we go along.

In terms of volumes, you see while they put all their business on our platform when we say take an example of an annuity exchange, where in they might have put their business for, they have put their business in terms of auto entry, in terms of generation of our policy and to be able to guess sell an annuity. They still don’t do servicing of an annuity policy on it, because that’s where AMP is. And once AMP goes live that’s what they will start doing, they will start ramping it up and utilizing our platform on for servicing the policy. Similarly, today they are handling clearance on the actions with other bodies winning again that’s an open area for Ebix to go into.

Winning today we helped them in clearance, but we don’t make money on clearance of transactions. There is portability of an insurance policy. We handle portability in places like Brazil, but in U.S. we don’t handle portability of a policy, for example. And again that’s a new functionality where nothing is electronic in the U.S. and that can be electronic. So I think in terms of volumes, their focus is to put everything on our exchanges. However, the volume ultimately depend on how many policies that they ultimately [write]. And it depends on how well is their business doing and that gets driven by the economy sometimes. And there is not much Ebix can do in that direction we have to make. We provide a cutting edge platform and at that point, it all depends on their own acumen, sales acumen, and also their reach and market dynamic.

Jeff Van Rhee – Craig-Hallum Capital Group LLC

I’ll leave it there. Thank you.

Robin Raina

Thank you.

Operator

And I’m actually not showing any further questions or comments at this time.

Robin Raina

Thank you. I think we look forward to our next quarterly investor call. Thanks for to everybody for participating. With that I’m going to close the investor call today. Thank you

Operator

Well ladies and gentlemen, this does conclude today’s presentation. You may now disconnect and have a wonderful day.

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