IBEX(US:IBEX)2024-11-07 21:22Financial Performance - The company reported revenues of $129.7 million for the three months ended September 30, 2024, representing a 4.1% increase compared to $124.6 million in the prior year quarter[123]. - Net income for the same period was $7.5 million, a 1.4% increase from $7.4 million in the prior year quarter, driven by higher revenues and improved operational delivery[123]. - Income from operations was $9.1 million for the three months ended September 30, 2024, with an operating margin of 7.0%, up from 6.7% in the prior year quarter[150]. - Adjusted net income for the three months ended September 30, 2024, was $9.0 million, with an adjusted net income margin of 7.0%, compared to 6.1% in the prior year quarter[158]. - EBITDA for the three months ended September 30, 2024, was $14.0 million, with an adjusted EBITDA of $15.6 million and an adjusted EBITDA margin of 12.0%[164]. - Free cash flow decreased to $4.1 million for the three months ended September 30, 2024, down from $6.6 million in the prior year quarter, driven by increased capital expenditures[169]. - Net cash as of September 30, 2024, was $60.8 million, compared to $61.2 million as of June 30, 2024[171]. - The company reported a net cash inflow from operating activities of $7.8 million for the three months ended September 30, 2024, a decrease from $8.7 million in the prior year quarter[181]. Revenue Growth - The HealthTech vertical saw a revenue increase of $3.5 million, or 23.4%, while Retail & E-commerce and Travel, Transportation & Logistics verticals increased by 8.6% and 10.0%, respectively[141]. - Demand for customer interaction services increased due to growth in existing clients and new client acquisitions in strategic verticals[127]. Operational Efficiency - The company expanded its delivery center capacity and opened two new sites during the quarter, enhancing its operational capabilities[122]. - The company is aggressively integrating AI into its solutions, leveraging its Wave iX technology to enhance customer experience and operational efficiency[126]. - Labor costs increased due to wage pressures, but the company offset some of these costs through higher agent quality and increased productivity[131]. - The company successfully negotiated price increases with many clients due to tightening labor markets and rising operational costs[136]. Client Diversification - The largest client accounted for 11% of total revenues, while the top three clients represented 26%, indicating a focus on client diversification[135]. Expenses and Costs - SG&A expense increased by $3.2 million, or 13.8%, to $26.2 million for the three months ended September 30, 2024, primarily due to higher payroll and related costs[148]. - Income tax expense increased by $0.6 million to $2.0 million for the three months ended September 30, 2024, with an effective tax rate of 20.8%[152]. - D&A expense decreased by $0.7 million, or 13.3%, to $4.4 million for the three months ended September 30, 2024, as a percentage of revenue, D&A decreased to 3.4%[149]. - The company experienced changes in foreign currency gains/losses amounting to $2.3 million year over year, impacting SG&A expenses[148]. Cash and Financing Activities - As of September 30, 2024, the company had cash and cash equivalents totaling $62.3 million, including $8.2 million located outside the United States[180]. - During the three months ended September 30, 2024, the company incurred net expenditures of $3.6 million on investing activities, primarily for expansions in offshore and nearshore regions[183]. - The company expended $4.6 million on financing activities during the three months ended September 30, 2024, with $4.8 million related to purchasing common shares[184]. - The company authorized a share repurchase program of $30 million on May 1, 2024, and repurchased 282,129 shares totaling $4.7 million during the three months ended September 30, 2024[177]. - Total indebtedness as of September 30, 2024, was $1.5 million, consisting of finance leases, with compliance to all debt covenants[174]. - The company did not have any outstanding balances on its $80 million revolving credit facility as of September 30, 2024, indicating no interest expense exposure from this facility[194]. Liquidity and Currency Impact - The company believes its existing cash balance and cash generated from operations will be sufficient to meet liquidity requirements for at least the next twelve months[175]. - A 10% appreciation/depreciation in the Philippine Peso against the U.S. dollar would have increased or decreased expenses incurred in PHP by approximately $3.3 million or $2.7 million, respectively[190].