IBEX(US:IBEX)2025-05-08 20:24Financial Performance - The company reported revenues of $140.7 million for the three months ended March 31, 2025, an 11.0% increase compared to the prior year quarter, driven by growth in HealthTech, Travel, Transportation & Logistics, Retail & E-commerce, and Other verticals [130]. - Net income for the three months ended March 31, 2025, was $10.5 million, a 1.5% increase from $10.3 million during the same quarter in the prior year [130]. - For the nine months ended March 31, 2025, revenues reached $411.1 million, a 7.1% increase compared to the same period in the prior year, attributed to growth from existing and new clients [131]. - The company experienced a 14.5% increase in net income for the nine months ended March 31, 2025, totaling $27.3 million compared to $23.8 million in the prior year [131]. - Adjusted net income for the three months ended March 31, 2025, was $11.8 million, with an adjusted net income margin of 8.4% [177]. - Net income for the three months ended March 31, 2025, was $10.5 million, with a net income margin of 7.4%, down from 8.1% in the prior year quarter [182][183]. - Adjusted EBITDA for the three months ended March 31, 2025, was $19.4 million, resulting in an adjusted EBITDA margin of 13.8%, compared to 15.1% in the prior year quarter [182][185]. Revenue Growth - The HealthTech vertical revenue increased by $3.7 million, or 20.0%, while the Retail & E-commerce vertical grew by $4.6 million, or 14.6%, during the three months ended March 31, 2025 [148]. - Revenue for the nine months ended March 31, 2025, was $411.1 million, an increase of $27.1 million or 7.1% year-over-year, driven by growth in HealthTech and Travel verticals [160]. Cost and Expenses - Payroll and related costs were $72.4 million during the three months ended March 31, 2025, reflecting a 7.1% increase compared to the prior year quarter, while as a percentage of revenue, payroll costs decreased to 51.4% [151]. - Cost of services increased to $284.8 million, up $13.7 million or 5.0% compared to the prior year, primarily due to higher payroll and related costs [162]. - Payroll and related costs were $216.9 million, an increase of $7.8 million or 3.7%, with payroll cost as a percentage of revenue decreasing to 52.8% [163]. - SG&A expenses were $27.1 million, an increase of $3.5 million or 14.8% year-over-year, driven by higher payroll costs and share-based compensation [154]. - IT expenses rose to $1.8 million, an increase of $0.6 million or 48.2% compared to the prior year, primarily due to additional software license fees [153]. - Reseller commissions and lead expenses increased to $5.5 million, up $2.8 million or 106.1% year-over-year, driven by higher utilization of third-party affiliates and search engine costs [152]. Operational Efficiency - The company is leveraging generative AI through its Wave iX technology to enhance customer experience and operational efficiency, positioning itself for future revenue growth [134]. - Income from operations was $13.3 million, compared to $11.3 million in the prior year, with an operating margin of 9.5%, up from 8.9% [156]. Client Base and Market Position - The largest client accounted for 11% of consolidated revenues, while the three largest clients accounted for 27% during the nine months ended March 31, 2025, indicating a diversified client base [142]. - The company has successfully negotiated price increases with many clients due to tightening labor markets and rising operational costs, which is expected to enhance margins [143]. Cash Flow and Liquidity - Free cash flow for the three months ended March 31, 2025, was $3.6 million, a decrease from $9.7 million in the prior year period [186]. - Net cash inflow from operating activities decreased to $17.7 million in the nine months ended March 31, 2025, down from $18.5 million in the prior year [206]. - Cash and cash equivalents totaled $13.0 million as of March 31, 2025, with additional unused availability under credit facilities of $46.1 million [190]. - The Company experienced a net decrease in cash and cash equivalents of $49.7 million during the nine months ended March 31, 2025 [203]. - The company anticipates that existing cash and cash generated from operations will be sufficient to meet liquidity requirements for at least the next twelve months [200]. Debt and Financing - Total debt as of March 31, 2025, was $20.6 million, with $19.1 million on HSBC Credit Facilities and $1.5 million of finance leases [199]. - The U.S. Credit Facility provides for a $25 million secured revolving credit facility, maturing on October 29, 2027 [191]. - The UAE Credit Agreement includes a committed $50 million revolving loan facility, with a final repayment date two years from the effective date [193]. - Financing activities resulted in an expenditure of $54.4 million during the nine months ended March 31, 2025, with $76.4 million related to share repurchases [208]. Capital Expenditures - Capital expenditures for the three months ended March 31, 2025, were $5.3 million, up from $1.7 million in the prior year [186]. - The Company incurred $13.2 million in investing activities during the nine months ended March 31, 2025, primarily for expansions and IT equipment, compared to $6.6 million in the same period of 2024 [207]. Currency and Risk Management - A 10% appreciation/depreciation in the Philippine Peso against the U.S. dollar would have impacted expenses by approximately $10.3 million or $8.4 million, respectively [215]. - As of March 31, 2025, the outstanding balance on the HSBC Credit Facilities was $19.1 million, with a potential annualized interest expense change of approximately $0.1 million for a 10% change in SOFR [218]. - Cash management policies are designed to mitigate risks related to global cash, with $8.7 million of cash held outside the U.S. as of March 31, 2025 [205]. - The Company has not experienced any counterparty defaults related to its derivative contracts as of the date of the report [216].