IBEX(US:IBEX)2025-09-11 20:21Cautionary Statement Regarding Forward-Looking Statements This section outlines that the Form 10-K contains forward-looking statements, which are not guarantees of future performance and are subject to various risks and uncertainties detailed in the 'Risk Factors' section Purpose and Risks of Forward-Looking Statements This section clarifies that the Form 10-K contains forward-looking statements based on current expectations and assumptions, which are not guarantees of future performance, and highlights that actual results could differ materially due to known and unknown risks and uncertainties, as detailed in the 'Risk Factors' section - Forward-looking statements are based on current expectations and assumptions, not guarantees of performance, and involve known and unknown risks and uncertainties12 - Important factors that could cause actual results to differ materially are disclosed under 'Risk Factors' in this Form 10-K13 - The company undertakes no obligation to update or revise any forward-looking statement unless required by law14 Key Factors Affecting Future Results Key factors that could cause actual results to differ from expectations include the ability to attract and retain clients, profitability management, client consolidation or insourcing, general economic conditions, international operations management, natural events, technology adoption (including AI), workforce management, regulatory compliance, cybersecurity, and tax matters - Ability to attract new business and retain key clients15 - Profitability based on utilization, pricing, and cost management15 - Potential for client consolidation or expansion of insourcing activities15 - General economic uncertainty, including inflation, interest rates, recession, and foreign exchange fluctuations15 - Ability to manage international operations, particularly in the Philippines, Jamaica, Pakistan, and Nicaragua15 - Impact of natural events, health epidemics, geopolitical conditions, and cyberattacks15 - Ability to anticipate, develop, and implement information technology solutions, including Artificial Intelligence (AI)15 - Ability to recruit, engage, motivate, manage, and retain the global workforce15 - Compliance with applicable laws and regulations, including privacy, data protection, and information security15 - Impact of tax matters, including new legislation and actions by taxing authorities15 Part I ITEM 1. BUSINESS IBEX Limited provides technology-enabled customer lifecycle experience (CLX) solutions, leveraging its Wave iX platform, global delivery model, and agent-first culture to serve over 140 clients in the BPO industry - IBEX delivers innovative BPO, smart digital marketing, online acquisition technology, and end-to-end customer engagement solutions28 - The company serves more than 140 clients, leveraging its proprietary technology platform, company culture, and operational excellence29 - As of June 30, 2025, IBEX operates 30 delivery centers with approximately 33,000 employees globally38 Company Overview IBEX Limited offers innovative business process outsourcing (BPO), digital marketing, and end-to-end customer engagement solutions to over 140 clients - IBEX Limited provides innovative business process outsourcing (BPO), smart digital marketing, online acquisition technology, and end-to-end customer engagement solutions28 - The company helps over 140 clients create innovative and differentiated customer experiences to increase loyalty, enhance brand awareness, and drive revenue29 Service Offerings IBEX provides integrated technology-enabled customer lifecycle experience (CLX) solutions, including customer service, technical support, and digital marketing for customer acquisition - IBEX offers end-to-end technology-enabled customer lifecycle experience (CLX) solutions through an integrated platform30 - The 'Connect' business delivers customer service, technical support, revenue generation, and back-office services via an omni-channel CX model31 - The 'ibex Digital' suite provides digital marketing, e-commerce technology, and platform solutions for customer acquisition, alongside CX services for measuring and managing customer experiences32 Culture IBEX fosters an 'agent-first' culture through branded sites, technology-enabled recruiting, and engagement programs, achieving an Employee Net Promoter Score (eNPS) of 77 - IBEX is built around an 'agent-first' culture, supported by branded sites, technology-enabled recruiting, and year-round employee engagement programs33 - The company achieved an Employee Net Promoter Score (eNPS) of 77 and has been recognized as a top employer by Forbes and Newsweek in 202533 Technology The Wave iX technology platform, with its three-pronged AI strategy, underpins IBEX's service offerings to enhance agent interactions, client CX, and overall performance - The Wave iX technology platform is the foundation for IBEX's service offerings, featuring a three-pronged AI strategy to enhance agent interactions, client CX, and overall performance34 - Wave iX integrates AI-powered solutions for hyper-personalized interactions, automation, and customized client solutions, deployed across most of the client portfolio3637 Flexible Operating Delivery Model IBEX employs a global delivery model with 30 centers and approximately 33,000 employees across onshore, nearshore, and offshore locations, including work-at-home capabilities - IBEX operates a global delivery model with onshore (U.S.), nearshore (Nicaragua, Honduras, Jamaica), and offshore (Philippines, Pakistan, India) customer experience centers, including work-at-home capabilities38 - As of June 30, 2025, the company has 30 delivery centers and approximately 33,000 employees, with 97% of on-site capacity in high-growth, high-margin offshore and nearshore geographies3842 Strategic Approach IBEX focuses on delivering exceptional customer experiences through innovative technology, operational excellence, a strong culture, and a client-devoted 'land and expand' strategy - IBEX prioritizes delivering exceptional customer experiences and has transformed into a technology-led provider, focusing on clients who view CX as a competitive differentiator4344 - The growth strategy is based on four pillars: innovative technology, best-in-class operations, high-performing company culture, and a client-devoted mentality, utilizing a 'land and expand' approach454649 Our Clients IBEX partners with growing 'Digital-First' and established 'Blue Chip' companies across diverse verticals, maintaining high client retention and a Net Promoter Score (NPS) of 68 - IBEX partners with growing companies and established Fortune 500 brands across various verticals (Retail & E-commerce, HealthTech, Telecommunication, FinTech, Travel, Technology)48 - Clients are categorized as 'Digital-First Companies' (fast-growing, tech/e-commerce) and 'Blue Chip Companies' (large customer bases, seeking digital transformation)5051 - The company maintains high client retention rates and a client Net Promoter Score (NPS) of 68, reflecting strong relationships53 Industry Overview and Trends The BPO industry is evolving towards technology-enabled solutions, with increasing integration of AI, a focus on customer experience, and demand for integrated end-to-end partners - The BPO industry is shifting from labor arbitrage to technology-enabled solutions, with Blue Chip clients increasingly evaluating AI-enabled technologies5556 - Prioritization of Customer Experience (CX)5859 - Focus on Consumer Centricity & Customer Lifetime Value (LTV)5859 - Outsourcing across the entire operational value chain5859 - Increasing integration of AI to enhance service delivery, including generative AI for automation and insights5859 - Demand for integrated end-to-end partners offering unified solutions5859 - Preference for 'Bestshore' flexible delivery models (onshore, nearshore, offshore, remote)5859 - Heightened focus on Data Protection & Security5859 - Integration of Data and Analytics into core service offerings5859 Sales and Marketing Sales and marketing efforts focus on driving awareness, customer acquisition, and expanding existing client relationships through a 'land and expand' strategy across key verticals - Sales and marketing focus on driving awareness, customer acquisition, and expanding existing client relationships through a 'land and expand' strategy60 - Efforts target key market verticals (Retail & E-commerce, HealthTech, FinTech, Technology, Travel, Telecommunications) and key decision-makers (CDO, CIO, CXO, CCO, CMO)6169 - The sales process for digital-first clients is 30-60 days, while for larger blue-chip clients, it can extend up to two years64 Competition The highly fragmented BPO industry presents opportunities for differentiated providers like IBEX, which competes on service quality, value-added offerings, and advanced technology - The BPO industry is highly fragmented, creating opportunities for differentiated providers like IBEX, especially as clients seek unified, end-to-end solutions7172 - IBEX faces competition from traditional BPO companies and in-house customer service departments, with key competitive factors including service quality, value-added offerings, and advanced technological capabilities737475 Competitive Strengths and Differentiators IBEX differentiates itself through its nimble, innovative culture, Wave iX AI technology, strong employer brand, broad digital service portfolio, and leading global delivery model - Differentiation as a nimble, disruptive provider with an innovative and entrepreneurial culture787984 - Wave iX technology solutions, leveraging generative AI (Wave iX AI Virtual Agent, Wave iX Translate) to drive performance and innovation787984 - Position as a leading brand and employer in its markets, fostering high employee engagement and lower attrition787984 - Broad portfolio of full lifecycle digital services (ibex Connect, ibex Digital, ibex CX)787984 - Leading global delivery model with significant growth in high-margin nearshore and offshore regions, offering geographic diversity and business continuity787984 Seasonality IBEX's business experiences seasonal fluctuations, with increased customer engagement during the calendar year-end holiday period and customer acquisition revenues rising in summer and Q4 - IBEX's business performance is subject to seasonal fluctuations, with increased activity in customer engagement during the calendar year-end holiday period81 - Customer acquisition revenues may increase during the summer (household moves) and the final calendar quarter (holiday season)82 Intellectual Property IBEX protects its competitive position through intellectual property laws, contractual arrangements, proprietary technology, registered trademarks, and trade secret controls - IBEX relies on intellectual property laws, contractual arrangements, and proprietary technology (next-generation software) to protect its competitive position83 - The company registers trademarks and service marks in the U.S. and other countries and maintains trade secrets through contractual clauses and system access controls848586 Regulation IBEX is subject to diverse U.S. and foreign laws and regulations concerning privacy, data protection, intellectual property, and employment, with compliance being costly and time-consuming - IBEX is subject to U.S. federal and state, and foreign laws and regulations concerning privacy, data protection, intellectual property, competition, consumer protection, export taxation, and employment87 - As a Bermuda company, IBEX must comply with the Bermuda Companies Act 1981, the Economic Substance Act 2018 (effective July 1, 2019), and the Personal Information Protection Act 2016 (fully implemented January 1, 2025)889192 - Compliance with these diverse legal requirements is costly and time-consuming, with potential for significant fines or penalties for violations99 Human Capital Resources IBEX had approximately 33,000 full-time employees as of June 30, 2025, fostering a customer-centric, employee-driven culture with an eNPS of 77 - IBEX had approximately 33,000 full-time employees as of June 30, 2025, up from 30,000 in 2024, driven by a customer-centric, employee-driven culture100 - The company's culture is built on three principles: being the best employer, an employee-first approach, and highly immersive engagement, resulting in an eNPS of 77101105 Information about our Executive Officers This section lists the executive officers of IBEX Limited as of September 11, 2025, who serve at the discretion of the Board with no family relationships Executive Officers as of September 11, 2025 | Name | Age | Title | | :--- | :--- | :--- | | Robert Dechant | 63 | Chief Executive Officer | | Taylor Greenwald | 57 | Chief Financial Officer | | Christy O'Connor | 56 | Chief Legal Officer and Assistant Secretary | | David Afdahl | 51 | Chief Operating Officer | | Julie Casteel | 64 | Chief Marketing and Strategic Accounts Officer | | Bruce Dawson | 61 | Chief Sales and Client Services Officer | | Paul Inson | 61 | Chief People Officer | | Andreas Wilkens | 53 | Chief Technology Officer | | Michael Darwal | 42 | Deputy CFO, President ibex Digital | - Executive officers serve at the discretion of the Board, with no family relationships between them or directors104 ITEM 1A. RISK FACTORS This section details material risks to IBEX's business, financial condition, and operations, categorized across business, financial, operational, legal, Bermuda incorporation, and common share factors - Investment in IBEX is speculative and risky due to material risks and uncertainties that could adversely affect business, results of operation, reputation, prospects, financial condition, operating results, cash flows, profitability, liquidity, and stock price116 - The risks described are not exhaustive, and additional unknown or currently immaterial risks may also harm the business116 Business Risks Business risks include dependence on key clients, challenges in maintaining profitability, potential client claims, effects of consolidation, inability to adapt to market trends, acquisition risks, and intellectual property protection failures - Dependence on key clients, with the top three clients accounting for 26% of revenue in FY2025117118119126127128129130131132133135136137138139140141142 - Profitability relies on efficient asset utilization, appropriate pricing, and cost management, with most contracts lacking minimum volume requirements117118119126127128129130131132133135136137138139140141142 - Risk of client claims for reduced payments or damages if quality standards are not met117118119126127128129130131132133135136137138139140141142 - Adverse effects from client consolidation or increased insourcing activities117118119126127128129130131132133135136137138139140141142 - Inability to anticipate client needs, adapt to market/technology trends (including AI), or successfully convert customer acquisition website visitors117118119126127128129130131132133135136137138139140141142 - Risks associated with future acquisitions, including diversion of management attention, dilution, and integration difficulties117118119126127128129130131132133135136137138139140141142 - Failure to adequately protect intellectual property and proprietary information, leading to competitive impairment or costly litigation117118119126127128129130131132133135136137138139140141142 Financial, Accounting, and Economic Risks Financial risks encompass high working capital needs, quarterly operating fluctuations, economic uncertainty, client payment defaults, debt covenant restrictions, goodwill impairment, and limitations on net operating loss carryforwards - Inability to fund high working capital requirements and new investments, potentially increasing financing costs143144145146147148149150152153154155156157 - Operating results may fluctuate quarterly due to factors like client loss, new contracts, termination of existing contracts, and seasonal changes143144145146147148149150152153154155156157 - Adverse effects from general economic uncertainty, including inflation, rising interest rates, recession, and foreign exchange fluctuations, particularly given 96% of FY2025 revenue from U.S. clients143144145146147148149150152153154155156157 - Risk of clients failing to pay accounts receivable balances in a timely manner, impacting financial condition and cash flow143144145146147148149150152153154155156157 - Debt covenants may restrict operational flexibility, and non-compliance could lead to default143144145146147148149150152153154155156157 - Potential for significant charges to earnings if goodwill or intangible assets become impaired143144145146147148149150152153154155156157 - Limitations on the ability to use U.S. state and international net operating loss carryforwards, which begin to expire between 2026 and 2039143144145146147148149150152153154155156157 Operational Risks Operational risks involve reliance on technology, challenges with AI integration, dependence on international operations, workforce management, impacts of natural events, currency fluctuations, advertising effectiveness, and facility lease renewals - Heavy reliance on technology, telephone, and computer systems, as well as third-party telecommunications providers, exposing the company to technical difficulties or disruptions158159160161162163164165166167168169170171172173174175176 - Risks from integrating AI and generative AI technology, including unintended consequences, data sourcing issues, program bias, security challenges, and potential replacement of lower-tier service offerings158159160161162163164165166167168169170171172173174175176 - Significant dependence on international operations, particularly in the Philippines, Jamaica, Pakistan, and Nicaragua, where disruptions could diminish competitive advantage158159160161162163164165166167168169170171172173174175176 - Challenges in attracting, retaining, and motivating qualified senior management, employees, and agents, exacerbated by high industry turnover and increasing labor costs158159160161162163164165166167168169170171172173174175176 - Adverse effects from natural events, health epidemics, geopolitical conditions, widespread civil unrest, or terrorist attacks in operating countries158159160161162163164165166167168169170171172173174175176 - Material impact on results of operations from unhedged fluctuations in local currencies against the U.S. dollar158159160161162163164165166167168169170171172173174175176 - Negative impact if unable to advertise cost-effectively on internet search engines to attract consumers to customer acquisition websites158159160161162163164165166167168169170171172173174175176 - Difficulties and increased expenses when expanding operations into new countries with less familiar local procedures or less developed infrastructure158159160161162163164165166167168169170171172173174175176 - Adverse effects if unable to renew leases for facilities on commercially acceptable terms or at all158159160161162163164165166167168169170171172173174175176 Legal and Regulatory Risks Legal and regulatory risks include compliance with diverse laws, potential fines for non-compliance, liability from data breaches, and costs associated with intellectual property infringement claims - Exposure to numerous and sometimes conflicting legal and regulatory requirements across multiple countries and industries, including data privacy, telecommunications, import/export, and anti-corruption laws177178179180181182183184185186187 - Non-compliance with legal regimes could result in significant fines, penalties, civil enforcement actions, criminal prosecution, and reputational damage177178179180181182183184185186187 - Unauthorized or improper disclosure of personal information, privacy breaches, or cyber-attacks could lead to significant liability and harm reputation177178179180181182183184185186187 - Claims of intellectual property infringement or violation of contractual protections by others could result in substantial costs, diversion of resources, and reputational harm177178179180181182183184185186187 Risks Related to Being Incorporated in Bermuda Risks related to Bermuda incorporation include adverse tax impacts, less shareholder protection under Bermuda law, and difficulties enforcing foreign judgments against the company - Potential adverse impact from tax matters, new legislation (e.g., Bermuda Corporate Income Tax Act 2023 if revenues exceed €750 million), and actions by taxing authorities188189190191192193194195196197198199200201202203 - Differences in Bermuda law compared to U.S. law may afford less protection to common shareholders, with limited rights for class actions or derivative actions188189190191192193194195196197198199200201202203 - Difficulty enforcing U.S. or other foreign judgments against IBEX in Bermuda due to its incorporation and asset location outside the U.S188189190191192193194195196197198199200201202203 Risks Related to Our Common Shares Risks to common shares include influence from major shareholders, dilution from warrants, disclosure exemptions as an emerging growth company, increased compliance costs, potential PFIC characterization, market price volatility, and no planned dividends - The Resource Group International Limited (TRGI) beneficially owns ~13% of common shares and has consent rights over certain actions, potentially limiting other shareholders' influence204205206207208209210211212213214215216217218219220 - The Amazon Warrant, if exercised, will dilute ownership interests and could adversely affect the market price of common shares204205206207208209210211212213214215216217218219220 - As an 'emerging growth company' and 'smaller reporting company,' IBEX benefits from disclosure exemptions, which may make its common shares less attractive to investors204205206207208209210211212213214215216217218219220 - Increased costs and demands on management due to complying with public company laws and regulations, including Section 404 of Sarbanes-Oxley Act204205206207208209210211212213214215216217218219220 - Risk of adverse U.S. tax consequences for certain U.S. holders if IBEX is characterized as a passive foreign investment company (PFIC)204205206207208209210211212213214215216217218219220 - Potential for a significant portion of total outstanding shares to be sold into the market, causing a decrease in market price204205206207208209210211212213214215216217218219220 - Anti-takeover provisions in bye-laws and the ability to issue preferred shares without shareholder approval could make acquisitions more difficult and limit shareholder influence204205206207208209210211212213214215216217218219220 - The market price of common shares may be volatile due to various factors, including operating performance, analyst reports, and economic conditions204205206207208209210211212213214215216217218219220 - IBEX does not plan to pay dividends in the foreseeable future, meaning investors may only realize gains if the share price increases204205206207208209210211212213214215216217218219220 ITEM 1B. UNRESOLVED STAFF COMMENTS This section states that there are no unresolved staff comments from the SEC regarding the company's previous filings - There are no unresolved staff comments221 ITEM 1C. CYBERSECURITY IBEX outlines its comprehensive cybersecurity risk management program, integrated into its enterprise risk management framework, with Board oversight and management-led day-to-day operations - IBEX integrates cybersecurity processes into its overall enterprise risk management framework to evaluate and manage risks222224 - The Board of Directors is responsible for overseeing cybersecurity risk management, receiving periodic updates from management232235 - While cybersecurity threats in the last fiscal year have not materially affected the Company's business strategy, results of operations or financial condition, future incidents are unavoidable and could have material adverse effects236 Risk Management and Strategy IBEX conducts periodic cybersecurity evaluations, assesses AI-related risks, oversees third-party risks, maintains robust incident response plans, and provides mandatory employee training - Periodic evaluations of cybersecurity policies, processes, and practices by in-house security teams and third-party firms, including audits, penetration testing, and threat modeling225226227228229230 - Consideration of likelihood, impact, and feasibility of controls in assessing cybersecurity risks, with controls including vulnerability management, firewalls, access controls, and data encryption225226227228229230 - Integration of AI into solutions and third-party offerings, with risk assessments conducted to identify potential threats and vulnerabilities in AI systems225226227228229230 - Established processes to oversee and identify cybersecurity risks from third parties, including contractual controls and periodic assessments of vendor practices225226227228229230 - Maintenance of business continuity, incident response, and disaster recovery plans, routinely evaluated and updated by IT Security, Operations, and Compliance teams225226227228229230 - Regular, mandatory cybersecurity training for all personnel and out-of-cycle notices from the CTO225226227228229230 Governance The Board oversees cybersecurity risk management, receiving updates from management, while a dedicated Cybersecurity Committee and CISO handle day-to-day oversight - The Board oversees cybersecurity risk management, receiving periodic updates from management on strategy, risk assessments, and significant developments232235 - Management, supported by dedicated professionals and a Cybersecurity Committee, handles day-to-day oversight, with the Chief Information Security Officer (CISO) leading the Information Security department233 - The current CISO has over eighteen years of experience in cybersecurity and holds multiple professional certifications (CIISSP, CISA, CISM)234 Cybersecurity Threats IBEX has implemented enhanced safeguards, and while past threats have not materially impacted the company, future cybersecurity incidents are unavoidable and could have material adverse effects - IBEX has implemented additional technical and procedural safeguards to strengthen its security posture, including enhanced incident response protocols and employee awareness training236 - While cybersecurity threats in the last fiscal year have not materially affected the Company's business strategy, results of operations or financial condition, future cybersecurity incidents are unavoidable and could have material adverse effects236 ITEM 2. PROPERTIES IBEX operates executive management offices in Washington, D.C., and 30 leased global delivery centers, housing 20,456 workstations as of June 30, 2025, primarily in offshore and nearshore regions - IBEX leases all of its facilities, including executive management offices in Washington, D.C. (5,300 sq ft) and 30 delivery centers globally237239 Delivery Centers and Workstations as of June 30, 2025 | Country | Number of centers | Number of workstations | | :--- | :--- | :--- | | United States | 2 | 654 | | Philippines | 9 | 8,567 | | Pakistan | 10 | 4,058 | | Jamaica | 4 | 3,810 | | Nicaragua | 4 | 2,691 | | Honduras | 1 | 676 | | Total | 30 | 20,456 | - The company expects to procure additional space and expand geographically to meet business demands240 ITEM 3. LEGAL PROCEEDINGS IBEX is involved in ordinary course legal actions, accruing for probable losses, but management believes current proceedings will not materially affect financial position or operations - IBEX is involved in legal actions in the ordinary course of business and accrues for probable and reasonably estimable losses241 - Management believes that the disposition or ultimate resolution of any current legal proceedings will not have a material adverse effect on the Company's financial position, cash flows, or results of operations242 ITEM 4. MINE SAFETY DISCLOSURES This item is not applicable to IBEX Limited - This item is not applicable243 Part II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES This section provides information on IBEX's common shares trading on Nasdaq, outstanding shares, dividend policy, and details of the $15 million share repurchase program authorized on May 1, 2025 - IBEX common shares began trading on the Nasdaq Global Market under the symbol 'IBEX' on August 7, 2020245 - As of August 29, 2025, there were 13,315,077 common shares outstanding and 94 holders of record6245 - The company currently does not plan to declare dividends, intending to retain all future earnings to finance business growth and development246 Share Repurchases for the Three Months Ended June 30, 2025 | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under 2025 Share Repurchase Program ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | April 1 - 30, 2025 | — | — | — | — | | May 1 - 31, 2025 | 14,300 | $28.68 | 14,300 | $14,590 | | June 1 - 30, 2025 | 43,980 | $28.79 | 43,980 | $13,324 | | Total | 58,280 | $28.76 | 58,280 | | ITEM 6. [RESERVED] This item is reserved and contains no information - This item is reserved252 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section analyzes IBEX's financial condition and results for FY2025, highlighting 9.8% revenue growth to $558.3 million, 9.5% net income increase to $36.9 million, and diluted EPS of $2.36, driven by client growth and strategic shifts - IBEX delivered revenues of $558.3 million during the fiscal year ended June 30, 2025, a 9.8% increase compared to the prior year257 - Net income for FY2025 was $36.9 million, a 9.5% increase from $33.7 million in the prior year, driven by revenue growth in higher margin offshore regions and improved gross margin performance257 - Fully diluted earnings per share for FY2025 was $2.36, up from $1.84 in the prior year, due to higher net income and fewer diluted shares outstanding257 Overview IBEX provides innovative BPO, digital marketing, and customer engagement solutions, operating a global CX delivery model with 30 centers and approximately 33,000 employees - IBEX delivers innovative BPO, smart digital marketing, online acquisition technology, and end-to-end customer engagement solutions255 - The company operates a global CX delivery center model with 30 centers and approximately 33,000 employees, managing nearly 169 million customer interactions255 Business Highlights In FY2025, IBEX achieved strong financial results with growth in key verticals, expanded capacity in offshore/nearshore regions, and secured sixteen new client wins - During FY2025, IBEX delivered strong financial results with growth in Retail & E-commerce, HealthTech, Travel, Transportation & Logistics, and Other verticals256 - The company increased capacity in offshore and nearshore regions, expanded into two new sites, and achieved sixteen new client wins256 Recent Financial Highlights FY2025 saw revenues of $558.3 million (+9.8%), net income of $36.9 million (+9.5%), and fully diluted EPS of $2.36 (+28.3%), driven by higher-margin offshore growth Key Financial Highlights (FY2025 vs FY2024) | Metric | FY2025 | FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | Revenues | $558.3 million | $508.6 million | +9.8% | | Net Income | $36.9 million | $33.7 million | +9.5% | | Fully Diluted EPS | $2.36 | $1.84 | +28.3% | - The increase in net income was driven by revenue growth in higher margin offshore regions and improved gross margin performance257 Trends and Factors Affecting our Performance Performance is influenced by macroeconomic factors, AI integration, demand for services, capacity utilization, wage pressures, operating margins from geographic shifts, client concentration, pricing strategies, employee turnover, and currency exchange rates - Macroeconomic factors (inflation, interest rates, geopolitical uncertainty, foreign exchange) have impacted financial results, leading some clients to shift work to offshore sites for cost reduction259260261262263264265266267268269270271272273274275 - IBEX is aggressively leveraging generative AI through its Wave iX technology to increase agent productivity, provide customer insights, and deploy voice/chat bots, aiming to capture AI-enabled revenue259260261262263264265266267268269270271272273274275 - Demand for customer interaction services reflects client business performance; FY2025 saw higher demand due to digital-first solutions, existing client growth, and new client wins259260261262263264265266267268269270271272273274275 - Capacity utilization impacts margins; overall utilization increased to 88% in FY2025 from 84% in FY2024, with U.S. utilization over 100% due to work-at-home model259260261262263264265266267268269270271272273274275 - Increasing wage pressure in all geographies was offset by higher agent quality, increased productivity, better retention, and contractual cost of living adjustments (COLA)259260261262263264265266267268269270271272273274275 - Operating margins are influenced by the shift towards higher-margin offshore and nearshore delivery locations, which now account for approximately 97% of workstations259260261262263264265266267268269270271272273274275 - IBEX has a strong track record of new client wins, with in-year wins historically generating 2.0x to 3.0x revenue in subsequent years259260261262263264265266267268269270271272273274275 - Client concentration: largest client accounted for 11% of revenue, and top three clients for 26% in FY2025, but overall client diversification is increasing259260261262263264265266267268269270271272273274275 - Pricing strategies include base price per minute/hour, bonuses/penalties, and successful negotiation of price increases/COLA due to labor market tightening and facilities expenses259260261262263264265266267268269270271272273274275 - High employee turnover in the outsourcing industry impacts profitability; IBEX focuses on employee engagement to support lower attrition rates259260261262263264265266267268269270271272273274275 - Increased costs for sourcing or generating leads, or changes in conversion rates, can impact profit margins in customer acquisition solutions259260261262263264265266267268269270271272273274275 - Increased up-front costs for hiring and training new employees in response to demand can initially depress operating profit margins259260261262263264265266267268269270271272273274275 - Net effect of currency exchange rate fluctuations: a significant portion of operating expenses are in foreign currencies (PHP, JMD, PKR), while revenues are primarily in USD, leading to FX exposure259260261262263264265266267268269270271272273274275 Key Operational Metrics Key operational metrics include workstations, work-at-home agents, and capacity utilization, which increased to 88% in FY2025 from 84% in FY2024, driven by offshore and nearshore optimization - Workstations: Number of physical workstations used for production at delivery centers276 - Work at home: Number of production agents working from home277 - Capacity Utilization: Efficiency metric defined as (on-site workstations in use + work at home seats) / total on-site workstations278 - Capacity utilization increased to 88% in FY2025 from 84% in FY2024, driven by utilization in nearshore and offshore geographies and optimization of onshore capacity279 Capacity Utilization by Region (as of June 30, 2025 and 2024) | | As of June 30, 2025 | | As of June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | | Total Production Workstations | Utilization % | Tota