IBEX(US:IBEX)2025-11-06 21:27Financial Performance - Revenues for the three months ended September 30, 2025, were $151.2 million, a 16.5% increase from $129.7 million in the prior year quarter [100]. - Net income for the same period was $12.0 million, representing a 59.9% increase from $7.5 million in the prior year quarter [100]. - Income from operations rose to $13.7 million, with an operating margin of 9.1%, up from 7.0% in the prior year quarter, primarily due to growth in higher margin offshore regions [126]. - Adjusted net income increased to $13.1 million, with an adjusted net income margin of 8.7%, compared to 7.0% in the prior year quarter [134]. - EBITDA for the three months ended September 30, 2025, was $18.1 million, with an adjusted EBITDA margin of 12.9%, compared to 12.0% in the prior year quarter [139]. - The effective tax rate decreased to 10.9% for the three months ended September 30, 2025, down from 20.8% in the prior year quarter [129]. Revenue Breakdown - The Retail & E-commerce vertical saw revenue growth of $7.9 million, or 25.0%, while the HealthTech vertical grew by $3.6 million, or 19.5% [116]. - The Telecommunications vertical experienced a revenue decline of $4.5 million, or 22.5%, compared to the prior year quarter [116]. - The largest client accounted for 10% of total revenues, while the top three clients represented 26% of consolidated revenues, indicating strong client diversification [111]. Costs and Expenses - Payroll and related costs increased to $77.9 million, a 14.6% rise, but as a percentage of revenue, it decreased to 51.5% from 52.4% [119]. - SG&A expenses increased by $0.3 million, or 1.2%, to $26.5 million for the three months ended September 30, 2025, driven by higher payroll costs and stock-based compensation [124]. - Reseller commissions and lead expenses surged by 119.7% to $8.3 million, driven by increased utilization of third-party affiliates [120]. Cash Flow and Liquidity - Free cash flow for the three months ended September 30, 2025, was $8.0 million, up from $4.1 million in the prior year, with net cash provided by operating activities at $15.7 million [143]. - Net cash as of September 30, 2025, was $21.1 million, an increase from $13.7 million as of June 30, 2025 [145]. - Cash and cash equivalents totaled $22.7 million as of September 30, 2025, with additional unused credit facilities of $67.4 million [147]. - The company expects existing cash and cash generated from operations to meet liquidity requirements for at least the next twelve months [149]. - Net cash inflow from operating activities for the three months ended September 30, 2025, was $15.7 million, up from $7.8 million in the same period last year, driven by increased revenues and lower working capital usage [156]. Investments and Financing - The company incurred $7.6 million in investing activities during the three months ended September 30, 2025, compared to $3.6 million in the prior year, primarily for offshore expansions and IT equipment purchases [157]. - Financing activities resulted in an expenditure of $0.6 million for the three months ended September 30, 2025, including $2.8 million for share repurchases [158]. - The company has a share repurchase program allowing up to $15 million in shares to be repurchased through May 12, 2026, with 91,658 shares repurchased for $2.7 million during the three months ended September 30, 2025 [152]. Operational Strategy - The company is actively integrating AI into its solutions to enhance customer experience and operational efficiency [103]. - The company is expanding its capacity in offshore regions to meet growing demand and optimize costs [106]. - The company’s offshore and nearshore workstations accounted for approximately 97% of total workstations as of September 30, 2025, up from 95% in the prior year [108]. Risk Management - A 10% appreciation/depreciation in the Philippine Peso against the U.S. dollar would have impacted expenses by approximately $3.7 million or $3.0 million, respectively, for the three months ended September 30, 2025 [165]. - The company did not have any outstanding balances on the HSBC Credit Facilities as of September 30, 2025, indicating no immediate interest rate risk exposure [168]. - The company’s cash management policies are designed to mitigate risks related to global cash, although it cannot guarantee against potential losses [154].