IBEX(US:IBEX)2024-05-09 20:14Financial Performance - The company reported revenues of $126.8 million for the three months ended March 31, 2024, a decline of 3.6% compared to the same quarter in the prior year[106]. - Net income for the three months ended March 31, 2024 was $10.3 million, down 8.6% from $11.3 million in the same quarter of the previous year[106]. - For the nine months ended March 31, 2024, revenues totaled $384.0 million, reflecting a 3.7% decrease compared to the same period in the prior year[107]. - The company experienced a significant decline in revenue from the FinTech vertical, which decreased by $7.0 million or 28.7% year-over-year[126]. - Revenue for the nine months ended March 31, 2024, was $384.0 million, a decrease of $14.6 million, or 3.7%, primarily driven by declines in the FinTech and Telecommunications verticals[139]. - Net income for the three months ended March 31, 2024, was $10.3 million, with a net income margin of 8.1%, down from 8.6% in the prior year quarter[162]. - Adjusted net income for the three months ended March 31, 2024, was $12.6 million, with an adjusted net income margin of 9.9%[158]. - Adjusted EBITDA for the three months ended March 31, 2024, was $19.2 million, representing an adjusted EBITDA margin of 15.1%, an increase from 14.3% in the prior year quarter[162][164]. - The decrease in net income margin for the nine months ended March 31, 2024, to 6.2% from 6.8% in the prior year was primarily driven by lower revenue and planned investments[163]. Operational Efficiency - The company closed two sites during the quarter to optimize utilization in onshore and nearshore geographies[105]. - The percentage of workstations in nearshore and offshore centers was approximately 95% as of March 31, 2024, enhancing profit margins[118]. - Payroll and related costs were $67.2 million, a decrease of $3.2 million, or 4.5%, compared to the prior year quarter, representing 53.0% of revenue[130]. - Facilities expenses were $12.2 million, a decrease of $0.7 million, or 5.7%, compared to the prior year quarter, due to site optimization efforts[131]. - SG&A expense increased to $23.6 million, an increase of $1.4 million, or 6.4%, primarily due to impairment losses and severance costs[132]. - Income from operations was $11.3 million, down from $13.1 million in the prior year quarter, with an operating margin of 8.9%[135]. - Cost of services was $271.2 million, a decrease of $16.5 million, or 5.7%, compared to the same prior year period[141]. Client and Market Dynamics - The largest client accounted for 13% of consolidated revenues during the nine months ended March 31, 2024, indicating a degree of client concentration[121]. - The company has seen an increase in new client wins, with fifteen new clients acquired during the nine months ended March 31, 2024, compared to eight in the prior year[105]. - The Retail & E-commerce vertical saw a revenue increase of $2.7 million, or 9.3%, contributing to the overall performance[126]. Cash Flow and Capital Management - Free cash flow for the nine months ended March 31, 2024, increased to $11.8 million compared to $9.2 million during the same period in the prior year[178]. - Cash and cash equivalents as of March 31, 2024, totaled $50.7 million, a decrease from $57.4 million as of June 30, 2023, primarily due to share repurchases[176]. - Total debt as of March 31, 2024, was $1.4 million, with the company in compliance with all debt covenants[170]. - The company repurchased 1,124,876 shares for $18.6 million under the Share Repurchase Program during the nine months ended March 31, 2024[173]. - Net cash provided by operating activities for the nine months ended March 31, 2024, was $18.5 million, down from $24.4 million in the prior year[177]. - Capital expenditures for the nine months ended March 31, 2024, were $6.6 million, significantly lower than $15.2 million in the prior year[179]. - The company has $80 million available under its revolving credit facility to support future liquidity needs[172]. Tax and Interest - Interest income increased to $1.5 million for the nine months ended March 31, 2024, compared to $0.4 million in the prior year[149]. - The effective tax rate decreased to 11.0% for the three months ended March 31, 2024, down from 14.2% in the prior year[138]. Currency and Risk Management - A 10% appreciation/depreciation in the Philippine Peso against the U.S. dollar would have increased or decreased expenses by approximately $9.1 million or $7.5 million, respectively, during the nine months ended March 31, 2024[188]. - A 10% appreciation/depreciation in the Jamaican Dollar against the U.S. dollar would have increased or decreased expenses by approximately $4.3 million or $3.5 million, respectively, during the same period[188]. - A 10% appreciation/depreciation in the Pakistani Rupee against the U.S. dollar would have increased or decreased expenses by approximately $2.8 million or $2.3 million, respectively, during the same period[188]. - The Company serves U.S.-based clients through delivery centers in various countries, exposing it to foreign currency exchange risks[186]. Internal Controls and Compliance - The Company is continuing to implement its remediation plan for a material weakness in internal control over financial reporting related to complex non-routine transactions[192]. - As of March 31, 2024, the Company's disclosure controls and procedures were not effective due to the noted material weakness[192]. - The Company will continue to capitalize qualifying implementation costs until the new software solution is substantially complete and ready for intended use[183]. - The Company has not experienced any counterparty defaults related to its derivative contracts as of the date of this Form 10-Q[189]. - The Company did not have any outstanding balances on its credit facilities as of March 31, 2024, indicating no interest expense impact from a hypothetical 10% change in SOFR[190].