IBEX(US:IBEX)2022-02-17 01:41Financial Data and Key Metrics Changes - Revenue increased approximately 13% year over year, reaching a record $132.2 million, representing a combined two-year growth of 23% [8][35] - Last twelve months (LTM) revenue and EBITDA are $458 million and $61.8 million respectively, resulting in a 7.1% organic growth and a 13.5% EBITDA margin [9][40] - Net income for the second quarter was $8.5 million compared to $2.5 million in the same period last year, primarily driven by a decrease in fair value measurement related to the warrant liability [37] Business Line Data and Key Metrics Changes - Revenue from new clients grew by 57% during the quarter, now representing 70% of total company revenues [10][35] - Legacy three clients' revenues were approximately flat sequentially, now representing less than 20% of revenue, down from 44% at the time of the IPO [11][36] - FinTech and HealthTech verticals now account for approximately 20% of the business combined, with projected inorganic revenue exceeding $100 million for the fiscal year [17][41] Market Data and Key Metrics Changes - The geographical makeup shows that 88% of seats are in high-margin regions, which have grown at a 22% CAGR since FY '16 [19] - The telecommunications vertical exposure decreased to 17.2% of revenue compared to 29.5% a year ago [41] Company Strategy and Development Direction - The company is transforming into a digital-first business, referred to as BPO 2.0, with a focus on client diversification and high-margin growth [7][15] - The growth model emphasizes a "land and expand" approach, aiming to increase wallet share with clients over time [13] - The company is increasing revenue growth guidance to 10% to 12% from a previous range of 7% to 9% while maintaining EBITDA guidance [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business's growth trajectory, expecting continued acceleration in the second half of the year [18][31] - The company has maintained 100% client retention, indicating strong value propositions and operational effectiveness [17] - Management acknowledged challenges related to wage inflation but noted successful negotiations for price adjustments with clients [56] Other Important Information - The company announced a share repurchase program authorized for up to $20 million, reflecting confidence in the business and attractive internal rates of return [24][71] - The ownership structure broadened as the majority shareholder reduced its stake from 62% to 35%, allowing for a more diverse investor base [23] Q&A Session Summary Question: Margin improvement outlook - Management indicated that while there may be fluctuations in margins due to client clusters, the long-term trajectory for EBITDA margins is expected to be north of 15% [50] Question: CapEx visibility - Management expects CapEx to diminish as operations return to pre-pandemic models, projecting a lower range of about 5% for future growth [52] Question: Wage inflation impact - Management has engaged with clients for price adjustments due to rising wages, with many contracts including cost of living adjustments [56] Question: Revenue growth from new contracts - Management expressed confidence that the growth from new clients will offset the legacy business's headwinds, with expectations for strong growth in Q3 and Q4 [79] Question: Share repurchase concerns - Management acknowledged the liquidity concerns but emphasized the compelling internal rate of return on the share buyback, viewing it as a wise use of capital [71]