IBEX(IBEX) - 2026 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported headline revenue growth of 17% and adjusted EPS growth of 46% in Q2 FY 2026, with revenue reaching $164.2 million, a 16.7% increase from $140.7 million in the prior year quarter [4][13] - Net income increased to $12.2 million from $9.3 million in the prior year quarter, driven by growth in higher-margin offshore regions and reduced SG&A expenses as a percentage of revenue [16][17] - Adjusted EBITDA reached a record of $20.7 million, or 12.6% of revenue, up from $16.5 million, or 11.8% of revenue in the same period last year [19] Business Line Data and Key Metrics Changes - Revenue growth was primarily driven by the health tech vertical, which grew by 35.1%, travel, transportation, and logistics by 20.2%, and retail and e-commerce by 17.2% [14] - The telecommunications vertical saw a decline of 23.1%, marking it as one of the smallest verticals [14] - Health tech now accounts for 17.4% of total revenue, up from 15.1% in the prior year quarter, while telecommunications decreased to 8.7% of revenue from 13.1% [20][21] Market Data and Key Metrics Changes - Offshore revenues grew by 16.2% compared to the prior year quarter, while nearshore locations grew by 8.5%, and onshore regions expanded by 27.5% [15] - The company’s highest margin offshore revenues comprised 52.3% of total revenue, reflecting a strategic focus on higher-margin delivery locations [15] Company Strategy and Development Direction - The company is focused on expanding its AI capabilities and strategic market presence, positioning itself as a leader in AI-powered customer experience [9][10] - The expansion into India is highlighted as a key growth vector, with plans to continue scaling operations in the region [8] - The company aims to maintain its leadership in BPO 3.0 by investing in talent and resources to support AI-driven growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company’s ability to sustain growth momentum, with expectations of further revenue and adjusted EBITDA guidance increases for the fiscal year [25][26] - The company anticipates a more consistent revenue flow throughout the year, moving away from historical seasonal spikes [33] Other Important Information - The company repurchased approximately 78,000 shares for $2.9 million during the quarter, with a total of 170,000 shares repurchased for $5.6 million in the fiscal year [24] - The company ended the quarter with a net cash position of $14 million, consistent with the previous fiscal year [24] Q&A Session Summary Question: Demand and impact of AI on the company - Management stated that the company has established itself as a leader in AI, which aids in winning new clients and enhances operational execution, contributing to market share growth [28][30] Question: Changes in revenue patterns due to business mix - Management indicated that the mix shift towards higher-margin sectors may lead to a more consistent revenue flow throughout the year, reducing the historical seasonal decline [32][34] Question: Gross margins and operating expenses - Management acknowledged that while gross margins have decreased year-over-year, SG&A expenses are growing at a slower rate than revenue, which is favorable for long-term margin trajectory [36][37]