IBEX(US:IBEX)2026-02-05 22:32Financial 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, up 16.7% 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] - Fully diluted EPS rose to $0.83, a 45% increase from $0.57 in the prior year quarter, supported by strong operating performance and fewer diluted shares outstanding [17][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 [15] - 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% from 13.1% [20][21] Market Data and Key Metrics Changes - Offshore revenues grew by 16.2% compared to the prior year quarter, comprising 52.3% of total revenue, while onshore revenues expanded to 24% of total revenue from 22% [15][16] - The company continues to win and grow in all geographic markets, with a focus on higher-margin offshore delivery locations positively impacting bottom-line results [15] Company Strategy and Development Direction - The company is focused on expanding its AI capabilities and strategic investments in high-margin verticals, positioning itself as a leader in AI-powered customer experience [9][10] - The recent promotion of Mike Darwal to Chief AI and Digital Officer reflects the company's commitment to enhancing its AI leadership [10][12] - The company aims to maintain a structurally sound business model with a focus on market-leading growth, expanding margins, and strong cash flow generation [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain momentum in the second half of FY 2026, with expectations to raise revenue and adjusted EBITDA guidance [25][26] - The company anticipates a more consistent revenue flow throughout the fiscal year, moving away from historical seasonal spikes [33] Other Important Information - The company achieved a record adjusted EBITDA of $20.7 million, or 12.6% of revenue, reflecting growth in higher-margin offshore locations and services [18][25] - Capital expenditures increased to $11.7 million, or 7.1% of revenue, driven by expansion in offshore regions [22][23] Q&A Session Summary Question: Demand and impact of AI on the industry - Management highlighted that the company has established itself as an AI leader, 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 noted that the mix shift towards higher-margin verticals 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, indicating operational efficiency [35][36]