IBEX Limited (NASDAQ:IBEX) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
IBEX reported record revenue growth and improved margins, with optimistic guidance for FY 2025. The company announced a successful share repurchase program, a positive signal for shareholder returns. Despite some risks like competitive pressures and economic factors, the overall sentiment is positive, supported by strong financial performance and strategic client diversification. The Q&A section revealed stable demand and continued market share gains, reinforcing the positive outlook. The stock price is expected to rise by 2% to 8% over the next two weeks.
Key Financial Performance
Revenue $140.7 million, up 6.1% from $132.6 million in the prior year quarter. Revenue growth was driven by vertical growth in health tech of 31%, travel transportation and logistics of 17%, and retail and e-commerce of 4%, partially offset by a decline in the FinTech vertical of 15%.
Adjusted EBITDA Margin 11.8%, up 100 basis points from 10.8% in the prior year. The improvement was primarily driven by growth in higher margin offshore locations, growth in key verticals, and stronger operating results due to site optimization efforts.
Adjusted Net Income $9.6 million, up 20% from $8 million in the prior year quarter. The increase was driven by higher EBITDA and fewer diluted shares outstanding, offset by higher income tax and interest expense.
Adjusted EPS $0.59, up 36% from $0.44 in the prior year quarter. The increase was driven by higher EBITDA and fewer diluted shares outstanding, offset by higher income tax and interest expense.
Net Income $9.3 million, compared to $6.1 million in the prior year quarter. The increase was primarily driven by growth in higher margin offshore regions and realization of site and cost optimization efforts, partially offset by higher income tax and interest expense.
Net Cash Generated from Operating Activities $1.1 million, compared to an outflow of $1.6 million in the prior year quarter. The increase was driven by increased revenues and stronger operating results, partially offset by longer DSOs for receivables.
Free Cash Flow Outflow of $3.2 million, improved from an outflow of $4.5 million in the prior year quarter. The improvement was driven by increased net cash provided by operating activities, partially offset by higher capital expenditures.
Capital Expenditures $4.3 million or 3.1% of revenue, compared to $2.9 million or 2.2% of revenue in the prior year quarter. The increase was primarily driven by expansions in offshore nearshore regions to support growth.
Net Debt $13.7 million, compared to net cash of $60.8 million at the end of the first quarter. The decrease was primarily driven by the share repurchase of 3.6 million shares for $70 million.
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Operating Highlights
New Product Launches: IBEX had significant wins with its WaveIX translate and automate Generative AI solutions, which are positioned to redefine customer experience.
AI Solutions: The WaveIX AI translate solution provides real-time multilingual support, enhancing customer experience and reducing costs.
AI Automate Solution: The AI automate solution leverages analytics and AI to automate low-complexity call types, increasing revenue and margin.
Market Expansion: IBEX achieved 14% year-over-year growth in its offshore region and 8% growth in omnichannel revenue.
Client Diversification: The largest client accounted for 12% of revenue, with top client concentrations decreasing, indicating a more diversified client portfolio.
Operational Efficiency: Adjusted EBITDA margin improved by 100 basis points to 11.8%, driven by growth in higher margin offshore locations.
Share Repurchase: IBEX executed a strategic repurchase of approximately 3.6 million shares, enhancing independence as a company.
Strategic Shifts: The company is focusing on AI capabilities and sales resources to drive future growth.
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Risk or Challenges
Competitive Pressures: IBEX faces competitive pressures from larger competitors in the industry, which necessitates a strong differentiation strategy to win large enterprise deals.
Regulatory Issues: The company is subject to various regulatory risks that could impact its operations and financial performance, as noted in the forward-looking statements.
Supply Chain Challenges: There are potential supply chain challenges that could arise, particularly in relation to the delivery of services in offshore regions.
Economic Factors: Economic fluctuations could impact client spending and demand for services, particularly in the FinTech vertical, which has already seen a decline.
Client Concentration Risk: While client diversification has improved, there remains a risk associated with revenue concentration from top clients, which could affect financial stability.
Cash Flow Management: The company experienced longer Days Sales Outstanding (DSOs), which could impact cash flow and operational liquidity.
Debt Management: IBEX's net debt position has increased due to share repurchases, which could pose risks if not managed effectively.
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Guidance & Outlook
Revenue Growth: Achieved highest growth in two years at 6.1%, leading to record Q2 revenue of $140.7 million.
Adjusted EBITDA Margin: Expanded adjusted EBITDA margin by 100 basis points to 11.8%.
Client Retention: High client retention rates, with revenue retention rates among the highest in the industry.
New Client Wins: Closed five new logos in Q2, totaling eight year-to-date, including traditional and generative AI deployments.
AI Solutions: Successful launches of WaveIX AI translate and automate solutions, enhancing customer experience and reducing costs.
Share Repurchase: Strategic repurchase of approximately 3.6 million shares to eliminate controlled company status.
Revenue Guidance: Expected revenue range increased to $525 to $535 million from $515 to $525 million.
Adjusted EBITDA Guidance: Adjusted EBITDA expected in the range of $68 million to $69 million, up from $67 to $69 million.
Capital Expenditures Guidance: Capital expenditures expected to remain in the range of $15 to $20 million.
Tax Rate Guidance: Expected tax rate to track toward 21% to 22% for the year.
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Shareholder Return Plan
Share Repurchase Program: Executed the strategic repurchase of approximately 3.6 million shares from TRGI for $70 million, funded with $45 million of cash on hand and a $25 million convertible promissory note.
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Key Q&A
Q:Is the revenue growth a combination of factors like a better backdrop, winning against competitors, and the impact of Gen AI?
A:The biggest drivers for us are our continued winning new logos that then drive a lot of revenue growth with them. We are also winning market share and managing through pressures on top-line revenue. Demand has stabilized, allowing us to build momentum.
Q:Regarding margins, why does it look like margins might be down in the back half despite raising EBITDA guidance?
A:We improved gross margins significantly in Q1 and Q2 and expect that improvement to continue. We are intentionally investing in SG&A and technology, which may affect margins slightly, but we still feel good about our adjusted EBITDA margin.
Q:Review of Unclear Management Responses
A:Management did not provide a direct answer regarding the specific impact of Gen AI on revenue, describing it as a combination of factors without clear detail on its role.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AI complexity
AI deployment
AI talent
AI translation
Automate Solutions
BPOs contact
English agent
FY today
IBEX FY
IBEX addition
IBEX customer
Limited expectation
NASDAQ definition
Solutions milestone
TRGI status
Transcript IBEX
WaveIX AI
WaveIX offering
WaveIX solution
ability competition
ability differentiation
ability partner
addition industry
addition profitability
agent game
agent language
automate solution
bureau example
customer experience
enterprise
experience client
language translation
retention
success
trophy
IBEX Transcript
IBEX Limited (IBEX) Q1 2026 Earnings Call Transcript
Positive11-7
The earnings call summary indicates strong financial performance with a 16.5% revenue increase and a 74.1% rise in adjusted EPS. The guidance was raised, and share repurchases were made, both positive indicators. Despite some risks like a decline in telecommunications and increased CapEx, the growth in other verticals and AI investments are promising. The Q&A session confirmed management's confidence in future growth. Overall, the sentiment is positive, suggesting a stock price increase of 2% to 8% over the next two weeks.
IBEX Limited (IBEX) Q4 2025 Earnings Call Transcript
Positive9-11
The earnings call reflects strong financial performance with record-high revenue and EPS growth, positive guidance, and successful market expansion, particularly in India. The Q&A session confirms sustainable growth in key areas and a positive outlook on AI integration. Despite increased expenses, the share repurchase plan supports shareholder value. Overall, the positive financials and strategic moves outweigh the risks, suggesting a positive stock price movement.
IBEX Limited (IBEX) Q3 2025 Earnings Call Transcript
Positive5-10
The earnings call summary and Q&A indicate strong revenue growth, record high revenue, and optimistic guidance, which are positive indicators. The company has announced a new market entry in India, new client wins, and a share repurchase program, all of which are favorable. Despite some margin decline due to strategic investments, the overall sentiment remains positive, especially with the raised guidance and strategic growth initiatives. The stock price is likely to react positively in the short term.
IBEX Limited (NASDAQ:IBEX) Q2 2025 Earnings Call Transcript
Positive2-7
IBEX reported record revenue growth and improved margins, with optimistic guidance for FY 2025. The company announced a successful share repurchase program, a positive signal for shareholder returns. Despite some risks like competitive pressures and economic factors, the overall sentiment is positive, supported by strong financial performance and strategic client diversification. The Q&A section revealed stable demand and continued market share gains, reinforcing the positive outlook. The stock price is expected to rise by 2% to 8% over the next two weeks.
IBEX Slides
IBEX Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
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No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
