IBEX — IBEX Limited

IBEX Q2 FY 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $164.2 million, up 16.7% year-over-year from $140.7 million.
• Adjusted EPS: $0.87, a 46% increase from $0.59 in the prior year.
• Net Income: $12.2 million, compared to $9.3 million in the prior year.
• Adjusted EBITDA: $20.7 million (12.6% of revenue), up from $16.5 million (11.8% of revenue) year-over-year.
• Cash Flow: Record net cash generated from operations at $6.6 million, up from $1.1 million in the prior year.
• Capital Expenditures: Increased to $11.7 million (7.1% of revenue) from $4.3 million (3.1% of revenue) in the prior year.
• Client Diversification: Largest client accounted for 10% of revenue; top 5, 10, and 25 clients represented 39%, 57%, and 79% of revenue, respectively.

2. Strategic Updates and Business Highlights:

• IBEX achieved its fourth consecutive quarter of double-digit organic revenue growth, driven by strong performance in HealthTech (35.1% growth) and digital acquisition services.
• The company is expanding its operations in India, now with nearly 1,000 agents and additional services in revenue cycle management and credentialing.
• IBEX is investing in AI capabilities, with the Wave iX AI solution enhancing both customer experience and internal operations.
• Leadership changes include the promotion of Mike Darwal to Chief AI and Digital Officer, emphasizing the company's focus on AI integration.

3. Forward Guidance and Outlook:

• Revenue guidance raised to $620 million - $630 million, up from $605 million - $620 million.
• Adjusted EBITDA guidance increased to $80 million - $82 million from $78 million - $81 million.
• Capital expenditures expected to be at the upper end of the previous $20 million - $25 million range.
• The company anticipates a more consistent revenue flow throughout the fiscal year, reducing the historical seasonal decline in Q3 and Q4.

4. Bad News, Challenges, or Points of Concern:

• Gross margins declined year-over-year, attributed to increased training costs and ongoing investments in India, which are expected to improve over time.
• The telecommunications vertical saw a significant decline of 23.1%, marking a notable shift as it now comprises less than 10% of total revenue for the first time since pre-IPO.
• Deferred training revenue is impacting gross margins due to the timing of expense recognition versus revenue recognition.

5. Notable Q&A Insights:

• CEO Bob Dechant emphasized IBEX's leadership position in AI, stating it enhances both client acquisition and operational execution.
• The company is experiencing a favorable shift in its business mix towards higher-margin sectors, particularly HealthTech, which may stabilize revenue patterns throughout the year.
• Concerns were raised about the impact of deferred training costs and the ongoing investments in India, which are seen as necessary for long-term growth but are currently headwinds to profitability.