IBEX — IBEX Limited

IBEX Q2 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, or 12.6% of revenue, up from $16.5 million (11.8% of revenue) year-over-year.
• Cash Flow: Record net cash from operations of $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.
• Debt: $1.4 million, with a net cash position of $14 million.

2. Strategic Updates and Business Highlights:

• Market Growth: Achieved 17% headline revenue growth and 46% adjusted EPS growth, marking the fourth consecutive quarter of double-digit organic revenue growth.
• Vertical Performance: HealthTech revenue increased by 35.1%, contributing significantly to overall growth. The company aims for HealthTech to reach $100 million by fiscal year-end.
• Geographic Expansion: Successful entry into India with nearly 1,000 agents and expansion into revenue cycle management and credentialing services.
• AI Leadership: Continued investment in AI capabilities, with the promotion of Mike Darwal to Chief AI and Digital Officer to enhance AI integration in operations and client services.

3. Forward Guidance and Outlook:

• Revenue Guidance: Increased to $620 million - $630 million, up from $605 million - $620 million.
• Adjusted EBITDA Guidance: Raised 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.

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

• Telecommunications Decline: Revenue from the telecommunications vertical decreased to 8.7%, marking a significant drop and the first time it fell below 10% of total revenue.
• Gross Margin Pressure: Year-over-year gross margins declined, attributed to increased training costs and ongoing investments in India, which are expected to improve over time.
• Deferred Training Revenue: Increasing training costs are impacting gross margins as revenue recognition is spread over longer periods.

5. Notable Q&A Insights:

• AI Demand: CEO Bob Dechant emphasized that IBEX's AI leadership is enhancing their competitive position, helping to win new clients and improve operational execution.
• Revenue Consistency: Dechant noted a potential shift towards more consistent quarterly revenue flows, reducing the historical seasonal drop-off in Q3 and Q4.
• Operating Expense Management: CFO Taylor Greenwald highlighted effective management of SG&A expenses, which have decreased as a percentage of revenue, despite headwinds from deferred training costs and investments in India.

Overall, IBEX demonstrated strong financial performance and strategic growth initiatives, particularly in HealthTech and AI, while facing challenges in certain verticals and managing margin pressures. The company remains optimistic about its future trajectory and market position.