NASDAQ:IBEX IBEX Q2 2025 Earnings Report $25.43 +0.64 (+2.58%) Closing price 04:00 PM EasternExtended Trading$25.42 0.00 (-0.02%) As of 07:55 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast IBEX EPS ResultsActual EPS$0.51Consensus EPS $0.49Beat/MissBeat by +$0.02One Year Ago EPSN/AIBEX Revenue ResultsActual RevenueN/AExpected Revenue$134.63 millionBeat/MissN/AYoY Revenue GrowthN/AIBEX Announcement DetailsQuarterQ2 2025Date2/6/2025TimeAfter Market ClosesConference Call DateThursday, February 6, 2025Conference Call Time4:30PM ETUpcoming EarningsIBEX's Q3 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 4:30 PM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q3 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)SEC FilingEarnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by IBEX Q2 2025 Earnings Call TranscriptProvided by QuartrFebruary 6, 2025 ShareLink copied to clipboard.PresentationSkip to Participants Operator00:00:00Welcome to the Ivex Second Quarter FY twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question and answer session. To note, there isn't an accompanying earnings deck presentation available on the Ivex Investor Relations website at investors.ibex.co. Operator00:00:34I will now turn this conference over to Mr. Michael Darwold, Head of Investor Relations for Ibex. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:00:43Good afternoon, and thank you for joining us today. Before we begin, I want to remind you that matters discussed on today's call may include forward looking statements related to our operating performance, financial goals and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward looking statements reflect our opinion as of the date of this call, and we undertake no obligation to revise this information as a result of new developments, which may occur. Forward looking statements are subject to various risks, uncertainties and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our annual report on Form 10 K filed with the U. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:01:31S. Securities and Exchange Commission on 09/12/2024. With that, I will now turn the call over to Ivek's CEO, Bob Deken. Robert DechantCEO at IBEX00:01:41Thanks, Mike. Good afternoon, everyone, and thank you all for joining us today as we share our second quarter fiscal year twenty twenty five results. I'd like to start by once again thanking my team for a tremendous quarter. They continue to show why they are the best in the industry. The second quarter was strong across the board. Robert DechantCEO at IBEX00:02:06We achieved our highest growth in two years at 6.1%. This enabled us to post the highest revenue for a quarter in the history of Ivex. In addition, we had another great quarter on profitability and now have improved adjusted EBITDA margin over the prior year in 10 out of the last 11 quarters. Our top line growth starts with the success of our powerful new logo engine and our ability to highlight our differentiation enabling us to win large enterprise deals with trophy brands. Our growth is then accelerated by our ability to take market share within our embedded based clients, driven by our ability to outperform the competition. Robert DechantCEO at IBEX00:03:01This is our proven land and expand playbook. Also important to our success is our high client retention, where our revenue retention rates are some of the highest in the industry, highlighting our ability to be a strategic partner with our clients. We also had important wins with our WAVE IX translate and automate generative AI solutions that position us well into the future. These wins added to an extremely strong quarter. More on this later. Robert DechantCEO at IBEX00:03:40These growth vectors continue to be our margin expansion drivers. We continue to grow aggressively in both our highest margin regions, exemplified by 14% year over year growth in our offshore region in Q2 and in our highest margin services, highlighted by 8% year over year growth in omni channel revenue in Q2. These vectors have enabled us to expand adjusted EBITDA margin consistently. As a result, we remain confident in our ability to continue to drive top line growth and expand margin. I'm proud to report the following highlights for Q2 FY 2025. Robert DechantCEO at IBEX00:04:30We delivered record Q2 revenue of $140,700,000 up 6.1% from a year ago. We expanded adjusted EBITDA margin 100 basis points from prior year to 11.8% while delivering record Q2 adjusted net income of $9,600,000 up 20% from a year ago. We achieved adjusted EPS of $0.59 up 36% from a year ago. We closed five new logos in the quarter for a total of eight year to date. Several of these new wins include both traditional agent support and innovative generative AI deployments demonstrating the power of our differentiated solutions. Robert DechantCEO at IBEX00:05:22We executed the strategic repurchase of approximately 3,600,000.0 shares from TRGI, enabling us to eliminate our status as a controlled company within the NASDAQ definition. This will provide better independence for us as Robert DechantCEO at IBEX00:05:39a company. And Robert DechantCEO at IBEX00:05:41we bolstered our Board of Directors with the additions of JJ Zhuang, Patrick McGinnis and Karen Battenbockel, who bring a strong industry and AI talents. Lastly, we had a great quarter winning opportunities and launches with our Wave IX AI solution stack, placing Ivex ahead of the market as we turned the quarter into our fiscal Q3. We are winning with both AI translate and AI automate solutions. These mark significant milestones for Ivex as we continue to redefine the customer experience for many of our clients. As a reminder, our Wave IX AI Translate solution is a disruptive solution that displaces old world third party language translation service bureaus. Robert DechantCEO at IBEX00:06:39As an example, for one of our hospitality clients, we are able to have our English speaking agents provide multilingual support utilizing AI for real time translation. This eliminates the need to augment our trained customer service agents with additional language translation only agents, providing a game changing solution that significantly improves the customer experience and reduces unnecessary costs. This has already been positively seen by clients across the multitude of industry segments and is 100% accretive to revenue and profitability. Our Wave IX offering also includes our AI Automate solution, where we leverage our deep analytics and AI to automate low complexity call types. This is an enterprise wide solution, meaning we are providing 100% of the automated support for our clients. Robert DechantCEO at IBEX00:07:46So in implementations where IBEX is one of multiple BPOs providing contact center services, which is the high majority of our engagements, we see this as both incremental to revenue and margin, while further enhancing our trusted partner status with our clients. As a result, we are increasing our stickiness with our clients and expanding our competitive mode. And this positions us extremely well as we look out over the next several years. In summary, we are bullish on the trajectory as we move into the second half of FY twenty twenty five. We believe our business is well positioned today for continued growth, strong EPS and one where we lead the competition from an AI perspective. Robert DechantCEO at IBEX00:08:36Our ability to win on the big stage with trophy clients against our much larger competitors is the staple of IBEX. I'm extremely proud of the business we have built and I expect this to continue throughout FY twenty twenty five and beyond. With that, I will now turn the call over to Taylor to go into more details on our second quarter FY twenty twenty five financials and guidance. Taylor? Taylor GreenwaldChief Financial Officer at IBEX00:09:06Thank you, Bob, and good afternoon, everyone. Thank you for joining the call today. In my discussion of our second quarter fiscal year twenty twenty five financial results, references to revenue, net income and net cash generated from operations are on a U. S. GAAP basis, while adjusted net income, adjusted earnings per share, adjusted EBITDA and free cash flow are on a non GAAP basis. Taylor GreenwaldChief Financial Officer at IBEX00:09:29Reconciliations of our U. S. GAAP to non GAAP measures are included in the table attached to our earnings press release. Turning to our results, our second quarter results are among the strongest in our history with record top line results and strong profitability. Second quarter revenue was $140,700,000 an increase of 6.1% from $132,600,000 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:09:54Revenue growth was driven by vertical growth in HealthTech of 31%, Travel, Transportation and Logistics of 17% and Retail and e commerce of 4% and was partially offset by a decline in the FinTech vertical of 15%. Our focused efforts to grow our higher margin offshore delivery locations are continuing to have a favorable impact on bottom line results. Offshore revenues now comprised 53% of total revenue versus 49% in the prior year quarter. Revenue mix in our higher margin digital and omni channel services also continues to be strong. Digital and omni channel delivery represented 80% of our total revenue, an increase from 79% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:10:39For context, digital nomichannel comprised roughly 65% at the time of our IPO in 2020. We expect that we will continue to be successful driving growth in these higher margin regions services as new client wins and growth in our embedded base continue to be focused in these areas. Second quarter net income increased to $9,300,000 compared to $6,100,000 in the prior year quarter. The increase was primarily driven by the meaningful growth of work and higher margin offshore regions of 14% year over year for the quarter and the realization of the site and cost optimization efforts completed over the past year, partially offset by higher income tax and interest expense. Fully diluted EPS was $0.57 up from $0.33 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:11:28Contributing to the EPS growth was the impact from fewer diluted shares outstanding from share repurchases over the last year, including the repurchase of 3,600,000.0 shares from TRGI in November. Our weighted average diluted shares outstanding for the quarter were 16,500,000.0 versus 18,400,000.0 1 year ago. In the third quarter, we expect this number to be approximately 14,300,000 shares as we realize a full quarter impact from the $3,600,000 TRGI share repurchase. Moving to non GAAP measures, adjusted EBITDA increased to $16,500,000 or 11.8% of revenue from $14,300,000 or 10.8 percent of revenue for the same period last year. The 100 basis point improvement in adjusted EBITDA margin was primarily driven by growth in our higher margin offshore locations during recent years, growth in key verticals from existing and new clients launched throughout fiscal twenty twenty four and fiscal twenty twenty five to date, and stronger operating results due to site optimization efforts. Taylor GreenwaldChief Financial Officer at IBEX00:12:33Adjusted net income increased to $9,600,000 from $8,000,000 in the prior year quarter. Non GAAP fully diluted adjusted earnings per share increased to $0.59 from $0.44 in the prior year quarter. The increases were driven by the higher EBITDA and fewer diluted shares outstanding offset by higher income tax and interest expense. We expect our tax rate to track toward 21% to 22% for the year. As a company, we are pleased with the client diversification we have established over the last several years. Taylor GreenwaldChief Financial Officer at IBEX00:13:05For the second quarter of fiscal year twenty twenty five, our largest client accounted for 12% of revenue and our top five, ten and twenty five client concentrations declined compared to the prior year to 39%, fifty four % and seventy nine % from 41%, fifty nine % and eighty two % respectively of overall revenue, representative of a well diversified client portfolio which continues to become more diversified. Over the past decade, we have done a tremendous job attending our top 25 clients and are excited to see one of our signature client wins from fiscal year twenty twenty four already move into our top 20. Switching to our verticals, HealthTech increased to 15.1% of second quarter revenue versus 12.2% in the prior year quarter. Travel, transportation logistics increased to 13.7% versus 12.5% in the prior year quarter. And retail and e commerce remained relatively consistent at 28.5% versus 29% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:14:07These increases were driven by continued demand in multiple offshore geographies and our continued ability to win significant new clients in these verticals. Conversely, our exposure to FinTech vertical decreased to 11% of revenue for the quarter versus 13.7% in the prior year quarter, impacted by the changing landscape for some client payment support models and geographic shifts from onshore to offshore delivery. Net cash generated from operating activities was $1,100,000 for the second quarter of fiscal year twenty twenty five compared to an outflow of $1,600,000 for the prior year quarter. The increase was driven by increased revenues and stronger operating results, partially offset by longer DSOs for our receivables. Our DSOs were seventy nine days, up from seventy five days at the end of the first quarter as we experienced our typical seasonal increase in DSOs and also some delay in payments related to having our clients remit payments into a new bank account. Taylor GreenwaldChief Financial Officer at IBEX00:15:04We expect our DSOs to remain stable in the mid-70s on a go forward basis. Capital expenditures were $4,300,000 or 3.1% of revenue for the second quarter versus $2,900,000 or 2.2% of revenue in the prior year quarter. This increase was primarily driven by expansions in our offshore nearshore regions to support growth in these higher margin geographies. Free cash flow was an outflow of $3,200,000 in the current quarter compared to an outflow of $4,500,000 in the prior year quarter. The improvement was driven by increased net cash provided by operating activities, partially offset by higher capital expenditures during the current quarter. Taylor GreenwaldChief Financial Officer at IBEX00:15:46We ended the second quarter with $20,200,000 of cash and debt of $33,900,000 for a net debt of $13,700,000 compared to $62,300,000 of cash and debt of $1,500,000 for a net cash of $60,800,000 at the end of our first quarter. The decrease in our net cash position during the quarter was primarily driven by the share repurchase of 3,600,000.0 shares from TRGI for $70,000,000 We funded the share repurchase with $45,000,000 of cash on hand and a $25,000,000 convertible promissory note from TRGI. After the second quarter ended, this note was paid in full with proceeds from our new revolving lines of credit with HSBC. To summarize our second quarter of fiscal year twenty twenty five, we achieved strong top and bottom line second quarter results. We accelerate our top line momentum with over 6% revenue growth, driven by new client wins over the last year and continued expansion of our embedded client base made possible by strong service delivery. Taylor GreenwaldChief Financial Officer at IBEX00:16:46Additionally, our profitability continues to improve, where for 10 of the last eleven quarters we have delivered year over year adjusted EBITDA margin expansion enabling strategic investments in AI capabilities and sales resources. These results are still continued confidence in the execution of our strategy throughout 2025 enabling us to raise our fiscal year guidance and continue to return value to shareholders. Revenue is now expected to be in the range of $525,000,000 to $535,000,000 versus the previous range of $515,000,000 to $525,000,000 Adjusted EBITDA is now expected to be in the range of $68,000,000 to $69,000,000 versus the previous range of $67,000,000 to $69,000,000 and capital expenditures are expected to remain in the range of $15,000,000 to $20,000,000 Our business is well positioned for today and for the years ahead and we're excited about the future of buybacks as we head into the third quarter of fiscal year twenty twenty five and beyond. With that, Bob and I will now take questions. Operator, please open the line. Operator00:17:50Thank you. Our first question comes from David Koning with Baird. You may proceed. David KoningSenior Research Analyst at Robert W. Baird & Co00:18:10Yes. Hey guys, congrats on another great quarter. Really good to see. Robert DechantCEO at IBEX00:18:16Thanks, David. Yes, we're really pleased with the results we posted. David KoningSenior Research Analyst at Robert W. Baird & Co00:18:21Yes. And maybe to start, just on revenue, is it a combination is the backdrop getting better? Maybe a combination of a few kind of things. Is the backdrop getting better? Are you just winning against others? David KoningSenior Research Analyst at Robert W. Baird & Co00:18:36And how is Gen AI? I mean, you kind of talked a little bit about Gen AI actually a tailwind, headwind, a little of both, like because all those three things seem to be driving revenue? Robert DechantCEO at IBEX00:18:48Yes, Robert DechantCEO at IBEX00:18:48David. So appreciate the question. And maybe it's a little bit of all of the above, but I think probably the biggest drivers for us are continued winning new logos that then drive a lot of revenue growth with them in kind of in their year 2s and things like that. So, and that's been a staple of IBEX of our ability to win and then land and expand and get those new clients growing. So that's I think probably one of the biggest drivers. Robert DechantCEO at IBEX00:19:22Actually, it is the biggest driver. The second driver that's going on is for us is our ability to win market share. And I will say a lot of the embedded based clients are looking and moving some of their business into the lower labor cost markets that as you know over the years has been the game. A lot of that's been taking place that puts pressure on top line revenue. But what we've been able to do is manage through that, but take market share. Robert DechantCEO at IBEX00:19:54And so I think we're if you like look at our competitors, where those events are putting serious headwinds into their business. For us, it isn't because we're winning market share and as both Taylor and I said, we're winning market share because we're out executing our competitors. And so those are, I think, the two biggest variables. And then the third one just around the macro and kind of demand, I would kind of sit and say that the demand has stabilized. I'm not sure the demand has come back, right? Robert DechantCEO at IBEX00:20:31And so, but the good news is it's stabilized and that's allowing us to, I think, continue to build the momentum. And as you've seen over the last several quarters, our top line growth continues to build and grow. David KoningSenior Research Analyst at Robert W. Baird & Co00:20:47Yes, that's great. And then I guess secondly, just on margins, I mean, you continue to put up really good margins. The way you're guiding the back half though, it looks like margins might be down just a touch in the back half, to get the updated EBITDA guidance. I mean, you raised EBITDA guidance, which is great. But Q2 was so good that it actually takes a little bit of margin, creates a little margin headwind it looks like in the second half, right? David KoningSenior Research Analyst at Robert W. Baird & Co00:21:12So just kind of wondering on that. Robert DechantCEO at IBEX00:21:14Hey, Taylor, I'll throw that over to you if you want to look at that. Taylor GreenwaldChief Financial Officer at IBEX00:21:17Yes, absolutely. So David, if you look at our gross margins, on the gross margin level, we improved at 140 basis points in Q1, '2 '10 basis points in Q2, and we expect that improvement year over year to continue into Q3 and Q4. So we're feeling very good about the profitability of our business. Now what we're doing and it's intentional is we are investing in SG and A, in sales resources and technology both in the infrastructures. We recently implemented our new financial system and HR system and then also in AI capabilities to grow the business. Taylor GreenwaldChief Financial Officer at IBEX00:21:57But if you look at the back half of the year in terms of our guidance, we're still at around what 14% adjusted EBITDA margin. So we're still feel very good about that. And it's the fact that our gross margins are seeing such improvement that we're able to invest in growth and continue this trend. David KoningSenior Research Analyst at Robert W. Baird & Co00:22:16Got you. Well, great job guys. Thank you. Robert DechantCEO at IBEX00:22:20Great, David. Thanks. Good catching up. Operator00:22:23Thank you. And I'm not showing any further questions. I'd now like to turn the call back over to Bob Deckin for any closing remarks. Robert DechantCEO at IBEX00:22:43Josh, thank you and thank you all for attending. We're really proud of what we continue to do as a team, what we do operationally, what we do financially and then from a strategic standpoint with our AI strategy, put all those elements together. I love the trajectory of our business. And thank you all and we'll talk to you next quarter. Good Robert DechantCEO at IBEX00:23:06night. Operator00:23:06Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. 00:26:31Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. 00:28:18You 00:28:47you 00:29:55you 00:31:45Okay. You 00:32:27you you 00:32:56you 00:33:39you 00:33:51you you 00:34:33you Operator00:34:55Welcome to the Ivex Second Quarter FY twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question and answer session. To note, there isn't an accompanying earnings deck presentation available on the Ivex Investor Relations website at investors.ibex.co. Operator00:35:29I will now turn this conference over to Mr. Michael Darwold, Head of Investor Relations for Ibex. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:35:39Good afternoon, and thank you for joining us today. Before we begin, I want to remind you that matters discussed on today's call may include forward looking statements related to our operating performance, financial goals and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward looking statements reflect our opinion as of the date of this call, and we undertake no obligation to revise this information as a result of new developments, which may occur. Forward looking statements are subject to various risks, uncertainties and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our annual report on Form 10 K filed with the U. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:36:27S. Securities and Exchange Commission on 09/12/2024. With that, I will now turn the call over to Ivek's CEO, Bob Deken. Robert DechantCEO at IBEX00:36:36Thanks, Mike. Good afternoon, everyone, and thank you all for joining us today as we share our second quarter fiscal year twenty twenty five results. I'd like to start by once again thanking my team for a tremendous quarter. They continue to show why they are the best in the industry. The second quarter was strong across the board. Robert DechantCEO at IBEX00:37:02We achieved our highest growth in two years at 6.1%. This enabled us to post the highest revenue for a quarter in the history of Ivex. In addition, we had another great quarter on profitability and now have improved adjusted EBITDA margin over the prior year in 10 out of the last 11 quarters. Our top line growth starts with the success of our powerful new logo engine and our ability to highlight our differentiation enabling us to win large enterprise deals with trophy brands. Our growth is then accelerated by our ability to take market share within our embedded based clients, driven by our ability to outperform the competition. Robert DechantCEO at IBEX00:37:57This is our proven land and expand playbook. Also important to our success is our high client retention, where our revenue retention rates are some of the highest in the industry, highlighting our ability to be a strategic partner with our clients. We also had important wins with our WAVE IX translate and automate generative AI solutions that position us well into the future. These wins added to an extremely strong quarter. More on this later. Robert DechantCEO at IBEX00:38:36These growth vectors continue to be our margin expansion drivers. We continue to grow aggressively in both our highest margin regions, exemplified by 14% year over year growth in our offshore region in Q2 and in our highest margin services, highlighted by 8% year over year growth in omni channel revenue in Q2. These vectors have enabled us to expand adjusted EBITDA margin consistently. As a result, we remain confident in our ability to continue to drive top line growth and expand margin. I'm proud to report the following highlights for Q2 FY 2025. Robert DechantCEO at IBEX00:39:25We delivered record Q2 revenue of $140,700,000 dollars up 6.1% from a year ago. We expanded adjusted EBITDA margin 100 basis points from prior year to 11.8% while delivering record Q2 adjusted net income of $9,600,000 up 20% from a year ago. We achieved adjusted EPS of $0.59 up 36% from a year ago. We closed five new logos in the quarter for a total of eight year to date. Several of these new wins include both traditional agent support and innovative generative AI deployments demonstrating the power of our differentiated solutions. Robert DechantCEO at IBEX00:40:18We executed the strategic repurchase of approximately 3,600,000.0 shares from TRGI, enabling us to eliminate our status as a controlled company within the NASDAQ definition. This will provide better independence for us as a company. And we bolstered our Board of Directors with the additions of JJ Zhuang, Patrick McGinnis and Karen Battenbockel, who bring a strong industry and AI talents. Lastly, we had a great quarter, winning opportunities and launches with our Wave IX AI solution stack, placing Ivex ahead of the market as we turned the quarter into our fiscal Q3. We are winning with both AI translate and AI automate solutions. Robert DechantCEO at IBEX00:41:12These mark significant milestones for Ivex as we continue to redefine the customer experience for many of our clients. As a reminder, our Wave IX AI Translate solution is a disruptive solution that displaces old world third party language translation service bureaus. As an example, for one of our hospitality clients, we are able to have our English speaking agents provide multilingual support utilizing AI for real time translation. This eliminates the need to augment our trained customer service agents with additional language translation only agents, providing a game changing solution that significantly improves the customer experience and reduces unnecessary costs. This has already been positively seen by clients across the multitude of industry segments and is 100% accretive to revenue and profitability. Robert DechantCEO at IBEX00:42:18Our Wave IX offering also includes our AI Automate solution, where we leverage our deep analytics and AI to automate low complexity call types. This is an enterprise wide solution, meaning we are providing 100 of the automated support for our clients. So in implementations where IBEX is one of multiple BPOs providing contact center services, which is the high majority of our engagements, we see this as both incremental to revenue and margin, while further enhancing our trusted partner status with our clients. As a result, we are increasing our stickiness with our clients and expanding our competitive mode. And this positions us extremely well as we look out over the next several years. Robert DechantCEO at IBEX00:43:14In summary, we are bullish on the trajectory as we move into the second half of FY twenty twenty five. We believe our business is well positioned today for continued growth, strong EPS and one where we lead the competition from an AI perspective. Our ability to win on the big stage with trophy clients against our much larger competitors is the staple of IBEX. I'm extremely proud of the business we have built and I expect this to continue throughout FY twenty twenty five and beyond. With that, I will now turn the call over to Taylor to go into more details on our second quarter FY twenty twenty five financials and guidance. Robert DechantCEO at IBEX00:43:59Taylor? Taylor GreenwaldChief Financial Officer at IBEX00:44:01Thank you, Bob, and good afternoon, everyone. Thank you for joining the call today. And my discussion of our second quarter fiscal year twenty twenty five financial results references to revenue, net income and net cash generated from operations are on a U. S. GAAP basis, while adjusted net income, adjusted earnings per share, adjusted EBITDA and free cash flow are on a non GAAP basis. Taylor GreenwaldChief Financial Officer at IBEX00:44:25Reconciliations of our U. S. GAAP to non GAAP measures are included in the table attached to our earnings press release. Turning to our results, our second quarter results are among the strongest in our history with record top line results and strong profitability. Second quarter revenue was $140,700,000 an increase of 6.1% from $132,600,000 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:44:50Revenue growth was driven by vertical growth in HealthTech of 31%, Travel, Transportation and Logistics of 17% and Retail and e commerce of 4% and was partially offset by decline in the FinTech vertical of 15%. Our focused efforts to grow our higher margin offshore delivery locations are continuing to have a favorable impact on bottom line results. Offshore revenues now comprised 53% of total revenue versus 49% in the prior year quarter. Revenue mix in our higher margin digital and omni channel services also continues to be strong. Digital and omni channel delivery represented 80% of our total revenue, an increase from 79% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:45:34For context, digital nomichannel comprised roughly 65% at the time of our IPO in 2020. We expect that we will continue to be successful driving growth in these higher margin regions services as new client wins and growth in our embedded base continue to be focused in these areas. Second quarter net income increased to $9,300,000 compared to $6,100,000 in the prior year quarter. The increase was primarily driven by the meaningful growth of work and higher margin offshore regions of 14% year over year for the quarter and the realization of the site and cost optimization efforts completed over the past year, partially offset by higher income tax and interest expense. Fully diluted EPS was $0.57 up from $0.33 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:46:24Contributing to the EPS growth was the impact from fewer diluted shares outstanding from share repurchases over the last year, including the repurchase of 3,600,000.0 shares from TRGI in November. Our weighted average diluted shares outstanding for the quarter were 16,500,000.0 versus 18,400,000.0 1 year ago. In the third quarter, we expect this number to be approximately 14,300,000.0 shares as we realize a full quarter impact from the $3,600,000 TRGI share repurchase. Moving to non GAAP measures, adjusted EBITDA increased to $16,500,000 or 11.8% of revenue from $14,300,000 or 10.8% of revenue for the same period last year. The 100 basis point improvement in adjusted EBITDA margin was primarily driven by growth in our higher margin offshore locations during recent years, growth in key verticals from existing and new clients launched throughout fiscal twenty twenty four and fiscal twenty twenty five to date, and stronger operating results due to site optimization efforts. Taylor GreenwaldChief Financial Officer at IBEX00:47:29Adjusted net income increased to $9,600,000 from $8,000,000 in the prior year quarter. Non GAAP fully diluted adjusted earnings per share increased to $0.59 from $0.44 in the prior year quarter. The increases were driven by the higher EBITDA and fewer diluted shares outstanding offset by higher income tax and interest expense. We expect our tax rate to track toward 21% to 22% for the year. As a company, we are pleased with the client diversification we have established over the last several years. Taylor GreenwaldChief Financial Officer at IBEX00:48:01For the second quarter of fiscal year twenty twenty five, our largest client accounted for 12% of revenue and our top five, ten and twenty five client concentrations declined compared to the prior year to 39%, fifty four % and seventy nine % from 41%, fifty nine % and eighty two % respectively of overall revenue, representative of a well diversified client portfolio which continues to become more diversified. Over the past decade, we have done a tremendous job attending our top 25 clients and are excited to see one of our signature client wins from fiscal year twenty twenty four already move into our top 20. Switching to our verticals, HealthTech increased to 15.1% of second quarter revenue versus 12.2% in the prior year quarter. Travel, transportation logistics increased to 13.7% versus 12.5% in the prior year quarter. And retail and e commerce remained relatively consistent at 28.5% versus 29% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:49:02These increases were driven by continued demand in multiple offshore geographies and our continued ability to win significant new clients in these verticals. Conversely, our exposure to FinTech vertical decreased to 11% of revenue for the quarter versus 13.7% in the prior year quarter, impacted by the changing landscape for some client payment support models and geographic shifts from onshore to offshore delivery. Net cash generated from operating activities was $1,100,000 for the second quarter of fiscal year twenty twenty five compared to an outflow of $1,600,000 for the prior year quarter. The increase was driven by increased revenues and stronger operating results, partially offset by longer DSOs for our receivables. Our DSOs were 79, up from seventy five days at the end of the first quarter as we experienced our typical seasonal increase in DSOs and also some delay in payments related to having our clients remit payments into a new bank account. Taylor GreenwaldChief Financial Officer at IBEX00:49:59We expect our DSOs to remain stable in the mid-70s on a go forward basis. Capital expenditures were $4,300,000 or 3.1% of revenue for the second quarter versus $2,900,000 or 2.2% of revenue in the prior year quarter. This increase was primarily driven by expansions in our offshore nearshore regions to support growth in these higher margin geographies. Free cash flow was an outflow of $3,200,000 in the current quarter compared to an outflow of $4,500,000 in the prior year quarter. The improvement was driven by increased net cash provided by operating activities, partially offset by higher capital expenditures during the current quarter. Taylor GreenwaldChief Financial Officer at IBEX00:50:41We ended the second quarter with $20,200,000 of cash and debt of $33,900,000 for a net debt of $13,700,000 compared to $62,300,000 of cash and debt of $1,500,000 for a net cash of $60,800,000 at the end of our first quarter. The decrease in our net cash position during the quarter was primarily driven by the share repurchase of 3,600,000.0 shares from TRGI for $70,000,000 We funded the share repurchase with $45,000,000 of cash on hand and a $25,000,000 convertible promissory note from TRGI. After the second quarter ended, this note was paid in full with proceeds from our new revolving lines of credit with HSBC. To summarize our second quarter of fiscal year twenty twenty five, we achieved strong top and bottom line second quarter results. We accelerate our top line momentum with over 6% revenue growth, driven by new client wins over the last year and continued expansion of our embedded client base made possible by strong service delivery. Taylor GreenwaldChief Financial Officer at IBEX00:51:42Additionally, our profitability continues to improve, where for 10 of the last eleven quarters we have delivered year over year adjusted EBITDA margin expansion enabling strategic investments in AI capabilities and sales resources. These results instill continued confidence in the execution of our strategy throughout 2025 enabling us to raise our fiscal year guidance and continue to return value to shareholders. Revenue is now expected to be in the range of $525,000,000 to $535,000,000 versus the previous range of $515,000,000 to $525,000,000 Adjusted EBITDA is now expected to be in the range of $68,000,000 to $69,000,000 versus the previous range of $67,000,000 to $69,000,000 and capital expenditures are expected to remain in the range of $15,000,000 to $20,000,000 Our business is well positioned for today and for the years ahead and we're excited about the future buybacks as we head into the third quarter of fiscal year twenty twenty five and beyond. With that, Bob and I will now take questions. Operator, please open the line. Operator00:52:46Thank you. Our first question comes from David Koning with Baird. You may proceed. David KoningSenior Research Analyst at Robert W. Baird & Co00:53:05Yes. Hey guys, congrats on another great quarter. Really good to see. Robert DechantCEO at IBEX00:53:11Thanks, David. Yes, we're really pleased with the results we posted. David KoningSenior Research Analyst at Robert W. Baird & Co00:53:17Yes. And maybe to start, just on revenue, is it a combination is the backdrop getting better? Maybe a combination of a few kind of things. Is the backdrop getting better? Are you just winning against others? David KoningSenior Research Analyst at Robert W. Baird & Co00:53:32And how is Gen AI? I mean, you kind of talked a little bit about Gen AI actually a tailwind, headwind, a little of both, like because all those three things seem to be driving revenue. Robert DechantCEO at IBEX00:53:43Yes, David. So appreciate the question. And maybe it's a little bit of all of the above, but I think probably the biggest drivers for us are continued winning new logos that then drive a lot of revenue growth with them in kind of in their year 2s and things like that. So, and that's been a staple of IBEX of our ability to win and then land and expand and get those new clients growing. So that's I think probably one of the biggest drivers. Robert DechantCEO at IBEX00:54:18Actually, it is the biggest driver. The second driver that's going on is for us is our ability to win market share. And I will say a lot of the embedded based clients are looking and moving some of their business into the lower labor cost markets. That as you know over the years has been the game, a lot of that's been taking place that puts pressure on top line revenue. But what we've been able to do is manage through that, but take market share. Robert DechantCEO at IBEX00:54:50And so I think we're, if you like, look at our competitors, where those events are putting serious headwinds into their business. For us, it isn't because we're winning market share and as both Taylor and I said, we're winning market share because we're out executing our competitors. And so those are, I think, the two biggest variables. And then the third one just around the macro and kind of demand, I would kind of sit and say that the demand has stabilized. I'm not sure the demand has come back, right? Robert DechantCEO at IBEX00:55:26And so, but the good news is it's stabilized and that's allowing us to, I think, continue to build the momentum. And as you've seen over the last several quarters, our top line growth continues to build and grow. David KoningSenior Research Analyst at Robert W. Baird & Co00:55:42Yes, that's great. And then I guess secondly, just on margins, I mean you continue to put up really good margins. The way you're guiding the back half though, it looks like margins might be down just a touch in the back half to get to the updated EBITDA guidance. I mean, you raised EBITDA guidance, which is great. But Q2 was so good that it actually takes a little bit of margin, creates a little margin headwind, it looks like in the second half, right? David KoningSenior Research Analyst at Robert W. Baird & Co00:56:08So just kind of wondering on that. Robert DechantCEO at IBEX00:56:10Hey, Taylor, I'll throw that over to you if you want to look Taylor GreenwaldChief Financial Officer at IBEX00:56:12at that. Yes, absolutely. So David, if you look at our gross margins, on the gross margin level, we improved at 140 basis points in Q1, '2 '10 basis points in Q2, and we expect that improvement year over year to continue into Q3 and Q4. So we're feeling very good about the profitability of our business. Now what we're doing and it's intentional is we are investing in SG and A, in sales resources and technology, both in the infrastructures. Taylor GreenwaldChief Financial Officer at IBEX00:56:44We recently implemented our new financial system and HR system and then also in AI capabilities to grow the business. But if you look at the back half of the year in terms of our guidance, we're still at around what 14% adjusted EBITDA margin. So we're still feel very good about that and it's the fact that our gross margins are seeing such improvement that we're able to invest in growth and continue this trend. David KoningSenior Research Analyst at Robert W. Baird & Co00:57:11Got you. Well, great job guys. Thank you. Robert DechantCEO at IBEX00:57:15Great, David. Thanks. Good catching up. Operator00:57:19Thank you. And I'm not showing any further questions. I'd now like to turn the call back over to Bob Deckin for any closing remarks. Robert DechantCEO at IBEX00:57:39Josh, thank you and thank you all for attending. We're really proud of what we continue to do as a team, what we do operationally, what we do financially and then from a strategic standpoint with our AI strategy, put all those elements together. I love the trajectory of our business. And thank you all and we'll talk to you next quarter. Good night. Operator00:58:02Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.Read moreParticipantsExecutivesMichael DarwalExecutive VP of Investor Relations & Deputy CFORobert DechantCEOTaylor GreenwaldChief Financial OfficerAnalystsDavid KoningSenior Research Analyst at Robert W. Baird & CoPowered by Conference Call Audio Live Call not available Earnings Conference CallIBEX Q2 202500:00 / 00:00Speed:1x1.25x1.5x2xTranscript SectionsPresentationParticipants Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) IBEX Earnings HeadlinesFinancial Comparison: Benchmark Energy (OTCMKTS:BMRK) versus IBEX (NASDAQ:IBEX)May 2 at 1:43 AM | americanbankingnews.comIBEX (IBEX) Expected to Announce Quarterly Earnings on ThursdayMay 1 at 2:31 AM | americanbankingnews.comSilicon Valley Gold RushA new technology has sparked a modern-day gold rush in Silicon Valley. OpenAI’s Sam Altman invested $375M. Bill Gates has backed four companies in this space. The World Economic Forum calls it “the most exciting human discovery since fire.” Whitney Tilson believes this trend could mint a new class of wealthy investors—and he’s sharing one stock to watch now, for free.May 2, 2025 | Stansberry Research (Ad)ibex to Showcase AI-powered CX Solutions for Utilities at the IUCX Annual Conference 2025April 30 at 6:31 PM | finance.yahoo.comIBEX poised to surge to six year high [Video]April 29 at 11:51 AM | fxstreet.comibex AI Solutions Win 2025 Product of the Year Awards from CUSTOMER MagazineApril 29 at 11:51 AM | finance.yahoo.comSee More IBEX Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like IBEX? Sign up for Earnings360's daily newsletter to receive timely earnings updates on IBEX and other key companies, straight to your email. Email Address About IBEXIBEX (NASDAQ:IBEX) provides end-to-end technology-enabled customer lifecycle experience solutions in the United States and internationally. The company products and services portfolio includes ibex Connect, that offers customer service, technical support, revenue generation, and other revenue generation outsourced back-office services through the CX model, which integrates voice, email, chat, SMS, social media, and other communication applications; ibex Digital, a customer acquisition solution that comprises digital marketing, e-commerce technology, and platform solutions; and ibex CX, a customer experience solution, which provides a suite of proprietary software tools to measure, monitor, and manage its clients' customer experience. It operates customer engagement and customer acquisition delivery centers. The company serves banking and financial services, delivery and logistics, health tech and wellness, high tech, retail and e-commerce, streaming and entertainment, travel and hospitality, and utility industries. The company was formerly known as IBEX Holdings Limited and changed its name to IBEX Limited in September 2019. IBEX Limited was incorporated in 2017 and is headquartered in Washington, District of Columbia. 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PresentationSkip to Participants Operator00:00:00Welcome to the Ivex Second Quarter FY twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question and answer session. To note, there isn't an accompanying earnings deck presentation available on the Ivex Investor Relations website at investors.ibex.co. Operator00:00:34I will now turn this conference over to Mr. Michael Darwold, Head of Investor Relations for Ibex. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:00:43Good afternoon, and thank you for joining us today. Before we begin, I want to remind you that matters discussed on today's call may include forward looking statements related to our operating performance, financial goals and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward looking statements reflect our opinion as of the date of this call, and we undertake no obligation to revise this information as a result of new developments, which may occur. Forward looking statements are subject to various risks, uncertainties and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our annual report on Form 10 K filed with the U. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:01:31S. Securities and Exchange Commission on 09/12/2024. With that, I will now turn the call over to Ivek's CEO, Bob Deken. Robert DechantCEO at IBEX00:01:41Thanks, Mike. Good afternoon, everyone, and thank you all for joining us today as we share our second quarter fiscal year twenty twenty five results. I'd like to start by once again thanking my team for a tremendous quarter. They continue to show why they are the best in the industry. The second quarter was strong across the board. Robert DechantCEO at IBEX00:02:06We achieved our highest growth in two years at 6.1%. This enabled us to post the highest revenue for a quarter in the history of Ivex. In addition, we had another great quarter on profitability and now have improved adjusted EBITDA margin over the prior year in 10 out of the last 11 quarters. Our top line growth starts with the success of our powerful new logo engine and our ability to highlight our differentiation enabling us to win large enterprise deals with trophy brands. Our growth is then accelerated by our ability to take market share within our embedded based clients, driven by our ability to outperform the competition. Robert DechantCEO at IBEX00:03:01This is our proven land and expand playbook. Also important to our success is our high client retention, where our revenue retention rates are some of the highest in the industry, highlighting our ability to be a strategic partner with our clients. We also had important wins with our WAVE IX translate and automate generative AI solutions that position us well into the future. These wins added to an extremely strong quarter. More on this later. Robert DechantCEO at IBEX00:03:40These growth vectors continue to be our margin expansion drivers. We continue to grow aggressively in both our highest margin regions, exemplified by 14% year over year growth in our offshore region in Q2 and in our highest margin services, highlighted by 8% year over year growth in omni channel revenue in Q2. These vectors have enabled us to expand adjusted EBITDA margin consistently. As a result, we remain confident in our ability to continue to drive top line growth and expand margin. I'm proud to report the following highlights for Q2 FY 2025. Robert DechantCEO at IBEX00:04:30We delivered record Q2 revenue of $140,700,000 up 6.1% from a year ago. We expanded adjusted EBITDA margin 100 basis points from prior year to 11.8% while delivering record Q2 adjusted net income of $9,600,000 up 20% from a year ago. We achieved adjusted EPS of $0.59 up 36% from a year ago. We closed five new logos in the quarter for a total of eight year to date. Several of these new wins include both traditional agent support and innovative generative AI deployments demonstrating the power of our differentiated solutions. Robert DechantCEO at IBEX00:05:22We executed the strategic repurchase of approximately 3,600,000.0 shares from TRGI, enabling us to eliminate our status as a controlled company within the NASDAQ definition. This will provide better independence for us as Robert DechantCEO at IBEX00:05:39a company. And Robert DechantCEO at IBEX00:05:41we bolstered our Board of Directors with the additions of JJ Zhuang, Patrick McGinnis and Karen Battenbockel, who bring a strong industry and AI talents. Lastly, we had a great quarter winning opportunities and launches with our Wave IX AI solution stack, placing Ivex ahead of the market as we turned the quarter into our fiscal Q3. We are winning with both AI translate and AI automate solutions. These mark significant milestones for Ivex as we continue to redefine the customer experience for many of our clients. As a reminder, our Wave IX AI Translate solution is a disruptive solution that displaces old world third party language translation service bureaus. Robert DechantCEO at IBEX00:06:39As an example, for one of our hospitality clients, we are able to have our English speaking agents provide multilingual support utilizing AI for real time translation. This eliminates the need to augment our trained customer service agents with additional language translation only agents, providing a game changing solution that significantly improves the customer experience and reduces unnecessary costs. This has already been positively seen by clients across the multitude of industry segments and is 100% accretive to revenue and profitability. Our Wave IX offering also includes our AI Automate solution, where we leverage our deep analytics and AI to automate low complexity call types. This is an enterprise wide solution, meaning we are providing 100% of the automated support for our clients. Robert DechantCEO at IBEX00:07:46So in implementations where IBEX is one of multiple BPOs providing contact center services, which is the high majority of our engagements, we see this as both incremental to revenue and margin, while further enhancing our trusted partner status with our clients. As a result, we are increasing our stickiness with our clients and expanding our competitive mode. And this positions us extremely well as we look out over the next several years. In summary, we are bullish on the trajectory as we move into the second half of FY twenty twenty five. We believe our business is well positioned today for continued growth, strong EPS and one where we lead the competition from an AI perspective. Robert DechantCEO at IBEX00:08:36Our ability to win on the big stage with trophy clients against our much larger competitors is the staple of IBEX. I'm extremely proud of the business we have built and I expect this to continue throughout FY twenty twenty five and beyond. With that, I will now turn the call over to Taylor to go into more details on our second quarter FY twenty twenty five financials and guidance. Taylor? Taylor GreenwaldChief Financial Officer at IBEX00:09:06Thank you, Bob, and good afternoon, everyone. Thank you for joining the call today. In my discussion of our second quarter fiscal year twenty twenty five financial results, references to revenue, net income and net cash generated from operations are on a U. S. GAAP basis, while adjusted net income, adjusted earnings per share, adjusted EBITDA and free cash flow are on a non GAAP basis. Taylor GreenwaldChief Financial Officer at IBEX00:09:29Reconciliations of our U. S. GAAP to non GAAP measures are included in the table attached to our earnings press release. Turning to our results, our second quarter results are among the strongest in our history with record top line results and strong profitability. Second quarter revenue was $140,700,000 an increase of 6.1% from $132,600,000 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:09:54Revenue growth was driven by vertical growth in HealthTech of 31%, Travel, Transportation and Logistics of 17% and Retail and e commerce of 4% and was partially offset by a decline in the FinTech vertical of 15%. Our focused efforts to grow our higher margin offshore delivery locations are continuing to have a favorable impact on bottom line results. Offshore revenues now comprised 53% of total revenue versus 49% in the prior year quarter. Revenue mix in our higher margin digital and omni channel services also continues to be strong. Digital and omni channel delivery represented 80% of our total revenue, an increase from 79% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:10:39For context, digital nomichannel comprised roughly 65% at the time of our IPO in 2020. We expect that we will continue to be successful driving growth in these higher margin regions services as new client wins and growth in our embedded base continue to be focused in these areas. Second quarter net income increased to $9,300,000 compared to $6,100,000 in the prior year quarter. The increase was primarily driven by the meaningful growth of work and higher margin offshore regions of 14% year over year for the quarter and the realization of the site and cost optimization efforts completed over the past year, partially offset by higher income tax and interest expense. Fully diluted EPS was $0.57 up from $0.33 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:11:28Contributing to the EPS growth was the impact from fewer diluted shares outstanding from share repurchases over the last year, including the repurchase of 3,600,000.0 shares from TRGI in November. Our weighted average diluted shares outstanding for the quarter were 16,500,000.0 versus 18,400,000.0 1 year ago. In the third quarter, we expect this number to be approximately 14,300,000 shares as we realize a full quarter impact from the $3,600,000 TRGI share repurchase. Moving to non GAAP measures, adjusted EBITDA increased to $16,500,000 or 11.8% of revenue from $14,300,000 or 10.8 percent of revenue for the same period last year. The 100 basis point improvement in adjusted EBITDA margin was primarily driven by growth in our higher margin offshore locations during recent years, growth in key verticals from existing and new clients launched throughout fiscal twenty twenty four and fiscal twenty twenty five to date, and stronger operating results due to site optimization efforts. Taylor GreenwaldChief Financial Officer at IBEX00:12:33Adjusted net income increased to $9,600,000 from $8,000,000 in the prior year quarter. Non GAAP fully diluted adjusted earnings per share increased to $0.59 from $0.44 in the prior year quarter. The increases were driven by the higher EBITDA and fewer diluted shares outstanding offset by higher income tax and interest expense. We expect our tax rate to track toward 21% to 22% for the year. As a company, we are pleased with the client diversification we have established over the last several years. Taylor GreenwaldChief Financial Officer at IBEX00:13:05For the second quarter of fiscal year twenty twenty five, our largest client accounted for 12% of revenue and our top five, ten and twenty five client concentrations declined compared to the prior year to 39%, fifty four % and seventy nine % from 41%, fifty nine % and eighty two % respectively of overall revenue, representative of a well diversified client portfolio which continues to become more diversified. Over the past decade, we have done a tremendous job attending our top 25 clients and are excited to see one of our signature client wins from fiscal year twenty twenty four already move into our top 20. Switching to our verticals, HealthTech increased to 15.1% of second quarter revenue versus 12.2% in the prior year quarter. Travel, transportation logistics increased to 13.7% versus 12.5% in the prior year quarter. And retail and e commerce remained relatively consistent at 28.5% versus 29% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:14:07These increases were driven by continued demand in multiple offshore geographies and our continued ability to win significant new clients in these verticals. Conversely, our exposure to FinTech vertical decreased to 11% of revenue for the quarter versus 13.7% in the prior year quarter, impacted by the changing landscape for some client payment support models and geographic shifts from onshore to offshore delivery. Net cash generated from operating activities was $1,100,000 for the second quarter of fiscal year twenty twenty five compared to an outflow of $1,600,000 for the prior year quarter. The increase was driven by increased revenues and stronger operating results, partially offset by longer DSOs for our receivables. Our DSOs were seventy nine days, up from seventy five days at the end of the first quarter as we experienced our typical seasonal increase in DSOs and also some delay in payments related to having our clients remit payments into a new bank account. Taylor GreenwaldChief Financial Officer at IBEX00:15:04We expect our DSOs to remain stable in the mid-70s on a go forward basis. Capital expenditures were $4,300,000 or 3.1% of revenue for the second quarter versus $2,900,000 or 2.2% of revenue in the prior year quarter. This increase was primarily driven by expansions in our offshore nearshore regions to support growth in these higher margin geographies. Free cash flow was an outflow of $3,200,000 in the current quarter compared to an outflow of $4,500,000 in the prior year quarter. The improvement was driven by increased net cash provided by operating activities, partially offset by higher capital expenditures during the current quarter. Taylor GreenwaldChief Financial Officer at IBEX00:15:46We ended the second quarter with $20,200,000 of cash and debt of $33,900,000 for a net debt of $13,700,000 compared to $62,300,000 of cash and debt of $1,500,000 for a net cash of $60,800,000 at the end of our first quarter. The decrease in our net cash position during the quarter was primarily driven by the share repurchase of 3,600,000.0 shares from TRGI for $70,000,000 We funded the share repurchase with $45,000,000 of cash on hand and a $25,000,000 convertible promissory note from TRGI. After the second quarter ended, this note was paid in full with proceeds from our new revolving lines of credit with HSBC. To summarize our second quarter of fiscal year twenty twenty five, we achieved strong top and bottom line second quarter results. We accelerate our top line momentum with over 6% revenue growth, driven by new client wins over the last year and continued expansion of our embedded client base made possible by strong service delivery. Taylor GreenwaldChief Financial Officer at IBEX00:16:46Additionally, our profitability continues to improve, where for 10 of the last eleven quarters we have delivered year over year adjusted EBITDA margin expansion enabling strategic investments in AI capabilities and sales resources. These results are still continued confidence in the execution of our strategy throughout 2025 enabling us to raise our fiscal year guidance and continue to return value to shareholders. Revenue is now expected to be in the range of $525,000,000 to $535,000,000 versus the previous range of $515,000,000 to $525,000,000 Adjusted EBITDA is now expected to be in the range of $68,000,000 to $69,000,000 versus the previous range of $67,000,000 to $69,000,000 and capital expenditures are expected to remain in the range of $15,000,000 to $20,000,000 Our business is well positioned for today and for the years ahead and we're excited about the future of buybacks as we head into the third quarter of fiscal year twenty twenty five and beyond. With that, Bob and I will now take questions. Operator, please open the line. Operator00:17:50Thank you. Our first question comes from David Koning with Baird. You may proceed. David KoningSenior Research Analyst at Robert W. Baird & Co00:18:10Yes. Hey guys, congrats on another great quarter. Really good to see. Robert DechantCEO at IBEX00:18:16Thanks, David. Yes, we're really pleased with the results we posted. David KoningSenior Research Analyst at Robert W. Baird & Co00:18:21Yes. And maybe to start, just on revenue, is it a combination is the backdrop getting better? Maybe a combination of a few kind of things. Is the backdrop getting better? Are you just winning against others? David KoningSenior Research Analyst at Robert W. Baird & Co00:18:36And how is Gen AI? I mean, you kind of talked a little bit about Gen AI actually a tailwind, headwind, a little of both, like because all those three things seem to be driving revenue? Robert DechantCEO at IBEX00:18:48Yes, Robert DechantCEO at IBEX00:18:48David. So appreciate the question. And maybe it's a little bit of all of the above, but I think probably the biggest drivers for us are continued winning new logos that then drive a lot of revenue growth with them in kind of in their year 2s and things like that. So, and that's been a staple of IBEX of our ability to win and then land and expand and get those new clients growing. So that's I think probably one of the biggest drivers. Robert DechantCEO at IBEX00:19:22Actually, it is the biggest driver. The second driver that's going on is for us is our ability to win market share. And I will say a lot of the embedded based clients are looking and moving some of their business into the lower labor cost markets that as you know over the years has been the game. A lot of that's been taking place that puts pressure on top line revenue. But what we've been able to do is manage through that, but take market share. Robert DechantCEO at IBEX00:19:54And so I think we're if you like look at our competitors, where those events are putting serious headwinds into their business. For us, it isn't because we're winning market share and as both Taylor and I said, we're winning market share because we're out executing our competitors. And so those are, I think, the two biggest variables. And then the third one just around the macro and kind of demand, I would kind of sit and say that the demand has stabilized. I'm not sure the demand has come back, right? Robert DechantCEO at IBEX00:20:31And so, but the good news is it's stabilized and that's allowing us to, I think, continue to build the momentum. And as you've seen over the last several quarters, our top line growth continues to build and grow. David KoningSenior Research Analyst at Robert W. Baird & Co00:20:47Yes, that's great. And then I guess secondly, just on margins, I mean, you continue to put up really good margins. The way you're guiding the back half though, it looks like margins might be down just a touch in the back half, to get the updated EBITDA guidance. I mean, you raised EBITDA guidance, which is great. But Q2 was so good that it actually takes a little bit of margin, creates a little margin headwind it looks like in the second half, right? David KoningSenior Research Analyst at Robert W. Baird & Co00:21:12So just kind of wondering on that. Robert DechantCEO at IBEX00:21:14Hey, Taylor, I'll throw that over to you if you want to look at that. Taylor GreenwaldChief Financial Officer at IBEX00:21:17Yes, absolutely. So David, if you look at our gross margins, on the gross margin level, we improved at 140 basis points in Q1, '2 '10 basis points in Q2, and we expect that improvement year over year to continue into Q3 and Q4. So we're feeling very good about the profitability of our business. Now what we're doing and it's intentional is we are investing in SG and A, in sales resources and technology both in the infrastructures. We recently implemented our new financial system and HR system and then also in AI capabilities to grow the business. Taylor GreenwaldChief Financial Officer at IBEX00:21:57But if you look at the back half of the year in terms of our guidance, we're still at around what 14% adjusted EBITDA margin. So we're still feel very good about that. And it's the fact that our gross margins are seeing such improvement that we're able to invest in growth and continue this trend. David KoningSenior Research Analyst at Robert W. Baird & Co00:22:16Got you. Well, great job guys. Thank you. Robert DechantCEO at IBEX00:22:20Great, David. Thanks. Good catching up. Operator00:22:23Thank you. And I'm not showing any further questions. I'd now like to turn the call back over to Bob Deckin for any closing remarks. Robert DechantCEO at IBEX00:22:43Josh, thank you and thank you all for attending. We're really proud of what we continue to do as a team, what we do operationally, what we do financially and then from a strategic standpoint with our AI strategy, put all those elements together. I love the trajectory of our business. And thank you all and we'll talk to you next quarter. Good Robert DechantCEO at IBEX00:23:06night. Operator00:23:06Thank you. This concludes the conference. Thank you for your participation. You may now disconnect. 00:26:31Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh. 00:28:18You 00:28:47you 00:29:55you 00:31:45Okay. You 00:32:27you you 00:32:56you 00:33:39you 00:33:51you you 00:34:33you Operator00:34:55Welcome to the Ivex Second Quarter FY twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question and answer session. To note, there isn't an accompanying earnings deck presentation available on the Ivex Investor Relations website at investors.ibex.co. Operator00:35:29I will now turn this conference over to Mr. Michael Darwold, Head of Investor Relations for Ibex. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:35:39Good afternoon, and thank you for joining us today. Before we begin, I want to remind you that matters discussed on today's call may include forward looking statements related to our operating performance, financial goals and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward looking statements reflect our opinion as of the date of this call, and we undertake no obligation to revise this information as a result of new developments, which may occur. Forward looking statements are subject to various risks, uncertainties and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our annual report on Form 10 K filed with the U. Michael DarwalExecutive VP of Investor Relations & Deputy CFO at IBEX00:36:27S. Securities and Exchange Commission on 09/12/2024. With that, I will now turn the call over to Ivek's CEO, Bob Deken. Robert DechantCEO at IBEX00:36:36Thanks, Mike. Good afternoon, everyone, and thank you all for joining us today as we share our second quarter fiscal year twenty twenty five results. I'd like to start by once again thanking my team for a tremendous quarter. They continue to show why they are the best in the industry. The second quarter was strong across the board. Robert DechantCEO at IBEX00:37:02We achieved our highest growth in two years at 6.1%. This enabled us to post the highest revenue for a quarter in the history of Ivex. In addition, we had another great quarter on profitability and now have improved adjusted EBITDA margin over the prior year in 10 out of the last 11 quarters. Our top line growth starts with the success of our powerful new logo engine and our ability to highlight our differentiation enabling us to win large enterprise deals with trophy brands. Our growth is then accelerated by our ability to take market share within our embedded based clients, driven by our ability to outperform the competition. Robert DechantCEO at IBEX00:37:57This is our proven land and expand playbook. Also important to our success is our high client retention, where our revenue retention rates are some of the highest in the industry, highlighting our ability to be a strategic partner with our clients. We also had important wins with our WAVE IX translate and automate generative AI solutions that position us well into the future. These wins added to an extremely strong quarter. More on this later. Robert DechantCEO at IBEX00:38:36These growth vectors continue to be our margin expansion drivers. We continue to grow aggressively in both our highest margin regions, exemplified by 14% year over year growth in our offshore region in Q2 and in our highest margin services, highlighted by 8% year over year growth in omni channel revenue in Q2. These vectors have enabled us to expand adjusted EBITDA margin consistently. As a result, we remain confident in our ability to continue to drive top line growth and expand margin. I'm proud to report the following highlights for Q2 FY 2025. Robert DechantCEO at IBEX00:39:25We delivered record Q2 revenue of $140,700,000 dollars up 6.1% from a year ago. We expanded adjusted EBITDA margin 100 basis points from prior year to 11.8% while delivering record Q2 adjusted net income of $9,600,000 up 20% from a year ago. We achieved adjusted EPS of $0.59 up 36% from a year ago. We closed five new logos in the quarter for a total of eight year to date. Several of these new wins include both traditional agent support and innovative generative AI deployments demonstrating the power of our differentiated solutions. Robert DechantCEO at IBEX00:40:18We executed the strategic repurchase of approximately 3,600,000.0 shares from TRGI, enabling us to eliminate our status as a controlled company within the NASDAQ definition. This will provide better independence for us as a company. And we bolstered our Board of Directors with the additions of JJ Zhuang, Patrick McGinnis and Karen Battenbockel, who bring a strong industry and AI talents. Lastly, we had a great quarter, winning opportunities and launches with our Wave IX AI solution stack, placing Ivex ahead of the market as we turned the quarter into our fiscal Q3. We are winning with both AI translate and AI automate solutions. Robert DechantCEO at IBEX00:41:12These mark significant milestones for Ivex as we continue to redefine the customer experience for many of our clients. As a reminder, our Wave IX AI Translate solution is a disruptive solution that displaces old world third party language translation service bureaus. As an example, for one of our hospitality clients, we are able to have our English speaking agents provide multilingual support utilizing AI for real time translation. This eliminates the need to augment our trained customer service agents with additional language translation only agents, providing a game changing solution that significantly improves the customer experience and reduces unnecessary costs. This has already been positively seen by clients across the multitude of industry segments and is 100% accretive to revenue and profitability. Robert DechantCEO at IBEX00:42:18Our Wave IX offering also includes our AI Automate solution, where we leverage our deep analytics and AI to automate low complexity call types. This is an enterprise wide solution, meaning we are providing 100 of the automated support for our clients. So in implementations where IBEX is one of multiple BPOs providing contact center services, which is the high majority of our engagements, we see this as both incremental to revenue and margin, while further enhancing our trusted partner status with our clients. As a result, we are increasing our stickiness with our clients and expanding our competitive mode. And this positions us extremely well as we look out over the next several years. Robert DechantCEO at IBEX00:43:14In summary, we are bullish on the trajectory as we move into the second half of FY twenty twenty five. We believe our business is well positioned today for continued growth, strong EPS and one where we lead the competition from an AI perspective. Our ability to win on the big stage with trophy clients against our much larger competitors is the staple of IBEX. I'm extremely proud of the business we have built and I expect this to continue throughout FY twenty twenty five and beyond. With that, I will now turn the call over to Taylor to go into more details on our second quarter FY twenty twenty five financials and guidance. Robert DechantCEO at IBEX00:43:59Taylor? Taylor GreenwaldChief Financial Officer at IBEX00:44:01Thank you, Bob, and good afternoon, everyone. Thank you for joining the call today. And my discussion of our second quarter fiscal year twenty twenty five financial results references to revenue, net income and net cash generated from operations are on a U. S. GAAP basis, while adjusted net income, adjusted earnings per share, adjusted EBITDA and free cash flow are on a non GAAP basis. Taylor GreenwaldChief Financial Officer at IBEX00:44:25Reconciliations of our U. S. GAAP to non GAAP measures are included in the table attached to our earnings press release. Turning to our results, our second quarter results are among the strongest in our history with record top line results and strong profitability. Second quarter revenue was $140,700,000 an increase of 6.1% from $132,600,000 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:44:50Revenue growth was driven by vertical growth in HealthTech of 31%, Travel, Transportation and Logistics of 17% and Retail and e commerce of 4% and was partially offset by decline in the FinTech vertical of 15%. Our focused efforts to grow our higher margin offshore delivery locations are continuing to have a favorable impact on bottom line results. Offshore revenues now comprised 53% of total revenue versus 49% in the prior year quarter. Revenue mix in our higher margin digital and omni channel services also continues to be strong. Digital and omni channel delivery represented 80% of our total revenue, an increase from 79% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:45:34For context, digital nomichannel comprised roughly 65% at the time of our IPO in 2020. We expect that we will continue to be successful driving growth in these higher margin regions services as new client wins and growth in our embedded base continue to be focused in these areas. Second quarter net income increased to $9,300,000 compared to $6,100,000 in the prior year quarter. The increase was primarily driven by the meaningful growth of work and higher margin offshore regions of 14% year over year for the quarter and the realization of the site and cost optimization efforts completed over the past year, partially offset by higher income tax and interest expense. Fully diluted EPS was $0.57 up from $0.33 in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:46:24Contributing to the EPS growth was the impact from fewer diluted shares outstanding from share repurchases over the last year, including the repurchase of 3,600,000.0 shares from TRGI in November. Our weighted average diluted shares outstanding for the quarter were 16,500,000.0 versus 18,400,000.0 1 year ago. In the third quarter, we expect this number to be approximately 14,300,000.0 shares as we realize a full quarter impact from the $3,600,000 TRGI share repurchase. Moving to non GAAP measures, adjusted EBITDA increased to $16,500,000 or 11.8% of revenue from $14,300,000 or 10.8% of revenue for the same period last year. The 100 basis point improvement in adjusted EBITDA margin was primarily driven by growth in our higher margin offshore locations during recent years, growth in key verticals from existing and new clients launched throughout fiscal twenty twenty four and fiscal twenty twenty five to date, and stronger operating results due to site optimization efforts. Taylor GreenwaldChief Financial Officer at IBEX00:47:29Adjusted net income increased to $9,600,000 from $8,000,000 in the prior year quarter. Non GAAP fully diluted adjusted earnings per share increased to $0.59 from $0.44 in the prior year quarter. The increases were driven by the higher EBITDA and fewer diluted shares outstanding offset by higher income tax and interest expense. We expect our tax rate to track toward 21% to 22% for the year. As a company, we are pleased with the client diversification we have established over the last several years. Taylor GreenwaldChief Financial Officer at IBEX00:48:01For the second quarter of fiscal year twenty twenty five, our largest client accounted for 12% of revenue and our top five, ten and twenty five client concentrations declined compared to the prior year to 39%, fifty four % and seventy nine % from 41%, fifty nine % and eighty two % respectively of overall revenue, representative of a well diversified client portfolio which continues to become more diversified. Over the past decade, we have done a tremendous job attending our top 25 clients and are excited to see one of our signature client wins from fiscal year twenty twenty four already move into our top 20. Switching to our verticals, HealthTech increased to 15.1% of second quarter revenue versus 12.2% in the prior year quarter. Travel, transportation logistics increased to 13.7% versus 12.5% in the prior year quarter. And retail and e commerce remained relatively consistent at 28.5% versus 29% in the prior year quarter. Taylor GreenwaldChief Financial Officer at IBEX00:49:02These increases were driven by continued demand in multiple offshore geographies and our continued ability to win significant new clients in these verticals. Conversely, our exposure to FinTech vertical decreased to 11% of revenue for the quarter versus 13.7% in the prior year quarter, impacted by the changing landscape for some client payment support models and geographic shifts from onshore to offshore delivery. Net cash generated from operating activities was $1,100,000 for the second quarter of fiscal year twenty twenty five compared to an outflow of $1,600,000 for the prior year quarter. The increase was driven by increased revenues and stronger operating results, partially offset by longer DSOs for our receivables. Our DSOs were 79, up from seventy five days at the end of the first quarter as we experienced our typical seasonal increase in DSOs and also some delay in payments related to having our clients remit payments into a new bank account. Taylor GreenwaldChief Financial Officer at IBEX00:49:59We expect our DSOs to remain stable in the mid-70s on a go forward basis. Capital expenditures were $4,300,000 or 3.1% of revenue for the second quarter versus $2,900,000 or 2.2% of revenue in the prior year quarter. This increase was primarily driven by expansions in our offshore nearshore regions to support growth in these higher margin geographies. Free cash flow was an outflow of $3,200,000 in the current quarter compared to an outflow of $4,500,000 in the prior year quarter. The improvement was driven by increased net cash provided by operating activities, partially offset by higher capital expenditures during the current quarter. Taylor GreenwaldChief Financial Officer at IBEX00:50:41We ended the second quarter with $20,200,000 of cash and debt of $33,900,000 for a net debt of $13,700,000 compared to $62,300,000 of cash and debt of $1,500,000 for a net cash of $60,800,000 at the end of our first quarter. The decrease in our net cash position during the quarter was primarily driven by the share repurchase of 3,600,000.0 shares from TRGI for $70,000,000 We funded the share repurchase with $45,000,000 of cash on hand and a $25,000,000 convertible promissory note from TRGI. After the second quarter ended, this note was paid in full with proceeds from our new revolving lines of credit with HSBC. To summarize our second quarter of fiscal year twenty twenty five, we achieved strong top and bottom line second quarter results. We accelerate our top line momentum with over 6% revenue growth, driven by new client wins over the last year and continued expansion of our embedded client base made possible by strong service delivery. Taylor GreenwaldChief Financial Officer at IBEX00:51:42Additionally, our profitability continues to improve, where for 10 of the last eleven quarters we have delivered year over year adjusted EBITDA margin expansion enabling strategic investments in AI capabilities and sales resources. These results instill continued confidence in the execution of our strategy throughout 2025 enabling us to raise our fiscal year guidance and continue to return value to shareholders. Revenue is now expected to be in the range of $525,000,000 to $535,000,000 versus the previous range of $515,000,000 to $525,000,000 Adjusted EBITDA is now expected to be in the range of $68,000,000 to $69,000,000 versus the previous range of $67,000,000 to $69,000,000 and capital expenditures are expected to remain in the range of $15,000,000 to $20,000,000 Our business is well positioned for today and for the years ahead and we're excited about the future buybacks as we head into the third quarter of fiscal year twenty twenty five and beyond. With that, Bob and I will now take questions. Operator, please open the line. Operator00:52:46Thank you. Our first question comes from David Koning with Baird. You may proceed. David KoningSenior Research Analyst at Robert W. Baird & Co00:53:05Yes. Hey guys, congrats on another great quarter. Really good to see. Robert DechantCEO at IBEX00:53:11Thanks, David. Yes, we're really pleased with the results we posted. David KoningSenior Research Analyst at Robert W. Baird & Co00:53:17Yes. And maybe to start, just on revenue, is it a combination is the backdrop getting better? Maybe a combination of a few kind of things. Is the backdrop getting better? Are you just winning against others? David KoningSenior Research Analyst at Robert W. Baird & Co00:53:32And how is Gen AI? I mean, you kind of talked a little bit about Gen AI actually a tailwind, headwind, a little of both, like because all those three things seem to be driving revenue. Robert DechantCEO at IBEX00:53:43Yes, David. So appreciate the question. And maybe it's a little bit of all of the above, but I think probably the biggest drivers for us are continued winning new logos that then drive a lot of revenue growth with them in kind of in their year 2s and things like that. So, and that's been a staple of IBEX of our ability to win and then land and expand and get those new clients growing. So that's I think probably one of the biggest drivers. Robert DechantCEO at IBEX00:54:18Actually, it is the biggest driver. The second driver that's going on is for us is our ability to win market share. And I will say a lot of the embedded based clients are looking and moving some of their business into the lower labor cost markets. That as you know over the years has been the game, a lot of that's been taking place that puts pressure on top line revenue. But what we've been able to do is manage through that, but take market share. Robert DechantCEO at IBEX00:54:50And so I think we're, if you like, look at our competitors, where those events are putting serious headwinds into their business. For us, it isn't because we're winning market share and as both Taylor and I said, we're winning market share because we're out executing our competitors. And so those are, I think, the two biggest variables. And then the third one just around the macro and kind of demand, I would kind of sit and say that the demand has stabilized. I'm not sure the demand has come back, right? Robert DechantCEO at IBEX00:55:26And so, but the good news is it's stabilized and that's allowing us to, I think, continue to build the momentum. And as you've seen over the last several quarters, our top line growth continues to build and grow. David KoningSenior Research Analyst at Robert W. Baird & Co00:55:42Yes, that's great. And then I guess secondly, just on margins, I mean you continue to put up really good margins. The way you're guiding the back half though, it looks like margins might be down just a touch in the back half to get to the updated EBITDA guidance. I mean, you raised EBITDA guidance, which is great. But Q2 was so good that it actually takes a little bit of margin, creates a little margin headwind, it looks like in the second half, right? David KoningSenior Research Analyst at Robert W. Baird & Co00:56:08So just kind of wondering on that. Robert DechantCEO at IBEX00:56:10Hey, Taylor, I'll throw that over to you if you want to look Taylor GreenwaldChief Financial Officer at IBEX00:56:12at that. Yes, absolutely. So David, if you look at our gross margins, on the gross margin level, we improved at 140 basis points in Q1, '2 '10 basis points in Q2, and we expect that improvement year over year to continue into Q3 and Q4. So we're feeling very good about the profitability of our business. Now what we're doing and it's intentional is we are investing in SG and A, in sales resources and technology, both in the infrastructures. Taylor GreenwaldChief Financial Officer at IBEX00:56:44We recently implemented our new financial system and HR system and then also in AI capabilities to grow the business. But if you look at the back half of the year in terms of our guidance, we're still at around what 14% adjusted EBITDA margin. So we're still feel very good about that and it's the fact that our gross margins are seeing such improvement that we're able to invest in growth and continue this trend. David KoningSenior Research Analyst at Robert W. Baird & Co00:57:11Got you. Well, great job guys. Thank you. Robert DechantCEO at IBEX00:57:15Great, David. Thanks. Good catching up. Operator00:57:19Thank you. And I'm not showing any further questions. I'd now like to turn the call back over to Bob Deckin for any closing remarks. Robert DechantCEO at IBEX00:57:39Josh, thank you and thank you all for attending. We're really proud of what we continue to do as a team, what we do operationally, what we do financially and then from a strategic standpoint with our AI strategy, put all those elements together. I love the trajectory of our business. And thank you all and we'll talk to you next quarter. Good night. Operator00:58:02Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.Read moreParticipantsExecutivesMichael DarwalExecutive VP of Investor Relations & Deputy CFORobert DechantCEOTaylor GreenwaldChief Financial OfficerAnalystsDavid KoningSenior Research Analyst at Robert W. Baird & CoPowered by