IBEX Q1 Earnings Call Highlights

Key Points

• IBEX posted record first-quarter results: Revenue rose 16% to $175.2 million, while adjusted EBITDA increased 29% to $25.2 million and its margin expanded to 14.4%.
• The company raised its fiscal 2027 outlook: It now expects revenue of $720 million to $735 million and adjusted EBITDA of $96 million to $99 million, citing stronger growth expectations.
• New customer wins and AI are supporting expansion: IBEX signed four traditional outsourcing clients and secured four AI Agent deals after quarter-end; management says AI services can add revenue and help win more human-agent work.

IBEX NASDAQ: IBEX raised its fiscal 2027 revenue and adjusted earnings guidance after reporting record first-quarter revenue, as new customer wins and growth among existing clients drove its seventh consecutive quarter of double-digit organic growth.

Revenue rose 16% to $175.2 million from $151.2 million a year earlier. Net income increased to $14.8 million from $12 million, while diluted earnings per share rose to $0.99 from $0.82.

The customer experience outsourcing company also reported adjusted EBITDA of $25.2 million, up 29% from $19.5 million. Its adjusted EBITDA margin expanded to 14.4% from 12.9%, helped by higher gross margins and lower selling, general and administrative expenses as a share of revenue.

Full-Year Outlook Raised

IBEX now expects fiscal 2027 revenue of $720 million to $735 million, representing growth of 12% to 14%. Its prior forecast called for $700 million to $715 million, or growth of 9% to 11%.

Management also raised its adjusted EBITDA outlook to $96 million to $99 million from $90 million to $94 million. The new range implies growth of 17% to 20% from fiscal 2026.

CFO Taylor Greenwald said the guidance implies a 50- to 70-basis-point improvement in the full-year adjusted EBITDA margin. He added that the company expects year-over-year margin improvement in each remaining quarter, though not to the extent reported in the first quarter.

Capital expenditures are expected to be approximately $30 million for the year, at the high end of the previous $25 million to $30 million range. Greenwald attributed the increase to higher growth expectations.

New Clients and AI Drive Expansion

CEO Bob Dechant said IBEX signed four new customers for traditional business process outsourcing services during the quarter. Since the quarter ended, the company has won four AI Agent deals and received verbal commitments for three more traditional outsourcing opportunities, all of which management expects to launch in the current quarter.

Customers won in fiscal 2026 and the first quarter of fiscal 2027 accounted for approximately half of the company’s revenue growth in the latest quarter, Dechant said. Revenue from its top five, top 10 and top 25 clients rose 14%, 13% and 18%, respectively, from a year earlier.

Dechant said demand for AI-powered customer service has grown through IBEX’s partnership with Sierra, announced in May 2026. The partnership combines Sierra’s conversational AI technology with IBEX’s customer experience, integration and analytics services.

As an example, Dechant described work for a fiber provider where IBEX deployed a Sierra-powered AI agent to replace a legacy interactive voice response system. He said the solution was launched within six weeks and reduced abandoned calls by more than 60%. The customer subsequently awarded IBEX its traditional call center work, which Dechant expects the company to take over by the end of December.

In response to an analyst question about AI potentially reducing contact volumes, Dechant said IBEX expects AI services to generate additional revenue while helping it win a larger share of clients’ human-agent work. He noted that AI was resolving 20% to 40% of interactions at some clients.

Margins and Cash Flow Improve

Gross margin expanded 90 basis points to 30.4%, supported by growth in higher-margin services and regions. Onshore revenue grew 37%, while offshore revenue increased 14% and represented half of total revenue. Nearshore revenue was flat year over year.

HealthTech revenue grew 40% and accounted for 17.5% of quarterly revenue, up from 14.5% a year earlier. Travel, transportation and logistics revenue rose 16%, technology increased 10%, and retail and e-commerce grew 9%.

Adjusted net income rose to $16.4 million from $13.1 million, and adjusted diluted earnings per share increased to $1.10 from $0.90. Operating cash flow was $16.3 million, compared with $15.7 million a year earlier, while free cash flow rose to $9.2 million from $8 million.

IBEX repurchased approximately 123,000 shares for $4.4 million during the quarter and had $13.5 million remaining under its repurchase authorization. It ended the period with $36.7 million in cash and $1.7 million in debt.

Greenwald said expanding capacity to meet demand remains the company’s first capital allocation priority, followed by share repurchases. Acquisitions are not a high priority, he said, though IBEX would consider a suitable opportunity in a particular geography or market.

About IBEX (NASDAQ:IBEX)

IBEX Limited NASDAQ: IBEX is a business process outsourcing and customer experience technology company. It provides customer service, technical support, sales, back-office processing and other digital services for businesses across industries, including communications, healthcare, retail, logistics and financial services.

The company combines customer contact centers, digital engagement channels, analytics and artificial intelligence-enabled tools to help clients manage customer interactions and improve operational efficiency.

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