IBEX Q4 Earnings Call Highlights

Key Points

• Record growth: IBEX’s fourth-quarter revenue rose 12% year over year to $164.3 million, while fiscal 2026 revenue increased 15.4% to $644.1 million. Health tech was a standout, with quarterly revenue up 42% to $29.4 million and full-year revenue up 38% to $114 million.
• AI momentum: The company now has AI-agent deployments with a double-digit number of clients across five verticals, including Philippine Airlines and BJ’s Wholesale. Management said AI is intended to expand revenue opportunities and support, rather than replace, human-agent services.
• Positive fiscal 2027 outlook: IBEX expects revenue of $700 million to $715 million and adjusted EBITDA of $90 million to $94 million, representing growth of 9% to 11% and 9% to 14%, respectively. Full-year cash flow strengthened, and the company repurchased $14.4 million of stock while ending the year with $30.9 million in net cash.

IBEX NASDAQ: IBEX reported record fourth-quarter and fiscal 2026 results, supported by double-digit revenue growth, expansion in health tech and other verticals, and increasing traction for its AI agent offerings.

Fourth-quarter revenue rose 12% year over year to $164.3 million, marking the company’s sixth consecutive quarter of double-digit revenue growth. For the full fiscal year, revenue increased 15.4% to $644.1 million. Chief Executive Officer Bob Dechant said the company’s growth reflected its differentiated positioning in the business-process outsourcing market, its new-client wins, and its ability to expand relationships with existing customers.

“We delivered record fourth quarter revenue,” Dechant said, adding that the company also produced full-year records for adjusted EBITDA, earnings per share, adjusted earnings per share, operating cash flow and free cash flow.

Client Wins and Vertical Growth

IBEX added nine new “trophy” client logos during the fourth quarter, bringing its fiscal-year total to 17 across multiple geographies and industry verticals. Revenue from its top five, top 10 and top 25 clients increased 24%, 22% and 15%, respectively, during the year, according to management.

The company said it achieved revenue and client retention rates above 99% in fiscal 2026. Dechant also said three Fortune 500 clients, each among IBEX’s top 10 customers, named the company Partner of the Year. Its client net promoter score was 71, while employee net promoter score rose to 82 from 77, with 95% participation.

Health tech remained a major growth driver. Fourth-quarter health-tech revenue increased 42% to $29.4 million, while full-year revenue in the vertical climbed 38% to $114 million. The company had previously targeted building the health-tech operation into a $100 million business by the end of the fiscal year.

Chief Financial Officer Taylor Greenwald said fourth-quarter growth also included a 27% increase in technology revenue, an 18% increase in travel, transportation and logistics revenue, and 7% growth in retail and e-commerce. For the year, health tech grew 38%, technology grew 26%, travel, transportation and logistics rose 17%, and retail and e-commerce increased 14%.

IBEX’s onshore revenue rose 15% in the fourth quarter, while offshore revenue grew 14% and nearshore revenue increased 2%. Offshore operations accounted for 50% of quarterly revenue. Digital and omnichannel services grew 12% and represented 82% of revenue, management said.

AI Agent Deployments Gain Traction

Dechant highlighted the company’s partnership with Sierra AI as a key part of IBEX’s strategy. The company formalized the partnership in late January and announced it publicly in May. IBEX said it now has AI agent deployments with a double-digit number of clients across five verticals.

The company cited several client examples. At Philippine Airlines, an existing customer, IBEX said it won an AI agent proof of concept against a pure-play AI provider, a software-as-a-service provider and a traditional BPO competitor. The pilot supported English, Tagalog and Taglish, achieved resolution rates above 20%, and generated customer satisfaction scores above 4.7 out of 5. IBEX said the program reached full-scale deployment at the beginning of fiscal 2027.

For BJ’s Wholesale, a new client, IBEX said its AI solution reached resolution rates above 40% and customer satisfaction scores above 4.7 out of 5 within weeks of a June launch. The company expects to begin deploying traditional human-agent services for the client in the first half of fiscal 2027.

Dechant said the AI initiatives are intended to add revenue opportunities rather than replace IBEX’s human-agent business. During the analyst question-and-answer session, he said AI agents can allow client programs to scale more quickly, including to 20% to 40% of enterprise call volumes, while also supporting additional human-agent work.

“We actually truly believe we future-proofed this business,” Dechant said.

Profitability, Cash Flow and Capital Returns

Fourth-quarter GAAP net income was $8.7 million, compared with $9.6 million in the prior-year quarter. GAAP diluted earnings per share were $0.59, compared with $0.66 a year earlier. Greenwald attributed the decline primarily to training costs associated with new client wins, a temporary transfer of work from nearshore to offshore centers, and higher fuel-related utility and transportation expenses in offshore operations.

Quarterly adjusted EBITDA was $20.2 million, or 12.3% of revenue, versus $20.5 million, or 13.9% of revenue, a year earlier. IBEX expects adjusted EBITDA margins to resume expansion in the first quarter of fiscal 2027, Greenwald said.

For the full year, GAAP net income increased to $46.3 million from $36.9 million, while diluted GAAP EPS rose 32.8% to $3.13. Adjusted EBITDA increased to a record $82.4 million from $72 million, though the adjusted EBITDA margin was essentially unchanged at 12.8%, compared with 12.9% in the prior year. Adjusted net income rose 21% to $52.2 million, and adjusted diluted EPS increased 28% to $3.52.

Operating cash flow reached a record $59 million, up from $45.7 million in fiscal 2025. Free cash flow totaled $31.2 million, compared with $27.3 million a year earlier. Capital expenditures rose to $27.8 million, reflecting offshore expansion and investments in IT and telecommunications equipment.

IBEX repurchased 453,000 shares for $14.4 million during the fiscal year. As of June 30, the company had $17.9 million remaining under its $20 million repurchase authorization. It ended the quarter with $32.6 million in cash and $1.7 million in debt, for net cash of $30.9 million.

Fiscal 2027 Outlook

For fiscal 2027, IBEX expects revenue of $700 million to $715 million, representing growth of 9% to 11%, and adjusted EBITDA of $90 million to $94 million, representing growth of 9% to 14%.

• First-quarter fiscal 2027 revenue is projected at $168 million to $170 million, up 11% to 12%.
• First-quarter adjusted EBITDA is expected to be $22 million to $23 million, up 13% to 18%.
• Fiscal 2027 capital expenditures are forecast at $25 million to $30 million.

Greenwald said IBEX expects a normalized tax rate of 20% to 22% going forward, following favorable discrete tax items in the fourth quarter and fiscal 2026. The company also renewed its HSBC revolving credit facilities through October 2029, with total capacity of up to $76 million.

About IBEX (NASDAQ:IBEX)

IBEX Holdings, Inc is a global business process outsourcing (BPO) company that specializes in customer experience solutions for a range of industries, including telecommunications, cable, technology, financial services and e-commerce. The company's core offerings encompass multichannel customer support delivered via voice, email, chat, social media and digital self-service platforms. In addition to front-line contact center services, IBEX provides back-office processing, order management, technical troubleshooting and analytics-driven insights to help clients optimize operational efficiency and customer satisfaction.

Beyond traditional contact center operations, IBEX has built a proprietary technology stack designed to integrate real-time data analytics, workforce management and quality assurance.

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