IBEX - Earnings call transcript Q2 2025

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Operator

Welcome to the IBEX Second Quarter FY 2025 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]. To note, there [ isn't ] an accompanying earnings deck presentation available on the IBEX Investor Relations website at investors.ibex.co. I will now turn this conference over to Mr. Michael Darwall Head of Investor Relations for IBEX.

Michael Darwal

you us thank and afternoon, for today. joining Good

may and to that include on matters we financial statements begin, on management's you want I goals performance, operating may opinion new information and Please no we Before occur. assumptions. current discussed beliefs our obligation that are developments, remind today's as date the to forward-looking these of note to this a our undertake outlook, and of result business of which which reflect related revise statements as this based forward-looking call, call

subject risks, today. cause described materially Forward-looking to statements that to those factors from and could are actual differ results various uncertainties and other expected our

report Exchange on Securities XX-K the more U.S. on with Commission Form description For risk a factors, annual detailed filed and XX, our of XXXX. September please our review

call With to turn over ibex's CEO, that, now I Dechant. will the Bob

Robert Dechant

for share continue XXXX in Thanks, you my thank why Mike. today industry. all again They once a like fiscal team are the year they us show the afternoon, quarter thanking for we tremendous everyone, Good results. start by second quarter. joining to as to I'd best and our

was X to revenue achieved the across highest growth quarter in enabled our a for ibex. in quarter board. post of second years The This strong X.X%. highest at We us the history the

out year XX on now improved have and margin the quarters. and the great profitability In addition, had prior quarter another we adjusted EBITDA last over . of XX

us large deals ability powerful logo starts line brands. engine growth our win and top our enterprise enabling highlight differentiation with to new trophy the of success with our Our to

to within clients our to then driven is growth This proven share our ability ability competition. embedded base market the our playbook. accelerated is our land-and-expand by Our take outperform by

the our a is ability client partner high with industry, in are retention revenue rates success where clients. some strategic to our to important retention be our highest our of the Also our highlighting

wins These with that on important and margin to had future. generative extremely also AI IX us growth later. added this translate continue strong More wins factors automate an our drivers. We the expansion Wave be our position to into These solutions well quarter.

to continue These We exemplified XX% margin services us in vectors in highlighted our enabled our by in growth year-over-year our adjusted both region consistently. regions, in highest offshore have grow revenue and growth omnichannel year-over-year margin EBITDA by We QX. in aggressively QX. to expand highest-margin in X%

remain to we As result, confident line to expand top growth a ability drive and our continue margin. in

up delivered income highlights from I EPS up points QX net to ago. for am from revenue record We following margin a EBITDA quarter We $X.X of year $X.XX, total for while of XX.X%, ago. year of prior ago. 'XX. QX X closed expanded $XXX.X a a adjusted proud report a QX year achieved basis to of million, year-to-date. XX% record FY XXX the from year We million, X.X% adjusted adjusted delivering logos We up new XX% the X in from

of Wang, Directors who power both eliminate wins for AI status us industry definition. X.X the bring Karen the company. our as bolstered repurchase with approximately new We strategic within Patrick and better traditional of strong include company from controlled of innovative and will the This a provide our additions [indiscernible], agent we McGinnis shares and the NASDAQ talents. independence Board And deployments, differentiated AI a GI, our as JJ a these of generative of support demonstrating to us TR solutions. enabling Several executed million

quarter of Lastly, into we great placing we opportunities turned launches QX. stack, and winning AI fiscal ahead as the the had with our quarter, a Wave solution our market Ibex

for we continue many and significant of milestones customer winning clients. experience for our translate These solutions. redefine automated AI are as AI We with Ibex mark the both to

As a old-world is Wave translation language bureaus. AI solution displaces reminder, solution a disruptive third-party our service that translate

for our clients. hospitality of an X As example,

English-speaking agents customer to have service agents, additional support, language a need agents to with utilizing and AI trained eliminates able are provide translation We for multilingual our only This our real-time providing augment translation. the that of costs. significantly the segments solution This across clients XXX% seen is revenue been and game-changing improves and to positively customer already the reduces profitability. experience unnecessary by multitude has industry accretive

is analytics offering AI we providing solution, meaning iX our leverage AI deep call the also we types. includes our our automate support automated and Wave of are automated XXX% This where solution, an low-complexity to for clients. Our enterprise-wide

which both of incremental see further services, is in contact and BPOs to the clients. multiple one of providing where partner So engagements. status enhancing majority margin trusted with revenue our Ibex high center our We our implementations is as this while

we over the next several our as expanding with a and stickiness This are result, well out our As moat. increasing extremely positions competitive our we clients us look years.

FY In business trajectory lead summary, our for second strong 'XX. of an and where we We today X we growth, well positioned bullish are believe we on competition from perspective. the AI EPS move is continued half as the into the

on is beyond. Ibex. stage extremely am proud I throughout trophy staple much clients of the the expect this to win continue with FY built 'XX our the I we of to ability Our and business against big and larger have competitors

Taylor? quarter go the and now second that, over more FY With financials on turn will our to into call to guidance. 'XX Taylor details I

Taylor Greenwald

Thank call and our and net and results a per basis. GAAP net revenue, of on good financial quarter to our share, in of Thank U.S. net adjusted year to fiscal to generated you today. income, second Reconciliations the cash non-GAAP non-GAAP included flow free everyone. are the our earnings table U.S. joining measures from are cash attached In you, income references GAAP on XXXX are basis, earnings release. discussion Bob, afternoon, EBITDA operations adjusted my while a press for adjusted

our to results. Turning

results top quarter strongest line in our results with second among the profitability. strong history Our and are record

from vertical in driven of the HealthTech by million decline XX%. X.X% increase transportation million, travel, of a retail and quarter XX%, in vertical and X% and XX% of offset was the and of Revenue was quarter. in partially an year $XXX.X of Second growth revenue by logistics e-commerce prior FinTech $XXX.X growth was

offshore versus a of focused Our quarter. quarter. XX% favorable have services to line Offshore represented from be grow comprise Revenue XX% total XX% bottom revenue mix in our results. total the our revenue, omnichannel higher-margin in the impact higher-margin of on and an prior are and also delivery to locations now year continuing efforts delivery revenues to continues our digital omnichannel Digital increase strong. year in prior XX%

XX% XXXX. in our For of at time context, comprised and digital IPO the roughly omnichannel

successful higher-margin in these areas. client continue new that wins services focused regions We these in in expect growth driving to and we will as embedded be base our growth be continue to

prior in the of for million driven quarter. Second by tax quarter to and net expense. offshore XX% $X.X was the completed million primarily cost past the income the year optimization interest work compared site year, to increase higher the The partially quarter. income increased offset realization and year-over-year and higher-margin meaningful of regions growth by $X.X the over in of efforts

the repurchase fewer over in outstanding from TRGI year EPS from Fully diluted growth the up was shares share of from in to November. Contributing last including quarter. EPS repurchases was diluted $X.XX, the the year. prior million the impact X.X from shares $X.XX

shares diluted realized In to expect the be TRG full quarter we million this the outstanding versus third for from ago. quarter average Our number weighted year the share million quarter, XX.X approximately as $XX.X impact $X.X were X repurchase. we $XX.X million a shares million

from income driven and in and XXXX our operating recent period clients by outstanding, Adjusted plus the $X.X adjusted adjusted higher optimization during same and EBITDA years $X.XX XX.X% date verticals measures. from XX.X% growth margin and increased year. quarter. last from non-GAAP The diluted of in the tax interest higher-margin $X were efforts. basis improvement fiscal and to by existing throughout the expense. million per quarter. net XXXX of offshore to fewer XXX driven year diluted $XX.X in to $XX.X Adjusted prior million to was Moving to by prior to million Non-GAAP due revenue key EBITDA $X.XX EBITDA the in fully growth point for or increased site fiscal shares stronger or increased primarily increases revenue share earnings locations in million results from income higher offset The new year

to our expect track the for rate tax to XX% year. towards XX% We

As last the a over company, years. we several established have are the client pleased diversification we with

to For more the of which our client in second our largest XX% XX%, XXXX, overall client X, and top client year of of well-diversified a concentrations become fiscal respectively, quarter XX of XX% to year diversified. XX%, and and continues XX%, XX% XX% to prior accounted the revenue portfolio, and declined representative revenue, compared XX from for

excited to wins year one moved top have retaining signature we Over into our XX job our top clients already are a done from the tremendous and decade, XX. client of fiscal 'XX our past see

models changing $X.X in impacted compared $X.X increased quarter in exposure the prior quarter shifts of continued and demand in geographic was these and the prior the to partially to our receivables. offshore Switching of in from remained and generated by million versus some longer versus relatively clients to delivery. of quarter, support Conversely, to to increases quarter. by XX.X% second our DSOs XX.X% second XX% XX.X% year geographies win the our the prior revenue landscape XX.X% in offshore XX% for fiscal for verticals. revenue versus for increased new consistent quarter Net by the Transportation in the year activities XX.X% driven year payment at operating of and These for to vertical and quarter. stronger from quarter. an prior year prior multiple HealthTech million quarter, cash decreased client year Fintech Logistics onshore significant our Travel, by and was were outflow the ability year continued e-commerce operating for results, versus The driven increase offset verticals. increased retail revenues to to XX.X% XXXX

end in into new Our remit and XX payments account. related the experienced of DSOs our XX quarter DSOs up clients in delay to days, bank some increase from seasonal we days having as first the also typical at were payments a our

quarter. in offshore or activities, driven We our capital outflow an compared driven stable these support the nearshore This quarter. operating the of on mid-XXs expect in current remain prior basis. prior outflow year during or partially $X.X cash and million cash flow year current by the by in higher provided by Free primarily the $X.X of regions X.X% offset to in higher-margin revenue revenue quarter. was of growth net million a Capital expansions the the in go-forward $X.X an $X.X to was of X.X% million expenditures in improvement quarter increased was The to were million our quarter geographies. by increase second expenditures versus for DSOs

debt first TRGI and with $XX.X the our $XX.X from After convertible a the net the lines million HSBC. million compared cash We ended We million $XX.X promissory to on repurchase primarily cash million note for with shares million of the repurchase quarter of second new of second a with cash cash in full cash the and for $XX.X million share ended, quarter paid was end $XX position quarter. proceeds of driven this $X.X at TRGI. $XX million of and million. quarter $XX.X our $XX by million of a decrease from debt X.X credit with of funded of hand revolving note share our The in net the was of for of debt million during net from

embedded we our made over and year second line second possible We summarize strong driven line our top X% over delivery. quarter service by the with accelerated top last growth year momentum XXXX, client new revenue expansion wins To continued client results. fiscal and of quarter our base achieved strong by of bottom

the and quarters, capabilities profitability in EBITDA continues Additionally, our sales investments of delivered XX where last year-over-year margin enabling for expansion, resources. to have we strategic improve adjusted XX AI

versus to shareholders. million, million $XX $XXX to results in still our is our return of year versus $XX the is expected the in in $XX be confidence the previous million guidance range expenditures expected throughout raise of the expected $XXX value of $XX execution and the us continued Adjusted strategy remain $XXX in now now million to be $XX previous to million of are to are Revenue These and range to $XXX to fiscal capital XXXX, to of range the range to million. to range million $XX enabling million. of to million EBITDA continue million

Our we beyond. and of years business future for and the excited about the today and XXXX ahead, well positioned we're head buybacks fiscal is year the for third into as quarter

line. I please open and questions. will Bob now that, Operator, the With take

Operator

question first Our comes Instructions] from David [Operator Koning Baird. with

David Koning

on great another quarter. Congrats

Robert Dechant

results We're the really pleased with we posted.

David Koning

revenue, the Are combination? winning maybe I of because combination it is getting on all a seem against actually Yes. the few to things. a Maybe of backdrop Is to others? a about And of the Yes. kind how revenue. a you headwind is a Is backdrop kind getting little better? just tailwind, And mean both, just Gen like bit AI? better? it talked those driving you be little things X start, in

Robert Dechant

David. Yes,

logos the like kind So And year it's all them. little of But our probably I maybe lot question. drive a then growth of the in the us that. that revenue a continued bit biggest think and above. for appreciate I in winning new drivers of things of Xs are with their

and win clients and then and So of staple and growing. been ability those new land expand to back -- a that's get of our

drivers. the I So is that's of probably driver. it think, biggest the Actually, biggest one

The our market ability us, share. is, win second to driver that's is for going on

will are the of I embedded labor the the base has and lot cost years, you moving a looking lower business as their And of into say know, markets over clients share. top that, do is that the been market puts But pressure on through that, been lot to taking game. been what line manage of we've but A able revenue. that's place take some

so And business. putting events serious those we're like if look where at -- their our think into are headwinds you competitors I

Taylor For because isn't winning as competitors. And us, we're market we're I share. share out it said, executing because our winning both we're market and

I think, And so X are, variables. biggest those the

to not kind and think, would to stabilized, of you've momentum. I And kind is the continue over of third right? the good last the news back, I'm our the continues demand it's that say And the growth build just demand. macro one, the sit and stabilized and quarters, as allowing line I top around that's demands to, the But sure then us several so. come has grow. build And seen

David Koning

continue Yes. is takes on margins you're like might to EBITDA QX like wondering raised I updated just So bit way really touch margins, just down That's margins. to is half, great, that. guidance. guidance, kind but I you so the mean, great. which actually right? up Create though, that half, headwind And the half secondly, little the looks looks back in EBITDA to you of the on of then a I good good guess, second in be put margin get guiding mean margin a just it back the it

Robert Dechant

if Taylor, that I'll throw want over to . you you to walk through that.

Taylor Greenwald

absolutely. No, Yes.

So margin QX at David, on QX gross at our points basis you we basis improvement look margins, XXX if year-over-year and continue improved that and QX, in we expect XXX the to into points level, in gross and QX.

the we're profitability about our of So very business. good feeling

at financial as sales are what investing the what if new grow terms and system our guidance. in both it's EBITDA Now is you We're around our look of and system to we're we in back still technology, But adjusted the year doing the SG&A the HR in in also resources at in margin. infrastructure half AI business. intentional recently then capabilities and of and implemented we

it's very that. So about we our such to we're feel continue trend. still invest are fact the in that good gross growth margins seeing this and that able improvement And

Operator

closing any And to Dechant Instructions]. questions. call like over further I'd the back not remarks. for to Bob [Operator now turn I'm any showing .

Robert Dechant

of to quarter. trajectory elements . put together, strategy, AI all you operationally, all love business. what and as you a Good we our team, Josh, We're thank we'll then the financially. thank night. of we thank next all, we our with you, do do And what talk for the I really you attending. what to proud continue from And standpoint do those and strategic

Operator

the you. for This Thank participation. you concludes Thank your conference.

now may disconnect. You

IBEX Limited (IBEX) 6 Feb 252025 Q2 Earnings call transcript