IBEX Ltd Q1 FY2025 earnings call

• IBEX achieved record first quarter results in revenue, net income, EPS, adjusted net income, adjusted EPS, and adjusted EBITDA. - Growth was driven by strong performance from the new logo team and market share gains in embedded base clients. - Higher-margin services and geographies account for nearly 80% of the overall business. - Won three new client relationships in the quarter, including a large e-commerce company. - Adjusted EBITDA margin expanded for the ninth time in the last 10 quarters, reaching 12%. - Strong free cash flow allowed the repurchase of over 280,000 shares. - AI solutions such as AI Automate, AI Translate, and AI Authenticate are showing early success, with two additional AI wins in the quarter. - IBEX was named number two for America's Best Employers for Tech Workers.

IBEX Limited reported record first quarter 2025 revenue of $129.7 million, representing a 4.1% increase from the prior year quarter. Revenue growth was driven by vertical segments: HealthTech saw a 23.4% increase, now accounting for 14.1% of total revenue; retail and e-commerce grew by 8.6%, making up 24.5% of revenue; travel, transportation, and logistics rose 10%, contributing 14.2% of revenue. Conversely, the FinTech vertical declined by 13%, representing 12.4% of revenue. Offshore and nearshore revenues now comprise 76% of total revenue (up from 75% in the prior year quarter), while onshore revenue decreased to 24% of total revenue (down from 25% in the prior year quarter). Digital and omnichannel delivery, which are higher-margin services, continued to represent 76% of total revenue, consistent with the prior year quarter.

• For fiscal year 2025, revenue is expected to be in the range of $515 million to $525 million, raising the lower end of the previous range. - Adjusted EBITDA is expected to be in the range of $67 million to $69 million. - Capital expenditures are expected to be in the range of $15 million to $20 million.

• Forward-looking statements discussed are subject to various risks, uncertainties, and other factors that could cause actual results to differ materially from expectations. - For a detailed description of risk factors, refer to the annual report on Form 10-K filed with the US Securities and Exchange Commission on September 12, 2024.

Q: What's the reason for the inflection in revenue growth after several quarters of flat to down, and can the momentum be sustained?

A: Revenue growth is driven by two key vectors - strong performance from the new logo team and market share gains in base clients. While there is some choppiness in the business due to macro challenges, the goal is to continue driving new logo signings and growth.

Q: How did HealthTech achieve significant growth in the quarter?

A: HealthTech's growth was a combination of nice wins on the new logo side and existing clients rewarding with new growth opportunities and lines of business, with IBEX outperforming competitors and capturing market share.