Executive Summary
IBEX Limited reported a strong Q2 FY2025, delivering record quarterly revenue of $140.7 million, up 6.1% year-over-year, and expanding adjusted EBITDA margin by 100 basis points to 11.8%. Net income rose to $9.3–$9.6 million (GAAP vs non-GAAP figures cited in the call) with adjusted EPS of $0.59 and GAAP EPS of $0.57, reflecting a favorable mix shift toward higher-margin offshore delivery and digital/omnichannel services. Management emphasized a differentiating land-and-expand strategy, a disciplined share-repurchase program, and a growing WaveIX AI solutions stack (translate and automate) as key tailwinds that bolster revenue, margin, and client stickiness. The company raised its full-year revenue guidance to $525–$535 million and adjusted EBITDA guidance to $68–$69 million, signaling confidence in sustained profitability as AI-enabled capabilities scale. While balance-sheet dynamics show meaningful cash usage tied to strategic investments and a large prior-year share repurchase, the company also highlighted ongoing diversification of the client base and improved offshore mix, which supports margin resilience over the medium term.
Key Performance Indicators
Key Insights
Revenue: $140.7m (+6.1% YoY; +8.45% QoQ). Gross margin: 29.8% (gross profit $41.92m). Operating margin: 8.48%. EBITDA: $16.53m; EBITDA margin 11.8%. Net income: $9.27m; net margin 6.59%. Diluted EPS: $0.57; Adjusted EPS: $0.59. DSO: 79 days. Offshore revenue: 53% of total. Digital/Omnichannel: 80% of revenue. Top client concentration: 12% of revenue; Top 5/10/25: 39%/54%/79% respectively. Capex: $4.3m (~3.1% of revenue). Free cash flow: -$3.2m. Cash at quarter end: ~$20.2m; Net debt (per managem...
Financial Highlights
Revenue: $140.7m (+6.1% YoY; +8.45% QoQ). Gross margin: 29.8% (gross profit $41.92m). Operating margin: 8.48%. EBITDA: $16.53m; EBITDA margin 11.8%. Net income: $9.27m; net margin 6.59%. Diluted EPS: $0.57; Adjusted EPS: $0.59. DSO: 79 days. Offshore revenue: 53% of total. Digital/Omnichannel: 80% of revenue. Top client concentration: 12% of revenue; Top 5/10/25: 39%/54%/79% respectively. Capex: $4.3m (~3.1% of revenue). Free cash flow: -$3.2m. Cash at quarter end: ~$20.2m; Net debt (per management): ~$13.7m (post-quarter notes and revolver activity). Guidance: 2025 revenue $525–$535m; Adjusted EBITDA $68–$69m; Capex $15–$20m.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
140.68M |
6.07% |
8.45% |
| Gross Profit |
41.92M |
14.07% |
5.66% |
| Operating Income |
11.93M |
71.70% |
31.19% |
| Net Income |
9.27M |
52.56% |
23.06% |
| EPS |
0.61 |
79.41% |
35.56% |
Key Financial Ratios
operatingProfitMargin
8.48%
operatingCashFlowPerShare
$0.08
freeCashFlowPerShare
$-0.21
Management Commentary
- Strategy and execution: Management emphasizes a robust land-and-expand approach, winning large enterprise logos, and expanding embedded client bases. CEO Bob Dechant notes the quarter featured the highest quarterly revenue in IBEX history and continued margin expansion, with adjusted EBITDA margin up 100 basis points year over year. - AI-driven growth: WaveIX AI translate and AI automate solutions are highlighted as differentiators that improve both customer experience and cost efficiency. Management described real-time translation capabilities and enterprise-wide automation as 100% accretive to revenue and profitability, reinforcing a differentiated value proposition. - Diversification and margins: Offshore delivery now represents 53% of revenue, up from 49% YoY, with digital/omnichannel services at 80% of revenue, underscoring a higher-margin mix. The company reiterates continued margin expansion supported by offshore growth and site optimization. - Guidance and outlook: IBEX raised full-year guidance, citing confidence in continued growth, AI investments, and sales resources. The company plans to invest in SG&A and AI capabilities while maintaining a mid-teens EBITDA margin trajectory for the back half of 2025. - Capital allocation and governance: The quarter featured a strategic repurchase of approximately 3.6 million shares from TRGI, reducing shares outstanding and enabling greater strategic independence; board enhancements were announced as part of governance strengthening. - Market and demand context: Management framed demand as stabilized—helpful for sustaining momentum but not a full recovery, with the company continuing to win new logos and outperform competitors in land-and-expand initiatives.
"We delivered record Q2 revenue of $140.7 million, up 6.1% from a year ago. We expanded adjusted EBITDA margin 100 basis points from the prior year to 11.8%."
— Bob Dechant
"What we're doing, and it's intentional, is we are investing in SG&A, in sales resources, in technology, both in the infrastructure as we recently implemented our new financial system and HR system, and then also in AI capabilities, to grow the business."
— Bob Dechant
Forward Guidance
IBEX raised FY2025 guidance to Revenue $525–$535 million and Adjusted EBITDA $68–$69 million, with capex guidance of $15–$20 million. The commentary highlights a favorable mix (offshore growth and high-margin digital/omnichannel services) and continued investments in AI capabilities and sales resources. Achievability assessment: High likelihood given (1) sustained new logo wins and embedded-base expansion, (2) 53% offshore mix and 80% digital/omni revenue, (3) a track record of EBITDA-margin expansion in 10 of the last 11 quarters, and (4) the monetization of WaveIX AI translate and automate across multiple verticals. Key factors to monitor include: new enterprise logos and upgrade cycles in HealthTech, Travel & Logistics, and Retail/E-commerce; offshore delivery capacity and utilization; progress in WaveIX adoption across existing clients; macro demand stabilization versus renewed growth; and the pace of AI-related investments affecting near-term margins. Practical investor takeaways: track revenue mix shifts (offshore/digital) and the realization of AI-driven efficiency gains; watch DSOs and working capital as the company scales; monitor share repurchase impact on per-share metrics and the potential for further capital returns amidst growth investment.