Executive Summary
IBEX delivered a record-breaking first quarter for FY2025, underscoring an improving margin trajectory and sustainable top-line momentum even as macro conditions remain mixed. Revenue reached $129.7 million, up 4.1% year over year, while adjusted EBITDA margin expanded to 12% from 11% in the prior year, reflecting a durable shift toward higher-margin offshore/nearshore delivery and the continued migration of clients to digital and omnichannel services. Management articulated a clear strategy centered on new logo acquisition, higher-margin service lines, and the integration of AI-enabled offerings (AI Automate, AI Translate, AI Authenticate) to sustain growth and competitive differentiation. The company also reaffirmed FY2025 guidance, targeting revenue of $515-525 million and adjusted EBITDA of $67-69 million, with capex guidance of $15-20 million, signaling disciplined reinvestment to scale AI capabilities and sales resources. The balance sheet remains healthy, with a modest net debt position and steady free cash flow generation, supporting share repurchases and potential accretion to shareholder value. Investors should monitor, over the coming quarters, the rate of new logo ramp, the mix shift toward higher-margin services, DSOs normalization, and the pace of AI-driven workflow improvements that may further boost margins and retention.”,
Key Performance Indicators
Key Insights
Revenue: First quarter revenue of $129.717 million, up 4.1% YoY and 4.16% QoQ. Gross profit: $39.676 million; gross margin 30.6% (0.306). Operating income: $9.092 million; operating margin 7.01% (0.0701). Net income: $7.531 million; net income margin 5.81% (0.0581). Diluted EPS: $0.43; non-GAAP diluted EPS: $0.52. Adjusted EBITDA: $15.6 million (12% of revenue). Cash flow: net cash provided by operating activities $7.762 million; free cash flow $4.132 million. Capex: $3.636 million (2.8% of reve...
Financial Highlights
Revenue: First quarter revenue of $129.717 million, up 4.1% YoY and 4.16% QoQ. Gross profit: $39.676 million; gross margin 30.6% (0.306). Operating income: $9.092 million; operating margin 7.01% (0.0701). Net income: $7.531 million; net income margin 5.81% (0.0581). Diluted EPS: $0.43; non-GAAP diluted EPS: $0.52. Adjusted EBITDA: $15.6 million (12% of revenue). Cash flow: net cash provided by operating activities $7.762 million; free cash flow $4.132 million. Capex: $3.636 million (2.8% of revenue). DSO: 75 days. Cash and equivalents: $62.305 million; total debt: $66.727 million; net debt: $4.422 million. Share repurchases: ~282k shares for $4.7 million in the quarter. Guidance for FY2025: Revenue $515-525 million; Adjusted EBITDA $67-69 million; Capex $15-20 million. Offshore/nearshore mix: 76% of revenue; onshore 24%. Top client concentration: largest client 11% of revenue; Top 5 36%; Top 10 51%; Top 25 77%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
129.72M |
4.10% |
4.16% |
| Gross Profit |
39.68M |
8.96% |
1.32% |
| Operating Income |
9.09M |
9.13% |
-29.35% |
| Net Income |
7.53M |
1.43% |
-23.50% |
| EPS |
0.45 |
9.76% |
-21.05% |
Key Financial Ratios
operatingProfitMargin
7.01%
operatingCashFlowPerShare
$0.46
freeCashFlowPerShare
$0.25
Management Commentary
- Strategy and AI-enabled growth: IBEX emphasized AI-driven offerings (AI Automate, AI Translate, AI Authenticate) as growth accelerators and a differentiator against larger competitors, with multiple AI opportunities won in Q1 and AI Translate earning the 2024 Generative AI Product of the Year. - Margin expansion and delivery mix: Management highlighted continued margin expansion with offshore/nearshore delivery contributing 76% of revenue and higher-margin digital/omnichannel services at 76% of revenue, driving improved EBITDA margins (9th expansion in the last 10 quarters). - Logo momentum and diversification: The company referenced 18 new logos won in the prior year and three new client relationships in the quarter, underpinning top-line strength amid a diversified client portfolio (largest client at 11% of revenue; top-25 at 77%). - Balance sheet discipline and capital allocation: Evidence of strong free cash flow and a modest net debt position supported ongoing buybacks (≈282k shares for $4.7M) and a remaining $22.2M authorization under the repurchase program. - Macro and guidance: While acknowledging near-term macro choppiness, IBEX maintained a constructive tone on FY2025 growth, guiding revenue of $515-525M and EBITDA of $67-69M, implying modest YoY growth but continued margin recovery and cash generation.
we have now improved adjusted EBITDA margin over the prior year in nine out of the last ten quarters
— Bob Dechant
we are having great success with our customer-facing Wave iX solutions we call AI Automate, AI Translate and AI Authenticate
— Bob Dechant
Forward Guidance
IBEX reaffirmed FY2025 guidance, signaling a fiscally disciplined path to modest revenue growth and margin expansion. Full-year revenue guidance of $515-525 million implies roughly flat to mid-single-digit growth against trailing annualized revenue of about $508 million (four quarters ended Sep 30, 2024). Adjusted EBITDA guidance of $67-69 million translates to an EBITDA margin of roughly 13% at the mid-point, supported by the 9 of the last 10 quarters of margin expansion and higher-margin offshore delivery. Capex guidance of $15-20 million suggests continued investment in offshore/nearshore capacity and AI capabilities. Key factors that could influence achievability include: (i) execution on new logo wins and forays into high-margin verticals (HealthTech, Retail/E-commerce, Travel/Logistics); (ii) the pace of offshore margin uplift and offshore/nearshore utilization; (iii) client mix and concentration (largest client 11%), and (iv) macroeconomic volatility affecting near-term demand. Monitoring metrics to watch: quarterly revenue cadence, adjusted EBITDA margin progression, DSO normalization, and AI-enabled service adoption rates.