Ibex Ltd Delivers Record Quarter and Lifts Guidance

Ibex Ltd ((IBEX)) has held its Q2 earnings call. Read on for the main highlights of the call.

Ibex Ltd’s latest earnings call struck an upbeat tone, underscoring strong operational momentum and accelerating profitability despite a few deliberate growing pains. Management highlighted record revenue, faster EPS growth, rising margins and increased full-year guidance, while framing higher CapEx, India ramp-up costs and a steep telecom decline as controlled, strategic trade-offs.

Record Revenue and Sustained Double-Digit Growth

Ibex reported second-quarter revenue of $164.2 million, up 16.7% year over year and marking its fourth straight quarter of double-digit organic growth. The performance builds on calendar 2025 revenue above $600 million with 16% growth, reinforcing the company’s position as a scaled player in the customer experience and digital services space.

EPS Surge and Expanding Profitability

Earnings power accelerated sharply, with GAAP diluted EPS climbing to $0.83 from $0.57 and non-GAAP EPS rising to $0.87 from $0.59. Adjusted EBITDA hit a record $20.7 million, representing 12.6% of revenue versus 11.8% a year ago, as SG&A fell to 16.8% of revenue and operating leverage kicked in.

High-Margin Verticals and Digital Services Outperform

Growth in higher-value verticals was a standout, led by HealthTech up 35.1% and now 17.4% of revenue, and travel, transportation and logistics up 20.2% at 14.1% of sales. Retail and e-commerce grew 17.2% and remains the largest slice at about 28.6%, while higher-margin digital and omnichannel offerings climbed 19% and now make up 82% of total revenue.

Offshore Mix and India Expansion Support Margins

Offshore revenues reached 52.3% of total, with the highest-margin offshore business growing 16.2% year over year, while onshore jumped 27.5% and nearshore rose 8.5%. Management highlighted India as a strategic growth engine, with two sites and nearly 1,000 agents launched since March 2025 to support healthcare programs and future scale.

Balance Sheet Strength and Higher Full-Year Targets

Ibex ended the quarter with $15.5 million in cash against $1.4 million of debt, keeping a roughly $14 million net cash position to fund growth initiatives. This strength underpinned a raise in full-year revenue guidance to $620 million to $630 million and adjusted EBITDA expectations to $80 million to $82 million.

Advancing AI Capabilities and Leadership Bench

The company continued to lean into artificial intelligence, promoting its Wave iX platform as a differentiator for both client-facing AI agents and internal productivity across the agent lifecycle. Leadership investments included elevating a Chief AI and Digital Officer and adding sales and delivery capacity to deepen Ibex’s AI-driven, tech-enabled value proposition.

Telecommunications Vertical Under Pressure

The one clear soft spot was telecommunications, where revenue fell about 23.1% year over year and shrank to 8.7% of total sales from 13.1%. Management attributed the weakness to lower volumes from legacy carriers and broader contraction in the vertical, but signaled the overall mix is tilting toward faster-growing, higher-margin sectors.

Gross Margin Weighed by Training and India Ramp

Gross margin faced some headwinds from the timing of training revenue recognition, with most training costs expensed now while the associated revenue is recognized over time. Early-stage investment in India also pressured margins as the sites are not yet at steady-state, though management framed these as temporary drags in support of longer-term growth.

Higher CapEx and Temporary Free Cash Flow Drag

Capital expenditures climbed to $11.7 million, or 7.1% of revenue, versus $4.3 million a year ago as Ibex invested in offshore expansion and new capacity. The heavier spending drove a free cash flow outflow of $5.1 million compared with a $3.2 million outflow in the prior-year quarter, and full-year CapEx is now expected at the high end of the previous range.

Flat FinTech and Rising Client Concentration Risk

FinTech revenues were essentially flat and slipped as a share of the mix to 9.3% from 11%, in contrast to the strong momentum in other verticals. Top-10 client concentration edged up to 57% from 54%, modestly increasing customer concentration risk even as the company continues to add and expand accounts in newer industries.

Working Capital and DSO Remain Watch Points

Net cash from operations improved in the quarter, but days sales outstanding rose to 73 days from 71 at the end of the prior quarter. Management expects DSOs to remain in the mid-70s, signaling that while liquidity is solid, working capital efficiency will be important to monitor as revenue scales.

Guidance and Outlook

Looking ahead, Ibex lifted its full-year outlook, now targeting $620 million to $630 million in revenue and $80 million to $82 million of adjusted EBITDA, with CapEx tracking toward roughly $25 million. The company expects HealthTech to reach around $100 million in revenue by year-end, maintains an effective tax rate in the low-20% range and sees DSOs holding in the mid-70s as growth investments continue.

Ibex’s earnings call painted a picture of a company balancing rapid growth with disciplined profitability and selective risk-taking. Strong results in HealthTech and digital services, a richer offshore mix and rising margins outweighed telecom weakness and near-term cash flow pressure, leaving investors with a broadly constructive outlook for the rest of the year.