IBEX Limited's Q4 2025: Contradictions Emerge on Sequential Growth, AI's Role, GenAI Revenue Impact, SG&A Investments, and Growth Sustainability

The above is the analysis of the conflicting points in this earnings call

Date of Call: September 11, 2025

Financials Results

• Revenue: $147.1M, up 18.2% YOY and ~5% sequentially
• EPS: $0.66 per diluted share, up 18% YOY (vs $0.56 prior-year quarter)
• Gross Margin: 31.4% (Q4), maintained; prior-period comparison not specified

Guidance:

• FY26 revenue expected at $590M–$610M
• FY26 adjusted EBITDA expected at $75M–$79M
• Q1 FY26 revenue expected at $143M–$146M
• Q1 FY26 adjusted EBITDA expected at $17.5M–$19M
• FY26 capex expected at $20M–$25M
• Normalized tax rate expected at 20%–22%
• DSO expected to remain in the mid-70s (days)

Business Commentary:

* Revenue Growth and Market Outperformance: - IBEX Limited reported record fiscal year revenue of $558.3 million, up 10% from the previous year, with Q4 revenues increasing by 18% from the prior year. - This growth was driven by operational excellence, market share expansion, and new logo wins with trophy clients.

• Profitability and Margin Expansion:
• The company achieved record adjusted EBITDA of $72 million for the fiscal year, up more than 10% from the previous year, and record adjusted EPS of $2.75, up 31% from the year before.

• This was attributed to strong financial performance, strategic investments in new markets and technology, and effective site optimization.

• Digital and Offshore Revenue Growth:

• IBEX's digital and omnichannel delivery represented 82% of total revenue, up from 77% in the prior year quarter, and offshore revenue grew by 17%.

• This increase was the result of successful growth in higher-margin offshore locations and digital acquisition business.

• AI Integration and Strategic Expansion:

• The company made significant strides in AI deployment, moving from proof of concept to full-scale production implementations with clients.
• This strategic shift is positioning IBEX to offer comprehensive AI solutions along the entire customer journey, enhancing its competitive advantage and growth potential.

Sentiment Analysis:

• Management highlighted “record fiscal year revenue of $558.3M, up 10% YOY,” “record adjusted EPS of $2.75, up 31%,” and “our strongest free cash flow quarter ever of $23M.” Q4 revenue grew 18.2% YOY, and they cited “continued confidence” with FY26 revenue guidance of $590–$610M and adjusted EBITDA of $75–$79M. CEO: “We are well positioned for FY ’26 and beyond.”

Q&A:

• Question from David Koning (Baird): Was Q4’s 5% sequential revenue growth driven by any one-time items, and what explains the large increase in the 'Other' vertical—new client and is it sustainable?
  Response: No one-time items; growth is durable, driven by share gains within existing clients (notably a large e-commerce client expanding across geographies), strong digital acquisition performance, and steady new-logo wins.

• Question from David Koning (Baird): How do you view GenAI’s impact on volumes and your business—net positive or negative?
  Response: Net positive; IBEX moved from POCs to full-scale deployments, and its integrated AI-agent-to-human-agent model differentiates the company and creates a new growth vector.