IBEX Outran the AI-Fear Trade, and the Market Is Still Pricing the Old Story

IBEX Limited just closed a record fiscal year. Fourth-quarter revenue came in at $164.3 million, up 11.6% from a year earlier, adjusted diluted earnings per share were $0.85, and the company raised guidance for the year ahead. The beat itself was small — revenue barely topped the consensus number. That is not the point. The point is what a full year of that looks like: six straight quarters of double-digit revenue growth, record free cash flow, and a balance sheet that now funds both expansion and a $20 million buyback. The market is still pricing the old risk profile while the operating setup is already getting cleaner.

The company is a customer-experience outsourcer — the kind of business you do not think about until you call a helpline that a brand handed to someone else to run. Its agents and delivery centers are spread across markets including the Caribbean, the Philippines, the U.S., and the U.K. It went public in 2020 at $19 a share and has spent most of its public life priced like a commodity: thin margins, low growth, a call-center toll taker. That is the story the sector earned. In mid-2026 rivals like Concentrix and Teleperformance traded down hard as investors concluded AI would make call centers obsolete, and hedge funds were reported to be shorting the group. IBEX's own stock fell through the past year even as its results kept improving.

But the numbers moved the other way. Fiscal 2026 revenue was $644.1 million, up 15.4% from $558.3 million a year earlier. The growth is concentrated where it is hardest to dismiss: HealthTech climbed 38.5% and now sits at over a tenth of company revenue, technology was up 25.6%, and retail and travel both grew in the high teens or better. The most important detail is the AI angle, because it directly flips the bear thesis. Rather than being destroyed by AI agents, IBEX is selling them — more than ten agent deployments delivered this year and two strategic AI-agent wins in the fourth quarter alone, built on a partnership with the conversational-AI company Sierra. The headlines say AI kills the call center. The cash-flow path says this one is getting paid to deploy it.

The hard proof is cash, not excitement. Operating cash flow came in at a record $59.0 million for the year, up from $45.7 million, and free cash flow reached $31.2 million, up from $27.3 million. Returns on capital have been running near a third, leverage is comfortable, and in May the board authorized a $20 million share repurchase to be funded out of cash and that same free cash flow. This is not about excitement. It is about a business that grows harder to dismiss as the free cash flow keeps showing up in the numbers.

The valuation bridge is what makes the re-rating arguable. The market cap is roughly half a billion dollars, and enterprise value is a bit below that. Against IBEX's own fiscal 2027 guidance of $700 million to $715 million in revenue and $90 million to $94 million in adjusted EBITDA, the stock trades around five times forward EBITDA for a business still guiding to double-digit growth — and roughly ten times trailing adjusted earnings of $3.52 a share. None of that is a distressed giveaway; free cash flow alone is only about a six percent yield on the market cap, because expansion soaks up a chunk of cash. But for a compounder with this return profile, five times next year's EBITDA is not a price that accepts the improving numbers.

The one risk worth naming plainly, and it is the whole thesis, is AI itself. If the technology displaces human-agent hours faster than IBEX converts to AI-agent and HealthTech revenue, the low multiple would no longer be an opportunity — it would be the market correctly pricing deterioration. Watch that, not the tape. That gap between reported and adjusted results stays wide (fourth-quarter GAAP EPS of $0.59 versus $0.85 adjusted), so the quality of the cash conversion deserves a close look every quarter. And the aggregate signal on the name is still only a Hold; the stock has rallied roughly 30% over the last four months but remains below where it traded a year ago. The re-rating is early and incomplete, which is exactly the setup this approach looks for, but it means the case rests on quarterly delivery rather than on a crowd that has already decided.

What would break the story is concrete and measurable: growth falling back below high single digits, or free cash flow stalling while EBITDA rises. Neither has happened. Six straight quarters of double-digit sales growth, record cash generation, and the market still pricing the old AI-fear story — that gap is the opportunity, and it is closing on the company's side.