Washington September 12 2024: IBEX Limited (“ibex”), a leading provider in global business process outsourcing and end-to-end customer engagement technology solutions, net income surge 6.6 percent to $33.7 million for the fiscal year ended June 30, 2024.
Share price of the company surge 16.04 percent in after hour market after closing at $16.46 on Thursday.
“We achieved record results across key financial metrics including full year net income, EPS, adjusted net income, adjusted EPS, and free cash flow, and had a strong fourth quarter that exceeded our expectations,” said Bob Dechant, ibex CEO. “Our revenues for the fourth quarter were encouraging, and we are happy to report that we pivoted back to year-on-year growth,” said Dechant.
“Our new logo engine continued to win signature new clients with three wins in the quarter including a leading gaming company. These wins total 18 for the year highlighting our differentiation and our ability to take on and beat our much larger competition. Our pipeline for customer facing AI led solutions continues to expand and position us well as we move into FY25. ibex AI solutions complement our agent-led BPO services with AI voice and chat bots for high-volume low-complexity contacts. I am excited to announce that we closed our first significant customer-facing AI opportunity with a leading client which will drive a new revenue stream for us.” Added Dechant, “The fourth quarter completes a strong second half and finish for the year and gives us great momentum as we enter our FY 2025.”
Revenue of $124.5 million, up slightly from the prior year quarter. Growth in Retail and E-commerce, Travel, Transportation and Logistics, and HealthTech was offset by declines in FinTech, Telecommunications, and Technology verticals.
Net income increased to $9.8 million compared to $4.5 million in the prior year quarter. Diluted earnings per share increased to $0.56 compared to $0.24 in the prior year quarter. The increase was primarily the result of improved gross margin performance on the year over year growth of delivery in our offshore regions, cost optimization efforts, lower income tax expense, and fewer diluted shares outstanding compared to the prior year quarter.
Net income margin increased to 7.9% compared to 3.6% in the prior year quarter.
Non-GAAP adjusted net income increased to $10.2 million, compared to $6.2 million in the prior year quarter.
Non-GAAP adjusted diluted earnings per share increased to $0.58, compared to $0.33 in the prior year quarter. The increase per share was primarily attributable to the impact of improved operating margins, a lower tax rate, and lower share count.
Adjusted EBITDA increased to $17.9 million, compared to $15.4 million in the prior year quarter (see Exhibit 2 for reconciliation), driven by higher operating margins and continuing cost optimization efforts undertaken during the year.
Adjusted EBITDA margin increased to 14.4%, compared to 12.4% in the prior year quarter.
For the full year, Revenue decreased 2.8% to $508.6 million from $523.1 million due to lower volumes in certain verticals and the migration from onshore to higher margin offshore and nearshore regions.
Growth in our Retail & E-commerce, HealthTech, and Travel, Transportation & Logistics verticals partially offset the above-mentioned revenue declines, particularly in the Telecommunication and FinTech verticals.
Net income and diluted earnings per share increased to $33.7 million and $1.84, both new record highs, respectively, compared to $31.6 million and $1.67, respectively, in the prior year. The increase was driven by higher gross profit margins from the growth of delivery in our higher margin regions, lower taxes, higher interest income, and fewer diluted shares outstanding.
Net income margin was 6.6%, compared to 6.0% in the prior year.
Non-GAAP adjusted net income and diluted adjusted earnings per share increased to $38.4 million and $2.10, respectively, compared to $36.9 million and $1.96, respectively, in the prior year.
Adjusted EBITDA decreased slightly to $65.2 million, compared to $66.6 million in the prior year (see Exhibit 2 for reconciliation), primarily driven by lower overall revenue and investments in technology, largely offset by improved gross margin driven by the migration from onshore to offshore higher margin regions and ongoing cost optimization efforts. Adjusted EBITDA margin was 12.8%, up 10 basis points from the prior year.
Cash Flows
- Net cash from operating activities decreased to $35.9 million, compared to $41.9 million in the prior year.
- Capital expenditures were $8.9 million compared to $19.0 million in the prior year.
- Full year free cash flow increased to $27.0 million, compared to $22.9 million in the prior year (see Exhibit 3 for reconciliation).
- Cash and cash equivalents improved to $62.7 million, compared to cash and cash equivalents of $57.4 million.
- Total debt was $1.5 million compared to total debt of $1.0 million last year.
- Net cash improved to $61.2 million, up from $56.4 million in the prior year.
Fiscal Year and First Quarter Fiscal 2025 Business Outlook“Our record financial results were largely due to the continued growth of our high margin services and geographies which drove operating performance improvement across all our regions. In the last half of fiscal year 2024, we delivered an adjusted EBITDA margin of 14.8%, placing ibex among the top performers of our industry. Our record year of generating Free Cash Flow has put us into an ideal position to continue to invest in our infrastructure, advanced AI capabilities, and our sales and marketing to accelerate future revenue growth. Importantly, it has also enabled us to execute meaningful share repurchases, representing approximately 8% of our shares outstanding, to return value to our shareholders,” said Taylor Greenwald, CFO of ibex.
“We view this most recent quarter as an inflection point for a return to top-line growth. We remain confident in the trajectory of our business.”
- For fiscal year 2025, revenue is expected to be in the range of $510 to $525 million. Adjusted EBITDA is expected to be in the range of $67 to $69 million.
- For the first quarter fiscal 2025 revenue is expected to be in the range of $124 to $126 million. Adjusted EBITDA is expected to be in the range of $14.5 to $15.5 million.
- Capital expenditures are expected to be in the range of $15 to $20 million.
