Gold prices climb, set for fourth straight month of gains on rate cut cheer
Introduction & Market Context
IBEX Ltd (NASDAQ:IBEX) presented its Q1 fiscal year 2026 earnings on November 6, 2025, showcasing substantial growth across key financial metrics. Despite beating market expectations with an EPS of $0.82 versus the forecasted $0.62, the company's stock experienced a slight 1.5% decline in after-hours trading, closing at $37.42.
The customer experience technology provider highlighted its continued transformation into a digital-first business, with significant investments in AI technology positioning the company competitively in the evolving business process outsourcing (BPO) landscape.
Quarterly Performance Highlights
IBEX reported impressive financial results for Q1 FY2026, with revenue reaching $151.2 million, representing a 16.5% year-over-year increase from $129.7 million in Q1 FY2025. Net income rose significantly to $12.0 million from $7.5 million in the prior year quarter, while fully diluted EPS nearly doubled to $0.82 from $0.43.
As shown in the following chart highlighting the company's financial achievements and strategic positioning:
The company's adjusted EBITDA grew 24.9% year-over-year to $19.5 million, with margin expanding to 12.9% from 12.0% in the prior year period. Adjusted EPS showed even stronger growth, increasing 74.1% to $0.90 from $0.52 in Q1 FY2025.
IBEX's financial highlights demonstrate the positive impact of its strategic initiatives:
On a non-GAAP basis, the company continued to show strong profitability improvements:
Detailed Financial Analysis
IBEX's growth strategy has focused on expanding its higher-margin digital and omni-channel services, which grew 25% year-over-year and now account for 82% of total revenue. The company also reported 21% revenue growth in its onshore region, driven by high-margin digital acquisition services, and 20% growth in higher-margin offshore regions.
By vertical, Retail & E-commerce led growth with a 25.0% year-over-year increase, followed by HealthTech at 19.5% and Travel, Transportation & Logistics at 15.4%. The FinTech vertical showed more modest growth of 3.4%.
The following chart illustrates IBEX's performance across strategic verticals:
Client diversification remains a key strength for IBEX. The company now has 63 clients generating over $1 million in annualized revenue, up from 51 in Q1 FY2024. Particularly notable is the 67% increase in clients generating $10-20 million in annual revenue, growing from 6 to 10 over the same period.
The revenue distribution among clients demonstrates reduced concentration risk:
Cash Flow and Balance Sheet
IBEX demonstrated strong cash generation capabilities in Q1 FY2026, with net cash from operations doubling to $15.7 million from $7.8 million in Q1 FY2025. Free cash flow also showed significant improvement, reaching $8.0 million compared to $4.1 million in the prior year quarter.
Capital expenditures increased to $7.6 million (5.1% of revenue) from $3.6 million (2.8% of revenue) in Q1 FY2025, reflecting ongoing investments in technology and infrastructure. Days sales outstanding (DSO) improved to 71 days from 75 days in the prior year quarter.
The company ended the quarter with a strong balance sheet, reporting $22.7 million in cash and cash equivalents and minimal debt of approximately $1.6 million, resulting in a net cash position of $21.1 million. During the quarter, IBEX repurchased 92,000 shares for $2.7 million at an average price of $29.21 per share.
Strategic Initiatives
IBEX's presentation highlighted several strategic initiatives driving its growth. The company emphasized its early mover advantage in AI solutions, with 75+ pipeline opportunities and 15+ deployments already in progress. This aligns with CEO Bob Dechant's statement in the earnings call that IBEX has "leaned in harder, faster, I believe, than anybody in the industry on AI."
The company's technological capabilities are supported by over 400 CX & AI developers and 800+ data and quality assurance analysts. IBEX also reported strong client satisfaction metrics, with a client Net Promoter Score (cNPS) of 71, up from 68 previously, and an employee Net Promoter Score (eNPS) at an all-time high of 77.
Forward-Looking Statements
Based on its strong Q1 performance, IBEX provided optimistic guidance for the full fiscal year 2026:
The revenue guidance of $605-620 million represents an increase from the previous range of $590-610 million mentioned in the earnings article, reflecting management's growing confidence in the company's growth trajectory. Similarly, the adjusted EBITDA guidance of $78-81 million indicates expected continued margin expansion.
Capital expenditures are projected to be between $20-25 million for the full year, supporting ongoing investments in technology and infrastructure to maintain IBEX's competitive edge in the evolving customer experience landscape.
Conclusion
IBEX's Q1 FY2026 presentation demonstrates the company's successful execution of its digital transformation strategy and focus on high-value services. With strong revenue growth, expanding margins, and increasing client diversification, IBEX appears well-positioned to capitalize on the growing demand for AI-enhanced customer experience solutions.
While the market reaction was slightly negative despite the earnings beat, the company's fundamentals remain solid, with improved cash generation, a strong balance sheet, and clear strategic direction. As IBEX continues to invest in AI capabilities and expand its digital service offerings, investors will be watching closely to see if the company can maintain its growth momentum throughout fiscal year 2026.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.