IBEX Limited (“ibex”), a leading provider in global business process outsourcing and end-to-end customer engagement technology solutions, announced financial results for its first quarter ended September 30, 2023.
First Quarter 2024 Key Highlights
GAAP Financials:
- First quarter revenue of $124.6 million was on the higher end of first quarter guidance, 2.5% less than the prior year period mainly due to continued migration from onshore to higher margin offshore regions.
- Net income increased to $7.4 million from $6.5 million in the prior year quarter. Net income margins increased to 6.0%, from 5.1% in the prior year quarter.
- Diluted earnings per share increased to $0.39 from $0.35 in the prior year quarter.
Non-GAAP Financial Measures:
- Adjusted net income increased to $7.6 million from $6.8 million in the prior year quarter.
- Adjusted earnings per share increased to $0.40 from $0.36 in the prior year quarter.
- Adjusted EBITDA increased 6.2% to $13.7 million, over the prior year quarter. Adjusted EBITDA margin increased to 11.0%, up 90 bps over the prior year quarter and in line with first quarter guidance.
Other Metrics:
- Net cash position improved to $61.1 million with total debt of just $1.0 million as of September 30, 2023 from $56.4 million as of June 30, 2023, due to strong free cash flow generated throughout the quarter (see Exhibit 4 for reconciliation).
- Repurchased 134,524 shares at a total cost of $2.0 million in the first quarter, and a total of 419,136 shares through November 8 at a total cost of $6.7 million fiscal year to date.
- Four new client relationships were established in the HealthTech, FinTech, and Technology verticals.
“We are pleased to report that we executed well this quarter, delivering strong growth in profitability, cash flow, and EPS, while revenue came in at the high end of our guidance,” said Bob Dechant, CEO of ibex. “ibex continues to improve our operating performance by executing on our strategy of shifting to higher margin services and geographies, as demonstrated by our fifth consecutive quarter of year-over-year adjusted EBITDA margin expansion. Our sales pipeline continues to strengthen, as we remain confident in our brand and our ability to win high profile new clients, with four impressive new wins to start the year. In addition, we continue to make significant progress on our initiatives integrating generative AI and automation into our delivery platforms, reinforcing our belief that these technologies represent greater opportunity than risk for ibex.”
First Quarter Financial Performance
Revenue
- Revenue was $124.6 million, compared to $127.8 million in the prior year quarter, a decrease of 2.5%. Revenues were impacted by the continued shift of delivery from onshore to higher margin offshore regions. 75% of revenue was delivered from these higher margin regions in the current quarter, up from 70% in the prior year quarter.
- Revenue growth in our HealthTech and Retail and E-Commerce verticals was offset by a decline in our FinTech vertical.
Net Income and Earnings Per Share
- Net income increased to $7.4 million compared to $6.5 million in the prior year quarter. Diluted earnings per share increased to $0.39 compared to $0.35 in the prior year quarter. The increase was primarily the result of stronger operating margins and interest income, partially offset by higher tax expense.
- Net income margin increased to 6.0% compared to 5.1% in the prior year quarter.
- Non-GAAP adjusted net income increased to $7.6 million, compared to $6.8 million in the prior year quarter. Non-GAAP adjusted diluted earnings per share increased to $0.40, compared to $0.36 in the prior year quarter (see Exhibit 1 for reconciliation).
Adjusted EBITDA
- Adjusted EBITDA increased to $13.7 million, compared to $12.9 million in the prior year quarter (see Exhibit 2 for reconciliation), driven by stronger operating results from higher capacity utilization and an increased mix of higher margin nearshore and offshore delivery.
- Adjusted EBITDA margin increased to 11.0%, compared to 10.1% in the prior year quarter (see Exhibit 2 for reconciliation).
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