IBEX Limited (IBEX) 16 Nov 222023 Q1 Earnings call transcript

Welcome to the IBEX First Quarter and Fiscal Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s call is being recorded. To note there is also an accompanying earnings deck presentation available on the IBEX Investor Relations website at investors.ibex.co. this to turn now will conference Mr. over I Darwal with IBEX. Michael may begin. you Sir

Good us for you afternoon thank and joining today.

to include Before we discussed statements goals may matters beliefs outlook, management's which you remind performance are related and forward-looking based business begin, I on want today's to our financial operating current on that and call result undertake as of information of this date Please that forward-looking these the may this which note developments, revise statements and new of no we occur. assumptions. as to a reflect our opinion obligation call

various are subject differ uncertainties statements and that Forward-looking factors those could from our to described to risks, result and actual other today. expected cause materially

our X, to Bob For I'll Securities the review factors, over US please report XXXX. turn Exchange it filed CEO. a description our on Commission With with more and of that, October risk on detailed Dechant, annual Form XX-F

quarter us of am for we business you, market share thank you well face how perform Thank all continues first conditions. XXXX current everyone, and our to Good in today as Mike. proud of fiscal the joining the results. afternoon, our extremely I

trailing of well-above XX.X% million record results million, by $X.X basis, the company's or and since XXXX, $X.X BPO XX% X.X $XXX.X in on We those $XX.X adjusted up total clients cash very to million million EBITDA $X.X revenue of rates, $XX.X while from historical strong an Adjusted new delivered free our On was led year XX% Our first revenues. which million. was million. XX% won impressive quarter. revenue quarter increased FY XX% to growth increased growth from across year-on-year board. XX.X%. and growth a best This prior Adjusted income our million XX-month $XXX.X net of to flow our were the $X.X million year-on-year EBITDA now of increased was XX.X% to highlighted by clients represent comprised

new successfully navigate clients win well elite choppy conditions. continues been to all market been across has has business engine economy This verticals. blue-chip in leading our powerful strategic all perform to waters built new Our logo and that our and by clients both fueled

outperform ability share key rapid client a The expand business result partnerships, our sizable and land leads competition in KPIs, to to resulting Our and gains. in client enviable that on diversification. vertical our market is both is

our well structurally standpoint built is to where digital-only a and grow. continues and IBEX mix omni-channel Additionally, of today digital overall from support is integrated business XX%

business in recall, you joined our when voice-only. XXXX, of I If XX% was IBEX May of

strategically a in and we positioned secular new healthcare to on interactions. a three clients In of capitalize leading we are trends As growth company quarter, the result, digital-first including customer won the both launches a QX client we in top-tier growth XXXX, significant growth we potential. company quarter. have FY new high wins late the the in had economy with new XX had Along who

marketing we in grows, year investments brand great continues another [Technical and build As organization year. expand our of revenue a and result, expect and pipeline our take into our the new fiscal to as hold. reputation added And our sales non-linearly by Difficulty]

wins to XX% to remarkable XX% over with and now healthtech our strategic in continue deals. of continue up We growth of we'll of pipeline with our business year-over-year. grow verticals represent our two do XXXX, late-stage job from verticals a key QX These and XX% approximately FY and fintech in recent

wallet. is where for embedded to revenue our vector increased share base resulting we growth of and within expand our expansion in an continue Another land key clients

services new as clients. and we won expand geographies since our With annual five new new with been has rate revenue clients over FY the last XXXX, retention greater XXX% into these the than years

of XX. increased Our in any the NPS has high and industry score to BPO as strong our rating as continues client retention an to be extremely

multibillion selected sought-after Recently, we Place Women the and Philippine IBEX. X.X across globe resonating Philippines We Place capabilities with blue-chip multiple first Daily BPO of were technology win company best as and competitors. IBEX's the and row. in across the for employers differentiate as our This both recognized large In Work unparalleled new were ability a Best economy-only to year well winning stack pure-play In and the differentiated Work traditional culture we for X third named our CALA, we as focused transforming new to competitors Philippines, are highlights with Wave against a highly Best both our Statista. awards. digitally the clients brands. Inquirer dollar clients economy clients well by digitally new were are one to and

While BPO Gender and Inclusivity Diversity in awards. we Pakistan, and won the best

to the continue the Technology be Customer X key technology CUSTOMER won Award Experience Award the as honoring by magazine. technologies as well. of Product Wave customer service Center Award Contact company excellence for embracing a noticed Year and Our for tool Innovation

Executive one Female we to and we named our over the industries. at that increase generate fiscal per of number track year client full our record awards million leaders Globee by care expect key These wins end Casteel, XX throttle. $X run as as leaders IBEX among Women Julie Awards. continues to new of thought new approximately who and proud innovators, that and movers annum to With contact in best incredibly the the the continues customer are my remains and we XX of logo World diversification engine XXXX of distinguish market Year important Lastly, to is Today, over our industry have client strengthen. clients center

to same very basis XX.X%. in realize XX.X% prior meaningful a two grow our years. over improvement margin the year resulted to points margin to out million, margin the we This to EBITDA sell built $XX.X healthy over expect adjusted to as EBITDA growth prior continue on Moving capacity available and we Adjusted over the XXX improvement quarter profitability. period into year and improved last

the business. to about few talking macroeconomic conclude, I environment. and to challenges let continue Before pressures minutes Inflation the a wage me add spend

a on meeting and delivering basis Our shareholders. challenges, these on for team daily focused clients both results and is

our as our them, incurring is and all trading continue contact in this present see and resiliency was pressures the with – is operating to example growth, struggle clients, have and regions. US-based a able of We an and business of This opportunities IBEX clients with sustainability built margins, themselves, for Our large achieve built centers. own and already cost business. strategic the our client. great to a we strong exit difficulties low-margin XX.X% into solution downturns capacity especially our with their while

I uniquely on positioned eliminate us gain these trends. to well Additionally, to we continue our of clients bottom-performing wallet, believe important positions are capitalize vendors. operational share as to stellar look performance to

to confident forward and beyond, the we business. Looking are remainder very our of XXXX FY in

about of momentum IBEX. the remains we strong passionate Our and future are

I'd Lastly, dedication to financial go continued Karl? through guidance. to and Karl my the mission. for thank to our now I'll team to over like results turn call their the

are you, EBITDA, adjusted you fiscal afternoon, while basis, everyone. and flow generated per results, XXXX Bob, net references Thank to discussions, revenue, earnings and from financial and IFRS income, for good our income call free first net the joining on record quarter best adjusted are Thank non-GAAP the net year my to today. share, cash an adjusted year of In to top release. attached operations basis. are in million quarter. a to highlighted a included earnings on tables by press growth our line IFRS to representing start the non-GAAP in had a Reconciliations $XXX.X prior strong on revenue to fiscal million, $XXX.X of XX.X% our We measures our quarter, year cash compared

prior QX million offset year was the a won income from that our negative growth to our revenue X.X experience continue fiscal including warrants, grew $X.X by depreciation. of were the quarter in net cohort non-recurring quarter. year fair and represents as this total absence share those million Net measurement stronger over now in costs operating $X high in BPO to prior year XXXX partially since the XX% versus in value of impact versus increase XX% increased XX% increased quarter. the primarily clients, year and year by XXXX, the driven We results, fiscal prior The of by income in

effective last value primarily annual driven $X.X increased On year quarter. non-GAAP prior with or to of to $XX.X effect basis, year the increased per quarter. $XX.X same increased earnings results, XX.X% to expect $X.X lower prior increased in the as continue by to year. well or to revenue, our BPO was income earnings adjusted We in partially fully the increase in net adjusted depreciation. higher-margin primarily EBITDA by clients rate income, with the adjusted of in increase on million up XX% $X.XX share be basis, for ramping Adjusted by growth in share period to offset diluted as new regions compared we in the Non-GAAP million to adjustment. scale. The EBITDA clients net per margin our million excluding million, growth to of fully a adjusted compared The tax associated $X.XX, fair in diluted adjusted leverage XX.X% operating compared warrant a offshore revenue continued normalized was stronger of XX% range driven the operating X.X along and costs to as

our quarter year to of the XX% For fiscal from quarter concentration last five revenue XXXX, first to overall year. top XX% of same client compared the decreased

the now prior XX% for clients account in XX% of revenue, XX top total Our down quarter. from year

and by the was year for was the in quarter, to base and Switching to HealthTech quarter are the quarter. XX% prior to XX.X% $X.X an diversify revenue of XX.X% to and to quarter, to XX.X% telecommunications in compared cash revenue FinTech increased quarter versus transportation due offset revenue generated our partially cash generated make. capital. $XX capital and year in progress primarily increased verticals. hard for to quarter, million of of increased travel, working worked year the million continue the our to to in versus versus e-commerce of compared prior have year XX.X% excluding increased first to operating client XX.X% Net prior operations proud vertical We the the to Retail quarter. we $X.X from XX.X% stronger logistics in prior first our versus million use of from Conversely, quarter prior results working first in decreased $X.X XX.X% year And the prior year quarterly operations quarter. of Net million the exposure revenue quarter. quarter. the

up DSOs days and days were year-over-year XX down days sequentially. Our four four

$XXX.X capacity in Non-GAAP of million line In $X.X cash, of on to million, ended XXXX. of debt down revolving increased in industry continue Total removal year as of from of down requirements. million, June first credit lease million momentum. Capital revolving increased versus by $XX.X XXXX to $X.X million the fiscal XXXX. during under as the down a $XX.X to million We total has We as below well driven pay availability XXXX, utilize revenue of of available quarter expenditures credit continued quarter of $XX.X $XX.X our quarter, $X.X X.X% XXXX, prior our June business or at net quarter. million borrowings to from of in liabilities free quarter, and million, revenue of compared prior we $XX.X facilities the mostly June total closing, September our distancing cash in including to great of debt quarter. year compared to was Borrowing $X.X or current million, the million, $X.X as a million flow with as of were average. million our of in social result be X.X% the first the $XX.X year the

We and expand multiple aggressively a business lines our business record current base across to grow of geographies. and continue pace at of

and acknowledge market partnerships, wage with uncertainty, engine, operational remain client challenging strategic environment cost based we optimistic the strengths and inflationary post-pandemic However, performance impacts on our footprint. existing pressures, the about and industry IBEX's but of outlook, new macroeconomic

our in and questions. of the We year take please confidence With forward previous I We we a result XXXX. and open now that, as guidance business, a reaffirming of degree for to Bob will fiscal look are line. have high our the Operator, success. growth continued

Truist. line the of Instructions] you. Sommer question of Our [Operator Tobey first from Thank comes

is line Your open.

Can me? Hello. you hear

you Yes, it's are How Tobey. doing? Bob. Hey,

because well. really if a wondering quarter doing on where the I Thanks. described Hey, new things conditions you launches or what's you're Great. driving of you could describe was couple your the launches? logo replace to market to How then what in in front those where you're are phenomenon your and looking terms would able offer characterize of customers recent some your drivers you underperforming vendors. in foot

Sure.

or that good at question. back target outsource. how just And that clients. is really in then I this clients work-at-home their And started had driven factors a pressure through internal the clients, have captive believe putting COVID macroeconomic whether they're that those a the there to moved challenges clients they is So outsourced of to I are replacing And new are may really they those because inflation then their jumps want existing increasing cetera. by flurry been economy that those to operations. try small agents look do our little typically whereas to or tend And call day of that. from are have don't effects captives they into bucket, and Agents of the I'll in more et the one these have wage get they've Attrition cost of up. – typically and the the what The blue-chip is to pressures, agents centers. deals

hey, to I outsourcing look say, virtuous have almost have for alternatives on into well going fits move really stay this to resilient. need react. to And you fast. that's to space. there. So then them to have where the I That I cycle look, leads

Tobey way a where that's the year started that's here trend and we that that offshore then almost seeing so that. of And the launching nearshore had And this clients real to or as we're have I some we hurdles markets as happen continue looking and several continue a believe that effect, to in we to in a ago deal at turbulence market. US with going

not a And enterprise have that with their look so – that's it ours but driver and shrinking. to of then rapidly may me not enterprise clients gets those have growing complemented this their at may may I big that have

with they deal full take volume have out running And than volumes from we're that retention that, bottom evidence from providers also IBEX, to outstanding. And have performers the As everybody as Promoter to best our performers. of have rather and our kind really going playing our to XX%, by strong that their looking they're Net that's really operationally. been numbers, because consolidate their to their top and which clients of I just with client decline they're well keep

growth that plays the IBEX so trajectory. And very to well

Thanks context. very much that for

to how that been You've margins. about of you the basis into capacity and do a the of able think growth last go-forward the – to there there sort before should and we How increases that's how added sort CapEx as that not pruning a – revive of margin is headwind? invest lower in customers long last tailwind of couple we years to you about grow on some that? the of Is less of of helping can over needing think need a ton

Yes, yes.

have capacity analysis nearshore, And exploding that really so approximately $XXX that offshore worth and that were that. markets we capacity places and million like our available has – the about of being in

feel And and we're a we look FY so of to without past XXXX mostly growth you us FY CapEx. beyond XXXX that if grow whole well into that that XXXX trajectory, at into somewhere FY lot and pushes our able

grow business. require the -- see operating of under you those belt plus next that call we're down we're as to CapEx, really those centers years over our position in under believe for some that fill And frame, into fixed will you today. already. think time a going Low CapEx, margin, are appreciation will new it, go Much kind two you Now little we but not as to want because we costs that those we a I path, costs. over of have this are do good that in geographies,

then And positioned so very strong expansion CapEx, think for free -- healthy well cash results in of result low that I the end we'll flow. a is, EBITDA which we're

queue. on things out, aspirations you building I'll needs be the direction? to position as see year and that over Xx you next that to back me two or in your focus go company for do question to the What the Xx size the get Last assuming

And are. billion. are Sure. to Yes, that's $X on an are, – organic they we aspirations track yes, our

our our radar. If you our team -- my just at on look that I in have really and trajectory and

in that need do build well logos look recipe just up then look believe look dominant markets. growth. our we is I into And for Now area like to another provincial of really become centers that to kind success accomplish would markets of market new then growth a what think today, that is of we and are and -- to win that opening nearshore which in Philippines, of continued probably move those market into, fill nearshore want -- clients rapidly. additional into an that, those a say I in India, where the markets, to and player and new our be lot I we continue do a for

and organic need we well we able Fintech, of And we higher did is that can higher the how you into that tuck-in go, expand what that do execute like know something And or do And we do that organically that a lot are we capabilities? well. acquisition, so how sticking some into where the to how that we healthcare those On certainly where build top are an and of view a I drive that margin, and extremely that are do as the look be expand to to very services of we I that, effort team spending Tobey, areas time about, though, we area my And those put to and things that's I side I that at what strategy really today, hope complementary? to accomplish to firm those value a keep think that we're the thinking look services. at up. and top line really and bottom are looking to line have moving and aggressively

you. Thank

over back call remarks. the to Difficulty] [Technical questions further no showing Bob I'm Instructions] Dechant [Operator

excited Valerie, want just to all for for on hopefully, being I in on getting thank turning all our results. holiday thank time all me. call business continued a And really you a to you, and management season. in over for and you this have thank Yes, to it quarter my today. the Thanksgiving team look We're operator now with healthy delivering about forward and you and And happy together that from and

you all, your IBEX. and So thank confidence in

Ladies and gentlemen the this all concludes Difficulty]. [Technical you for conference. Thank