IBEX Limited (IBEX) 9 May 242024 Q3 Earnings call transcript

Welcome to the IBEX Third Quarter Full Year 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. To note, there is an accompanying earnings deck presentation available on the IBEX Investor Relations website at investors.ibex.co.I will now turn this conference over to Mr. Michael Darwal, Investor Relations of IBEX.

Good afternoon, and thank you for joining us today.

business want may you to and include performance, goals I on matters our assumptions. begin, based financial call are today's forward-looking and we to current that remind discussed operating on Before management's which beliefs outlook, statements related of to to new Please date subject revise those statements risks, as result forward-looking of this today. which other could of these we may factors are and that and expected results cause reflect our information call, note as uncertainties and our undertake developments, described occur.Forward-looking from opinion to various statements the this no obligation that materially differ a actual

more annual Exchange Securities a please and description Form factors, on the risk review report XX, September U.S. For Commission our XXXX. of XX-K detailed our on filed with

of now the as a reporting are X, the previous that, July as Dechant. Bob became IFRS rather from XXXX, to on and filer a than turn reminder, standards.With a call will As over domestic IBEX such, CEO, U.S. basis GAAP we I

Mike. we Thank as all joining you for everyone, XXXX thank and today afternoon, quarter our us results. third share Good fiscal you,

third an business and strategy history. included XXXX into will my to to business of the fiscal These we have quarter are on which the a AI traditional also were prior built. that For to in be short-term record the our automated $X.XX primarily the quarter serviced EPS. adjusted to we the $XX.X year. EBITDA at share million of the versus agents our the a results upon of completion delivering and EPS offers last interactions.Our EBITDA detail margin leading last initiatives agents edge for strategic from and adjusted of And the our we XX.X% was margin the output live transformation strongest results strongest I review The virtual record. delivered in have Revenues one project $XXX.X due million over year, several and then quarter, slightly I of resulted EBITDA adjusted quarter go for and adjusted down remarks briefly today, structural quarters, will operational

grow XX% business revenues XX% prior XX% to and higher to our highest prior margin and from from integrated to year. grew continue our nearshore geographies.Our margin regions omnichannel of And and revenue XX% digital-first of We our services year. offshore our grew

lower Our U.S. region of to from higher margin contracted XX% revenue XX% prior revenue, year.

the to first with 'XX. compared new trends of these the expect in continue X clients.I'm and to in new again client We wins land quarter, great in excited had XX X we XXXX totaling same FY for period expand report to we as the quarters as X

CX our our create generative lot continues to Directors' continue AI be in of velocity pipeline BPO multibillion-dollar the the Board quarter am was segue and with disruption that loaded than a with The I strategy. confidence me in with a a and management look position business long-tenured to to Our in generating shares, pipeline.The great strong intersection win our in of competitors. the is to to now their our to back demonstrating member this of our of $X relationships clients alternatives by encouraged also of signature by fitness focused We better million while XXXX. confident excitement, blue-chip AI nearly initially remains for leverage in $XX potential the and strength, to $XX cash cash approximately million in scale of leading for health in to we March, able training of our of where headlines team.Let and win.Our sheet company, and net balance by free began ability November industry. reached position million and end were discussions week the flow first the buy in compete continue with our to we more January Launch quarter.

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cannot companies, company.I in some financials. secure.Jim IBEX Wave business.Now moment the to legacy iX, and measured the over fiscal I the go before over excellence.We recognize infrastructure to take to We call organization our end approach service at our June. I to contributions been the would who IBEX systems Jim's a and world's impact now a generative and year retirement and recently the delivered has and simply for his at globally has the leadership had at of safe success IT through will the on Jim of Wave turn key agents development our overnight being announced than recognized turn X.X COVID near our XX in well thank Ferrato, pragmatic CIO, has and Jim AI-powered thousands by to consistently his agents to on His transforming and technology suite. world-class the our also from CX in more successfully are customer like to resulted X the thank our the IT solution at home for of way Taylor, Jim solutions IBEX's to Taylor company's be we as the our been in award-winning greatest decade transition and leadership business. to the had again Since enabling in call metrics. company keeping measurable spaces BPO again resilient BPO of Taylor? traditional XXXX, has to work best leaves instrumental to groundbreaking of His building the platform to joining he experience for during IT in a be years that

non-GAAP measures everyone. share, earnings GAAP you release.Our press of our financial Reconciliations call flow third cash adjusted and U.S. free in a and year results third my while strongest and net fiscal are on basis, XXXX the to from included our GAAP you, U.S. operations quarter afternoon, adjusted Bob, tables our Thank among In are net per good history. references joining and income the Thank income, non-GAAP to results, earnings EBITDA for are our discussion and a in basis. quarter net are the revenue, attached today. of cash on adjusted generated

revenue continued third wins higher our ago, delivery prior adjusted total total decline across $XXX.X our in to versus million omnichannel quarter.Our now prior was the headwinds. now million. achieved despite X.X% and project-related which impacted in EBITDA and key while Revenue revenue record the of Our region year, a decline X to in the the the represents and year of versus revenue of all results onshore digital On XX% versus costs.Revenue expected business nearshore revenue offshore year our revenue environment our revenue lower-margin prior impacted Digital of for XX services basis, geographies. offset these geographies. $XXX.X revenue comprise partially from representing XX% our completion offshore resulted in points verticals, quarter. and a quarter the omnichannel decreased revenues new lower year, in a EPS of received several and were by in margin shift grow in client our margin XX% mix also by offshore strength of The the the to year-over-year year of the margin FinTech onshore total changing telecommunication of and XX% XX% was XX% higher prior from and versus

expense attributable positive the shift in to was margins. as $XX.X $X.X change million result million tax our We these a long-term our trends delivery prior organizations. quarter. from marketing was focus expect locations investments business.Our and primarily to strategy on well X with a as the drive these strategic AI quarter compared severance we as our items. effective XX% a the jurisdictions taxable discrete changes recorded last net of important are rate ERP technology, our our well connection have $X.X income HCM our between The million, continue sales in as and as in across to was investment year. for support exit impairment and rates that and to decision revenue was of infrastructure The year our $XX.X growth in GAAP impact to pieces primarily changes These mix tax down on of periods mix XX% will million in

prior top from for expenses, and in travel, revenue $XX.X diluted XX.X% quarter. million the all-time and adjusted XX% higher well-diversified and $XX.X efforts the return year of and increased margin revenue year and of year versus remained quarter XX.X% in the revenue XX expect was XX%, quarter to of revenue quarter.Conversely, respectively, to year million increased logistics or We in XX.X% in in $X.XX quarter.Fully our our rate impairment the to to third third portfolio.Switching same $XX.X the from fiscal XX% year fourth prior basis, tax quarter. client fully period XX.X% XX.X% XX.X% increased prior increased overall diluted to largely XX% versus increased quarter, margin from quarter.Adjusted prior XX.X% the $XX.X gross prior to revenue, XX%, exposure high third Non-GAAP lower X, and primarily XX.X% Health year concentrations representative to decreased compared The per an EBITDA of $X.XX transportation a expense of in severance our revenue quarter. the Retail last year. telecommunications client quarter.For year revenue, XX% million versus $X.XX XXXX, prior earnings million $X.XX of EBITDA the by year the non-GAAP test at adjusted our net a the in quarter income vertical cost to verticals. was XX SG&A prior the from to versus our and quarterly of of top in third On quarter the unchanged compared adjusted e-commerce top during driven the optimization or undertaken to excluding prior the of year to to change increased near EPS quarter. share the in to

million strong quarter, prior of were was fiscal utilize completed revenue the consistent in the year available years. the build-out $X.X third in cash as the of capacity versus flow million Several the first of months XXXX for Free by we offshore revenue in respectively.Our $X.X some April June increased impacted in cash X.X% line with from the cash the Additionally, was quarter.Capital revenue again, from impacted for of shifts prior versus and X million $XX.X of million million in a $XX.X client ended in payments XX year a the onshore or to $XX.X respectively.We quarter. to XXXX. payment XXXX, $XX.X year and ended the with quarter end XX.X% activities for $XX.X industry million from $XX.X the expenditures year. falling million, to compared geographic landscape months quarter continue third million consistent generated or compared X.X% XX, quarter of from cash Net million XX year to XX.X% previous cash to from $X.X activities changing June of driven operating we prior quarter from were DSOs FinTech $X.X the support as our year and $XX.X was million cash, the decreased to end and, generated quarter, with was XXXX, million with the for the at client weekend quarter. as the XXXX in quarter March prior current of from DSOs the in million XXXX, $XX.X $XX.X due models March operating Free days, $X.X quarter down solid and a million down X to delivery.Net during million of of XX, the average. larger quarter on repurchases ended share flow second received by Net week XXXX, and at the current third the for

our We continued third repurchased repurchase to announced share the XX, million. through September of XXXX, $X.X authorizing program worth March shares million us on to with repurchase quarter, XXXX.During shares for XXX,XXX up $XX we XX,

outstanding X% shares For the March have of we million. X ended our months or X.X roughly shares million XXXX, XX, or $XX.X repurchased

improvements has and a results our future in regions all accelerate million and the for capabilities revenue AI advanced services across record to next of was recently continuing growth We plan of adjusted $XX geographies. accomplished Board adjusted margins growth. repurchase continued over to our new high-margin year.Our the a invest these EPS share result margin and Our EBITDA authorized while

drive continue In optimizing quarter footprint in strategy will our generating we to that to addition, higher our will in the the accelerated guidance provided we margins confident cash remain guidance, full cost lower ahead.As of revenue EBITDA by margin of be last wins to adjusted our results year We near had growth another the of free client our the anticipate strong new EBITDA while through in our offshore savings regions realize end a of years high-performing midpoint adjusted flow. delivering and quarter. site near drive margin result efforts,

expenditure well to We remain capacity improving wins will and now excited head and our strategic year guidance our are as our investments we our us position also about as continue pipeline previous client take will Bob questions. we capital carefully believe fiscal into Operator, manage and open our I line. that, recent strengthen the utilization. please business XXXX.With We

[Operator the question Koning from of from comes Baird. line Our Instructions] David first

great profitability. Yes. Congrats on

of Great. milestone of Thanks, XX%. Yes. punching the We're proud north of Dave. really

And start how know of QX little just that sales. Q were sales and but called you QX though call in call you QX activity, and unthawing on if Yes. tougher for the we I maybe on of specifically sales a the the some out it's called No, Q kind on great. day, out decisions marked -- still

into goes kind of kind than getting between those also And normal kind and better. wins? bigger size get revenue? these average better the of when kind like when are are timeline clearly things of that or of So then What's then

velocity the started year of pace that So okay? of deals size fiscal July have the beginning would our up, Dave, and seeing Yes, kind starting frame. at around to of that so pick time we been

a quarters, X bit prior running slow. the were Now little things

sits getting not continue So only and the some strength go and QX. is, so into business what to a that, quality now BPO drive me solve buckets. also them help One cetera. size they blue can lead into Dave really interactions.And AI are the about in piece in the that candidly, AI your X into talking what I of is is we're on The differentiated challengers can potential is like that incumbents, -- out the us. velocity.Now and seeing But like internally. those the my impact brands out that traditional we in QX as is well et logos. looking the I kind decision-making and you can AI looking industry to mind, we deliver leverages you is And chips, we new started why strong, is remarks logos other feel front customer the to really technology, to leading challenge how accelerate that and in of into the what my They're AI to on are there new these we're to the of and about plays discussion experience. most of excited And are that

looking. think work those well we that's the clients are us. so And really And for what X things

what to kind win. and do are everybody wants us opportunities, So ability just are think, compete and the great. the who's done, I to which size business who love the of with, we've -- The who brands the for historically of the I to are

best, one one interesting, to a gross margin bit, we've mix maybe EBITDA was able the on geographic And margin margin you is happening was I good, Like super down little mix was -- particularly margin? really the the seen. what's a what just think, was the with do But of The or revenue you. follow-up. obviously. even then like that? gross a It are ever strong. it How Got

to geographies. as we take the let Dave, high-margin is built we want our to one me we color that that and more then, this add look, this. business and cut the at structurally grow so services think first we've if Taylor, some grow, But that solid is on we in you

those growing kind of that region. U.S. I now, Philippine think we you our And and our localized put X% our Now landing so continues region ceiling But into our regions.And think to expanding with headwinds, business, was but I lower-margin overall a those few nearshore and of is about rise. year. that to have right down I clients are our to headwinds we those structure together. me, and shared are from region, And prior

bounces so structure.Now you our off -- should all look QX. able align. have what solid really and a happened a but bit And margins, we Taylor, in more overall gross margin or a quarters, maybe as a to feel connect want should to have over as continues the I of And next ceiling some little might And you that's gross of quarter the kind into those margin that of that like so out gross around give vectors be rise to color regional I might those here as performance result of details, that cetera. several et

had we've improving And absolutely. of No, gross track margins. impressive record an

recently, seen also improvement at X we've initiatives a improved regional the you services look combination, higher a margins And we're good specific past we've could like in margin the gross going those driving basis. geographies, X on traction which initiatives. a has mentioned, we really, have and our margins.And drive where couple and helped into it's with had Bob then as in gross year-over-year quarters, higher improvement margin margins If gross thought we of

of really margin well So it's as a improvement initiatives as services. combination profit higher

to the back I like This remarks. it question-and-answer for to session. closing Dechant concludes Bob turn would now

you. Operator, thank

achievement Thank forward we and thank be to of believe we that, you the to are an quickly, trajectory team next the chatting also you. this quarter this of I'm presents with and leading milestones AI about proud were transformation.With us very the we the that very posted on excited opportunities the going said of and our all results and joining, real I'm that team. business from as look those this quarter. quite So really where you edge for

for participation program. today's does in the you conference. conclude Thank This your

disconnect. now may You