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IL

IBEX Ltd (IBEX)·Q1 2026 Earnings Summary

Executive Summary

  • IBEX delivered a record start to FY26: Revenue $151.2m, GAAP EPS $0.82, Adjusted EPS $0.90, and Adjusted EBITDA $19.5m; FY26 guidance was raised on both revenue and adjusted EBITDA .
  • Revenue and adjusted EPS grew 16.5% and 74.1% year over year, respectively; growth was driven by Retail & E-commerce (+25%), HealthTech (+19.5%), Travel/Transportation/Logistics (+15.4%), with FinTech returning to growth (+3.4%) .
  • IBEX beat S&P Global consensus: Revenue $151.2m vs $145.0m estimate*, Primary EPS $0.90 vs $0.735 estimate*; the beat was supported by mix shift to higher-margin offshore and digital services, lower SG&A as % of revenue, and a discrete tax benefit .
  • Management highlighted accelerating AI deployments and announced a new CTO hire to advance the AI roadmap, positioning AI as a medium-term margin lever .
  • Catalysts: Raised FY26 guidance, continued double-digit top-line growth, improving free cash flow and DSOs; gross margin pressure near-term from India ramp and upfront training costs despite deferred training revenue .

What Went Well and What Went Wrong

  • What Went Well

    • Record Q1 revenue and profitability metrics, with adjusted EBITDA margin up 90 bps YoY to 12.9% .
    • Strong vertical momentum and geographic mix: offshore revenue grew ~20% and digital/omnichannel reached 82% of total revenue; FinTech inflected back to growth .
    • Management confidence and strategic execution: raised FY26 revenue to $605–$620m and adjusted EBITDA to $78–$81m; “positioned us to post record first quarter adjusted EBITDA margin of 12.9%, adjusted EPS of $0.90, and free cash flow of $8 million” .

  • What Went Wrong

    • Gross margins down modestly in Q1 (and expected in Q2) due to India ramp investments and upfront training costs (with revenue deferred), even as SG&A leverage improved .
    • Telecommunications exposure continued to decline (legacy carrier volume), reducing mix contribution from that vertical .
    • FX headwinds impacted other comprehensive income (OCI) and contributed to adjustments in non-GAAP figures; foreign currency loss/gain is a reconciling item in adjusted metrics .

Financial Results

MetricQ3 2025Q4 2025Q1 2026Consensus Estimate (Q1 2026)
Revenue ($USD Millions)$140.736 $147.138 $151.179 $145.000*
GAAP Diluted EPS ($)$0.73 $0.66 $0.82 $0.735*
Adjusted Diluted EPS ($)$0.82 $0.87 $0.90 $0.735*
Net Income ($USD Millions)$10.469 $9.596 $12.042 —
Net Income Margin (%)7.4% 6.5% 8.0% —
Adjusted EBITDA ($USD Millions)$19.380 $20.450 $19.466 —
Adjusted EBITDA Margin (%)13.8% 13.9% 12.9% —
Cash from Operations ($USD Millions)$8.828 $27.937 $15.670 —
Free Cash Flow ($USD Millions)$3.561 $22.778 $8.031 —
Capital Expenditures ($USD Millions)$5.267 $5.159 $7.639 —

Notes:

  • Bold beat/miss vs consensus: Revenue $151.2m vs $145.0m estimate*; Primary EPS $0.90 vs $0.735 estimate*. Values retrieved from S&P Global.*

Segment and Mix

Vertical / MixQ1 2025Q1 2026
Retail & E-commerce (% of revenue)24.5% 26.3%
HealthTech (% of revenue)14.1% 14.5%
Travel, Transportation & Logistics (% of revenue)14.2% 14.1%
Telecommunications (% of revenue)15.4% 10.2%
FinTech (% of revenue)12.4% 11.0%
Digital & Omnichannel (% of revenue)—82%
Offshore Revenue Growth (YoY)—~20%

KPIs and Balance Sheet

KPIQ1 2025Q4 2025Q1 2026
DSOs (days)75 72 71
Shares Repurchased (units / $USD)—~0.1m / $1.7m 91,658 / $2.7m
Cash & Cash Equivalents ($USD Millions)$62.305 $15.350 $22.694
Net Cash ($USD Millions)—$13.731 $21.121
SG&A (% of revenue)——17.5% (vs 20.2% prior year)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY26$590–$610m $605–$620m Raised
Adjusted EBITDA ($USD Millions)FY26$75–$79m $78–$81m Raised
Capital Expenditures ($USD Millions)FY26$20–$25m $20–$25m Maintained
Revenue ($USD Millions)Q1 FY26$143–$146m Actual: $151.2m Beat vs guide high end
Adjusted EBITDA ($USD Millions)Q1 FY26$17.5–$19.0m Actual: $19.5m Beat vs guide high end

Earnings Call Themes & Trends

TopicQ-2 (Q3 FY25)Q-1 (Q4 FY25)Current Period (Q1 FY26)Trend
AI/Technology initiativesEntered India; AI solutions driving wins; raised FY25 guide “Shift from proof of concept to full-scale deployments”; record growth; planning AI acceleration Continued AI deployments; appointed CTO to accelerate AI roadmap; expecting AI to be a margin vector by FY27 Expanding deployments; organizational investment
Margin dynamicsAdj. EBITDA margin 13.8%; SG&A investment pressuring margins Adj. EBITDA margin 13.9%; SG&A and impairments pressured gross margin Adj. EBITDA margin 12.9%; gross margin softer due to India ramp and training cost timing; SG&A leverage improving Near-term gross margin headwinds, SG&A leverage
Vertical performanceHealthTech +20%, TTL +18.7%, Retail +14.6% YoY Retail +24.5%, HealthTech +19%, TTL +10% YoY Retail +25%, HealthTech +19.5%, TTL +15.4%; FinTech +3.4% YoY Broad-based strength; FinTech inflecting
Regional mixOffshore +19% growth YTD Offshore growth driving margin; strongest FCF quarter Offshore +~20% growth; onshore +21% driven by digital acquisition Favorable mix shift to offshore/digital
Client concentration/diversificationDiluted shares down from repurchases; concentration improving Record FCF; continued new logo wins Largest client 10%; top 5/10/25 at 37%/55%/79%; diversified portfolio Diversification improving

Management Commentary

  • CEO perspective: “We continue to drive exceptional operational delivery for our existing clients enabling us to win significant market share from our competition… progress we have made in our AI Automate Agent deployments… validates our position as a leader among our competition in the CX space.”
  • CFO on profitability drivers: “Meaningful growth of work in higher-margin offshore regions… SG&A expenses… went from 20.2% to 17.5% of revenue… tax rate was 11% versus 21%… due to a discrete tax benefit” .
  • CFO summary: “Record first quarter adjusted EBITDA margin of 12.9%, adjusted EPS of $0.90, and free cash flow of $8 million” .

Q&A Highlights

  • GenAI as catalyst: IBEX leaned “harder, faster… than anybody in the industry,” building an integrated AI-to-human model; expects AI to begin moving the needle by late FY26 into FY27 .
  • Gross margin color: Pressure in Q1/Q2 driven by India ramp (not yet at long-term margins) and upfront training costs (training revenue deferred); EBITDA margin projected ~13% for FY26 with SG&A leverage .
  • Operational resilience: Rapid recovery of Jamaican operations post-hurricane, reflecting robust business continuity and client support .

Estimates Context

MetricQ1 2026 ConsensusQ1 2026 Actual
Revenue ($USD Millions)$145.0m*$151.179m
Primary EPS ($)$0.735*$0.90 (Adjusted) / $0.82 (GAAP)
  • IBEX delivered a beat on both revenue and EPS vs S&P Global consensus; Street “Primary EPS” aligns with adjusted EPS reporting convention. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong beat-and-raise quarter: Revenue and adjusted EPS beat Street, with FY26 revenue and adjusted EBITDA guidance raised—supportive of estimate revisions upward .
  • Mix shift tailwinds: Offshore and digital/omnichannel growth (now 82% of revenue) underpin margin resilience despite near-term gross margin investment drag .
  • Margin path: SG&A leverage and tax cadence drove EPS; expect gross margin to improve as India ramps and training cohorts transition to steady-state .
  • Free cash flow execution: Record Q1 FCF of $8.0m and improved DSOs to 71 days, enabling continued reinvestment and buybacks .
  • Vertical breadth and diversification: Retail, HealthTech, and TTL remain growth engines; FinTech returned to growth; largest client at 10% and top 25 at 79%—reduced concentration risk .
  • AI roadmap as medium-term upside: New CTO and accelerating deployments position IBEX to capture AI-driven efficiency and margin expansion in FY27 .
  • Tactical implications: Near-term narrative likely focuses on sustained double-digit growth and guidance raise; monitor gross margin normalization and India ramp commentary next quarter for confirmation of margin trajectory .

Additional Data References

  • Consolidated financials (Income Statement, Balance Sheet, Cash Flow) and non-GAAP reconciliations are included in the Q1 FY26 8-K Exhibit 99.1 .
  • Prior quarter context: Q4 FY25 revenue $147.1m; adjusted EPS $0.87; record quarterly FCF $22.8m .
  • Prior two quarters trend: Q3 FY25 revenue $140.7m; adjusted EPS $0.82; adjusted EBITDA margin 13.8% .