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IBEX
Earnings call · Jun 2026 (Q4 FY26)

IBEX Q4 FY26 earnings call IBEX

Sep 10, 2026 Source

Executive summary

IBEX Q4 FY26 — Record Performance Driven by AI-Enabled Solutions and Strong Client Growth

IBEX delivered a strong Q4 and record FY26, driven by double-digit revenue growth and significant expansion in its Health Tech vertical. The company's strategic partnership with Sierra AI is establishing it as a leader in AI agent solutions, turning a perceived threat into a growth opportunity and differentiating it from traditional BPO competitors. Management is confident this momentum, coupled with a healthy balance sheet, will drive continued outperformance in FY27.

Highlights

5

  • Record Q4 revenue of $164.3 million, up 12% YoY, marking the sixth consecutive quarter of double-digit growth.

  • Full-year organic revenue growth of 15% to $644.1 million, with record adjusted EBITDA ($82.4M), EPS ($3.13), adjusted EPS ($3.52), operating cash flow ($59M), and free cash flow ($31.2M).

  • Health Tech vertical grew 42% in Q4 to $29.4 million and 38% for the full year to $114 million, significantly surpassing the $100 million target.

  • Client retention rates north of 99% and a world-class Net Promoter Score of 71, alongside an employee NPS increase from 77 to 82.

  • Added nine new trophy logos in Q4, bringing the annual total to 17, with top 5, top 10, and top 25 client revenue growing 24%, 22%, and 15% respectively for the year.

Concerns

5

  • Q4 GAAP net income decreased to $8.7 million from $9.6 million YoY, primarily due to training expenses for new client wins and temporary work transfer impacts.

  • Q4 adjusted EBITDA decreased slightly to $20.2 million (12.3% of revenue) from $20.5 million (13.9% of revenue) YoY, impacted by new client expenses, work transfer, and higher fuel prices.

  • GAAP fully diluted EPS was $0.59, down from $0.66 in the prior year quarter.

  • Telecommunications vertical decreased to 9.4% of revenue from 10.9% YoY due to lower volume from legacy carriers.

  • FinTech vertical revenue was up 3% but decreased as a percentage of total revenue to 9.7% from 10.6% YoY.

Guidance & targets

CategoryTargetConfidence
Fiscal Year 2027 Revenue
$700 million to $715 million
high materiality
High
Fiscal Year 2027 Adjusted EBITDA
$90 million to $94 million
high materiality
High
First Quarter Fiscal Year 2027 Revenue
$168 million to $170 million
medium materiality
High
First Quarter Fiscal Year 2027 Adjusted EBITDA
$22 million to $23 million
medium materiality
High
Fiscal Year 2027 Capital Expenditures
$25 million to $30 million
medium materiality
High
Normalized Tax Rate
20% to 22%
medium materiality
High
Adjusted EBITDA Margins
return to expanding
medium materiality
High
DSOs
remain stable in the low to mid-70s
low materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Onshore
Growth driven by clients won and launched during FY26, including several in the higher margin Health Tech vertical. Comprised 28% of total revenue in Q4, up from 27% in prior year quarter. Full-year growth was 25%.
—15%——
Offshore
Highest margin region. Comprised 50% of total revenue in Q4. Full-year growth was 16% and comprised 51% of total revenue.
—14%——
Nearshore
Full-year growth was 5%.
—2%——
Health Tech
Significantly surpassed the $100 million revenue goal for the fiscal year. Strong performance with big payers and specialty areas like non-emergency medical transportation. Expected to be an important growth vector in FY27 and beyond.
Q4 Revenue as % of total: 17.9%Prior Q4 Revenue as % of total: 14%Full-year growth: 38%Full-year revenue: $114 million
$29.4 million42%——
Technology
Continued growth in multiple offshore geographies and new client wins.
Q4 Revenue as % of total: 8.4%Prior Q4 Revenue as % of total: 7.4%Full-year growth: 26%
—27%——
Travel, Transportation, and Logistics
Continued growth in multiple offshore geographies and new client wins, including successful AI agent deployment with Philippine Airlines.
Q4 Revenue as % of total: 14.5%Prior Q4 Revenue as % of total: 13.8%Full-year growth: 17%
—18%——
Retail and E-commerce
Continued growth in multiple offshore geographies and new client wins. Winning market share against competitors, particularly in low-cost markets like Pakistan.
Q4 Revenue as % of total: 24.2%Prior Q4 Revenue as % of total: 25.3%Full-year growth: 14%
—7%——
Telecommunications
Lower volume from legacy carriers, representing a decrease in exposure to this lower margin vertical.
Q4 Revenue as % of total: 9.4%Prior Q4 Revenue as % of total: 10.9%
————
FinTech
Revenue was up 3% but decreased as a percentage of total revenue.
Q4 Revenue as % of total: 9.7%Prior Q4 Revenue as % of total: 10.6%
—3%——

Deals & partnerships

Sierra AI Strategic partnership to provide AI agent solutions

Establishes IBEX as a leading provider of AI agents, combining best-in-class AI agent engine with IBEX's business insights to deliver cost savings and high-quality AI-driven interactions. Includes double-digit client deployments across five verticals.

Philippine Airlines AI agent solution deployment

IBEX beat out pure-play AI tech companies and traditional BPO peers to win this contract with an existing client. Strong early proof point of winning in the BPO 3.0 market.

BJ's Wholesale Club AI agent solution deployment, leading to human agent services

New trophy client win where IBEX led with its AI solution. Illustrates ability to lead with AI, deliver meaningful client outcomes, and then win additional business (land and expand model).

Leading luxury activewear brand Human agent support alongside AI solution long-term agreement

Sierra introduced IBEX to this brand seeking a partner to scale human agent support. IBEX signed and launched a proof of concept quickly and then a long-term agreement after outperforming the incumbent vendor.

Risks & headwinds

Training expenses for new client wins Q4 FY26

Primarily driven Q4 GAAP net income decrease and adjusted EBITDA decrease

Mitigation:Expected adjusted EBITDA margins to return to expanding in Q1 FY27.

Temporary impact of work transferring from nearshore to offshore delivery centers Q4 FY26

Primarily driven Q4 GAAP net income decrease and adjusted EBITDA decrease

Mitigation:Expected adjusted EBITDA margins to return to expanding in Q1 FY27.

Impact of higher fuel prices on utility and transportation expenses Q4 FY26

Primarily driven Q4 GAAP net income decrease and adjusted EBITDA decrease

Mitigation:Expected adjusted EBITDA margins to return to expanding in Q1 FY27.

Lease termination losses and severance expense Q4 FY26

$2 million

Mitigation:Associated with a shift of work from nearshore to offshore regions, included in GAAP results.

Lower volume from legacy carriers in Telecommunications vertical Q4 FY26

Telecommunications vertical decreased to 9.4% of revenue from 10.9% YoY

Mitigation:Company is diversifying away from lower margin verticals.

What to watch in Q1 FY27

Adjusted EBITDA margins

Q1 FY27
Current 12.3% (Q4 FY26)
Target expanding

Why it matters

Indicates recovery from Q4 pressures (training costs, work transfer, fuel prices) and validates operational efficiency.

We expect adjusted EBITDA margins to return to expanding in the first quarter of fiscal year 2027.

Q&A highlights

Is the recent acceleration in growth already benefiting from AI, or is AI an accelerating factor for future years?

Management believes the Sierra AI partnership differentiates IBEX from competitors, helping win new logos and creating a new dimension for growth. AI agent solutions allow for rapid scaling (20-40% enterprise volume) that would take much longer with human agents, effectively future-proofing the business.

“Because if you think about our implementations, we go from a proof of concept to rapidly, you know, full deployment. We go to 20% to 40% of their enterprise volume, as I highlighted in those case studies. Now, do you know how long that would take to hire to 20% to 40% on the human side between training and hiring? It takes a long time to build that type of scale. And now we are building that scale almost immediately with the scale of the AI agent solution.”

asked by Jacob Haggarty · answered by Robert Dechant

3 min read 6 chapters

Detailed narrative

AI Agent Solutions Driving Growth and Differentiation

IBEX has strategically partnered with Sierra AI, positioning itself as a leading provider of AI agents. This collaboration allows IBEX to offer integrated solutions that deliver both effective AI agent call containment and high customer satisfaction, addressing a market gap where many AI solutions fall short on ROI or quality. The company has achieved significant traction with double-digit client deployments across five verticals, turning the perceived threat of AI for BPOs into a growth opportunity.

Successful AI Deployments and 'Land and Expand' Model

The company highlighted four case studies demonstrating the success of its AI strategy. These include winning an AI agent partnership with Philippine Airlines, achieving over 20% resolution rates and high CSAT scores, and leading with AI for BJ's Wholesale Club, where resolution rates exceeded 40% and CSAT scores surpassed human agent performance. This success has led to the expansion of traditional human agent services, illustrating a powerful 'land and expand' model where AI solutions drive new business and subsequent growth.

Strong Client Acquisition and Retention

IBEX's 'flywheel' strategy, combining differentiation, operational outperformance, and high client retention, continues to yield results. The company added nine new 'trophy logos' in Q4, totaling 17 for the year, across multiple verticals and geographies. Client retention rates exceeded 99%, and the client Net Promoter Score remained at a world-class 71, indicating strong client satisfaction and loyalty. Revenue from top clients also saw significant growth, with top 5, top 10, and top 25 clients growing 24%, 22%, and 15% respectively.

Vertical Market Outperformance, Especially Health Tech

The Health Tech vertical was a standout performer, growing 42% in Q4 to $29.4 million and 38% for the full year to $114 million, significantly exceeding the $100 million target. This growth was organic and is expected to be a key vector for FY27. Other verticals like Technology (27% growth), Travel, Transportation, and Logistics (18% growth), and Retail and E-commerce (7% growth) also contributed positively, demonstrating broad-based strength and diversification.

Operational Efficiency and Employee Engagement

IBEX continues to improve its operational efficiency and employee engagement. The employee Net Promoter Score increased from 77 to 82 with a 95% participation rate, placing the company in a leading position across industries. This high employee satisfaction is considered a competitive moat and a foundation for consistent outperformance. The company also structurally built its growth vectors in high-margin regions, services, and vertical markets, expecting continued long-term margin growth.

Financial Performance and Capital Allocation

Fiscal year 2026 was a record year for revenue, adjusted EBITDA, EPS, adjusted EPS, operating cash flow, and free cash flow. The company generated $59 million in operating cash flow and $31.2 million in free cash flow. Capital expenditures increased to $27.8 million (4.3% of revenue) to support offshore expansions and IT investments. IBEX repurchased 453,000 shares for $14.4 million in FY26 and authorized a new $20 million share repurchase program. The company ended Q4 with a net cash position of $30.9 million and renewed its $76 million revolving credit facilities.

AI-generated summary of the company's earnings call. Not investment advice.