IBEX Posts Record Revenue and EPS

IBEX(NASDAQ:IBEX) reported fourth quarter and fiscal year 2025 earnings on Sept. 11, 2025, delivering record annual revenue of $558.3 million, up 10% year-over-year in fiscal 2025 (period ended June 30, 2025), adjusted EBITDA of $72 million, and adjusted EPS of $2.75, up 31% year over year. Significant expansion in digital and offshore services, accelerated AI integration, and robust free cash flow (non-GAAP) of $27.3 million for the year and $23 million in the fourth quarter marked a transformative year, positioning the company for continued outperformance.

The call featured material updates on strategic AI progress, geographic diversification, and detailed fiscal 2026 guidance.

AI leadership accelerates IBEX competitive advantage

Digital and omnichannel service revenue grew 25% year-over-year in the fourth quarter, now comprising 82% of total revenue in the fourth quarter, up from 65% at the time of the IPO in 2020. Management cited a shift from proof-of-concept to scalable AI solution deployments with clients in the quarter, representing a tangible pivot in IBEX’s business model.

"Importantly, this past quarter, marked the shift from proof of concept for our AI solutions to full-scale deployments. Setting the table for future growth. Fiscal 2025 was a milestone year across many fronts. Including our successful entry into India. When we IPOed the company in August 2020, we were early in our strategy. And a work in progress company. We believed in ourselves and our strategy, and what an amazing journey this has been. Today, we have built IBEX into a structurally strong company that is outperforming the market and is well positioned for the future. Let me highlight the current state of IBEX. We are a growth leader. Revenue grew 10% in fiscal 2025, while many of the largest players saw low single-digit or negative growth. We have a strong margin profile that continues to expand, though the increase was modest as growth in our higher-margin services and geographies was largely offset by increased SG&A expense. Our balance sheet is very healthy with zero net debt and strong free cash flow generation. More than 80% of our business is higher valued digital first and integrated omnichannel support. We have a powerful new logo engine that continues to win high profile clients an operational team that outperforms. And we believe we are the early leader in bringing compelling AI CX solutions to market for our clients. All this gives me, our leadership, and our board great confidence as we look ahead to the next three to five years."
-- Bob Dechant, CEO

This advancement in AI solution deployment expands IBEX’s value proposition, supporting above-industry growth rates as automation and complex customer engagement needs converge.

Offshore and digital expansion drive margin improvement

Offshore operations accounted for 49% of revenue in the fourth quarter and 51% for the full year, each representing double-digit year-over-year growth, while gross margin held firm at 31.4% in the fourth quarter. Capital expenditures rose to $18 million (3.3% of revenue) in fiscal 2025 as IBEX invested in capacity and technology for profitable geographies and services.

"Our focused efforts to grow our higher margin offshore delivery locations are continuing to have a favorable impact on bottom line results. Offshore revenue grew 17% from the prior year and comprised 49% of total revenue, allowing us to maintain our strong gross margin of 31.4%. Revenue mix in our higher margin digital and omnichannel services also continues to be strong. Digital and omnichannel delivery represented 82% of our total revenue, an increase from 77% in the prior year quarter, and grew 25% versus the same quarter a year ago."
-- Taylor Greenwald, CFO

Geographic and service mix optimization enables IBEX to counter industry cost pressures, fund reinvestments, and expand margins without sacrificing growth or client concentration risk.

Disciplined capital allocation underpins shareholder value

IBEX moved to a net cash position of $13.7 million by the end of the fourth quarter despite executing $77.2 million in share repurchases during the year, including a major $70 million buyback from its parent (TRGI) during the year, resulting in lower diluted shares outstanding and driving a 31% year-over-year surge in adjusted EPS.

"Positively impacting EPS growth were fewer diluted shares outstanding due to our share repurchases totaling 3.9 million shares during fiscal 2025. Which includes the repurchases of 58,000 shares in the fourth quarter for $1.7 million. Our weighted average diluted shares outstanding for the quarter were 14.5 million versus 17.6 million one year ago. Moving to non-GAAP measures. Adjusted EBITDA increased to $20.5 million, or 13.9% of revenue, in the fourth quarter, up from $17.9 million, or 14.4% of revenue, in the same period last year."
-- Taylor Greenwald, CFO

Maintaining strong liquidity alongside aggressive share repurchase activity demonstrates IBEX's capital discipline and signals confidence in both current operations and long-term intrinsic value appreciation.

Looking Ahead

For fiscal 2026, management projects revenue between $590 million and $610 million and adjusted EBITDA (non-GAAP) between $75 million and $79 million, with first quarter revenue expected to be between $143 million and $146 million and adjusted EBITDA (non-GAAP) projected at $17.5 million to $19 million for the first quarter. Capital expenditures are planned at $20 million to $25 million for the year, and the normalized tax rate is expected to range from 20% to 22% going forward. Management expresses confidence in sustaining growth momentum through further AI integration, expansion in high-margin geographies, and continued diversification of the client portfolio.

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