Ibex Revenue Jumps 18% in Fiscal Q4

Key Points

• Revenue rose 18.2% year over year to $147.1 million in Q4 FY2025, the fastest quarterly growth in nearly three years.

• Diluted earnings per share (adjusted) jumped 50.0% to $0.87 for Q4 FY2025, while net income margin compressed to 6.5% from 7.9% in Q4 FY2025.

• Full-year revenue and adjusted EBITDA (non-GAAP) for FY2025 both exceeded the company's raised guidance, but higher operating expenses weighed on margins.

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Ibex (NASDAQ:IBEX), a technology-focused business process outsourcing provider, announced its Q4 FY2025 results on September 11, 2025. The company reported record quarterly revenue and significant gains in adjusted per-share earnings, supported by expansion in digital and AI-driven customer experience products. Both revenue and adjusted EBITDA came in above the top end of management’s raised guidance. However, the quarter also revealed compression in net income margin as operating expenses grew, pointing to mixed trends on profitability even as the top line accelerated.

Company Overview and Business Approach

Ibex delivers customer engagement and digital transformation services to global brands. It provides solutions that combine AI-powered automation and human support to handle customer service, technical support, and sales across various sectors. The company's core offering is its Wave iX technology platform, which uses artificial intelligence to automate and personalize customer interactions, track performance analytics, and integrate multiple communication channels such as chat, voice, and email.

In recent years, it has focused on expanding digital capabilities and scaling up its AI and automation technology. Key elements of its growth strategy include entering new markets such as India, investing in employee engagement, and prioritizing digital transformation for clients. Critical success factors for the business include staying at the forefront of technology innovation, retaining skilled agents, maintaining high client satisfaction, and effective cost management given rising investment in innovation and capacity.

Quarterly Performance: Key Developments and Financial Results

The most recent quarter saw revenue climb 18.2%, the fastest growth for Ibex in nearly three years, propelled mainly by double-digit expansion in its top verticals: retail and e-commerce (up 24.5%), health technology (up 19.0%), and travel, transportation, and logistics (up 10.0%). Management cited “outstanding growth in the digital acquisition business” as a further driver. Full-year revenue came to $558.3 million, up 9.8% from the prior year, setting a new annual revenue growth record for the company in three years.

The quarter marked a shift for the company’s AI initiatives, as the Wave iX platform moved from isolated pilot programs to full-scale customer deployments. According to management, “this quarter marked the shift from proof of concept for our AI solutions to full scale deployments, setting the table for future growth.” This transition may pave the way for the company’s automated services—AI-powered tools for customer engagement and translation—to play a greater part in driving revenue and, potentially, profitability in coming quarters. Increased capital expenditures, up to $18.4 million (from $8.9 million in FY2024), primarily supported the company’s India market entry and capacity expansion in higher-margin offshore regions.

Adjustments to the business model, such as these expansion efforts, required significant staff and infrastructure investment. As a result, operating expenses grew, particularly selling, general, and administrative costs such as payroll, which increased $5.7 million compared to the prior year period. Net income margin compressed to 6.5% from 7.9% in the prior year quarter, a 1.4 percentage point decline. In addition to higher payroll, management attributed this margin compression to impairment losses of $1.4 million and increased foreign currency costs. Despite these margin headwinds, diluted earnings per share increased to $0.66, due in part to a lower share count following significant buybacks, while adjusted diluted earnings per share jumped to $0.87—a 50.0% rise year over year.

Shareholder returns were a major feature of the period. Ibex repurchased 3.9 million shares, equivalent to 23% of shares outstanding. This buyback eliminated the “controlled company” status by fully buying out a large shareholder, TRGI, according to IBEX Limited. At quarter-end, the cash balance stood at $15.4 million, down from $62.7 million a year earlier after the buybacks. Free cash flow set a quarterly record at $22.8 million, although full-year free cash flow was flat versus the prior year. Capital expenditures are expected to remain at an elevated $20–25 million level as expansion, particularly in new geographies, continues.

Technology, Digital Transformation, and Strategic Priorities

The Wave iX platform—Ibex’s suite of AI-powered technology products—sits at the center of its client services. These solutions are designed to boost agent productivity, automate routine queries with AI, and provide customers with personalized, multi-language support. By accelerating the transition from pilot to production deployment during the quarter, the company aims to differentiate itself from traditional business process outsourcers and capitalize on the industry-wide push toward digital-first, omnichannel customer experience management.

The company’s “land and expand” approach remains central, with leadership highlighting new client wins and ongoing market share gains. Its geographic diversification strategy advanced with the launch of operations in India. While management did not break out the specific revenue contribution from India, it identified the region as a high-margin opportunity and a primary recipient of increased investment. Employee engagement programs, consistently touted as competitive strengths, continue to support talent retention and service quality.

Outlook and What to Monitor Going Forward

Looking ahead to FY2026, Ibex expects revenue in the $590 million to $610 million range, representing growth of between 5.7% and 9.3% over FY2025. Adjusted EBITDA is guided to between $75 million and $79 million, translating to growth between 4.2% and 9.7%. Management expects revenue of $143 million to $146 million for Q1 FY2026. The company provided no explicit guidance on future per-share earnings.

The company plans to keep capital spending elevated in the $20 million to $25 million range to continue funding technology investments and international expansion. Areas to watch in future quarters include the pace at which full-scale AI deployments contribute to revenue and margins, whether operating expenses stabilize relative to sales, and if Ibex’s free cash flow generation recovers as investments mature.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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