IBEX Limited Common Shares 2026 Q4 Earnings Call

Sir, you may begin. Good afternoon, and thank you for joining us today.

Before we begin, I want to remind you that matters discussed on today's call may include forward-looking statements related to our operating performance, financial goals, and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward-looking statements reflect our opinion as of the date of this call, and we undertake no obligation to revise this information as a result of new developments, which may occur. Forward-looking statements are subject to various risks, uncertainties, and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our annual report on Form 10-K, filed with the U.S. Securities and Exchange Commission on September 10th, 2026, and any other risk factors we include in the subsequent filings with the SEC.

With that, I will now turn the call over to IBEX CEO, Bob Dechant.

Thanks, Greg. Good afternoon, and thank you all for joining us today as we review our fourth quarter and fiscal year 2026 results. I am pleased to report that our fourth quarter marked another period of outperformance, continuing the momentum we have built throughout fiscal 2026 as we further expanded our differentiation while creating additional separation between IBEX and the rest of the traditional BPO market. We delivered record fourth quarter revenue, growing 12% to $164.3 million, bringing our full-year organic revenue growth to 15%, or $644.1 million. We also did this while generating full-year records for adjusted EBITDA, EPS, adjusted EPS, operating cash flow, and free cash flow. The quarter also marked our sixth straight quarter of double-digit revenue growth. These results demonstrate the strength of IBEX and the separation we have from the competition. We have created a powerful flywheel that enables us to consistently outperform the market.

It starts with our differentiation and proven track record, which enables us to win trophy new logo clients across key verticals. We then operationally outperform our competition, allowing us to rapidly take significant market share. As a result, we have built a business with best-in-class client retention rates. The proof points of our flywheel are clear. in Q4, our new logo engine accelerated considerably. During the period, we added nine new trophy logos, bringing our annual total to 17 wins across multiple verticals and geographies. For the year, revenue from our top five, top 10, and top 25 clients grew 24%, 22%, and 15%, respectively. This growth represents market share we are taking from our competitors.

I am proud to report that IBEX was named Partner of the Year by three different Fortune 500 companies, all of which are top 10 clients, highlighting that our clients clearly recognize the impact of our solutions on their business outcomes. In fiscal 2026, we recorded revenue and client retention rates north of 99%, indicating our ability to deliver not just for a select few clients, but across our client base. Additionally, our client NPS remains world-class at 71. While our financial results already underscore this point, it is another strong validation that our clients remain incredibly supportive of the work we are doing. On the topic of growth, earlier this year, we announced our target of growing the health tech vertical into a $100 million business by the end of the fiscal year.

During the fourth quarter, the segment grew 42% to $29.4 million and grew 38% for the full year to $114 million, significantly surpassing the revenue goal we set for the business. What makes that performance especially compelling is that this growth has been built organically and will continue to be one of IBEX's most important growth vectors in fiscal 2027 and beyond. While health tech represents a large and important vertical to us, it also serves as a strong showcase of our proven ability to build and scale new verticals organically across new geographies, further validating our ongoing investment and expansion into additional high-growth markets. One attribute of IBEX that I am particularly proud of is our ability to improve as we grow. That applies to our business, our team, and our brand.

I am pleased to report that our employee NPS increased this year from an already impressive 77 to 82, with a 95% participation rate, putting us in unprecedented territory, not only amongst traditional BPO peers, but across all industries. This is an important part of our competitive moat and a foundation for our ability to consistently outperform the competition. Fiscal 2026 also marked a transformational step forward in defining a new era of BPO, one powered by AI agents. Our strategic partnership with Sierra AI firmly establishes IBEX as a leading provider of AI agents. We bring an integrated solution to market that enables us to deliver both effective AI agent call containment and high levels of customer satisfaction. Many studies, including one by MIT, have highlighted that AI agent solutions often fall short on ROI or deliver poor-quality interactions.

Our solution is designed to deliver both significant cost savings and high-quality AI-driven interactions. It combines a best-in-class AI agent engine with our best-in-class business insights to create customer journeys that deliver the and. We formalized the strategic partnership in late January and announced it publicly in May. In that short period of time, we have achieved tremendous traction across both new and existing clients, demonstrating that our AI strategy is translating into a transformational success for our clients and IBEX. The following are four distinct and meaningful case studies that highlight the progress we are making at AI speed. In the first, IBEX beat out a pure-play AI technology company, a SaaS technology company, and a traditional multibillion-dollar BPO peer to win and launch an AI agent partnership with Philippine Airlines, an existing IBEX client.

We won the proof of concept in Q4 and reached full-scale deployment at the start of fiscal 2027. During the proof of concept phase, IBEX launched an AI agent solution in three languages, English, Tagalog, and Taglish, achieved resolution rates above 20%, and delivered CSAT above 4.7 out of 5.0, on par with our traditional human agents while our competitors struggled. Importantly, and consistent with our thesis going in, this solution is not cannibalizing our revenues. As we continue to be a critical partner, we are able to take share from our BPO competitors on the human agent side. This is a significant net win and a strong early proof point of how we intend to win in the evolving BPO 3.0 market. The second example is with BJ's Wholesale, a new trophy client win in which we led with our AI solution, not traditional BPO.

We launched in June and achieved impressive results in weeks, not months. We are attaining resolution rates above 40% and CSAT scores above 4.7 out of 5.0, exceeding the human agent scores delivered by the client's legacy BPO vendor. Based on the outstanding performance and the strength of the partnership we have forged, we now anticipate launching traditional human agents in the first half of fiscal 2027. This adds another dimension to our powerful land and expand model. We believe BJ's is a great illustration of our ability to lead with AI, deliver meaningful client outcomes, and then win additional business, proving that our AI agent solutions are not merely an ancillary offering, but a leading solution that will drive future growth. The third example comes from deploying Sierra AI on our digital customer acquisition business.

In this case, we are leveraging AI agent solutions we built to take inbound call volume that were previously handled through a traditional IVR and converting them into incremental sales opportunities for our human agents. This creates a virtuous cycle. We are easily able to scale to answer all the call volume generated through our own digital marketing efforts, efficiently convert them into additional revenue opportunities, and reinvest in new digital marketing campaigns to further expand this growing business. The last and fourth example highlights the strength of our partnership. Not only are we winning new business by leading with the IBEX Sierra solution, but we are also winning traditional CX business through the partnership. Earlier in the year, Sierra introduced us to a leading luxury activewear brand seeking the right partner to scale human agent support alongside its AI solution as the brand experiences hypergrowth.

Based on the strength of Sierra AI's partnership and the trust it had developed with the client, we signed and launched a proof of concept within 30 days. Following our outperformance versus the incumbent vendor, we signed a long-term agreement and are now executing an aggressive ramp. This is a great example of how our traditional BPO can work and now move at the speed of AI, not BPO. Each of these four solutions are driving incremental growth for IBEX, and we currently have double-digit client deployments with our AI agent solution spread across five verticals, creating additional vectors of growth. Importantly, we have now turned the perceived threat of AI for BPOs into an important growth opportunity for IBEX. The result is a business that is strategically built for today and tomorrow.