IBEX reports record Q4 revenue, lifts fiscal 2027 outlook

IBEX (NASDAQ: IBEX ) released fourth-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

1 million, marking a 15% growth year-over-year. The company achieved significant growth in its HealthTech vertical, surpassing its $100 million target, with a 42% increase in Q4 and 38% for the full year. IBEX's strategic partnership with Sierra AI has positioned it as a leader in AI agent solutions, significantly contributing to client growth and retention. The company added nine new trophy logos in Q4, bringing the annual total to 17, with revenue from top clients growing significantly.

2 million due to new client-related expenses but is expected to expand in fiscal 2027. Management provided guidance for fiscal 2027, expecting revenue growth between 9% and 11% and adjusted EBITDA growth between 9% and 14%. IBEX reported a strong employee Net Promoter Score increase from 77 to 82, indicating high employee satisfaction and contributing to its competitive edge. The company has renewed its HSBC credit facilities, ensuring financial flexibility for future growth investments.

Full Transcript OPERATOR Hello and welcome to IBEX's fourth quarter full year 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone.

You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. co. I would now like to hand the conference over to Mr.

Greg Bradbury, Investor Relations for IBEX. Sir, you may begin. Greg Bradbury, Investor Relations 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. S. Securities and Exchange Commission on September 10, 2026, and any other risk factors we include in subsequent filings with the SEC.

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

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 5, 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 Net Promoter Score 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 HealthTech vertical into a $100 million business by the end of the fiscal year. 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 HealthTech 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 in 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 Net Promoter Score 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 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 end 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.

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. 0 market.

The second example is with BJ's Wholesale, the 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. 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. A 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 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'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 solutions 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. For many quarters, we have demonstrated our ability to outperform the traditional BPO market on the human agent side of the business.

Now we have created the ability to deliver best-in-class AI agents as well, which gives us confidence in our ability to continue to deliver on our growth trajectory both near term and long term. To summarize, we will look back on fiscal 2026 not only as another banner year across the business, but also as the start of something greater. 0—and we are confident in our ability to build on this momentum and solidify IBEX's industry leadership position. I firmly believe our business today is stronger than ever and that we are best positioned for the future.

Lastly, I want to thank my team for their tireless efforts in making IBEX the best in the industry. With that, I will now turn the call over to Taylor to go into more detail on our fourth quarter and fiscal year 2026 financial results and guidance. Taylor Greenwald, Chief Financial Officer Thank you, Bob, and good afternoon, everyone. Thank you for joining the call today.

S. GAAP basis, while adjusted net income, adjusted earnings per share, adjusted EBITDA, and free cash flow are on a non-GAAP basis. S. GAAP to non-GAAP measures are included in the tables attached to our earnings press release.

Turning to our results, we had a strong fourth quarter across many key operating metrics, including revenue, adjusted EBITDA, EPS, and free cash flow. This was our sixth consecutive quarter of double-digit revenue growth, resulting in top-line growth of 12% for the quarter. Our differentiated solutions and execution are clearly separating us from the traditional BPO pack. 1 million in the prior-year quarter.

Revenue growth was driven by vertical growth in HealthTech of 42%, Technology of 27%, Travel, Transportation and Logistics of 18%, and Retail and E-commerce of 7%. With help from growth in our AI agent solutions, we continued to win and grow in all geographic markets during the quarter. Our onshore region grew 15% compared to the prior-year quarter, driven by clients won and launched during fiscal year 2026, including several clients in our higher-margin HealthTech vertical. Our highest-margin offshore region grew 14% from the prior-year quarter, and our nearshore location grew 2%.

6% for the quarter. Onshore revenue expanded to 28% of total revenue from 27% in the prior-year quarter. Our higher-margin digital and omni-channel services also continued to strengthen, growing 12% versus the prior-year quarter to 82% of total revenue. This continued mix shift reflects the growing contribution of our digital and AI-enabled solutions and reinforces the strategic and financial impact as deployments begin to scale.

We have structurally built IBEX so that our growth vectors are our highest-margin regions, services, and vertical markets, and we expect that we will continue to be successful driving long-term margin growth. 6 million in the prior-year quarter. Results were primarily driven by training expenses related to the many new client wins in the quarter and temporary impact of work transferring from nearshore to offshore delivery centers, as well as the impact of higher fuel prices on utility and transportation expenses, particularly in our offshore region.

Our GAAP results also include $2 million of lease termination losses and severance expense associated with a shift of work from our nearshore to offshore regions, as well as impairment losses and asset disposal gains. Our tax rate was 10% versus 19% in the prior-year quarter, primarily attributable to changes in revenue mix across our taxable jurisdictions and discrete tax items, including a favorable resolution of an uncertain tax position during the current year. 66 in the prior-year quarter.

9% of revenue, for the same period last year, and driven primarily by the expenses related to new client wins, the temporary impact of work transferring from nearshore to offshore, as well as the impact of higher fuel prices. We expect adjusted EBITDA margins to return to expanding in the first quarter of fiscal year 27. In addition to our customary non-GAAP adjustments of stock-based compensation and foreign currency gains and losses, our non-GAAP results also exclude the $2 million of lease termination losses, severance expense, impairment losses, and asset disposal gains discussed above. 7 million when compared to the prior quarter.

87 in the prior-year quarter. As a company, we're pleased with the client diversification we've established over the last several years. For the fourth quarter of fiscal year 2026, our largest client accounted for 9% of revenue, and our top 5, top 10, and top 25 clients represented 33%, 53%, and 75%, respectively, of overall revenue, compared to 36%, 54%, and 79%, respectively, of overall revenue in the prior-year quarter—representative of a well-diversified client portfolio which continues to diversify with new clients. Over the past decade, we've done a tremendous job of not only retaining our top 25 clients, but also winning and growing new strategic clients.

Two great examples of this are two of our signature client wins from fiscal year 25 growing into top 25 clients and one of our signature client wins from fiscal year 24 growing into a top 10 client. 9% of fourth quarter revenue versus 14% in the prior-year quarter. 4%.