Washington February 16 2023: IBEX Limited (“ibex”), a leading global provider in business process outsourcing and end-to-end customer engagement technology solutions, today announced financial results for its second quarter ended December 31, 2022.
“We delivered on a tremendous second quarter of fiscal year 2023. Driven by our strategic decision to aggressively expand capacity in our high margin regions and exit a low margin tenured client, our adjusted EBITDA and adjusted EBITDA margin both soared to record levels this past quarter. Adjusted EBITDA margin is up 450 basis points to 18%, and adjusted EBITDA is up 40% to $25.1 million,” said Bob Dechant, CEO of ibex.
“Additionally, revenue continues to grow, fueled by an enviable client list comprised of both elite blue-chip and leading new economy clients. Despite trying market conditions, our powerful New Logo sales engine continues to deliver outstanding results. Looking ahead, I am very excited about the trajectory of our business” he added.
Second Quarter of Fiscal Year 2023 Highlights
Business Highlights
- Won 4 new logos across key verticals in the quarter for a total of 7 new logos this fiscal year.
- Capacity utilization increased to 62% at December 31, 2022 from 49% at June 30, 2022 enabling significant margin improvement.
- The FinTech & HealthTech verticals continued to increase significantly to 27.9% of total revenue in the second quarter, compared to 22.3% of total revenue in the prior year quarter.
Revenue
- Revenue increased 5.5% to $139.4 million, compared to $132.2 million in the prior year quarter.
- Excluding a legacy client we exited in the fourth quarter of fiscal year 2022, revenue increased 12.6% over the prior year quarter.
- Revenue related to our BPO 2.0 clients grew 16.9% compared to the prior year quarter and now represents 77.3% of our quarterly revenue.
Net Income
- Net income and net income margin decreased to $1.9 million and 1.3%, respectively, compared to $8.5 million and 6.4%, respectively, in the prior year quarter. The decrease was primarily the result of the revaluation of share warrants driven by the improvement in the stock price.
- Non-GAAP adjusted net income increased to $11.7 million, compared to $5.2 million in the prior year quarter. Non-GAAP adjusted net income margin increased to 8.4%, compared to 3.9% in the prior year quarter (see Exhibit 1 for reconciliation).
Adjusted EBITDA
- Non-GAAP adjusted EBITDA increased to $25.1 million, compared to $17.8 million in the prior year quarter (see Exhibit 2 for reconciliation).
- Non-GAAP adjusted EBITDA margin increased to 18.0%, compared to 13.5% in the prior year quarter (see Exhibit 2 for reconciliation).
Earnings Per Share
- IFRS fully diluted earnings per share was $0.10, compared to $0.45 in the prior year quarter.
- Non-GAAP adjusted fully diluted earnings per share increased to $0.62, compared to $0.27 in the prior year quarter.
Cash flow and balance sheet
- Cash flow from operations increased to $8.3 million, compared to $3.4 million in the prior year quarter primarily due to stronger operating results partially offset by an increased use of working capital.
- Capex was $7.9 million compared to $11.8 million in the prior year quarter, as we continue to utilize capacity built in the two prior fiscal years.
- Free cash flow for the second quarter increased to $0.3 million, compared to ($8.4) million in the prior year quarter.
- Cash and cash equivalents were $38.1 million and availability on our revolving credit facilities of $71.1 million as of December 31, 2022, compared to cash and cash equivalents of $48.8 million and availability on our revolving credit facilities of $50.5 million as of June 30, 2022.
- Total borrowings were $4.5 million as of December 31, 2022, compared to total borrowings of $15.0 million as of June 30, 2022.
- DSOs were 61 days, down 1 day compared to the prior year quarter, and up 2 days sequentially.
Raising Fiscal Year 2023 Adjusted EBITDA Guidance
- Fiscal year adjusted EBITDA of $82 million to $84 million with midpoint margin of 15.1%, up from $77 million to $79 million and a midpoint margin of 14.2% previously.
Reaffirming Fiscal Year 2023 Revenue and Capex Guidance
- Fiscal year 2023 organic revenue between $545 million and $555 million with midpoint growth of 11.4% versus fiscal year 2022.
- Fiscal year 2023 capex of $18 million to $22 million.
