ibex Raises FY2027 Outlook After Q1 Revenue Grows 16%

ibex (IBEX) raised its fiscal 2027 outlook after first-quarter revenue increased 16% year over year to a record $175.2 million, supported by growth across key verticals, market-share gains with existing clients and expanding AI agent activity. Adjusted EBITDA rose faster than revenue, increasing 29% to $25.2 million as the company benefited from higher-margin services and operating leverage.

For the fiscal year, ibex now expects revenue of $720 million to $735 million, representing growth of 12% to 14%, compared with its previous forecast of $700 million to $715 million. Adjusted EBITDA is projected at $96 million to $99 million, or growth of 17% to 20%, up from the prior range of $90 million to $94 million. The company expects capital expenditures of about $30 million, versus its earlier range of $25 million to $30 million.

Revenue Growth and Margin Expansion

Organic revenue also grew 16% in the quarter ended September 30, 2026, marking ibex’s seventh consecutive quarter of double-digit organic growth. Onshore revenue increased 37%, driven by the company’s higher-margin digital acquisition business and HealthTech operations, while offshore revenue rose 14%.

HealthTech was the strongest named vertical, with revenue up 40% year over year. Travel, Transportation and Logistics revenue increased 16%, Technology grew 10%, and Retail and E-commerce advanced 9%. Revenue categorized under other verticals rose 31%. The company also cited accelerating revenue from AI agent solutions.

GAAP net income increased 23% to $14.8 million from $12.0 million, while diluted earnings per share rose 20% to a record $0.99 from $0.82. Revenue growth in higher-margin offerings and regions, together with lower selling, general and administrative expenses as a percentage of revenue, supported profitability.

Those benefits were partly offset by higher income tax expense. The first-quarter tax rate rose to 19% from 11% a year earlier, primarily because of changes in the revenue mix across taxable jurisdictions and favorable discrete tax benefits recognized in the prior-year quarter.

On a non-GAAP basis, adjusted net income increased 25% to $16.4 million, and adjusted diluted EPS rose 21% to $1.10. Adjusted EBITDA margin expanded by 150 basis points to 14.4% from 12.9%, reflecting an improved gross margin and SG&A leverage.

Client Growth and AI Deployment

ibex reported market-share gains among existing customers, with revenue from its top five, top 10 and top 25 clients increasing 14%, 13% and 18%, respectively. Client revenue retention exceeded 99%, while the company reported a client net promoter score of 83 and an employee score of 82.

Client concentration declined from a year earlier. The top five customers accounted for 34% of revenue, down from 37%, while the top 10 represented 53%, compared with 55%. The largest customer contributed 9% of revenue, down from 10%. ibex had 78 clients generating at least $1 million in annualized revenue, approximately 22% more than a year earlier.

The company secured four new clients during the first quarter after nine wins in the fourth quarter of fiscal 2026. Since the end of the latest quarter, it also recorded four new AI agent wins and three verbal wins for traditional business-process outsourcing services.

ibex is pursuing its AI agent strategy through a partnership with Sierra, combining ibex’s customer-service operations, business insights and technology integration with Sierra’s conversational AI platform. The presentation indicated that AI agent deployments can be completed in four to six weeks and said the company has more than 10 deployments across five vertical markets.

Cash Flow and Balance Sheet

Operating cash flow reached a first-quarter record of $16.3 million, compared with $15.7 million a year earlier. Non-GAAP free cash flow increased to a record $9.2 million from $8.0 million. Capital expenditures declined to $7.2 million, or 4.1% of revenue, from $7.6 million, or 5.1%.

Days sales outstanding increased to 72 days from 69 days at the end of the preceding quarter and 71 days a year earlier. ibex ended the quarter with $36.7 million in cash and cash equivalents, $1.7 million of debt and net cash of $35.0 million.

During the quarter, the company repurchased approximately 123,000 shares for $4.4 million at an average price of $35.92. Another $13.5 million remained available under its repurchase authorization.

The fiscal 2027 outlook remains subject to risks including the company’s ability to win and retain clients, maintain utilization and pricing, control costs and compete effectively. Other uncertainties identified by ibex include economic and foreign-exchange volatility, management of international operations, client insourcing, workforce retention, cybersecurity and data-protection requirements, tax matters, geopolitical disruptions, and the company’s ability to develop and deploy AI-based solutions that meet changing customer needs.