Key Takeaways:
A sixth straight quarter of double-digit top-line growth at IBEX Ltd. came with a shrinking bottom line: revenue reached a record $164.3 million in the fiscal fourth quarter, 11.6% above the year-earlier $147.1 million, while GAAP diluted earnings per share dropped 11.3% to $0.59.
"Growth was broad across the four verticals for which we disclose quarterly rates," Chief Executive Officer Robert Dechant said on the earnings call, pointing to HealthTech's 42.3% expansion as the fastest-growing segment.
The quarter, ended June 30, 2026, beat the $160.0 million revenue consensus by 2.7%. Cost of services rose about 16% to $117.3 million, outpacing the top line, and operating income fell to $9.8 million from $12.3 million. Adjusted EBITDA slipped 1.3% to $20.2 million, with its margin contracting 160 basis points to 12.3%. Net income declined 8.8% to $8.7 million, a 5.3% margin versus 6.5% a year earlier. Stock-based compensation climbed to $3.3 million from $1.9 million.
Full-year results were stronger than the fourth-quarter profit trend. Fiscal 2026 revenue rose 15.4% to $644.1 million, net income advanced 25.7% to $46.3 million, and diluted EPS climbed 32.8% to $3.13 from $2.36. Annual adjusted EBITDA increased 14.5% to $82.4 million, with its margin nearly flat at 12.8% versus 12.9%.
HealthTech led the disclosed verticals at 42.3% growth, followed by Technology at 27.4%, Travel, Transportation and Logistics at 17.8%, and Retail and E-Commerce at 7.0%. IBEX secured nine new client wins in the quarter, including two strategic AI Agent deals, and said it has completed more than 10 AI Agent implementations across five verticals. The company did not quantify the revenue or profit contribution from those deployments.
Cash generation held up. Fourth-quarter operating cash flow was $24.8 million, with free cash flow of $21.7 million after $3.2 million of capital expenditures. For the full year, operating cash flow rose to $59.0 million from $45.7 million, and free cash flow reached $31.2 million. IBEX ended the period with $32.6 million of cash against $1.7 million of debt, a net cash position of $30.9 million, up from $13.7 million a year earlier. The company repurchased 0.1 million shares for $4.3 million at an average price of $29.83.
IBEX introduced fiscal 2027 revenue guidance of $700 million to $715 million, implying growth of 9% to 11% — a moderation from fiscal 2026's 15.4% pace. Adjusted EBITDA is guided to $90 million to $94 million, or 9% to 14% growth, with capital expenditures of $25 million to $30 million. First-quarter revenue is projected at $168 million to $170 million, an 11% to 12% increase, with adjusted EBITDA of $22 million to $23 million. The company did not provide a reconciliation of the forward non-GAAP guidance to a comparable GAAP measure.
Management attributed the margin pressure to training costs for new client wins and temporary inefficiencies as work moved from nearshore to offshore delivery centers. The distinction matters: IBEX said higher-margin offshore growth benefited full-year net income, while the transition itself created the fourth-quarter drag. Whether those costs prove temporary is the central question for fiscal 2027.
The stock fell 2.01% after the close, and Wall Street remains cautious — the analyst consensus shows zero buy ratings, four holds, and one sell. Institutional positioning was mixed in the second quarter: JPMorgan Chase added 299,223 shares and D. E. Shaw added 108,398 shares, while American Century removed 170,141 shares and G2 Investment Partners cut 151,780 shares. Insiders sold six times over the past six months with no open-market purchases, including 18,389 shares sold by Chief Sales and Customer Success Officer Bruce Neil Dawson for an estimated $577,467.
For holders, the quarter confirms demand is intact but profit conversion is not — revenue growth of 11.6% translated into an 8.8% decline in net income. The next test is the fiscal first-quarter report, where investors will watch whether onboarding costs roll off and whether the 9% to 11% full-year guide proves conservative or a ceiling.
This article is for informational purposes only and does not constitute investment advice.
