IBEX (NASDAQ: IBEX) boosts Q3 2026 profit with offshore and AI-driven CX mix
Filing Impact
Filing Sentiment
Form Type
10-Q
IBEX Limited delivered strong growth for the quarter ended March 31, 2026. Revenue reached $164.4 million, up 16.8% from the prior-year quarter, driven by HealthTech, Retail & E-commerce, Travel, Technology and Other verticals, partly offset by lower Telecommunications revenue.
Net income rose to $13.3 million, a 27.3% increase, with diluted earnings per share climbing to $0.89 from $0.73. For the nine-month period, revenue grew 16.7% to $479.8 million, while net income increased 37.8% to $37.6 million and diluted EPS improved to $2.54. Margin gains were helped by higher contributions from offshore delivery centers and growth in higher-margin digital acquisition services, while the company continued investing in AI-enabled CX solutions and new capacity offshore.
Positive
- Strong top-line growth: Revenue rose 16.8% in the quarter to $164.4 million and 16.7% year-to-date to $479.8 million, driven by multiple verticals and digital acquisition services.
- Significant earnings and EPS expansion: Net income increased 27.3% in the quarter and 37.8% year-to-date, with diluted EPS up to $0.89 and $2.54, supported by mix shift and tax benefits.
- Margin improvement from offshore mix: Operating margin improved to 9.8% for the quarter and 9.4% year-to-date as more work shifted to higher-margin offshore delivery centers.
- Balance sheet and liquidity support growth: Cash from operating activities reached $34.2 million year-to-date and the company had $67.1 million available under its $75.0 million revolving credit facilities.
Negative
- None.
Insights
IBEX posts double-digit revenue and earnings growth with margin expansion driven by offshore mix.
IBEX reported revenue of $164.4 million for the quarter, up 16.8%, and nine‑month revenue of $479.8 million, up 16.7%. Growth was broad-based across HealthTech, Retail & E‑commerce, Travel, Technology and Other verticals, while Telecommunications declined.
Operating income increased to $16.2 million for the quarter and $45.1 million year‑to‑date, lifting operating margin to 9.8% for the quarter and 9.4% for nine months. Management attributes this mainly to higher volumes in offshore regions and expansion of higher‑margin digital acquisition work.
Net income rose 27.3% in the quarter and 37.8% year‑to‑date, with diluted EPS up to $0.89 and $2.54, respectively. The company is also actively deploying AI within its Wave iX platform and expanding offshore capacity, which could influence future margins, while share repurchases and tax holidays supported per‑share and after‑tax results in the period.
Key Figures
Quarterly revenue: $164.4M
Quarterly net income: $13.3M
Quarterly diluted EPS: $0.89/share
+5 more
8 metrics
Quarterly revenue
$164.4M
Three months ended March 31, 2026; up 16.8% year over year
Quarterly net income
$13.3M
Three months ended March 31, 2026; up 27.3% year over year
Quarterly diluted EPS
$0.89/share
Three months ended March 31, 2026; previously $0.73
Nine-month revenue
$479.8M
Nine months ended March 31, 2026; up 16.7%
Nine-month net income
$37.6M
Nine months ended March 31, 2026; up 37.8%
Operating margin
9.8%
Quarter ended March 31, 2026; 9.5% in prior-year quarter
Cash from operations
$34.2M
Net cash inflow from operating activities, nine months ended March 31, 2026
Available revolving credit
$67.1M
Availability under $75.0M HSBC credit facilities as of March 31, 2026
Key Terms
Business Process Outsourcing (BPO), customer experiences (CX) delivery center, Tax Holidays, cash flow hedges, +2 more
6 terms
Business Process Outsourcing (BPO) financial
"ibex delivers innovative business process outsourcing ("BPO"), smart digital marketing..."
Business process outsourcing (BPO) is when a company hires an outside firm to handle routine or specialized tasks—like customer support, payroll, IT, or data entry—so the company can focus on its main products or services. For investors, BPO matters because it can lower costs and improve efficiency like hiring a skilled contractor for chores, but it also changes a company’s profit margins, growth potential and risk profile through factors such as service quality, data security and dependence on third parties.
customer experiences (CX) delivery center financial
"The Company operates a global customer experiences ("CX") delivery center model consisting of 32 delivery centers..."
Tax Holidays financial
"We have been granted Tax Holidays as an incentive to attract foreign investment by the governments of Nicaragua, Pakistan..."
cash flow hedges financial
"Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in accumulated other comprehensive income..."
A cash flow hedge is an accounting label companies use when they enter financial contracts—like currency or interest-rate agreements—to protect expected future cash payments or receipts from unpredictable moves. For investors, it signals that the company is trying to smooth out future cash variability (think of locking in a price to avoid surprises), which can reduce reported profit swings but also means the company has exposure to derivative instruments and their associated risks.
variable interest entity (VIE) financial
"The Company consolidates variable interest entities ("VIE"), when it is deemed to be the primary beneficiary."
A variable interest entity (VIE) is a company or legal entity that an investor controls and reports in its financial statements not by owning a majority of shares but through contracts or other arrangements that give it economic rights and decision-making power. Investors care because a VIE can expose them to assets, debts and legal risks without traditional ownership—think of it like running someone else’s branch through a power-of-attorney rather than holding the keys, which can affect transparency and value.
Total Shareholder Return (TSR) Awards financial
"The Company has certain restricted stock units... based upon the Company's Total Shareholder Return ("TSR")... (the "TSR Awards")."
Earnings Snapshot
Revenue: $164.4M
Q3 2026
Revenue
$164.4M
+16.8% YoY
Net income
$13.3M
+27.3% YoY
Diluted EPS
$0.89
+21.9% YoY (from $0.73)
Nine-month revenue
$479.8M
+16.7% YoY
Nine-month net income
$37.6M
+37.8% YoY
Nine-month diluted EPS
$2.54
+49.6% YoY (from $1.70)
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 10-Q
_______________________
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2026
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from_____________to______________
Commission File Number: 001-38442
_______________________
(Exact name of registrant as specified in its charter)
_______________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(202 ) 580-6200
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
_______________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No
The number of common shares outstanding of IBEX LIMITED as of April 30, 2026 was 13,389,116 .
Table of Contents
IBEX LIMITED
Quarterly Report on Form 10-Q
For Quarterly Period Ended March 31, 2026
Table of Contents
| Page No. | ||||||||
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS | 1 | |||||||
PART I. | FINANCIAL INFORMATION | 2 | ||||||
Item 1. | Financial Statements | 2 | ||||||
Consolidated Balance Sheets (unaudited) | 3 | |||||||
Consolidated Statements of Comprehensive Income (unaudited) | 4 | |||||||
Consolidated Statements of Stockholders' Equity (unaudited) | 5 | |||||||
Consolidated Statements of Cash Flows (unaudited) | 7 | |||||||
Notes to the Consolidated Financial Statements (unaudited) | 8 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 39 | ||||||
Item 4. | Controls and Procedures | 40 | ||||||
PART II. | OTHER INFORMATION | 41 | ||||||
Item 1. | Legal Proceedings | 41 | ||||||
Item 1A. | Risk Factors | 41 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 41 | ||||||
Item 3. | Defaults Upon Senior Securities | 42 | ||||||
Item 4. | Mine Safety Disclosures | 42 | ||||||
Item 5. | Other Information | 42 | ||||||
Item 6. | Exhibits | 43 | ||||||
Signatures | 44 | |||||||
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q ("Form 10-Q") contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance. Forward-looking statements provide management’s current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements may include words such as "anticipate," "believe," "contemplate," "estimate," "expect," "forecast," "guidance," "may," "outlook," "plan," "projection," "should," "target," "will," "would" and other words, the negative forms of such words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Such forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other important factors that could cause our actual results, performance or achievements or industry results, to differ materially from historical results or any future results, performance or achievements expressed, suggested, or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to statements about:
•Our ability to attract new business and retain key clients;
•Our profitability based on our utilization, pricing and managing costs;
•The potential for our clients or potential clients to consolidate;
•Our clients deciding to enter into or further expand their insourcing activities and current trends toward outsourcing services may reverse;
•General economic uncertainty in global markets and unfavorable global economic conditions, including inflation, rising interest rates, recession, foreign exchange fluctuations and supply-chain issues;
•Our ability to manage our international operations, particularly in the Philippines, Jamaica, Pakistan and Nicaragua;
•Natural events, health epidemics, geopolitical conditions, including developing or ongoing conflicts, widespread civil unrest, terrorist attacks and other attacks of violence involving any of the countries in which we or our clients operate;
•Our ability to anticipate, develop and implement information technology solutions, including Artificial Intelligence ("AI"), that keep pace with evolving industry standards and changing client demands;
•Our ability to recruit, engage, motivate, manage and retain our global workforce;
•Our ability to comply with applicable laws and regulations, including those regarding privacy, data protection and information security, employment and anti-corruption;
•The effect of cyberattacks or cybersecurity vulnerabilities on our information technology systems; and
•The impact of tax matters, including new legislation and actions by taxing authorities.
We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. We caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other filings with the United States Securities and Exchange Commission ("SEC") and public communications. You should evaluate all forward-looking statements made in this Form 10-Q in the context of these risks and uncertainties.
We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Form 10-Q are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
1
Table of Contents
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
2
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IBEX LIMITED AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share data)
| March 31, 2026 | June 30, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Accounts receivable, net | |||||||||||
| Prepaid expenses | |||||||||||
| Due from related parties | |||||||||||
| Tax advances and receivables | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Non-current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease assets | |||||||||||
| Goodwill | |||||||||||
| Deferred tax asset, net | |||||||||||
| Other non-current assets | |||||||||||
| Total non-current assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders' equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued liabilities | $ | $ | |||||||||
| Accrued payroll and employee-related liabilities | |||||||||||
| Current deferred revenue | |||||||||||
| Current operating lease liabilities | |||||||||||
| Current debt | |||||||||||
| Due to related parties | |||||||||||
| Income taxes payable | |||||||||||
| Total current liabilities | |||||||||||
| Non-current liabilities | |||||||||||
| Non-current deferred revenue | |||||||||||
| Non-current operating lease liabilities | |||||||||||
| Long-term debt | |||||||||||
| Other non-current liabilities | |||||||||||
| Total non-current liabilities | |||||||||||
| Total liabilities | |||||||||||
Common shares: par value $ | |||||||||||
Treasury stock at cost: | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
See accompanying notes to unaudited consolidated financial statements.
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IBEX LIMITED AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
(Unaudited)
(in thousands, except per share data)
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Cost of services (exclusive of depreciation and amortization presented separately below) | |||||||||||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||
| Income from operations | |||||||||||||||||||||||||||||||||||||||||||||||
| | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||||||||||||||||||||||||||
| | |||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income tax expense | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||
| Unrealized (loss) / gain on cash flow hedging instruments, net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total other comprehensive (loss) / income | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Total comprehensive income | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net income per share | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Weighted average common shares outstanding | |||||||||||||||||||||||||||||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to unaudited consolidated financial statements.
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IBEX LIMITED AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity
(Unaudited)
(in thousands)
| Three months ended March 31, 2025 and 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| Common shares | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Changes in fair value of cash flow hedges | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of common shares | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Common shares | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Changes in fair value of cash flow hedges | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of common shares | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
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IBEX LIMITED AND SUBSIDIARIES
Consolidated Statements of Stockholders’ Equity (continued)
(Unaudited)
(in thousands)
| Nine months ended March 31, 2025 and 2026 | Common shares | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income / (Loss) | Retained Earnings / (Deficit) | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Changes in fair value of cash flow hedges | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of common shares | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Common shares | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income / (Loss) | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Amount | ||||||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Changes in fair value of cash flow hedges | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||
| Purchase of treasury shares | ( | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Issuance of common shares | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Shares withheld related to net share settlement of equity awards | ( | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to unaudited consolidated financial statements.
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IBEX LIMITED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
| Nine Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Noncash lease expense | |||||||||||
| Deferred income tax | ( | ( | |||||||||
| Stock-based compensation expense | |||||||||||
| Allowance for expected credit losses | |||||||||||
| Change in assets and liabilities: | |||||||||||
| Increase in accounts receivable | ( | ( | |||||||||
| Increase / (decrease) in prepaid expenses and other current assets | ( | ||||||||||
| Decrease in accounts payable and accrued liabilities | ( | ( | |||||||||
| Increase in deferred revenue | |||||||||||
| Decrease in operating lease liabilities | ( | ( | |||||||||
| Net cash inflow from operating activities | |||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Purchase of property and equipment | ( | ( | |||||||||
| Net cash outflow from investing activities | ( | ( | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from line of credit | |||||||||||
| Repayments of line of credit | ( | ( | |||||||||
| Proceeds from the exercise of options | |||||||||||
| Taxes paid related to net share settlement of equity awards | ( | ||||||||||
| Principal payments on finance leases | ( | ( | |||||||||
| Purchase of treasury shares | ( | ( | |||||||||
| Net cash outflow from financing activities | ( | ( | |||||||||
| Effects of exchange rate difference on cash and cash equivalents | ( | ||||||||||
| Net increase / (decrease) in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning | |||||||||||
| Cash and cash equivalents, ending | $ | $ | |||||||||
| Supplemental cash flow disclosures | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | $ | $ | |||||||||
| Supplemental non-cash disclosures | |||||||||||
| Change in accounts payable related to fixed assets | $ | $ | ( | ||||||||
See accompanying notes to unaudited consolidated financial statements.
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IBEX LIMITED AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
(Unaudited)
(in thousands, except per share amounts)
1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
OVERVIEW
IBEX Limited ("IBEX" and together with its subsidiaries, the "Company," "ibex," "we," "us," or "our") was incorporated on February 28, 2017 in Hamilton, Bermuda. Our registered office in Bermuda is Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda. On August 7, 2020, the Company was admitted to trade on the Nasdaq Global Market under the ticker symbol "IBEX."
The Company delivers innovative business process outsourcing ("BPO"), smart digital marketing, online acquisition technology, end-to-end customer engagement, and Artificial Intelligence ("AI") solutions to help its clients acquire, engage, and retain valuable customers. The Company operates a global customer experiences ("CX") delivery center model consisting of 32 delivery centers around the world, while deploying next-generation technology to drive superior customer experiences for many of the world’s leading companies across various verticals, including Retail & E-commerce, HealthTech, FinTech, Utilities, and Travel, Transportation & Logistics. The Company leverages its diverse global team of approximately 36,000 employees together with industry-leading technology, including its Wave iX platform, to manage customer interactions on behalf of our clients, driving a truly differentiated customer experience.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation and principles of consolidation
The Company’s interim consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP") and include the financial results of all wholly-owned subsidiaries. When the Company does not have majority ownership in an entity but exerts significant influence over that entity, the Company accounts for the entity under the equity method of accounting. All intercompany balances and transactions have been eliminated in consolidation.
The Company consolidates variable interest entities ("VIE"), when it is deemed to be the primary beneficiary. The Company is considered the primary beneficiary if it has both (1) the power to direct the activities that most significantly impact the VIE’s economic performance, and (2) the obligation to absorb significant losses of the VIE or the right to receive significant benefits from the VIE.
These unaudited consolidated financial statements and accompanying notes have been prepared in accordance with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the "Annual Report") as filed with the SEC. There have been no changes to the Company’s significant accounting policies described in the Annual Report that have had a material impact on the Company’s consolidated financial statements and related notes.
In the opinion of the Company, these unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of March 31, 2026, its results of operations, comprehensive income, and stockholders’ equity for the three and nine months ended March 31, 2026 and 2025, and cash flows for the nine months ended March 31, 2026 and 2025. The consolidated balance sheet as of June 30, 2025 was derived from the audited annual financial statements included in the Annual Report.
Amounts in these interim consolidated financial statements are presented in thousands, except for share and per share data. Due to rounding, numbers presented throughout this document may not foot precisely to the totals provided.
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Use of estimates
Revenue recognition
The Company recognizes revenues for services for which control has transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring the promised services. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied as it provides services to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the service.
Revenues from contact center services, which consist of customer service, technical support and other value-added outsourced back-office services, are recognized as the services are performed on the basis of the number of billable minutes or hours, contractual rates, and other contractually agreed metrics, if applicable. Certain of our client contracts include bonus and penalty provisions. Revenues related to training that occurs upon commencement of a new client contract or statement of work are deferred and recognized on a straight-line basis over the estimated life of the client program, as it is not considered to have a standalone value to the customer. The related expenses are expensed as incurred. Revenues are recognized over time as performance obligations are satisfied and in the period in which the Company has a right to invoice, net of discounts, incentives, and/or penalties as per contractual terms. Bonuses and penalties accrue for the current billing period and do not depend on future performance. In some cases, we may estimate these bonuses or penalties using the "most likely amount" method based on actual data and historical experience.
Revenues from digital services are recognized at a point in time upon the successful consumer activation or purchase of clients’ services. We utilize third parties in the satisfaction of this performance obligation; however, because we retain control over these third parties and are solely responsible for the risk and reward associated with this performance obligation, we have determined that we are the principal in these transactions and therefore recognize revenue on a gross basis.
All of our contracts include the right to invoice for services on a monthly basis. None of our contracts include significant termination penalties, and generally may be terminated for convenience at any time with a short notice period (generally 30 to 120 days).
The Company generally does not incur significant upfront costs to fulfill or obtain a contract that would qualify for capitalization under Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers.
Trade receivables
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Concentration of credit risk
The Company is exposed to credit risk in the normal course of business, primarily related to accounts receivable and derivative instruments. Historically, the losses related to credit risk have been immaterial. The Company regularly monitors its credit risk to mitigate losses. The Company evaluates the creditworthiness of its clients prior to and throughout the life of the client relationship. The Company does not believe it is exposed to more than a nominal amount of credit risk in its derivative instruments as all of its counterparties are investment-grade financial institutions.
Property and equipment, net
Property and equipment and assets leased under finance leases are carried at cost at the acquisition date and are depreciated using the straight-line method over their estimated useful lives.
Leases
The Company determines whether an arrangement contains a lease at inception in accordance with the provisions of ASC 842, Leases. Operating leases are included in operating lease assets and current and non-current operating lease liabilities, and assets leased under finance leases are included in property and equipment, net and current and long-term debt in the consolidated balance sheets.
Contingencies
The Company is subject to claims and lawsuits filed in the ordinary course of business. Although management does not believe that any such proceedings will have a material adverse effect on its consolidated financial position, results of operations, or cash flows, no assurances to that effect can be given based on the uncertainty of litigation and demands of third parties. The Company records a liability for pending litigation and claims where losses are both probable and can be reasonably estimated. Legal fees are expensed as incurred.
Stock-based compensation plans
The Company accounts for its stock-based awards in accordance with provisions of ASC 718, Compensation - Stock Compensation. The Company calculates the fair value of option awards using the Black-Scholes model. The Company has certain restricted stock units, which are subject to service and market conditions based upon the Company's Total Shareholder Return ("TSR") as compared with the TSR of a defined set of peer companies (the "TSR Awards"). The Company calculates the fair value of the TSR Awards using a Monte Carlo model. For equity-classified awards, total compensation cost is based on the grant date fair value. For liability-classified awards, total compensation cost is based on the fair value of the award on the date the award is granted and is subsequently re-measured at each reporting date until settlement.
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Income taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are also recognized for the estimated future effects of tax loss carryforwards. The effect of changes in tax rates on deferred taxes is recognized in the period in which the enactment dates change. The Company records valuation allowances against its deferred tax assets based on whether it is more likely than not that the deferred tax assets will be realized.
Share repurchase programs
The Company’s board of directors (the "Board") may authorize share repurchases of the Company’s common shares. Purchases made pursuant to these authorizations may be carried out through open market transactions, negotiated purchases or otherwise, at times and in such amounts as the Company deems appropriate. Shares repurchased under such authorizations are held in treasury for general corporate purposes, including issuances under various employee stock-based award plans. When Company shares are repurchased, the amount of the consideration paid (including directly attributable costs, net of any tax effects) is recognized as a deduction of additional paid in capital. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are subsequently sold or reissued, the amount received is recognized as an increase in additional paid in capital, and any resulting surplus or deficit on the transaction is reclassified to accumulated deficit.
The Board will review any authorized repurchase program periodically and may authorize adjustment of its terms and size, and suspend or discontinue the program. The Company has funded and expects to fund future repurchases with its existing cash balance. The share repurchase programs do not obligate the Company to acquire any particular amount of common shares. See Note 11. "Stockholders’ Equity" for more information on share repurchases.
Variable Interest Entity
During February 2025 and in connection with our strategic expansion into India, the Company entered into an agreement with Safeguard, LLC and its controlled affiliate (collectively, "Safeguard"), an unrelated provider of Business Process Outsourcing ("BPO") services. The Company has a variable interest in Safeguard due to Safeguard's lack of sufficient equity. The Company’s variable interest includes certain lease guaranty and exposure to certain severance payment obligations for Safeguard employees servicing ibex's account. Management determined that ibex is not the primary beneficiary as ibex does not have the power to direct or control the activities which most significantly affect Safeguard's financial performance (such as engaging new clients, expanding its offerings, and engaging in financing activities, among others). Accordingly, the Company is not required to consolidate the results of Safeguard.
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Cloud Computing Software Implementation Costs
The Company incurs costs to implement cloud computing arrangements that are hosted by a third-party vendor. In accordance with ASC 350-40, Goodwill and Other, Internal-Use Software, for cloud computing arrangements that meet the definition of a service contract, the Company capitalizes qualifying implementation costs incurred during the application development stage in prepaid expenses and other non-current assets. Capitalized costs are primarily comprised of third-party consulting fees, direct labor, and related expenses. Capitalization of these costs concludes once the project is substantially complete and the software is ready for the Company's intended use. Once available for its intended use, the capitalized costs will be amortized on a straight-line basis over the term of the associated hosting arrangement including periods covered by an option to extend, and are included in selling, general and administrative expenses in the consolidated statements of comprehensive income. Costs related to data conversion, overhead, general and administrative activities, maintenance, and training are expensed as incurred.
The Company had capitalized cloud computing software costs of $3.7 million and $4.1 million, which are included in prepaid expenses and other non-current assets in the consolidated balance sheets, as of March 31, 2026 and June 30, 2025, respectively.
Emerging Growth Company
The Company qualifies as an "emerging growth company" under the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Accordingly, the Company has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies pursuant to Section 13(a) of the Exchange Act. The Company has elected to use the extended transition period until we are no longer an emerging growth company (which we expect will occur on June 30, 2026) or until we choose to opt out of the extended transition period affirmatively and irrevocably.
Recently Issued Accounting Pronouncements
In March 2024, the SEC issued climate disclosure rules, which required the disclosure of climate-related information in annual reports and registration statements. Various legal challenges were made to the rules, which were consolidated for review by the U.S. Eighth Circuit Court of Appeals. On March 27, 2025, the SEC voted to end its defense to these legal challenges. On April 24, 2025, and again on September 12, 2025, the U.S. Eighth Circuit Court of Appeals ordered that the litigation would again be held in abeyance until such time as the SEC reconsiders or renews its defense of the climate disclosure rules. Unless or until the SEC reconsiders or resumes defining its climate change rules, the litigation will remain paused. We continue to monitor for any updates and evaluate the impact of the new rules on the disclosures to our consolidated financial statements.
In November 2024, the Financial Accounting Standards Board ("FASB") issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses, which requires disclosures about significant expense categories, including but not limited to, employee compensation, depreciation, amortization, and selling expenses. The amendments in ASU No. 2024-03 are effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of the new guidance on the disclosures to our consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs under Subtopic 350-40 and requires a Company to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments in ASU No. 2025-06 are effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact of the new guidance on the disclosures to our consolidated financial statements.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which improves the guidance in Topic 270 by providing additional guidance on required disclosures for interim reporting periods. The amendments also include a disclosure principle that requires
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entities to disclose events since the end of the last annual reporting period that have a material impact on the Company. The amendments in ASU No. 2025-11 are effective for fiscal years beginning after December 15, 2027, and interim periods within fiscal years beginning after December 15, 2028. Early adoption is permitted. We are currently evaluating the impact of the new guidance on the disclosures to our consolidated financial statements.
Recently adopted accounting pronouncements
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign), and (3) the income tax expense or benefit from continuing operations (separated by federal, state and foreign). This update also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The amendments in ASU No. 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. We expect the adoption of this guidance will modify our annual disclosures, but we do not expect the ASU will have a material impact on our consolidated financial statements.
2.REVENUE FROM CONTRACTS WITH CUSTOMERS
The majority of the Company’s revenues are derived from contracts with customers who are located in the United States of America (the "United States" or "U.S."). However, the Company delivers most of its services from regional customer experience delivery centers that are located in geographies outside of the United States. Our global delivery model is built on regional delivery centers and includes a unique ability to support work-at-home capabilities in any region.
The Company generated its revenue from clients based in the United States and other countries as shown below:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Other countries | |||||||||||||||||||||||
| Total Revenue | $ | $ | $ | $ | |||||||||||||||||||
The following table presents the breakdown of the Company’s revenues by geographical location, based on where the services are provided:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Onshore (United States) | $ | $ | $ | $ | |||||||||||||||||||
| Offshore (Philippines, Pakistan, India) | |||||||||||||||||||||||
| Nearshore (Jamaica, Nicaragua, Honduras) | |||||||||||||||||||||||
| Total Revenue | $ | $ | $ | $ | |||||||||||||||||||
The following table presents the breakdown of the Company’s revenue by pattern of revenue recognition:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Services transferred over time | $ | $ | $ | $ | |||||||||||||||||||
| Services transferred at a point in time | |||||||||||||||||||||||
| Total Revenue | $ | $ | $ | $ | |||||||||||||||||||
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The movement in deferred revenue was as follows:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Revenue recognized | ( | ( | ( | ( | |||||||||||||||||||
| Revenue deferred | |||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
3.ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENT
Accounts receivable, net in the accompanying consolidated balance sheets consists of the following:
| March 31, | June 30, | ||||||||||
| ($000s) | 2026 | 2025 | |||||||||
| Accounts receivable | $ | $ | |||||||||
| Less: Allowance for credit losses | ( | ( | |||||||||
| Accounts receivable, net | $ | $ | |||||||||
The Company will write-off accounts receivable against the allowance when it determines a balance is uncollectible.
Activity in the Company's allowance for credit losses consists of the following:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Provision for credit losses | |||||||||||||||||||||||
| Reversal of provision for credit losses | ( | ( | |||||||||||||||||||||
| Uncollectible receivables written off | ( | ( | ( | ( | |||||||||||||||||||
| Effect of foreign exchange | |||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
Significant Client
During the nine months ended March 31, 2026 and 2025, the Company had one client that contributed approximately 10 % and 11 % of total revenue, respectively.
To limit the Company's credit risk with its clients, management regularly monitors the aging of customer receivables, maintains allowances for credit losses and may require prepayment for services from certain clients. Based on currently available information, management does not believe significant credit risk exists as of March 31, 2026.
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4.LEASES
The Company has operating lease obligations primarily for its delivery centers and finance lease obligations primarily for vehicles and other equipment. Leases typically have initial terms of two to 15 years, and may include renewal options if the Company is reasonably certain to exercise such options.
The components of lease cost are as follows:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Operating lease cost: | |||||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Short-term lease cost | |||||||||||||||||||||||
| Total operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||
| Amortization of right of use assets | $ | $ | $ | $ | |||||||||||||||||||
| Interest on lease liabilities | |||||||||||||||||||||||
| Total finance lease cost | $ | $ | $ | $ | |||||||||||||||||||
The following table presents supplemental balance sheet information related to leases:
| March 31, | June 30, | ||||||||||
| ($000s) | 2026 | 2025 | |||||||||
| Operating lease assets | $ | $ | |||||||||
| Operating lease liabilities, current | |||||||||||
| Operating lease liabilities, non-current | |||||||||||
| Total operating lease liabilities | $ | $ | |||||||||
| Finance lease assets, net | $ | $ | |||||||||
| Finance lease liabilities, current | $ | $ | |||||||||
| Finance lease liabilities, non-current | |||||||||||
| Total finance lease liabilities | $ | $ | |||||||||
The following table presents supplemental cash flow information related to leases:
| Nine Months Ended March 31, | |||||||||||
| ($000s) | 2026 | 2025 | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities | $ | $ | |||||||||
| Operating cash flows paid for interest portion of finance leases | $ | $ | |||||||||
| Financing cash flows paid for principal portion of finance leases | $ | $ | |||||||||
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The following table presents supplemental noncash information related to leases:
| Nine Months Ended March 31, | |||||||||||
| ($000s) | 2026 | 2025 | |||||||||
| Right-of-use assets obtained in exchange for lease obligations | |||||||||||
| Operating leases | $ | $ | |||||||||
| Finance leases | $ | $ | |||||||||
| Reduction due to reassessment of lease renewal options | |||||||||||
| Right-of-use assets | $ | $ | ( | ||||||||
| Operating lease liabilities | $ | $ | ( | ||||||||
Included in the right-of-use assets obtained in exchange for lease obligations above, are two significant renewals resulting in noncash operating lease additions of $2.4 million during the nine months ended March 31, 2026, compared to four significant lease agreements and four significant renewals resulting in noncash operating lease additions of $8.1 million and $15.2 million, respectively, during the nine months ended March 31, 2025.
| March 31, | June 30, | ||||||||||
| 2026 | 2025 | ||||||||||
| Weighted average remaining lease term (in years) | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
As of March 31, 2026, the maturities of our lease liabilities by fiscal year are as follows:
| ($000s) | Operating Leases | Finance Leases | |||||||||
| 2026-remainder of year | $ | $ | |||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| 2030 | |||||||||||
| Thereafter | |||||||||||
| Total undiscounted lease payments | |||||||||||
| Less: liability accretion | ( | ( | |||||||||
| Total lease liabilities | $ | $ | |||||||||
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5. DEBT
Debt consists of the following:
| March 31, | June 30, | ||||||||||
| ($000s) | 2026 | 2025 | |||||||||
| Debt | |||||||||||
| Finance leases | |||||||||||
| Total Debt | $ | $ | |||||||||
| Less: Current debt | ( | ( | |||||||||
| Total Long-term debt | $ | $ | |||||||||
As of March 31, 2026, the Company had $67.1 million of borrowing available under our $75.0 million revolving credit facilities with HSBC Bank USA, National Association and HSBC Bank Middle East Limited (collectively, the "HSBC Credit Facilities") based on eligible collateral.
The HSBC Credit Facilities contain certain financial and non-financial covenants, including, among other things, covenants in respect of a total net leverage ratio, fixed charge coverage ratio, and restrictions on incurring additional debt and liens, making certain restricted payments and investments, engaging in certain transactions with affiliates, and disposal of assets. The Company was in compliance with all debt covenants as of March 31, 2026.
The Company had deferred debt issuance costs of $0.6 million and $0.9 million, as of March 31, 2026 and June 30, 2025, respectively, which are included in other current assets and other non-current assets in the consolidated balance sheets.
6. DERIVATIVES
Foreign exchange contracts
From time to time, the Company enters into foreign currency exchange contracts, consisting of offsetting foreign exchange option contracts ("collars"), to mitigate foreign exchange fluctuations on the Philippine Peso ("PHP") within a certain range and on a certain percentage of its PHP operating costs. The collars are designated as cash flow hedges upon inception, in accordance with ASC 815, in order to match the financial results of the hedges with the forecasted transactions. These contracts cover periods commensurate with the expected exposure, generally one to 18 months. The Company has not experienced any counterparty defaults.
The following tables show the notional amount of our foreign exchange cash flow hedging instruments as of March 31, 2026 and June 30, 2025:
| Hedged currency | Local Currency Notional amount (000s) | U.S. Dollar Notional amount ($000s) | Contracts Maturing Through | |||||||||||||||||||||||
| As of March 31, 2026 | PHP | $ | August 2027 | |||||||||||||||||||||||
| As of June 30, 2025 | PHP | $ | September 2026 | |||||||||||||||||||||||
Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in accumulated other comprehensive income (loss) ("AOCI"). Amounts previously recognized in AOCI are reclassified to cost of services in the periods in which the hedged expenses occur.
Refer to Note 9. "Fair Value" for further details on the fair value of our foreign exchange cash flow hedging instruments as of March 31, 2026 and June 30, 2025.
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7.WARRANT
On November 13, 2017, and as subsequently amended, the Company issued to Amazon.com NV Investment Holdings LLC, a subsidiary of Amazon.com, Inc. ("Amazon"), a 10-year warrant to acquire approximately 1,674,017 common shares (the "Warrant Shares").
8.STOCK-BASED COMPENSATION
The following tables summarize the components of stock-based compensation expense recognized in the Company’s consolidated statements of comprehensive income, both by line item and by plan:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Cost of services | $ | ( | $ | $ | $ | ||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Phantom Stock Plans | $ | ( | $ | $ | ( | $ | |||||||||||||||||
| 2020 Long Term Incentive Plan | |||||||||||||||||||||||
| Total stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
During the nine months ended March 31, 2026, the Company granted 78,115 TSR Awards under the 2020 Long Term Incentive Plan. The TSR Awards are measured equally over three separate performance periods ending on June 30, 2026, June 30, 2027, and June 30, 2028. The weighted average grant-date fair value of the awards was $42.55 per award.
During the nine months ended March 31, 2026, the Company granted 25,000 performance-based restricted stock units (“PSU”) subject to service and performance conditions. The PSUs will vest equally over five tranches, which are based on reaching certain revenue targets. The weighted average grant-date fair value of the awards was $30.17 per award.
As of March 31, 2026, there was $11.3 million of total unrecognized compensation expense related to non-vested stock-based awards, which is expected to be recognized over a weighted-average period of 2.78 years.
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9.FAIR VALUE
The fair value hierarchy prioritizes the input to valuation techniques used to measure fair value. The hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The levels of the fair value hierarchy are as follows:
Level 1: Quoted prices for identical instruments traded in active markets.
Level 2: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.
Level 3: Unobservable inputs that cannot be supported by market activity and that are significant to the fair value of the asset, liability, or equity such as the use of certain pricing models, discounted cash flow models and similar techniques that use significant unobservable inputs.
The carrying value of our cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued payroll and employee-related liabilities, approximate fair value because of their short-term nature. The Company measures its debt at carrying value including accrued interest, which approximates fair value because of its short-term nature.
Derivatives designated as cash flow hedges
The values of our derivative instruments are derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such the derivatives are classified as Level 2 in the fair value hierarchy.
Phantom stock awards
The Company uses the Black-Scholes option pricing model to value our phantom stock awards. All inputs to the model are derived from active market information for identical or similar instruments, including stock price, volatility, and interest rates. The inputs to the valuation pricing models are observable in the market, and as such the phantom stock awards are classified as Level 2 in the fair value hierarchy.
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The following is a summary of the Company’s fair value measurements on a recurring basis as of March 31, 2026 and June 30, 2025:
| As of March 31, 2026 | Fair Value Measurements Using | ||||||||||||||||
| ($000s) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
| Liabilities | |||||||||||||||||
| Cash flow hedge - foreign currency collars, net | $ | $ | $ | ||||||||||||||
| Phantom stock options | |||||||||||||||||
| Total liabilities | $ | $ | $ | ||||||||||||||
| As of June 30, 2025 | Fair Value Measurements Using | ||||||||||||||||
| ($000s) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
| Assets | |||||||||||||||||
| Cash flow hedge - foreign currency collars, net | $ | $ | $ | ||||||||||||||
| Total assets | $ | $ | $ | ||||||||||||||
| Liabilities | |||||||||||||||||
| Phantom stock options | $ | $ | $ | ||||||||||||||
| Total liabilities | $ | $ | $ | ||||||||||||||
These balances are included in accounts payable and accrued liabilities and other non-current liabilities in the consolidated balance sheets as of March 31, 2026, and in other current assets, accounts payable and accrued liabilities, and other non-current liabilities as of June 30, 2025.
There were no transfers between the different hierarchy levels during the three and nine months ended March 31, 2026 and 2025.
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10.INCOME TAXES
In determining its interim provision for income taxes, the Company used an estimated annual effective tax rate, which is based on expected income before taxes, statutory tax rates and tax planning opportunities available in the various jurisdictions in which the Company operates. Certain significant or unusual items are separately recognized in the period in which they occur and can be a source of variability in the effective tax rate from quarter to quarter.
The Company’s income tax provision includes the results of the Company’s U.S. operations and its various foreign operations including subsidiaries based in Canada, Jamaica, Nicaragua, Pakistan, Honduras, the Philippines, United Arab Emirates, and Saudi Arabia. Historically, the Company’s Bermuda-based companies have not been subject to income tax as there was no corporate income tax in Bermuda. On December 27, 2023, the Bermuda Corporate Income Tax Act 2023 ("CIT") was passed which provides for a 15% corporate tax rate beginning on or after January 1, 2025 for companies with revenue in excess of 750 million Euros. The Company's consolidated revenues do not meet this 750 million Euro threshold, and accordingly, we are not currently subject to the Bermuda CIT.
The Company recorded a provision for income taxes of $2.6 million and $7.0 million during the three and nine months ended March 31, 2026, respectively. The effective tax rate was 16.6 % and 15.7 % for the three and nine months ended March 31, 2026, respectively. The Company recorded a provision for income taxes of $2.5 million and $6.8 million in the three and nine months ended March 31, 2025, respectively. The effective tax rate was 19.2 % and 20.0 % for the three and nine months ended March 31, 2025, respectively. The changes in effective tax rates between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and discrete items, including discrete tax benefits from stock-based compensation recorded during the nine months ended March 31, 2026.
The difference between the effective tax rate applicable to the Company and the 21% U.S. federal statutory rate in the three and nine months ended March 31, 2026 was primarily due to "Tax Holidays" in certain countries in which we operate and the distribution of taxable income in countries with differing tax rates. We have been granted Tax Holidays as an incentive to attract foreign investment by the governments of Nicaragua, Pakistan, Honduras, Jamaica, and certain qualifying locations in the Philippines. Generally, a Tax Holiday is an agreement between us and a foreign government under which we receive certain tax benefits in that country.
The aggregate reduction in income tax expense due to the above Tax Holidays was $1.2 million and $3.7 million for the three and nine months ended March 31, 2026, respectively. The aggregate reduction in income tax expense per diluted share was $0.08 and $0.25 for the three and nine months ended March 31, 2026, respectively. The aggregate reduction in income tax expense due to the above Tax Holidays was $1.8 million and $4.0 million for the three and nine months ended March 31, 2025, respectively. The aggregate reduction in income tax expense per diluted share was $0.12 and $0.25 for the three and nine months ended March 31, 2025, respectively.
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11.STOCKHOLDERS’ EQUITY
AOCI
The following tables present changes by component:
| Three months ended March 31, 2025 and 2026 | |||||||||||||||||||||||
| ($000s) | Foreign Currency Translation Adjustment | Derivative Valuation | Defined Benefit Plan | Total | |||||||||||||||||||
| Balance, December 31, 2024 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Foreign currency translation | — | — | |||||||||||||||||||||
| Unrealized gains on cash flow hedges | — | — | |||||||||||||||||||||
| Reclassifications to earnings | — | — | |||||||||||||||||||||
| Balance, March 31, 2025 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| ($000s) | Foreign Currency Translation Adjustment | Derivative Valuation | Defined Benefit Plan | Total | |||||||||||||||||||
| Balance, December 31, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Foreign currency translation | ( | — | — | ( | |||||||||||||||||||
| Unrealized losses on cash flow hedges | — | ( | — | ( | |||||||||||||||||||
| Reclassifications to earnings | — | — | |||||||||||||||||||||
| Balance, March 31, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
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| Nine months ended March 31, 2025 and 2026 | |||||||||||||||||||||||
| ($000s) | Foreign Currency Translation Adjustment | Derivative Valuation | Defined Benefit Plan | Total | |||||||||||||||||||
| Balance, June 30, 2024 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
| Foreign currency translation | — | — | |||||||||||||||||||||
| Unrealized gains on cash flow hedges | — | — | |||||||||||||||||||||
| Reclassifications to earnings | — | — | |||||||||||||||||||||
| Balance, March 31, 2025 | $ | ( | $ | $ | $ | ( | |||||||||||||||||
| ($000s) | Foreign Currency Translation Adjustment | Derivative Valuation | Defined Benefit Plan | Total | |||||||||||||||||||
| Balance, June 30, 2025 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Foreign currency translation | ( | — | — | ( | |||||||||||||||||||
| Unrealized losses on cash flow hedges | — | ( | — | ( | |||||||||||||||||||
| Reclassifications to earnings | — | — | |||||||||||||||||||||
| Balance, March 31, 2026 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Share repurchase programs
The Board may authorize share repurchases of the Company’s common shares and the Company had multiple share repurchase plans during the three and nine months ended March 31, 2026 and 2025. On May 1, 2025, the Board authorized $15 million in share repurchases which commenced on May 12, 2025 for twelve months (the "2025 Share Repurchase Program"). As of March 31, 2026, the amount available for repurchase under the 2025 Share Repurchase Program was $3.2 million.
During the three and nine months ended March 31, 2026, the Company repurchased 140,300 and 310,158 common shares, respectively, totaling $4.5 million and $10.1 million, respectively. The Company did no t repurchase any common shares during the three months ended March 31, 2025. During the nine months ended March 31, 2025, the Company repurchased 327,230 5.6
During the nine months ended March 31, 2025, the Company also entered into a purchase agreement with The Resource Group International Limited ("TRGI"), pursuant to which the Company purchased from TRGI 3,562,341 common shares of the Company for an aggregate price of $70 million, of which $45 million was paid in cash and $25 million was paid in the form of a convertible promissory note.
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12.WEIGHTED AVERAGE SHARE COUNTS
The following table sets forth the components of the computation from basic to diluted earnings per share for net income for the three and nine months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| (000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Shares used in basic earnings per share calculation | |||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Employee stock-based compensation | |||||||||||||||||||||||
| Warrant | |||||||||||||||||||||||
| TRG Conversion | |||||||||||||||||||||||
| Total effects of dilutive securities | |||||||||||||||||||||||
| Shares used in diluted earnings per share calculation | |||||||||||||||||||||||
| Shares considered anti-dilutive using the treasury method | |||||||||||||||||||||||
Net income was adjusted as follows:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Convertible debt - interest expense, net of tax | |||||||||||||||||||||||
| Numerator for diluted EPS | $ | $ | $ | $ | |||||||||||||||||||
13.INVESTMENT IN JOINT VENTURE
The Company has an investment in Lake Ball, LLC to procure and sell commercial leads for its customers. The Company’s ownership interest is 47.5 % and is accounted for under the equity method. The Company’s investment of $0.4
The table below presents our investment in the joint venture:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
| Dividends received | ( | ( | ( | ( | |||||||||||||||||||
| Share of profit | |||||||||||||||||||||||
| Ending balance | $ | $ | $ | $ | |||||||||||||||||||
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14.SEGMENT INFORMATION
An operating segment is defined as a component of a company for which separate financial information is available and which is regularly evaluated by the chief operating decision maker ("CODM") for the purpose of making decisions regarding resource allocation and performance assessment. The Company’s CODM is the chief executive officer ("CEO").
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q (this "Form 10-Q"), the financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the "Annual Report"), as filed with the Securities and Exchange Commission (the "SEC"), and the information included under "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report. In addition to historical data, the following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed in our forward-looking statements as a result of various factors, including but not limited to those discussed under "Cautionary Note Regarding Forward-Looking Statements" in this Form 10-Q, under Part II, Item 1A. "Risk Factors" in this Form 10-Q, and under Part I, Item 1A, "Risk Factors" in the Annual Report.
This Form 10-Q includes certain historical consolidated financial and other data for IBEX Limited ("ibex," "we," "us," "our" or the "Company"). The following discussion provides a narrative of our financial condition and results of operations for the three and nine months ended March 31, 2026 compared to the three and nine months ended March 31, 2025.
Overview
ibex delivers innovative business process outsourcing ("BPO"), smart digital marketing, online acquisition technology, end-to-end customer engagement, and Artificial Intelligence ("AI") solutions to help companies acquire, engage, and retain valuable customers. ibex operates a global customer experiences ("CX") delivery center model consisting of 32 delivery centers around the world, while deploying next-generation technology to drive superior customer experiences for many of the world’s leading companies across various verticals, including Retail & E-commerce, HealthTech, FinTech, Utilities, and Travel, Transportation & Logistics. ibex leverages its diverse global team of approximately 36,000 employees together with industry-leading technology, including its Wave iX platform, to manage customer interactions on behalf of our clients, driving a truly differentiated customer experience.
Business Highlights
During the three and nine months ended March 31, 2026, the Company delivered strong financial results, and experienced growth with leading clients in our HealthTech, Retail & E-commerce, Travel, Transportation & Logistics, Technology, and Other verticals, partially offset by decreases in our Telecommunications vertical. The business performed well in several important areas this quarter, including total revenues, profitability, cash from operating activities, client and vertical diversification, and continued expansion including eight new client wins in strategic verticals year-to-date.
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Recent Financial Highlights
The Company delivered revenues of $164.4 million during the three months ended March 31, 2026, a 16.8% increase compared to the prior year quarter due to growth across our key verticals and digital acquisition business. Net income during the three months ended March 31, 2026 was $13.3 million, a 27.3% increase from $10.5 million during the same quarter in the prior year. Fully diluted earnings per share for the three months ended March 31, 2026 of $0.89, increased from $0.73 during the prior year quarter.
The Company delivered revenues of $479.8 million during the nine months ended March 31, 2026, a 16.7% increase compared to the same period in the prior year due to growth from existing and new clients launched throughout fiscal 2025 and fiscal 2026. Net income during the nine months ended March 31, 2026 was $37.6 million, a 37.8% increase from $27.3 million during the same period in the prior year. Fully diluted earnings per share for the nine months ended March 31, 2026 of $2.54, a 49.6% increase from $1.70 during the prior year period.
The increases in net income and fully diluted earnings per share for both the three and nine months ended March 31, 2026 were driven by revenue growth in our higher margin offshore regions resulting in improved overall operating margins. The increase in fully diluted earnings per share during the nine months ended March 31, 2026 was also driven by fewer diluted shares outstanding compared to the same period in the prior year.
Trends and Factors Affecting Our Performance
There are a number of key trends and factors that have affected and may affect our results of operations.
Macroeconomic Trends
Macroeconomic factors, including but not limited to, inflation and interest rates, global economic and geopolitical uncertainty, changes in foreign currency exchange rates, and the impact of these factors on our clients and their customers, could impact our financial results. Some of our customers have increased their focus on cost reduction, resulting in decisions to shift work from onshore sites to offshore sites, which may impact our revenues and operations in the near term. However, we also believe that they present opportunities with both new and existing clients, as companies maintain a focus on cost reduction and look for new solutions and delivery options.
Artificial Intelligence ("AI")
With the increasing applicability of AI in enhancing business processes, the BPO industry is increasingly evaluating and starting to integrate AI into its range of solutions to improve the customer experience, serve an increasing number of consumers, and drive efficiencies throughout the customer journey. We are moving aggressively to leverage generative AI in our business, both internally and in consumer-facing interactions. Our Wave iX technology has a three-pronged AI strategy, which continues to keep ibex at the forefront of this digital transformation. Our internal solutions are focused on increasing agent productivity and the quality of our services by leveraging AI across the agent lifecycle to improve recruiting, hiring, training, and coaching. We are leveraging AI to better understand and improve customer journeys at every step, providing deeper customer insights to tailor client solutions and elevate their customers' experiences. Finally, we are putting AI agents in front of the customer journey with voice and chat solutions to automate low-complexity transactions, enable smoother, more effective and efficient, seamless AI to human agent interactions, and provide real-time translation solutions.
With the combination of our company’s decades of experience across BPO and CX solutions, the strength of our internal technologies, our unique stable of best-in-class AI-tech partners, and the depth and breadth of our business intelligence and business insights team, we feel we are uniquely positioned to deliver on the three key tenets to successfully leverage AI in CX: (1) improving overall customer experience and satisfaction through more effective, efficient, and empathetic AI-to-human solutions, (2) increasing our clients’ ability to serve their end consumers, and (3) driving efficiency, and where beneficial, cost savings along the journey.
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We believe we are well positioned to leverage our leadership position in adopting AI technology in the CX sector to create significant value for our clients through the application of AI. Our approach of bringing a combination of our AI-enabled solutions plus a robust set of third-party AI-enabled solutions to our clients positions us to not only be a fast-mover in the market, but also to capture an outsized share of AI-impacted future revenue, minimizing risk to our overall revenue and providing opportunities for future profitability enhancement. While the initial implementation of some AI-enabled solutions may impact revenue directly derived from traditional agent-driven activities, it is our belief that by remaining on the forefront and bringing these solutions to our clients, we will be able to capture a greater share of higher margin AI-enabled revenue work and maintain and grow our overall business and results in the near- and long-term.
Client’s Underlying Business Performance
Demand for customer interaction services reflects a client’s underlying business performance and priorities. Growth in a client’s business often results in increased demand for our customer engagement solutions. Conversely, a decline in a client’s business generally results in a decrease in demand for our customer engagement solutions, shifting volume to lower cost geographies, and potential increases in demand for our customer acquisition and expansion solutions. The correlation between a client's business performance and demand for outsourced customer interaction solutions can therefore be complex, and depends upon several factors, such as industry consolidation, client investments in growth, and overall macroeconomic environment, all of which can result in short term revenue volatility for outsourcing providers.
Capacity Utilization
As a significant portion of our customer interaction services are performed by customer-facing agents located in delivery centers, our margins are impacted by the level of capacity utilization in those facilities. We incur substantial fixed costs in operating such facilities. The greater the volume of interactions handled, the higher the utilization level of workstations within those facilities and the revenues generated to cover those fixed costs, thus the greater the percentage operating margin.
As demand for delivery locations has grown and continued to shift towards lower cost geographies during the nine months ended March 31, 2026, we are in the process of building additional capacity in our offshore regions. We also continue to realize cost savings as we geographically optimize our delivery centers in higher cost regions.
Additionally, we have continued to shift towards work at home seats, which has allowed us to rationalize a number of delivery locations in higher cost regions, especially in the United States.
Labor Costs
When compensation levels of our employees increase, we may not be able to pass on such increased costs to our clients or do so on a timely basis, which tends to depress our operating profit margins if we cannot generate sufficient offsetting productivity gains. We continued to see increasing wage pressure in all of our geographies, in part brought on by the current global inflation and labor shortage, which is increasing competition for contact center agents from other sectors of the economy during the nine months ended March 31, 2026. We were able to offset some of these wage increases with higher agent quality and increased productivity, higher agent retention, and increased client prices under contractual cost of living adjustments ("COLA"). Furthermore, our overall labor cost as a percentage of revenue is impacted by the aforementioned shift in delivery location from onshore delivery centers to offshore centers.
Delivery Location
We generate greater profit margins from our work carried out by agents located in offshore and nearshore regions compared to our work carried out from onshore locations in the United States. As a result, our operating margins are influenced by the proportion of our work delivered from these higher margin locations. Over time we have expanded and further diversified our delivery network by adding facilities in these locations, offering a significant relative cost advantage. Our percentage of workstations in nearshore and offshore geographies is approximately 97% as of March 31, 2026. We regularly evaluate whether to procure additional space or enter into new markets as we continue to add employees and expand geographically to meet the demands of our business.
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Provider Performance
Generally, our clients will re-allocate spend and market share in favor of outsourcing providers who consistently perform better and add more value than their competitors. Such re-allocation of spend can either take place on a short-term basis as higher performing providers are shielded by the client against demand volatility, or on a longer-term basis as the client shifts more and more of its overall outsourcing spend and volume to higher performing providers. Our revenues have generally increased as a result of performance-based market share gains with our existing clients, as well as due to our new client wins.
New Client Wins
We have a strong track record of winning key new client accounts and as a result of our land and expand strategy, we have been successful in subsequently increasing our revenues with these clients period over period. Historically, our in-year new client wins have generated approximately 2.0x to 3.0x revenue in the second and third years of the engagement.
Client Concentration
During the nine months ended March 31, 2026, our largest client accounted for 10%, while our three largest clients accounted for 25% of our consolidated revenues. We believe our client diversification is a strength and mitigates risk.
Pricing
Our revenues are dependent upon both volumes and unit pricing for our services. Client pricing is often expressed in terms of a base price per minute or hour as well as, in limited cases, with bonuses and occasionally penalties depending upon our achievement of certain client objectives. During the fiscal year ended June 30, 2025 and the nine months ended March 31, 2026, the tightening in the global labor market and corresponding wage inflation, as well as increasing facilities expenses have resulted in us pursuing and successfully negotiating price increases or COLA with many of our clients.
The current economic environment is also encouraging our clients to consider locating more of their support offshore. Within our customer engagement solutions, pricing for services delivered from onshore locations is higher than pricing for services delivered from offshore locations, largely driven by higher wage levels in onshore locations. Accordingly, a shift in service delivery location from onshore to offshore locations results in a lower price for our clients and a decline in our absolute revenues; however, our margins tend to increase, in percentage and often in absolute terms, as compared to onshore service delivery.
Seasonality
Our business performance is subject to seasonal fluctuations. These seasonal effects cause differences in revenues and expenses among the various quarters of any financial year, which means that the individual quarters should not be directly compared with each other or be used to predict annual financial results.
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Results of Operations
The following summarizes the results of our operations for the three and nine months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Revenue | $ | 164,407 | $ | 140,736 | $ | 479,807 | $ | 411,135 | |||||||||||||||
| Cost of services | 115,614 | 96,017 | 338,820 | 284,820 | |||||||||||||||||||
| Selling, general and administrative | 27,467 | 27,061 | 81,547 | 78,982 | |||||||||||||||||||
| Depreciation and amortization | 5,170 | 4,329 | 14,298 | 12,984 | |||||||||||||||||||
| Income from operations | $ | 16,156 | $ | 13,329 | $ | 45,142 | $ | 34,349 | |||||||||||||||
| Interest income | 62 | 32 | 151 | 926 | |||||||||||||||||||
| Interest expense | (249) | (404) | (714) | (1,186) | |||||||||||||||||||
| Income before income taxes | $ | 15,969 | $ | 12,957 | $ | 44,579 | $ | 34,089 | |||||||||||||||
| Provision for income tax expense | (2,644) | (2,488) | (6,995) | (6,821) | |||||||||||||||||||
| Net income | $ | 13,325 | $ | 10,469 | $ | 37,584 | $ | 27,268 | |||||||||||||||
Three Months Ended March 31, 2026 and 2025
Revenue
Our revenue was $164.4 million for the three months ended March 31, 2026, an increase of $23.7 million, or 16.8%, compared to the prior year quarter. This increase was primarily driven by increases in our HealthTech vertical of $11.9 million, or 53.7%, Technology vertical of $4.5 million, or 42.6%, Retail & E-commerce vertical of $3.0 million, or 8.3%, Travel, Transportation & Logistics vertical of $3.0 million, or 15.1% and Other vertical of $4.8 million, or 26.5%, due to growth in our digital acquisition business, compared to the prior year quarter. These increases were partially offset by decreases in the Telecommunications vertical of $4.3 million, or 23.1%.
As a percentage of total revenue, our HealthTech vertical increased to 20.8% compared to 15.8%, our Technology vertical increased to 9.2% compared to 7.5%, and our Other vertical increased to 14.0% compared to 13.0% in the prior year quarter. Conversely, our Telecommunications vertical decreased to 8.6% compared to 13.1%, our Retail & E-commerce vertical decreased to 23.9% compared to 25.8%, and our Travel, Transportation & Logistics remained consistent at 13.8% compared to the prior year quarter.
Operating Expenses
Cost of services
Cost of services was $115.6 million during the three months ended March 31, 2026, an increase of $19.6 million, or 20.4%, compared to the prior year quarter. The increase in cost of services was primarily due to increases in payroll and related costs, reseller commissions and lead expenses, IT, facility expenses, and local transportation expenses.
Payroll and related costs were $84.8 million during the three months ended March 31, 2026, an increase of $12.4 million, or 17.1%, compared to the prior year quarter, due to additional headcount to support increased revenues during the current year quarter and severance costs of $0.7 million due to migrating volume from our nearshore to offshore regions. As a percent of revenue, payroll costs were 51.5% during the three months ended March 31, 2026, consistent with the prior year quarter.
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Reseller commissions and lead expenses were $8.7 million during the three months ended March 31, 2026, an increase of $3.2 million, or 57.3%, compared to the prior year quarter. These increases were primarily due to increases in the utilization of our third-party affiliates for inbound inquiries as well as search engine costs in connection with increased revenues in our higher margin digital sales and marketing efforts.
IT expenses were $2.8 million during the three months ended March 31, 2026, an increase of $1.0 million, or 53.6%, compared to the prior year quarter, primarily due to additional software license fees.
Facility expenses were $13.8 million during the three months ended March 31, 2026, an increase of $2.3 million, or 19.6%, compared to the prior year quarter, primarily driven by expansions in our offshore regions.
Local transportation expenses were $2.1 million, an increase of $0.4 million, or 26.4%, compared to the prior year period. These increases were primarily due to increased transportation needs in offshore regions to support increasing revenue during the current year quarter.
Selling, general and administrative expense ("SG&A")
SG&A expense was $27.5 million during the three months ended March 31, 2026, an increase of $0.4 million, or 1.5%, compared to the prior year quarter. The change was driven by increased payroll and related costs of $2.5 million due to higher performance-based incentives and new hires to support growth, as well as higher IT expenses of $0.3 million due to additional software license fees. These increases were partially offset by favorable foreign currency impacts of $1.0 million, lower legal and professional fees and facilities expenses of $0.9 million and lower stock-based compensation expenses of $0.5 million compared to the prior year quarter.
Depreciation and amortization expense ("D&A")
D&A expense was $5.2 million during the three months ended March 31, 2026, an increase of $0.8 million, or 19.4% compared to the prior year quarter. The increase was primarily due to new capital additions partially offset by lower depreciation expense resulting from an increase in fully depreciated assets. As a percentage of revenue, D&A was 3.1% during the three months ended March 31, 2026, consistent with 3.1% during the prior year quarter.
Income from operations
Income from operations was $16.2 million during the three months ended March 31, 2026 compared to $13.3 million during the prior year quarter. The operating margin was 9.8% for three months ended March 31, 2026, up from 9.5% for the prior year quarter. The increase was primarily driven by margin expansion as we continued to realize growth in our higher margin offshore regions compared to the prior year quarter.
Interest income
Interest income during the three months ended March 31, 2026 was $0.06 million, compared to $0.03 million during the prior year quarter and consisted primarily of income from invested funds.
Interest expense
Interest expense during the three months ended March 31, 2026 was $0.2 million, a decrease of $0.2 million, and consisted primarily of interest on borrowings and finance leases.
Provision for Income Taxes
Income tax expense was $2.6 million during the three months ended March 31, 2026, an increase of $0.2 million when compared with the prior year quarter, primarily due to higher pre-tax income in the current year quarter. The effective tax rate was 16.6% and 19.2% for the three months ended March 31, 2026 and 2025, respectively. The change in effective tax rates between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and favorable discrete tax benefits in the current year quarter.
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Nine Months Ended March 31, 2026 and 2025
Revenue
Our revenue was $479.8 million for the nine months ended March 31, 2026, an increase of $68.7 million, or 16.7%, compared to the same period in the prior year. This increase was primarily driven by increases in our HealthTech vertical of $22.9 million, or 37.2%, Retail & E-commerce vertical of $17.8 million, or 16.5%, Travel, Transportation & Logistics vertical of $9.7 million, or 16.9%, Technology vertical of $8.1 million, or 25.0%, and Other vertical of $22.0 million, or 46.1%, due to growth in our digital acquisition business, compared to the same period in the prior year. These increases were partially offset by decreases in the Telecommunications vertical of $13.0 million, or 22.9%, compared to the prior year period.
As a percentage of total revenue, our HealthTech vertical increased to 17.6% compared to 15.0%, our Technology vertical increased to 8.5% compared to 7.9%, and our Other vertical increased to 14.5% compared to 11.6% in the prior year period. Our Retail & E-commerce vertical and our Travel, Transportation & Logistics vertical remained consistent at 26.3% and 14.0%, respectively, compared to the prior year period. Conversely, our Telecommunications vertical decreased to 9.1% for the nine months ended March 31, 2026 compared to 13.8% in the prior year period.
Operating Expenses
Cost of services
Cost of services was $338.8 million during the nine months ended March 31, 2026, an increase of $54.0 million, or 19.0%, compared to the prior year period. The increase in cost of services was primarily due to increases in payroll and related costs, reseller commissions and lead expenses, IT, facility, and local transportation expenses.
Payroll and related costs were $250.0 million during the nine months ended March 31, 2026, an increase of $33.0 million, or 15.2%, compared to the prior year period, due to additional headcount to support increased revenues during the current year and severance costs of $0.7 million due to migrating volume from our nearshore to offshore regions. As a percent of revenue, payroll cost decreased to 52.1% during the nine months ended March 31, 2026 compared to 52.8% during the prior year period, reflecting the continuing trend towards lower cost, higher margin regions.
Reseller commissions and lead expenses were $24.5 million during the nine months ended March 31, 2026, an increase of $11.5 million, or 88.0%, compared to the prior year period. These increases were primarily due to increases in the utilization of our third-party affiliates for inbound inquiries as well as search engine costs in connection with increased revenue in our higher margin digital sales and marketing efforts.
IT expenses were $7.1 million during the nine months ended March 31, 2026, an increase of $2.3 million or 48.9%, compared to the prior year period, primarily due to additional software license fees.
Facility expenses were $40.1 million during the nine months ended March 31, 2026, an increase of $4.1 million, or 11.3%, compared to the prior year period, primarily driven by expansions in our offshore regions.
Local transportation expenses were $6.4 million during the nine months ended March 31, 2026, an increase of $1.4 million or 27.2%, compared to the prior year period, driven primarily by transportation needs in offshore regions to support increasing revenues during the current year.
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SG&A expense
SG&A expense was $81.5 million during the nine months ended March 31, 2026, an increase of $2.6 million, or 3.2%, compared to the prior year period. The increase was driven by higher payroll and related costs of $6.1 million due to higher performance-based incentives and new hires to support growth, stock-based compensation of $1.2 million due to new grants issued during the current year, and higher IT expenses of $1.2 million due to additional software license fees. These increases were partially offset by favorable foreign currency impacts of $3.3 million, lower legal and professional fees of $1.6 million, and lower telecommunication, insurance, facilities and other site related expenses of $0.8 million compared to the prior year period.
D&A expense
D&A expense was $14.3 million during the nine months ended March 31, 2026, an increase of $1.3 million or 10.1%, compared to the prior year period. The increase was primarily due to new capital additions in our offshore regions partially offset by lower depreciation expense resulting from an increase in fully depreciated assets. As a percentage of revenue, D&A decreased to 3.0% during the nine months ended March 31, 2026 compared to 3.2% in the prior year period.
Income from operations
Income from operations was $45.1 million during the nine months ended March 31, 2026 compared to $34.3 million during the prior year period. The operating margin was 9.4% for nine months ended March 31, 2026, up from 8.4% for the prior year period. The increase was primarily driven by margin expansion as we continued to realize growth in our higher margin offshore regions.
Interest income
Interest income during the nine months ended March 31, 2026 was $0.2 million, compared to $0.9 million during the prior year period, and consisted primarily of income from invested funds.
Interest expense
Interest expense during the nine months ended March 31, 2026 was $0.7 million, a decrease of $0.5 million, or 39.8%, primarily due to expenses incurred during the prior year period including the loss on extinguishment related to the termination of our PNC Credit Facility and interest expense on the convertible promissory note which was repaid during fiscal 2025.
Provision for Income Taxes
Income tax expense was $7.0 million during the nine months ended March 31, 2026, consistent with the prior year period. The effective tax rate was 15.7% and 20.0% for the nine months ended March 31, 2026 and 2025, respectively. The changes in effective tax rates between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and discrete items, including discrete tax benefits from stock-based compensation recorded in the current period.
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Non-GAAP Financial Measures
We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance, as we believe that these non-GAAP financial measures provide a more helpful depiction of our performance of the business by encompassing only relevant and manageable events, enabling us to evaluate and plan more effectively for the future. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies, have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our operating results as reported in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Non-GAAP financial measures and ratios are not measurements of our performance, financial condition or liquidity under U.S. GAAP and should not be considered as alternatives to operating profit or net income / (loss) or as alternatives to cash flow from operating, investing or financing activities for the period, or any other performance measures, derived in accordance with U.S. GAAP.
Adjusted net income, adjusted net income margin, and adjusted earnings per share
Adjusted net income is a non-GAAP profitability measure that represents net income before the effect of the following items: severance costs, foreign currency gains and losses, and stock-based compensation expense, net of the tax impact of such adjustments. We define adjusted net income margin as adjusted net income divided by revenue. We define adjusted earnings per share as adjusted net income divided by weighted average diluted shares outstanding.
We use adjusted net income, adjusted net income margin, and adjusted earnings per share internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance. We believe that adjusted net income, adjusted net income margin, and adjusted earnings per share are meaningful indicators of performance as it reflects what we believe is closer to the actual results of our business performance by removing items that we believe are not reflective of our underlying business. We also believe that adjusted net income, adjusted net income margin, and adjusted earnings per share may be widely used by investors, securities analysts and other interested parties as a supplemental measure of performance.
Adjusted net income, adjusted net income margin, and adjusted earnings per share may not be comparable to other similarly titled measures of other companies and have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our operating results as reported under U.S. GAAP. Because of these limitations, investors should consider adjusted net income, adjusted net income margin, and adjusted earnings per share in conjunction with other U.S. GAAP financial performance measures, including net income from operations and net income, among others.
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The following table provides a reconciliation of net income to adjusted net income, net income margin to adjusted net income margin, and diluted earnings per share to adjusted earnings per share for the periods presented:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s, except per share amounts) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | 13,325 | $ | 10,469 | $ | 37,584 | $ | 27,268 | |||||||||||||||
| Net income margin | 8.1 | % | 7.4 | % | 7.8 | % | 6.6 | % | |||||||||||||||
| Severance costs | 814 | — | 973 | — | |||||||||||||||||||
| Foreign currency (gain) / loss | (913) | 121 | (2,678) | 666 | |||||||||||||||||||
| Stock-based compensation expense | 788 | 1,601 | 4,452 | 3,506 | |||||||||||||||||||
| Total adjustments | $ | 689 | $ | 1,722 | $ | 2,747 | $ | 4,172 | |||||||||||||||
| Tax impact of adjustments1 | (437) | (404) | (829) | (1,006) | |||||||||||||||||||
| Adjusted net income | $ | 13,577 | $ | 11,787 | $ | 39,502 | $ | 30,434 | |||||||||||||||
| Adjusted net income margin | 8.3 | % | 8.4 | % | 8.2 | % | 7.4 | % | |||||||||||||||
| Diluted earnings per share | $ | 0.89 | $ | 0.73 | $ | 2.54 | $ | 1.70 | |||||||||||||||
| Per share impact of adjustments to net income | 0.02 | 0.09 | 0.13 | 0.20 | |||||||||||||||||||
| Adjusted earnings per share | $ | 0.91 | $ | 0.82 | $ | 2.67 | $ | 1.90 | |||||||||||||||
| Weighted average diluted shares outstanding | 14,994 | 14,404 | 14,780 | 16,135 | |||||||||||||||||||
EBITDA, adjusted EBITDA, and adjusted EBITDA margin
EBITDA is a non-GAAP profitability measure that represents net income before the effect of the following items: interest expense, income tax expense, and D&A. Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before the effect of the following items: severance costs, interest income, foreign currency gains and losses, and stock-based compensation expense. Adjusted EBITDA margin is a non-GAAP profitability measure that represents adjusted EBITDA divided by revenue.
We use EBITDA, adjusted EBITDA, and adjusted EBITDA margin internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance. We may use adjusted EBITDA as a vesting trigger in some performance-based restricted stock units. We believe that EBITDA, adjusted EBITDA and adjusted EBITDA margin are meaningful indicators of the health of our business as they provide additional information to investors about certain non-cash or non-recurring charges that we believe may not continue at the same level in the future or be reflective of our long-term performance. We also believe that EBITDA, adjusted EBITDA and adjusted EBITDA margin are widely used by investors, securities analysts, and other interested parties as a supplemental measure of performance.
1 The tax impact of each adjustment is calculated using the effective tax rate in the relevant jurisdictions.
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EBITDA, adjusted EBITDA and adjusted EBITDA margin may not be comparable to other similarly titled measures of other companies and have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of our operating results as reported under U.S. GAAP. Some of these limitations are as follows:
•although D&A is a non-cash charge, the assets being depreciated and amortized may have to be replaced in the future. EBITDA, adjusted EBITDA and adjusted EBITDA margin do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•EBITDA, adjusted EBITDA and adjusted EBITDA margin are not intended to be a measure of free cash flow for our discretionary use, as they do not reflect: (i) changes in, or cash requirements for, our working capital needs; (ii) debt service requirements; (iii) tax payments that may represent a reduction in cash available to us; and (iv) other cash costs that may recur in the future;
•other companies, including companies in our industry, may calculate similarly titled measures differently, which reduces their usefulness as comparative measures.
Because of these and other limitations, investors should consider EBITDA, adjusted EBITDA and adjusted EBITDA margin in conjunction with U.S. GAAP financial performance measures, including cash flows from operating activities, investing activities and financing activities, net income, net income margin, and other financial results.
The following table provides a reconciliation of net income to EBITDA and adjusted EBITDA and net income margin to adjusted EBITDA margin for the periods presented:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income | $ | 13,325 | $ | 10,469 | $ | 37,584 | $ | 27,268 | |||||||||||||||
| Net income margin | 8.1 | % | 7.4 | % | 7.8 | % | 6.6 | % | |||||||||||||||
| Interest expense | 249 | 404 | 714 | 1,186 | |||||||||||||||||||
| Income tax expense | 2,644 | 2,488 | 6,995 | 6,821 | |||||||||||||||||||
| Depreciation and amortization | 5,170 | 4,329 | 14,298 | 12,984 | |||||||||||||||||||
| EBITDA | $ | 21,388 | $ | 17,690 | $ | 59,591 | $ | 48,259 | |||||||||||||||
| Severance costs | 814 | — | 973 | — | |||||||||||||||||||
| Interest income | (62) | (32) | (151) | (926) | |||||||||||||||||||
| Foreign currency (gain) / loss | (913) | 121 | (2,678) | 666 | |||||||||||||||||||
| Stock-based compensation expense | 788 | 1,601 | 4,452 | 3,506 | |||||||||||||||||||
| Adjusted EBITDA | $ | 22,015 | $ | 19,380 | $ | 62,187 | $ | 51,505 | |||||||||||||||
| Adjusted EBITDA margin | 13.4 | % | 13.8 | % | 13.0 | % | 12.5 | % | |||||||||||||||
Net income margin
Net income margin was 8.1% for the three months ended March 31, 2026 compared to 7.4% during the prior year quarter. Net income margin was 7.8% for the nine months ended March 31, 2026 compared to 6.6% during the prior year period. These increases were primarily driven by revenue growth in our higher margin offshore regions and lower SG&A expenses as a percentage of revenue, partially offset by increases in income tax and depreciation expense compared to the same periods in the prior year.
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Adjusted EBITDA margin
Adjusted EBITDA margin was 13.4% for the three months ended March 31, 2026 compared to 13.8% during the prior year quarter. This decrease was primarily driven by the temporary impact of migrating volume from our nearshore to offshore regions, partially offset by lower SG&A expenses, compared to the same quarter in the prior year. Adjusted EBITDA margin was 13.0% for the nine months ended March 31, 2026 compared to 12.5% during the prior year period. This increase was primarily driven by revenue growth in our higher margin offshore regions and lower SG&A expenses as a percentage of revenue.
Free cash flow
Free cash flow is a non-GAAP liquidity measure that represents net cash provided by operating activities less capital expenditures. While we believe that free cash flow provides useful information to investors in understanding and evaluating our liquidity position in the same manner as our management, our use of free cash flow has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Further, other companies, including companies in our industry, may adjust their cash flows differently, which may reduce the value of free cash flow as a comparative measure. The following table reconciles net cash provided by operating activities to free cash flow, for the periods presented:
| Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net cash provided by operating activities | $ | 11,864 | $ | 8,828 | $ | 34,178 | $ | 17,731 | |||||||||||||||
| Less: capital expenditures | 5,273 | 5,267 | 24,644 | 13,216 | |||||||||||||||||||
| Free cash flow | $ | 6,591 | $ | 3,561 | $ | 9,534 | $ | 4,515 | |||||||||||||||
Net cash provided by operating activities during the three and nine months ended March 31, 2026 was $11.9 million and $34.2 million, respectively, compared to $8.8 million and $17.7 million, respectively, during the prior year periods. Free cash flow during the three and nine months ended March 31, 2026 was $6.6 million and $9.5 million, respectively, compared to $3.6 million and $4.5 million, respectively, during the prior year periods. The planned increase in capital expenditures during the current year was driven by expansions in our offshore regions to meet demand and purchases of IT and telecommunications equipment.
Net cash
Net cash is a non-GAAP liquidity measure that represents cash and cash equivalents less total debt. We believe that net cash provides useful information to investors in understanding and evaluating our ability to pay off debt. Our use of net cash has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Further, other companies, including companies in our industry, may adjust their cash or debt differently, which may reduce the value of net cash as a comparative measure.
Net cash is calculated below:
| March 31, | June 30, | ||||||||||
| ($000s) | 2026 | 2025 | |||||||||
| Cash and cash equivalents | $ | 15,409 | $ | 15,350 | |||||||
| Debt | |||||||||||
| Current | $ | 819 | $ | 823 | |||||||
| Non-current | 572 | 796 | |||||||||
| Total debt | $ | 1,391 | $ | 1,619 | |||||||
| Net cash | $ | 14,018 | $ | 13,731 | |||||||
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JOBS Act Accounting Election
We qualify as an emerging growth company ("EGC") pursuant to the provisions of the JOBS Act. The JOBS Act permits an EGC like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use the extended transition period until we are no longer an EGC (which we expect will occur on June 30, 2026) or until we choose to opt out of the extended transition period affirmatively and irrevocably. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies.
Liquidity and Capital Resources
As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents totaling $15.4 million, cash flows from operations, and the unused availability under our existing credit facilities with HSBC Bank USA, National Association and HSBC Bank Middle East Limited (collectively, the "HSBC Credit Facilities") of $67.1 million.
As of March 31, 2026, our total indebtedness was $1.4 million, consisting of our finance leases. We were in compliance with all debt covenants as of March 31, 2026. Refer to Note 5, "Debt" in the consolidated financial statements included in this Form 10-Q for additional information on our debt.
We use these resources to finance our operations, expand current delivery centers, open new delivery centers, invest in upgrades of technology, service offerings, and for other strategic initiatives, such as acquiring or investing in complementary businesses or executing share repurchases. Our future liquidity requirements will depend on many factors, including our growth rate and the timing and extent of spending to engage in the activities mentioned above. We believe that our existing cash balance together with cash generated from our operations will be sufficient to meet our liquidity requirements for at least the next twelve months.
To the extent additional funds are necessary to meet our long-term liquidity needs as we execute on our business strategy, we anticipate that they will be obtained through the utilization of current availability under our HSBC Credit Facilities, additional indebtedness, additional equity financings or a combination of these potential sources of funds; however, such additional financing may not be available on favorable terms, or at all. If we are unable to raise additional funds when desired, our business, financial condition and results of operations could be adversely affected.
In connection with the HSBC Credit Facilities, the Company had deferred debt issuance costs of $0.6 million, which are included in other current assets and other non-current assets in the consolidated balance sheets as of March 31, 2026.
The Board may authorize share repurchases of the Company’s common shares and the Company had multiple share repurchase plans during the nine months ended March 31, 2026 and 2025. The Company’s current share repurchase program allows us to repurchase up to $15 million in shares through May 12, 2026. During the nine months ended March 31, 2026 and 2025, the Company repurchased 310,158 and 327,230 common shares, respectively, totaling $10.1 million and $5.6 million, respectively. All repurchases under these programs were funded with our existing cash balance.
During the nine months ended March 31, 2025, the Company also entered into a purchase agreement with The Resource Group International Limited ("TRGI"), pursuant to which the Company purchased from TRGI 3,562,341 common shares of the Company for an aggregate price of $70 million, of which $45 million was paid in cash and $25 million was paid in the form of a convertible promissory note.
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The following discussion highlights our cash flow activities during the nine months ended March 31, 2026 and 2025:
| Nine Months Ended March 31, | |||||||||||
| ($000s) | 2026 | 2025 | |||||||||
| Net cash inflow / (outflow) from | |||||||||||
| Operating activities | $ | 34,178 | $ | 17,731 | |||||||
| Investing activities | (24,644) | (13,216) | |||||||||
| Financing activities | (9,454) | (54,426) | |||||||||
| Effects of exchange rate difference on cash and cash equivalents | (21) | 168 | |||||||||
| Net increase / (decrease) in cash and cash equivalents | $ | 59 | $ | (49,743) | |||||||
| Cash and cash equivalents at beginning of the period | 15,350 | 62,720 | |||||||||
| Cash and cash equivalents at the end of the period | $ | 15,409 | $ | 12,977 | |||||||
Cash and cash equivalents
The Company manages a centralized global treasury function with a focus on safeguarding and optimizing the use of its global cash and cash equivalents. The majority of the Company’s cash is held in large U.S. banks in U.S. dollars and outside of the U.S. in U.S. dollars and foreign currencies in regional or local banks in the countries in which it operates. The Company believes that its cash management policies and practices effectively mitigate its risk relating to its global cash. However, the Company can provide no assurances that it will not sustain losses.
As of March 31, 2026, we had cash and cash equivalents of $15.4 million, including $9.4 million located outside of the United States, and $2.2 million that is subject to certain local regulations on repatriation. As of June 30, 2025, we had cash and cash equivalents of $15.4 million, including $12.0 million located outside of the United States, and $2.7 million that is subject to certain local regulations on repatriation.
Cash Flows from Operating Activities
Net cash inflow from operating activities during the nine months ended March 31, 2026 increased to $34.2 million compared to $17.7 million during the same period in the prior year, which was driven by an increase in our revenues and profitability, as well as lower use of working capital.
Cash Flows from Investing Activities
During the nine months ended March 31, 2026, we incurred expenditures of $24.6 million on investing activities primarily driven by expansions in our offshore regions and purchases of IT and telecommunications equipment.
During the nine months ended March 31, 2025, we incurred expenditures of $13.2 million on investing activities primarily driven by expansions in our offshore and nearshore regions and purchases of IT and telecommunications equipment.
Cash Flows from Financing Activities
During the nine months ended March 31, 2026, we expended $9.5 million on financing activities, of which $10.1 million related to the repurchase of our common shares and $0.8 million related to principal payments on our finance leases, partially offset by net cash receipts of $1.5 million from stock transactions.
During the nine months ended March 31, 2025, we expended $54.4 million on financing activities, of which $76.4 million related to the repurchase of our common shares and $0.6 million related to principal payments on our finance leases, partially offset by net draws of $19.1 million from our HSBC Credit Facilities and net cash receipts of $3.5 million from stock transactions.
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Critical Accounting Policies and Estimates
The Company’s consolidated financial statements and accompanying notes included in this Form 10-Q are prepared in accordance with U.S. GAAP. A summary of the Company’s significant accounting policies and critical accounting estimates can be found in the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of the Annual Report. There have been no material changes to our significant accounting policies or critical accounting estimates as reported in the Annual Report.
Recent Accounting Pronouncements
Refer to Note 1, "Overview and Summary of Significant Accounting Policies" in the consolidated financial statements included in this Form 10-Q for additional information regarding recently issued accounting pronouncements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company’s activities expose it to a variety of financial and market risk (including foreign currency and interest rate risk).
Foreign currency exchange risk
The Company serves many of its U.S. based clients through our delivery centers located in various countries, primarily in the Philippines, Pakistan, Nicaragua, and Jamaica. Although contracts with these clients are typically priced in U.S. dollars, a substantial portion of related costs is denominated in the local currency of the country where services are provided, resulting in foreign currency exposure that could have an impact on our results of operations. Our primary foreign currency exposures are in Philippine Peso ("PHP"), Jamaican Dollar, and Pakistani Rupee. There can be no assurance that we can take actions to mitigate such exposure in the future, and if taken, that such actions will be successful or that future changes in currency exchange rates will not have a material adverse impact on our future operating results. A significant change in the value of the U.S. dollar against the currency of one or more countries where we operate may have a material adverse effect on our financial condition and results of operations.
To mitigate foreign exchange fluctuations on the PHP, we hedge a portion of our Philippine operating costs. While our hedging strategy can protect us from short term risks related to foreign currency movements, an overall strengthening of the PHP would adversely impact margins over the long term.
Based upon our level of operations during the nine months ended March 31, 2026, a 10% appreciation/depreciation in the PHP against the U.S. dollar would have increased or decreased our expenses incurred and paid in PHP by approximately $10.8 million or $8.8 million, respectively, for the nine months ended March 31, 2026. Based upon our level of operations during the nine months ended March 31, 2026, a 10% appreciation/depreciation in the Jamaican Dollar against the U.S. dollar would have increased or decreased our expenses incurred and paid in Jamaican Dollar by approximately $3.4 million or $2.8 million, respectively, for the nine months ended March 31, 2026. Based upon our level of operations during the nine months ended March 31, 2026, a 10% appreciation/depreciation in the Pakistani Rupee against the U.S. dollar would have increased or decreased our expenses incurred and paid in Pakistani Rupee by approximately $4.5 million or $3.7 million, respectively, for the nine months ended March 31, 2026.
To mitigate against credit and default risk, we only enter into derivative contracts and other financial instruments with investment grade financial institutions and our derivative valuations reflect the creditworthiness of our counterparties. As of the date of this Form 10-Q, we have not experienced, nor do we anticipate experiencing, any counterparty defaults.
Refer to Note 6. "Derivatives" in the consolidated financial statements included in this Form 10-Q for additional information on our foreign currency hedging program.
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Interest rate risk
As of March 31, 2026, the Company’s exposure to interest rate risk related primarily to the HSBC Credit Facilities. Borrowings under the U.S. Credit Facility bears interest at a per annum rate equal to term SOFR plus 2%, or equal to alternate base rate plus 1%. Borrowings under the UAE Loan Facility bear interest at a per annum rate equal to 3-month term SOFR plus 2%. As of March 31, 2026, the Company did not have any outstanding balances on the HSBC Credit Facilities. Accordingly, a hypothetical 10% increase or decrease in SOFR would not cause a material increase or decrease in our interest expense over the next 12 months.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain "disclosure controls and procedures," as this term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our Chief Executive Officer and Chief Financial Officer recognize that these controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of these controls will be met.
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2026. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2026.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal controls over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
Based on currently available information and advice received from counsel, the Company believes that the disposition or ultimate resolution of any current legal proceedings, except as otherwise specifically reserved for in its financial statements, will not have a material adverse effect on the Company’s financial position, cash flows or results of operations.
For further information, refer to the discussion found under the caption "Contingencies" in Note 1, "Overview and Summary of Significant Accounting Policies" in Part I, Item 1 of this Form 10-Q.
Item 1A. Risk Factors
We are subject to various risks that could have a material adverse impact on our financial position, results of operations or cash flows. Although it is not possible to predict or identify all such risks and uncertainties, they may include, but are not limited to, the factors discussed under "Risk Factors" in Part I, Item 1A. in the Annual Report. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our financial position, results of operations or cash flows. There have been no material changes to the risk factors included in the Annual Report. We encourage you to carefully consider the risk factors set forth in the Annual Report and the other information set forth elsewhere in this Form 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The Board may authorize share repurchases of the Company’s common shares. Purchases made pursuant to these authorizations may be carried out through open market or privately negotiated transactions, including block transactions and Rule 10b5-1 trading plans, depending on market conditions and in accordance with applicable rules and regulations, at times and in such amounts as the Company deems appropriate. The actual timing, number, and dollar amount of repurchase transactions will be determined by management at its discretion and will depend on a number of factors including, but not limited to, the market price of the Company’s common shares, general market and economic conditions, and compliance with Rule 10b-18 and/or Rule 10b5-1 under the Exchange Act.
The Board will review the repurchase program periodically and may authorize adjustment of its terms and size, suspend or discontinue the program. The Company has and expects to fund future repurchases with its existing cash balance. The share repurchase program does not obligate the Company to acquire any particular amount of common shares.
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On May 1, 2025, the Board authorized $15 million in share repurchases which commenced on May 12, 2025 for twelve months (the "2025 Share Repurchase Program”). The following table provides information related to our purchases of our common shares during the three months ended March 31, 2026:
| Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Approximate Dollar Value of Shares That May Yet Be Purchased Under 2025 Share Repurchase Program ($000s) | ||||||||||||||||||||||
| January 1 - 31, 2026 | 46,000 | $ | 37.86 | 46,000 | $ | 6,032 | ||||||||||||||||||||
| February 1 - 28, 2026 | 43,700 | $ | 31.23 | 43,700 | $ | 4,667 | ||||||||||||||||||||
| March 1 - 31, 2026 | 50,600 | $ | 28.53 | 50,600 | $ | 3,223 | ||||||||||||||||||||
| Total | 140,300 | $ | 32.43 | 140,300 | ||||||||||||||||||||||
Recent Sale of Unregistered Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(c) Trading Plans
During the quarter ended March 31, 2026, none of the Company's directors and officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated
During the previous quarter ended on December 31, 2025, Mr. Robert Dechant , the Company's Chief Executive Officer , adopted a trading plan intended to satisfy Rule 10b5-1(c) on November 18, 2025, to sell up to 40,000 shares of the Company's common shares between February 17, 2026 and November 16, 2026 , subject to such shares reaching certain price points.
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Item 6. Exhibits
EXHIBIT INDEX
| Incorporated by Reference | ||||||||||||||||||||||||||||||||||||||
| Exhibit Number | Description of Document | Form | File Number | Exhibit | Filing Date | Filed or Furnished Herewith | ||||||||||||||||||||||||||||||||
| 10.1 | Restated Employment Agreement dated January 1, 2021 by and between Ibex Global Solutions, Inc. and Michael Darwal | X | ||||||||||||||||||||||||||||||||||||
| 10.2 | Amendment to Restated Employment Agreement dated January 1, 2026 by and between Ibex Global Solutions, Inc. and Michael Darwal | X | ||||||||||||||||||||||||||||||||||||
| 31.1 | Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act | X | ||||||||||||||||||||||||||||||||||||
| 31.2 | Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act | X | ||||||||||||||||||||||||||||||||||||
| 32.1 | Certification of the Chief Executive Officer and the Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350 | X | ||||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document | X | ||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and included as Exhibit 101) | X | ||||||||||||||||||||||||||||||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| IBEX LIMITED | ||||||||||||||
| (Registrant) | ||||||||||||||
| Date: | May 6, 2026 | By: | /s/ Robert Dechant | |||||||||||
Robert Dechant | ||||||||||||||
Chief Executive Officer | ||||||||||||||
| (Principal Executive Officer) | ||||||||||||||
| Date: | May 6, 2026 | By: | /s/ Taylor Greenwald | |||||||||||
| Taylor Greenwald | ||||||||||||||
| Chief Financial Officer | ||||||||||||||
| (Principal Financial and Accounting Officer) | ||||||||||||||
44
FAQ
How did IBEX (IBEX) perform financially in the quarter ended March 31, 2026?
IBEX delivered solid quarterly growth, with revenue of $164.4 million, up 16.8% year over year. Net income rose to $13.3 million, a 27.3% increase, and diluted EPS improved to $0.89, reflecting higher offshore volume and stronger digital acquisition performance.
What were IBEX (IBEX) results for the nine months ended March 31, 2026?
For the nine-month period, IBEX generated $479.8 million in revenue, up 16.7% from the prior year. Net income reached $37.6 million, a 37.8% increase, and diluted EPS climbed to $2.54, aided by operating margin expansion and a lower effective tax rate.
Which client verticals drove IBEX (IBEX) revenue growth in this period?
Growth was led by HealthTech, Retail & E-commerce, Travel, Transportation & Logistics, Technology and Other verticals. HealthTech revenue rose 53.7% in the quarter and 37.2% year-to-date, while the Telecommunications vertical declined, reducing its share of total revenue.
How is IBEX (IBEX) improving its profit margins?
IBEX is shifting more work to offshore and nearshore delivery centers, which generally have higher margins than onshore operations. Combined with growth in higher-margin digital acquisition services, this helped lift operating margin to 9.8% for the quarter and 9.4% year-to-date.
What role does artificial intelligence play in IBEX (IBEX) strategy?
IBEX is integrating AI through its Wave iX platform across recruiting, training, coaching, and customer interactions. It is also deploying AI agents for voice and chat to automate low-complexity tasks, enhance customer journeys, and support higher-margin AI-enabled CX solutions.
How strong is IBEX (IBEX) liquidity and debt position?
IBEX reported $15.4 million in cash and cash equivalents at March 31, 2026, and only $1.4 million of finance lease debt. It also had $67.1 million available under its $75.0 million revolving credit facilities, supporting ongoing investments and share repurchases.