IBEX lifts fiscal 2027 outlook after 16% quarterly revenue growth

By Grace Kim

IBEX reported record fiscal 2027 first-quarter revenue of $175.2 million, up 16% from $151.2 million, and raised its full-year revenue and adjusted EBITDA guidance.

IBEX, a business process outsourcing and customer experience technology company, serves communications, healthcare, retail, logistics and financial-services clients with customer service, technical support, sales, back-office processing and other digital services. It combines customer contact centers, digital engagement channels, analytics and artificial-intelligence-enabled tools to help clients manage customer interactions and improve operational efficiency.

New customer wins and growth among existing clients drove IBEX's seventh consecutive quarter of double-digit organic growth (driven by new wins and existing-client expansion). Net income rose to $14.8 million from $12 million, while diluted earnings per share (EPS, profit divided by diluted shares) increased to $0.99 from $0.82.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) climbed 29% to $25.2 million from $19.5 million. Its adjusted EBITDA margin reached 14.4% from 12.9%, helped by higher gross margins and lower selling, general and administrative expenses as a share of revenue.

How much did IBEX raise its outlook?

• Fiscal 2027 revenue guidance: $720 million-$735 million, implying 12%-14% growth, up from $700 million-$715 million and 9%-11%.
• Adjusted EBITDA guidance: $96 million-$99 million, up from $90 million-$94 million; the new range implies 17%-20% growth from fiscal 2026.

CFO Taylor Greenwald said: "The guidance implies a 50- to 70-basis-point improvement in the full-year adjusted EBITDA margin." He expects year-over-year margin improvement in each remaining quarter, though not to the first quarter's extent.

Capital expenditures are expected to reach approximately $30 million, at the high end of the prior $25 million-$30 million range. Greenwald attributed the increase to higher growth expectations.

Takeaway: IBEX now needs faster revenue, earnings and margin growth than it previously forecast.

Where is the growth coming from?

CEO Bob Dechant said IBEX signed four traditional business process outsourcing customers during the quarter. Since quarter-end, the company has won four AI Agent deals and received verbal commitments for three more traditional outsourcing opportunities. Management expects all of them to launch in the current quarter.

Customers won in fiscal 2026 and the first quarter of fiscal 2027 accounted for approximately half of the latest quarter's revenue growth, Dechant said. Revenue from the top five, top 10 and top 25 clients rose 14%, 13% and 18%, respectively, year over year.

Demand for AI-powered customer service has grown through IBEX's partnership with Sierra, announced in May 2026. It combines Sierra's conversational AI technology with IBEX's customer experience, integration and analytics services.

At a fiber provider, IBEX deployed a Sierra-powered AI agent to replace a legacy interactive voice response system. The solution launched within six weeks and reduced abandoned calls by more than 60%. The provider then awarded IBEX its traditional call-center work, which Dechant expects the company to take over by the end of December.

CEO Bob Dechant said: "AI was resolving 20% to 40% of interactions at some clients." He expects AI services to generate additional revenue while helping IBEX win a larger share of clients' human-agent work.

Takeaway: IBEX has more business to start, but three traditional opportunities remain verbal commitments.

How are margins and cash flow trending?

Gross margin expanded 90 basis points to 30.4%, supported by growth in higher-margin services and regions. Onshore revenue grew 37%, offshore revenue rose 14% and represented half of total revenue, and nearshore revenue was flat year over year.

Sector revenue:

• HealthTech revenue grew 40% and represented 17.5% of quarterly revenue, up from 14.5% a year earlier.
• Travel, transportation and logistics revenue rose 16%.
• Technology revenue increased 10%.
• Retail and e-commerce revenue grew 9%.

Cash generation and capital returns:

• Adjusted net income rose to $16.4 million from $13.1 million; adjusted diluted EPS increased to $1.10 from $0.90.
• Operating cash flow reached $16.3 million, versus $15.7 million a year earlier; free cash flow (cash after operating spending and capital expenditure) rose to $9.2 million from $8 million.
• IBEX repurchased approximately 123,000 shares for $4.4 million and had $13.5 million remaining under its authorization.
• IBEX ended the period with $36.7 million in cash and $1.7 million in debt.

Greenwald said expanding capacity to meet demand remains the company's first spending priority, followed by share repurchases. Acquisitions are not a high priority, though IBEX would consider a suitable opportunity in a particular geography or market.

Takeaway: IBEX is funding capacity from improving cash flow while retaining $13.5 million for buybacks.

The raised outlook now tests whether AI deployments and new-client wins can sustain double-digit growth through fiscal 2027.