Executives from IBEX (NASDAQ:IBEX) outlined the company’s positioning in the business process outsourcing (BPO) and contact center market, emphasizing organic growth, margin expansion, and an emerging AI-driven product opportunity during a recent investor presentation and Q&A session.
Positioning in a fragmented BPO market
Management described IBEX as a provider that “connect[s] some of the world’s best brands with their customers seamlessly with human agents and AI agents.” The company said it employs about 38,000 people globally and supports customer interactions for brands across use cases such as e-commerce delivery inquiries and healthcare benefits questions.
From “BPO 1.0” to “BPO 2.0,” and an AI-driven “BPO 3.0”
IBEX leadership described an evolution in the industry from what it called “BPO 1.0”—a labor arbitrage model where “bigger was better” and cost was the primary focus—to “BPO 2.0,” where customer experience and brand alignment increasingly drive outsourcing decisions. The company said it has built a differentiated offering designed to compete on quality and outcomes rather than simply cost.
Executives said the company’s “BPO 2.0 power stack” includes:
- Culture, which management said supports consistent service delivery
- Technology, including a tech stack referred to as “Wave iX”
- Business insights to identify customer dissatisfaction and points of friction
As proof points, management highlighted an employee Net Promoter Score (eNPS) of 77 and a client Net Promoter Score of 71. The company also cited revenue retention of about 98.5%, saying it “doesn’t lose clients” and experiences less than 1.5% revenue exiting the business.
Looking ahead, executives said they are “defining BPO 3.0” by layering AI on top of existing operations and combining AI agents with human agents to deliver an end-to-end solution. Management said it has partnered with “a couple of the best AI companies in the world” building AI agents, and it plans to apply its customer-journey insights to determine which interactions should be automated versus handled by humans.
Financial performance and operating leverage
IBEX’s leadership reported strong recent performance and emphasized that growth has been organic rather than acquisition-driven. The company said its four-year compound annual revenue growth rate has been 6%, with management noting a pause between fiscal 2023 and fiscal 2024 as customers initially digested the implications of AI and delayed some purchasing decisions. Excluding that period, management said average growth has been closer to 10%, and it cited 16% growth for calendar year 2025.
Management said profitability has grown faster than revenue, pointing to operating leverage and mix shift toward higher-margin services. Executives said adjusted EBITDA growth has been nearly twice revenue growth over time, while adjusted EPS has grown faster still. The company also highlighted share repurchases, stating it has repurchased about 30% of its shares over the past two to three years.
Discussing fiscal second-quarter results (quarter ended Dec. 31), the company cited:
- 17% revenue growth (GAAP)
- 32% net income growth (GAAP)
- 45% EPS growth (GAAP)
On a non-GAAP basis, management said adjusted EBITDA rose 25%, adjusted net income increased 33%, and adjusted EPS grew 46%. The company said its EBITDA margin expanded year over year from 11.8% to 12.6%.
Executives attributed the quarter’s results to growth in higher-margin verticals and offshore geographies, citing vertical growth of 35% in HealthTech, 20% in travel and transportation, and 17% in retail. Management also highlighted SG&A discipline, noting SG&A as a percentage of revenue improved from 18.3% to 16.8% year over year.
Client mix, “land and expand,” and outsourcing catalysts
IBEX emphasized client and vertical diversification. Management said it has 60 clients generating $1 million or more in annual revenue and that vertical markets are each roughly 10% to 25% of total revenue. Executives noted telecommunications is an exception to the growth focus because it tends to carry lower margins, and the company said it is intentionally prioritizing higher-margin verticals instead.
Management pointed to healthcare as an example of organic expansion, stating that four years ago the company had no healthcare revenue and is now exiting the year with close to $100 million in healthcare revenue, driven organically.
Executives also described a typical new-client ramp profile: revenue from a new logo in year two tends to be about 2.5 times year one, and year three can grow another 50%. They said new logos may contribute a smaller portion of growth in year one because programs are ramping, but can “move the needle” in subsequent years as they scale. The company added that its top 10 clients grew 20% in the most recent quarter versus the prior year.
In response to a question about why clients outsource rather than keep work in-house, management cited both cost and service quality. As an example, executives discussed a large home improvement company that initially ran customer service in a captive onshore model and then shifted work to IBEX in a nearshore setup, citing an estimated cost reduction of about 60% compared with the captive operation. Management said the client expanded from zero outsourced work to about 80% outsourced over a two-year period because IBEX was outperforming the in-house operation.
AI economics: early-stage but viewed as upside
Management said the AI business remains early and “not material” to current results, framing it as future upside. However, executives provided illustrative cost benchmarks for interactions handled in different ways:
- U.S. human-assisted interaction: about $8 to $10 per interaction
- Philippines human-assisted interaction: about $3 per interaction
- AI interaction: about $1.50 per interaction (ballpark)
They also said AI-enabled solutions could carry significantly higher margins than the current business, describing AI margins as “more than double” compared with the company’s existing margin profile. Executives cautioned that outcomes vary by client and emphasized the importance of applying automation selectively to the right interaction types, citing an MIT study they said found that 90% of early AI-only solutions have not been effective.
Executives closed by reiterating confidence in IBEX’s trajectory and highlighting a “strong balance sheet.” Management said the company has virtually no debt and roughly $15 million in cash, and it described record operating cash flow in both the first and second quarters of the fiscal year. The company said it is using cash flow to reinvest in capacity based on demand, noting it can achieve a payback on new facilities in as little as a year, while also continuing share repurchases.
About IBEX (NASDAQ:IBEX)
IBEX Holdings, Inc is a global business process outsourcing (BPO) company that specializes in customer experience solutions for a range of industries, including telecommunications, cable, technology, financial services and e-commerce. The company’s core offerings encompass multichannel customer support delivered via voice, email, chat, social media and digital self-service platforms. In addition to front-line contact center services, IBEX provides back-office processing, order management, technical troubleshooting and analytics-driven insights to help clients optimize operational efficiency and customer satisfaction.
Beyond traditional contact center operations, IBEX has built a proprietary technology stack designed to integrate real-time data analytics, workforce management and quality assurance.
