ibex Q4 FY26 slides: AI push drives growth, margins face pressure

On September 10, 2026, outsourcing firm ibex (NASDAQ:IBEX) disclosed its fiscal fourth quarter and full-year 2026 results, highlighting record revenue and a strategic shift towards AI-driven customer service solutions. Despite meeting revenue and earnings expectations, shares saw a 2% decline in after-hours trading due to concerns over margin compression and slower growth forecasts for fiscal 2027.

The company reported Q4 revenue of $164.3 million and adjusted earnings per share of $0.85, exceeding analyst estimates of $153.38 million and $0.79, respectively. However, adjusted EBITDA margins dropped to 12.3% from 13.9% the previous year, driven by increased training expenses and restructuring costs. CEO Bob Dechant emphasized ibex's transformation from a conventional BPO provider to an AI-powered customer experience leader.

The company's Q4 performance showed robust revenue growth of 12% year-over-year, boosted by strong results in HealthTech (+42%), Technology (+27%), Travel, Transportation & Logistics (+18%), and Retail & E-commerce (+7%). Client retention remained exceptionally high at over 99%, and the company secured nine new clients, bringing the total to 17 for the year.

The partnership with conversational AI platform provider Sierra aimed to integrate AI technology into ibex's existing BPO model. The collaboration has resulted in over 10 AI agent solutions across five industries, delivering measurable results and new revenue streams. Specific case studies showcased the success of these implementations, such as Philippine Airlines and BJ’s Wholesale Club.

Despite the growth, margin pressure persisted, attributed to training costs, temporary inefficiencies in delivery centers, and higher fuel prices. Full-year 2026 adjusted EBITDA amounted to $82.4 million, a 14% increase, with margins at 12.8%. The company reported a record free cash flow of $31.2 million and maintained a strong balance sheet with $30.9 million in net cash.

Client concentration decreased, with the largest client now accounting for 9% of revenue, down from 10% previously, and the top 25 clients contributing to 75% of revenue. AI solutions are being deployed across all major industry sectors, signifying a shift from a niche offering to a horizontal capability. For fiscal 2027, ibex projected a slowdown in growth rates compared to the previous year.