IBEX Limited (IBEX) Bundle
Understanding IBEX Limited (IBEX) Revenue Streams
Understanding IBEX Limited’s Revenue Streams
The revenue for IBEX Limited for the three months ended September 30, 2024, was $129.7 million, reflecting an increase of $5.1 million or 4.1% compared to the same period in 2023. This growth was attributed to increases across several key verticals.
Breakdown of Primary Revenue Sources
- HealthTech: Revenue increased by $3.5 million or 23.4%.
- Retail & E-commerce: Revenue increased by $2.5 million or 8.6%.
- Travel, Transportation & Logistics: Revenue increased by $1.7 million or 10.0%.
- FinTech: Revenue decreased by $2.4 million or 13.0%.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for the three months ended September 30, 2024, was 4.1%, compared to 3.2% for the same period in 2023.
Contribution of Different Business Segments to Overall Revenue
| Segment | Revenue (2024) | Revenue (2023) | Percentage of Total Revenue (2024) | Percentage of Total Revenue (2023) |
|---|---|---|---|---|
| HealthTech | $18.3 million | $14.8 million | 14.1% | 11.9% |
| Retail & E-commerce | $31.8 million | $29.3 million | 24.5% | 23.4% |
| Travel, Transportation & Logistics | $18.4 million | $16.7 million | 14.2% | 13.5% |
| FinTech | $16.1 million | $18.5 million | 12.4% | 14.8% |
| Other | $44.9 million | $45.3 million | 34.7% | 36.4% |
Analysis of Significant Changes in Revenue Streams
The increase in revenue from the HealthTech, Retail & E-commerce, and Travel, Transportation & Logistics verticals indicates a positive trend in these segments. In contrast, the decrease in the FinTech segment signals potential challenges in that area, which may require strategic adjustments. The overall revenue from the United States contributed $124.6 million or 96.3% of total revenue, while revenue from other countries amounted to $5.1 million.
Geographic Revenue Breakdown
| Geography | Revenue (2024) | Revenue (2023) |
|---|---|---|
| Onshore (U.S.) | $31.1 million | $31.5 million |
| Offshore (Philippines, Pakistan) | $64.4 million | $57.4 million |
| Nearshore (Jamaica, Nicaragua, Honduras) | $34.2 million | $35.7 million |
A Deep Dive into IBEX Limited (IBEX) Profitability
A Deep Dive into IBEX Limited's Profitability
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit was calculated as follows:
| Metric | 2024 ($000s) | 2023 ($000s) |
|---|---|---|
| Revenue | 129,717 | 124,609 |
| Cost of Services | 90,041 | 88,196 |
| Gross Profit | 39,676 | 36,413 |
| Gross Profit Margin | 30.6% | 29.2% |
The gross profit margin increased from 29.2% in the prior year to 30.6% in 2024, reflecting improved operational efficiencies and revenue growth in higher-margin segments.
Operating Profit Margin: The operating income for the same period was:
| Metric | 2024 ($000s) | 2023 ($000s) |
|---|---|---|
| Income from Operations | 9,092 | 8,331 |
| Total Revenue | 129,717 | 124,609 |
| Operating Profit Margin | 7.0% | 6.7% |
The operating profit margin increased from 6.7% in 2023 to 7.0% in 2024, indicating enhanced cost management efforts and operational efficiency despite rising expenses.
Net Profit Margin: The net income figures for the three months ended September 30, 2024 are detailed below:
| Metric | 2024 ($000s) | 2023 ($000s) |
|---|---|---|
| Net Income | 7,531 | 7,425 |
| Total Revenue | 129,717 | 124,609 |
| Net Profit Margin | 5.8% | 6.0% |
The net profit margin slightly decreased from 6.0% to 5.8% year-over-year, influenced by higher income tax expenses due to an increase in the effective tax rate, which was 20.8% in 2024 compared to 15.7% in 2023.
Trends in Profitability Over Time: The following table summarizes the profitability metrics over the last two quarters:
| Quarter | Gross Profit Margin | Operating Profit Margin | Net Profit Margin |
|---|---|---|---|
| Q2 2024 | 30.6% | 7.0% | 5.8% |
| Q2 2023 | 29.2% | 6.7% | 6.0% |
This data illustrates a general trend of improving profitability margins, indicating effective management strategies and a favorable revenue mix.
Comparison of Profitability Ratios with Industry Averages: The industry average for gross profit margin in the Business Process Outsourcing sector is approximately 25%, while operating profit margins typically range around 5-6%. IBEX Limited's margins exceed these averages, showcasing its competitive edge and operational effectiveness.
Analysis of Operational Efficiency: The operational efficiency metrics reflect a decrease in payroll costs as a percentage of revenue, from 53.6% in the previous year to 52.4% in 2024, demonstrating improved cost management strategies. The decrease in depreciation and amortization expense to 3.4% of revenue also contributed positively to the operating profit margin.
Debt vs. Equity: How IBEX Limited (IBEX) Finances Its Growth
Debt vs. Equity: How IBEX Limited Finances Its Growth
As of September 30, 2024, IBEX Limited reported total debt of $1.5 million, which includes $698,000 in current maturities and $802,000 in long-term debt. The company's debt primarily consists of finance leases.
The debt-to-equity ratio for IBEX Limited stands at approximately 0.009 when calculated using total liabilities of $135.2 million and total stockholders' equity of $171.1 million. This ratio is significantly lower than the industry average, which typically ranges from 0.5 to 1.0, indicating a conservative approach to leveraging.
IBEX Limited has access to a revolving credit facility of $80 million, with $61 million available as of September 30, 2024. This facility includes various financial and operational covenants, and the company has remained compliant with these covenants as of the reporting date.
Recent debt activity includes the maintenance of finance leases totaling $1.5 million, with a slight decrease from $1.527 million in the previous quarter. The company has not issued new debt in the recent quarter, reflecting a strategy focused on managing existing obligations rather than increasing leverage.
IBEX Limited balances its growth financing through a mix of debt and equity. As of September 30, 2024, the company had cash and cash equivalents of $62.3 million, allowing it to cover its short-term obligations comfortably. The company's strategy emphasizes operational cash flow and equity financing, as evidenced by its recent share repurchase program authorized for $30 million.
| Financial Metric | Value ($000s) |
|---|---|
| Total Debt | 1,500 |
| Current Maturities of Long-term Debt | 698 |
| Long-term Debt | 802 |
| Debt-to-Equity Ratio | 0.009 |
| Available Borrowing under Credit Facility | 61,000 |
| Cash and Cash Equivalents | 62,305 |
| Share Repurchase Program Authorized | 30,000 |
Assessing IBEX Limited (IBEX) Liquidity
Assessing IBEX Limited's Liquidity
Current Ratio: As of September 30, 2024, the current ratio is calculated as follows:
| Current Assets ($000s) | Current Liabilities ($000s) | Current Ratio |
|---|---|---|
| Cash and Cash Equivalents: 62,305 | Total Current Liabilities: 77,772 | 0.80 |
Quick Ratio: The quick ratio is calculated excluding inventories, which are negligible in this context:
| Quick Assets ($000s) | Current Liabilities ($000s) | Quick Ratio |
|---|---|---|
| Cash and Cash Equivalents: 62,305 | Total Current Liabilities: 77,772 | 0.80 |
Analysis of Working Capital Trends
As of September 30, 2024, the working capital position shows:
| Current Assets ($000s) | Current Liabilities ($000s) | Working Capital ($000s) |
|---|---|---|
| Current Assets: 62,305 | Current Liabilities: 77,772 | (15,467) |
This indicates a negative working capital, which may raise concerns about short-term liquidity. However, the company has significant cash reserves and access to credit facilities.
Cash Flow Statements Overview
The cash flow from operating activities for the three months ended September 30, 2024, is:
| Cash Flow Type | Amount ($000s) |
|---|---|
| Net Cash Provided by Operating Activities | 7,762 |
| Less: Capital Expenditures | (3,630) |
| Free Cash Flow | 4,132 |
Cash flow from investing activities was:
| Cash Flow Type | Amount ($000s) |
|---|---|
| Net Cash Outflow from Investing Activities | (3,630) |
Cash flow from financing activities was:
| Cash Flow Type | Amount ($000s) |
|---|---|
| Net Cash Outflow from Financing Activities | (4,596) |
Potential Liquidity Concerns or Strengths
The total cash and cash equivalents as of September 30, 2024, amounted to 62,305 (including 8,200 located outside the U.S.). The total debt was 1,500, indicating a strong liquidity position with net cash of 60,805.
Debt structure as of September 30, 2024:
| Debt Type | Amount ($000s) |
|---|---|
| Current Debt | 698 |
| Non-Current Debt | 802 |
| Total Debt | 1,500 |
Compliance with all debt covenants was confirmed as of September 30, 2024, indicating no immediate liquidity concerns. The company also has unused availability under its existing credit facility of 61,000.
Is IBEX Limited (IBEX) Overvalued or Undervalued?
Valuation Analysis
To determine whether the company is overvalued or undervalued, we will analyze several key financial ratios and metrics, including price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios.
Price-to-Earnings (P/E) Ratio
The current stock price is $18.50, with a trailing twelve months (TTM) earnings per share (EPS) of $0.43. This results in a P/E ratio of:
P/E Ratio = Stock Price / EPS = $18.50 / $0.43 = 43.02
Price-to-Book (P/B) Ratio
The book value per share is calculated as total equity divided by the number of outstanding shares. As of September 30, 2024, total stockholders' equity was $171.1 million and shares outstanding were approximately 16.8 million.
Book Value Per Share = Total Equity / Outstanding Shares = $171,091,000 / 16,765,381 = $10.21
The P/B ratio is then:
P/B Ratio = Stock Price / Book Value Per Share = $18.50 / $10.21 = 1.81
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
To calculate the EV/EBITDA ratio, we first need the enterprise value (EV). The formula for EV is:
EV = Market Capitalization + Total Debt - Cash and Cash Equivalents
Market capitalization is calculated as:
Market Cap = Stock Price x Shares Outstanding = $18.50 x 16,765,381 = $310,307,000
As of September 30, 2024, total debt was $1.5 million, and cash and cash equivalents were $62.3 million.
EV = $310,307,000 + $1,500,000 - $62,305,000 = $249,503,000
Adjusted EBITDA for the three months ended September 30, 2024, was $15.6 million.
EV/EBITDA Ratio = EV / Adjusted EBITDA = $249,503,000 / $15,588,000 = 16.00
Stock Price Trends
Over the last 12 months, the stock has shown a trend as follows:
- 12 Months Ago: $15.00
- 6 Months Ago: $17.00
- Current Price: $18.50
This indicates a price increase of approximately 23.33% over the past year.
Dividend Yield and Payout Ratios
The company has not declared any dividends over the last fiscal year, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
Current analyst recommendations are as follows:
- Buy: 4 analysts
- Hold: 2 analysts
- Sell: 1 analyst
| Metric | Value |
|---|---|
| P/E Ratio | 43.02 |
| P/B Ratio | 1.81 |
| EV/EBITDA Ratio | 16.00 |
| Current Stock Price | $18.50 |
| 12-Month Price Change | 23.33% |
| Dividend Yield | 0% |
| Analyst Buy Recommendations | 4 |
| Analyst Hold Recommendations | 2 |
| Analyst Sell Recommendations | 1 |
Key Risks Facing IBEX Limited (IBEX)
Key Risks Facing IBEX Limited
IBEX Limited is exposed to various risk factors that could impact its financial health. Understanding these risks is crucial for investors looking to gauge the company's stability and growth potential.
Internal and External Risks
IBEX faces several internal and external risks, including:
- Industry Competition: The business process outsourcing (BPO) industry is highly competitive, with numerous players vying for market share. This competition can lead to pricing pressures and reduced margins.
- Macroeconomic Conditions: Economic fluctuations, including inflation and interest rate changes, can affect client spending and operational costs.
- Regulatory Changes: Changes in regulations, especially in foreign markets, can impact operational costs and compliance requirements.
- Market Conditions: The demand for outsourcing services can be cyclical and influenced by broader economic trends.
Operational Risks
Recent earnings reports have highlighted several operational risks:
- Client Concentration: A significant portion of revenue is derived from a limited number of clients. For the three months ended September 30, 2024, one client accounted for approximately 11% of total revenue.
- Cost of Services: The cost of services was $90.0 million during the three months ended September 30, 2024, an increase of 2.1% compared to the prior year.
Financial Risks
Financial risks include:
- Debt Levels: As of September 30, 2024, total debt was $1.5 million, consisting of finance leases.
- Effective Tax Rate: The effective tax rate increased to 20.8% for the three months ended September 30, 2024, up from 15.7% in the prior year.
Strategic Risks
Strategic risks that could impact future performance include:
- Shift in Client Focus: Clients are increasingly looking to reduce costs, leading to a potential shift from onshore to offshore service delivery, which may impact revenues.
- Technological Advancements: The integration of AI into the BPO sector presents both opportunities and risks. While it can enhance efficiencies, it may also disrupt traditional service models.
Mitigation Strategies
IBEX has implemented several strategies to mitigate these risks:
- Diversification of Client Base: The company is focusing on expanding its client base across various sectors to reduce dependency on any single client.
- Investment in Technology: Continued investments in technology, including AI, aim to improve service delivery and client engagement.
Recent Financial Performance
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Revenue | $129.7 million | $124.6 million |
| Net Income | $7.5 million | $7.4 million |
| Free Cash Flow | $4.1 million | $6.6 million |
| Adjusted EBITDA Margin | 12.0% | 11.0% |
As of September 30, 2024, IBEX's cash and cash equivalents totaled $62.3 million.
Future Growth Prospects for IBEX Limited (IBEX)
Future Growth Prospects for IBEX Limited
Analysis of Key Growth Drivers
IBEX Limited is positioned for growth through several key drivers. The company has reported a revenue of $129.7 million for the three months ended September 30, 2024, marking an increase of 4.1% compared to the same period in the previous year. This growth is largely attributed to its HealthTech vertical, which saw an increase of $3.5 million or 23.4%, as well as the Retail & E-commerce vertical, which experienced a growth of $2.5 million or 8.6%.
Future Revenue Growth Projections and Earnings Estimates
Future revenue growth is projected to continue, driven by the expansion in key verticals and new client acquisitions. The net income for the three months ending September 30, 2024, was $7.5 million, a 1.4% increase from $7.4 million in the prior year. The fully diluted earnings per share rose to $0.43 from $0.39.
Strategic Initiatives and Partnerships
IBEX is actively leveraging artificial intelligence (AI) to enhance operational efficiencies and customer experiences. The company's Wave iX technology is part of a three-pronged AI strategy aimed at increasing agent productivity and providing deeper customer insights. This strategic focus is expected to capture a significant share of AI-impacted future revenue.
Competitive Advantages
The company operates a global customer experience delivery model with 31 delivery centers worldwide, employing approximately 31,000 employees. This scale allows IBEX to provide cost-effective solutions, particularly as clients shift more operations offshore to reduce costs.
| Growth Driver | Details |
|---|---|
| Revenue Growth | $129.7 million for Q3 2024, a 4.1% increase YoY |
| Net Income | $7.5 million for Q3 2024, up 1.4% YoY |
| HealthTech Growth | $3.5 million increase, 23.4% growth |
| Retail & E-commerce Growth | $2.5 million increase, 8.6% growth |
| AI Strategy | Leveraging Wave iX technology for enhanced customer experience |
| Employee Base | Approximately 31,000 employees |
IBEX Limited (IBEX) DCF Excel Template
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Updated on 16 Nov 2024
Resources:
- IBEX Limited (IBEX) Financial Statements – Access the full quarterly financial statements for Q1 2025 to get an in-depth view of IBEX Limited (IBEX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View IBEX Limited (IBEX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.