IBEX GLOBAL SOLUTIONS PLC ORD 1P (IBEX) Q3 2021 Earnings Call Transcript

IBEX GLOBAL SOLUTIONS PLC ORD 1P (IBEX 1.35%)
Q3 2021 Earnings Call
May 18, 2021, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by, and welcome to the ibex third-quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator instructions] As a reminder, today's program may be recorded.

And now I'd like to introduce your host for today's program, Ms. Brinlea Johnson with The Blueshirt Group. Please go ahead.

Brinlea Johnson -- Investor Relations Contact

Good afternoon, and thank you for joining us today. Before we begin, I want to remind you that the matters discussed on today's call may include forward-looking statements related to our operations, performance, financial goals and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward-looking statements reflect our opinions as of the date of this call, and we undertake no obligation to revise this information as a result of new developments, which may occur. Forward-looking statements are subject to various risks, uncertainties, and other factors that could cause our actual results to differ materially from those expected and described today.

For a more detailed description of our risk factors, please review our annual report on Form 20-F filed with the Securities and Exchange Commission. With that, I'll turn it over to Bob Dechant, CEO.

Bob Dechant -- Chief Executive Officer

Thank you, Brinlea. Good afternoon, and thank you all for joining us today as we discuss our third-quarter fiscal year 2021 financial results. We are excited to speak to you today, as Karl and I share our business overview and the financial results. First and foremost, we hope all of you are staying healthy and safe.

The pandemic reminds us every day to put our employees and their families first. COVID-19 has not only changed the way ibex does business but the entire world. In the face of this global crisis, ibex has continued to execute and outperform expectations. A critical factor in our success is our people.

Without our employees, their drive, and commitment to put our customers first, we would not have achieved the success we are experiencing today. Many thanks to each of them for their continued commitment to our business. Today, I am extremely pleased to announce that ibex is winning in the market as we build on our continued strong momentum each quarter. I'm delighted to report that this is the 15th quarter in a row where we have organically increased revenue from prior year.

Equally impressive is our EBITDA has increased 11 straight quarters from prior year. This demonstrates our ability to drive revenue growth balanced with profitability. And we closed out a very strong third quarter, delivering revenues of $108.8 million, up 7.6%. Adjusted EBITDA increased 12% to $16.7 million, resulting in record EBITDA margin performance at 15.3%.

And non-GAAP EPS increased to $0.32 from $0.25 per share. Our leadership position in BPO 2.0 continues to fuel our differentiation and the delivery of our innovative solutions. Coming off of our seasonal ramps in Q2, we had a strong quarter of growth and winning key new logos. We benefited from an extraordinary performance by our sales teams, achieving 10 wins in the quarter that spanned across many of our key verticals, including fintech, healthcare, and utilities.

These solutions are being deployed across all our major markets, including Jamaica, Nicaragua, the Philippines, and the U.S. It is also important to note ibex's ability to capture market share in fintech and our rapidly growing healthcare vertical, including wins with payers, providers, pharmacy, pharmaceutical, and humanitarian organizations. In just two short years, these two verticals alone have grown to greater than 15% of company revenues. We believe these important achievements will position ibex for a very strong and successful 2021, enabling us to reaffirm our guidance while creating solid momentum and an exceptional growth path heading into our FY 2022.

As we continue to grow and diversify a solid base of new and existing customers, revenues outside our top three legacy clients is growing rapidly. This is being driven by sizable activity in our key verticals, and this has helped us reduce concentration on the telco sector to under 30%. To further showcase this new client growth trajectory, legacy tech and telco was 75% of our total business less than five years ago. Today, 58% of our total revenue is now derived outside of these verticals, which represents more than $250 million in revenue in the last 12 months and is growing at a rapid clip of 29%.

Needless to say, the return on our investment in these strategic verticals is paying off. Moving forward, we remain laser-focused on the new economy and our key strategic verticals as the demand economy continues to grow. Throughout this journey, we have won numerous awards, both from the industry and our clients. In Q3, FY '21, we were recognized by Great Places to Work for an exceptional workplace culture for a second year in a row.

ibex was also recognized as the Best Place to Work in Central America and The Caribbean, Best Workplace in Nicaragua, and Best Workplace for Women in Central America and The Caribbean. These accolades are being reflected internally within the company as well. A recent iVoice survey measured employee sentiment toward engagement, culture, commitment, and work satisfaction. Nearly 90% of our employees responded with an employee Net Promoter Score rating of 68, considered near best-in-class and an increase of three percentage points from our prior survey.

We also won the esteemed Frost & Sullivan Nearshore Company of the Year award, which highlighted our innovative BPO 2.0 approach to CX outsourcing, and serves as a testament to the vision, strategy, leadership, execution, and culture of ibex. In addition, and most importantly, we earned several distinctive awards from our clients based on our consistent performance in voice of customer and NPS rankings. In fact, one of our largest customers has recognized ibex with a year-to-date record 15 Customer Obsession awards for its work across the Philippines, Jamaica, and Nicaragua. This includes naming Bohol its top-performing site with additional recognition over consecutive months for outstanding customer engagement over digital and voice support channels.

In fact, ibex Bohol has now won six Customer Obsession awards. This company also recognized ibex' Jamaica and Nicaragua operations as top sites for several of its lines of business. And for the same client, ibex was also first -- the first company to receive their One Network award, along with being recognized for establishing numerous best practices on its behalf. They, as well as many other clients, have turned to ibex to evolve their business, while digitally powering their CX across the entire customer journey.

This is where BPO 2.0, our people, our Wave X technology continues to outpace the competition. ibex's approach fosters innovative, future-focused technology and market responsiveness. That is accelerating expansion and driving profitable growth for us. We continue to win and distance ourselves from the competition by a relentless focus on our people, our culture, and investment in future-proof technology across ibex Digital, ibex Connect, ibex CX, and our Wave X technology suite.

We have an innate ability to work with customers to solve their toughest business challenges. No longer are we the brand behind our clients but rather the brand beside them. The experienced economy continues to drive more personalized interactions, the demand for faster outcome, and frictionless experiences. Never has there been a more important time for companies to connect with their customers for strong brand affinity and success.

I mentioned in my opening that COVID-19 has changed how companies do business. The pandemic has forced a lot of businesses to rethink how they operate in terms of how they engage with their customers and their employees for that matter, how they evolve their customer experiences, and how they perform in today's digital environment. This, as you know, is what I call BPO 2.0. Trends show that companies are no longer looking for very large, labor arbitrage-focused service providers that provide mediocre experiences.

Instead, they are looking for partners with disruptive capabilities and a strong track record of helping create digital-first CX models. This is where ibex is leading and is growing. In fact, today, the top 10 providers in our industry, all multibillion-dollar corporations, represent approximately 30% of the market share. Many of these competitors have struggled to organically grow their businesses, and size does not guarantee success.

Now with only 30% of the market share, that implies 70% of all outsourcing is contracted outside of these top 10. 70% are outside these top 10. As many of those companies have been built through acquisitions, I would argue that the percentage of outsourcing away from them is even higher. Today, ibex is winning by enabling digital innovation while being fast and flexible for these new economy brands.

And we are winning by placing the customer first in everything we do. Meaning we start with them, we understand their business challenges, then innovate and build on their behalf. Not only are we winning major deals with this customer-first mentality, but we are also being recognized for it as a key competitive differentiator. Let me give you two specific examples of recent wins where we are leveraging our people and our technology to drive an industry-leading differentiated customer experience.

First is with a well-known fintech company that is fostering an open financial system, serving over 45 million accounts worldwide. This company was looking to diversify from a heavy Manila-centric concentration and, because of often unplanned and unprecedented volume spikes, were seeking a partner to help deliver flexibility to quickly achieve scale with superior speed to proficiency. They were also looking for a technology partner that could deliver high-quality results while reducing overall cost to operate, all without compromising security and other industry requirements in a provincial Philippine market. They chose ibex with an original plan to launch a conservative timeline and conservative ramp plan.

However, the bull run on cryptocurrency that started in late December 2020 changed everything. ibex needed to rapidly pivot from an original pragmatic plan to an aggressive one where over 100 agents needed onboarding in less than five days. ibex executed this with 100% attendance and was able to get the first wave proficient within three days and exceeded partner metrics within 10 days. The next two months were all about mass scaling superior speed to proficiency and agile scheduling.

ibex successfully scaled to over 630 agents within 75 days with 100% attendance in every training class. To date, we have a 1% to 2% agent attrition on the entire program while continuing to meet and exceed client performance KPIs, all of this without sacrificing the rigorous security and compliance requirements that are common in the fintech space. The second example, we are providing customer service and technical support to one of the largest and fastest-growing mobile investing platforms. Through our relationship, this client is able to tap into the power of ibex financial ecosystem and leverage our expertise to help them meet their objectives of scale and customer satisfaction.

Specifically, ibex solution is tailored to this high-growth new economy client. We scaled to over 200 U.S.-based agents in less than 60 days, while meeting and exceeding the client's enterprise key performance indicators. We were also the first partner to launch this client in a 100% highly regulated work-at-home model with results that mirrored their internal and captive sites. In summary, ibex is ideally suited for the rapidly evolving new economy and fintech spaces, possessing the agility, flexibility, and responsiveness to pivot on a dime for unplanned and unprecedented changes.

Our data security and compliance teams are key to the overall success of our results, providing feedback and insights on consumer behavior, through regression and correlative analysis on customer satisfaction metrics. We also embedded Wave X within the training process, increasing agent speed to proficiency and positively impacting NPS. I'd like to recognize our operational teams who have been absolutely extraordinary in the face of COVID-19 cases throughout the world. Through their hard work, they have kept all of our centers safe as we continue to pass 100% of our health audits around the world.

Additionally, our work-at-home solutions are delivering exceptional results. Let me highlight some of these results in the U.S. For one of our largest clients, our top performance on client KPIs, coupled with our low attrition and high attendance in a work-at-home environment have enabled us to move contractually to a permanent 100% work-at-home solution. In addition to delivering great results for our client, this will enable us to begin taking considerable capacity off-line in the U.S.

immediately. The end result is significant improvements on margins for ibex in the U.S. Additionally, we've been successful working with new clients in the U.S. where we have been raising wages for our agents without having an impact to our cost structure, as our BPO 2.0-focused clients are willing to pay for the value of our solutions.

This has helped us remove the challenges surrounding labor shortages that some of our competitors and other sectors of this economy are facing. Looking ahead, post-pandemic, we believe this trend will continue as we target new economy clients focused on brand and CX. And finally, even while operating in a global pandemic, we are launching new centers around the globe at an amazing pace. We added 800 seats completing the build-out of our new Gtech center in Jamaica and further expansion of our provincial Bohol, Philippines, where we added another 560 seats.

Before I conclude, I do want to touch on ESG and ibex. Our company culture is one of our key competitive differentiators, including fostering a more diverse and inclusive workforce. Our shared goals, values, and attitudes define our organization and is the ultimate foundation for our success. Over a year ago, we launched the Women of ibex initiative, with the goal to increase the number of opportunities for women in the company, further the impact of women throughout ibex, and create a gender-diversified culture.

I am proud to say that 35% of our directors and above are women. In addition, ibex is active in the rainbow movement project, designed to support LGBTQIA community. Embracing global diversity makes us stronger, more agile, and competitive company. It also makes us more valuable and meaningful place to work for our employees, and the marketplace is noticing our efforts.

As previously indicated, we most recently have been recognized as Best Place to Work in Nicaragua for Women in Central America and Caribbean, among other accolades. While there is much work to do, I'm excited about our initiatives and remain committed in this regard, and we'll continue to evolve our culture and our values to reflect the communities where we operate. In summary, ibex continues to lead the BPO 2.0 revolution, becoming a partner of choice for a growing portfolio of industry-leading brands. Not only are we securing new clients across various segments, but we are dramatically increasing market share across our installed base while expanding across new lines of businesses, services, and geographies.

I am honored to serve as CEO of this company and support our clients into this new era of accelerated growth and transformation. My team and I look forward to building on our momentum and continue to grow our company into a bigger, better, and more future-ready ibex. We will accomplish this through our people, our culture, and our technology and by making it easy for our clients to do business with us. I will now turn the call over to Karl.

Karl Gabel -- Chief Financial Officer

Thank you, Bob, and good afternoon, everyone. Thank you for joining the call today. As Bob highlighted, our ability to attract new logos, coupled with focus on accelerated growth across our strategic verticals, has resulted in strong revenue and a record adjusted EBITDA margin this quarter. We continue to see strong demand from our new economy clients and work with our blue-chip clients to drive their digital transformation efforts.

We are very optimistic about the outlook of the business and believe our business model aligns with our ability to deliver on our strategic growth initiatives while creating strong return for our shareholders. Revenue of $108.8 million increased by 7.6% compared to the year-ago quarter. New economy revenue grew 6.3%, nonvoice revenue increased 10.2% and digital revenue increased 1.8% compared to the prior-year quarter. After adjusting for one client that was significantly adversely impacted by the pandemic, which we believe is more indicative of the business, new economy revenue grew 21.9%, non-voice increased by 31.8% and digital growth was 10.5%.

Next quarter, the comparative adverse impact that the pandemic had on this client will end. Revenues fiscal year to date were $334.8 million, up 10% from the prior year. Net loss in the third quarter was $0.2 million compared to net income of $4.5 million for the same period last year. On a non-GAAP basis, adjusted net income was $6 million versus $4.7 million in the prior-year quarter.

Non-GAAP pro forma fully diluted adjusted earnings per share was $0.32 in the third quarter of 2021 versus $0.25 in the prior-year quarter based on 18.8 million shares outstanding. Adjusted EBITDA increased 12.4% from the prior-year quarter to $16.7 million to a record 15.3% of revenue, compared to $14.8 million or 14.7% of revenue for the same period last year. As we have previously discussed, we continue to expand our adjusted EBITDA margin by a combination of increasing our new economy and blue-chip digitally transforming clients, growth in our offshore and nearshore geographies, and growth in our higher-margin services such as non-voice and digital services despite increased costs related to becoming a public company. In addition, we have significantly improved our onshore margins in the third quarter through our flexible work-at-home model, which has led to lower attrition and improved productivity.

Our achievement of 15% or greater adjusted EBITDA margin for the second quarter in a row is a significant milestone for the company. Turning to client mix in the third quarter. Our client concentration continues to decrease quarter over quarter. In Q3 fiscal year '21, our top three legacy clients represented 34.1% of overall revenue, down from 43.6% for the same period last year.

The revenue generated from clients outside of the legacy top three increased by 25.9% and are the main drivers of the overall revenue growth. By vertical market, telecommunications decreased to 29.1% of revenue from 36.3% in the prior-year quarter, whereas retail and e-commerce increased to 19.7% of revenue from 16.5% for the same period last year. Additionally, technology increased to 15.5% of revenue from 13%, fintech increased to 9.6% of revenue from 7% and healthcare increased to 4.7% of revenue from 3.6% versus the prior-year quarter. Third-quarter net cash inflow from operations decreased slightly to $13.9 million from $14.3 million compared to the prior-year quarter.

We had an increase in cash flow from operations, excluding working capital change and nonrecurring expenses of $1.7 million year over year. DSOs, which are currently well below the industry average, was 51 days for the third quarter, up two days from the same period last year and three days sequentially. As mentioned last quarter, we expect our DSOs to increase during the remaining of fiscal year 2021 as the temporary decrease related to a key client is expected to reverse. The company's balance sheet remains strong with $62.6 million in cash compared to $21.9 million as of June 30, 2020, strengthened by the net proceeds of the IPO in August.

Total capital expenditure, which includes amounts financed in the period, if any, were $6.6 million or 6% of revenue for the third quarter of 2021 versus $2.1 million or 2.1% of revenue for the year-ago quarter. We added 1,360 workstations this quarter, 560 in the Philippines, and the remaining 800 seats in Jamaica that I mentioned last quarter. On a normalized basis, excluding the effect of the warrant fair value adjustment, our third-quarter tax rate was 8% versus 22% for the prior period. Reduction in a normalized rate was primarily the result of a U.S.

employment tax credit, which began to benefit the company this quarter. For the current fiscal year, we continue to expect our normalized effective tax rate to be between 17% and 20%. We are pleased to report that Frontier has successfully exited bankruptcy on April 30, 2021. We are proud to be partnering with them and look forward to our continued relationship.

As it relates to COVID-19, as communicated previously, the largest impact has been operational in nature, primarily related to the complexities ensuring staff can continue to be safe and productive, whether at home or in the new socially distanced office environment. From a financial perspective, the impact of the pandemic manifested itself primarily in the form of temporary housing costs last year and local transportation costs in the Philippines this year. As a result, we have incurred nonrecurring expenses of approximately $1.1 million in the third quarter, down from $4.3 million in the first quarter. We expect to continue incurring costs related to the ongoing public transportation disruptions in the Philippines through the end of this calendar year.

Turning now to our full-year 2021 guidance. Given our strong performance year to date, we are reaffirming our guidance for both revenue and adjusted EBITDA. We are expecting revenue of $445 million to $448 million and adjusted EBITDA of $62 million to $63.5 million. In closing, our revenue momentum continues to be strong.

We are focusing on strategic, long-term growth that will continue to fuel our leadership position in a BPO 2.0. Our ability to digitally transform our clients' customer experience is buoyed by our people and their relentless focus on our customers, along with investment in future-proof technology, such as our Wave X suite of capabilities. Our success is evidenced by the pursuit and award of critical business from clients who are focused on enhancing and leveraging their customer experience as a true competitive differentiator for their business. And as a result, we continue to deliver impressive results.

With that, Bob and I will now take questions. Operator, please open the line.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from the line of Dan Perlin from RBC Capital Markets. Your question, please.

Dan Perlin -- RBC Capital Markets -- Analyst

Thanks. Good evening, guys. You touched on this a little bit, but I'm curious, the talent acquisition kind of situation in the broader IT market and even in some of the areas that you guys are in, it does sound like it's a challenging market in aggregate. You mentioned maybe that you're not seeing some of those.

Your strategy is a little bit different. So maybe you could speak to that. And I'm wondering, given that, that might not be as big an issue for you, are you seeing incremental demand because you're able to fill those seats?

Bob Dechant -- Chief Executive Officer

Sure, Dan. Hey, thanks for joining the call today, and great question. And so, you know, we're all aware of the U.S. market and how the various checks from the government, etc., are putting stress on people, getting, you know, people into work or to take the jobs that are open.

Our approach, what we've done is in the markets that, you know, we've really been selling into in the U.S. has been working with, what I'll say, very competitive wages. And so -- which I think are a little bit different than our competitors are. And so we're going in with what I think are very competitive wages, you know, with a great value proposition of the heavy work-at-home environment, giving a whole lot of flexibility to that potential employee.

And then if you parlay that with these really cool brands that we're winning, it creates a great job. And so, you know, I've heard, you know, people, my peers, you know, and I'll let talk about the challenges that they're having, we're not seeing that because a combination of that and the fact that what I -- and I refer to it, you know, as our BPO 2.0-focused clients that are really focused on ensuring you deliver a great experience and not focused on, you know, let me try to, you know, just grind on the lowest prices, you know, in the marketplace. And the combination of those really allow us to structure a great job. People are taking them.

They're staying with us. And the result is our margin structure in the U.S. has improved significantly over the last quarter from where we have been.

Dan Perlin -- RBC Capital Markets -- Analyst

Yeah. No, that's great. And my follow-up is just, can you talk a little bit about the current pipeline that you have, maybe the nature of what's, you know, inside of that pipeline and how we should be thinking about the impacts to mix as we think about, you know, maybe even heading into next year? You got -- it seems like you have a pretty good jumping-off point at this level, but I'd love to hear about the current pipeline. Thank you.

Bob Dechant -- Chief Executive Officer

Sure. Yeah. Sure. And, you know, for us, you know, the pipeline for us is so important, getting out in front of, what I'll call, marquee brands.

And, you know, I'd like to refer to this as the deals that we're going are -- they are on-broadway deals. These are not off-broadway deals. These are high-profile deals that any of my competitors would love to go after. We've been winning those, and that pipeline continues to get stronger and stronger.

Our performance this year is going to be significantly higher than any year we've had of new logo revenue. And I expect that to continue and even continue to accelerate into 2022. The look of them are the new economy brands. They're digitally transforming blue chips.

They're big in fintech. We have great traction going in healthcare and then in the whole e-commerce ecosystem. So when I fast forward out, I just feel really, really positive and excited about the traction that we had, the results that we had, how that will impact our business going forward.

Dan Perlin -- RBC Capital Markets -- Analyst

That's great. Thank you.

Operator

Thank you. Our next question comes from the line of Tobey Sommer from Truist Securities. Your question, please.

Tobey Sommer -- Truist Securities -- Analyst

Thanks. I wanted to ask a question for you about the expense and kind of margin trajectory. You just reported the highest margin here in a while or ever. The -- as you see things normalizing, and I know that term applies to multiple facets of the business, is that normalization process an upward or downward bias on margins?

Bob Dechant -- Chief Executive Officer

Tobey, thanks for joining, and that's a fantastic question. There's a lot of -- there are a lot of puts and takes inside that. We talk about the costs that we're incurring on transportation. Those are fairly significant, especially in the market like the Philippines.

But those also occur in markets like Jamaica as well. And then there are incremental costs on kind of COVID testing and, you know, things like that, clearly offset by, what I'll call, you know, big reductions in T&E, you know, although we are now back to -- you know, we have clients that are coming to our centers. And, you know, my sales team is now out in front of clients' face-to-face meeting. So we're kind of evolving beyond just pure Zoom.

And so those are a lot of puts and takes. You know, I think the way I think about this is it's kind of probably about – you know, with all of that in there, it's probably about kind of equal to maybe positive for the business. But it's not all -- you know, there are pluses and minuses. So equal to a little bit positive.

Tobey Sommer -- Truist Securities -- Analyst

And as a follow-up, I wanted to ask you about how it -- how you've improved the process to remotely onboard new talent sort of today here or early in 2021 versus when you started a little more than a year ago, at least on a full-blown basis. And if you could compare and contrast that a little bit, that'd be helpful. Thanks.

Bob Dechant -- Chief Executive Officer

And if I could, just to make sure, are you talking about kind of the onboarding of clients or more of the onboarding of our agents that need to get to --

Tobey Sommer -- Truist Securities -- Analyst

Your agents, internal talent.

Bob Dechant -- Chief Executive Officer

Yeah. Perfect. Sure. So our onboarding process is, our ideal model is to -- is what I'll call more of a hub-and-spoke model.

We're hiring -- interviewing, hiring and that early onboarding in a pure virtual environment. But we like the idea of bringing the teams into our centers to start the training process. And in the early phase of their career is where we can to have them in a brick-and-mortar place to then eventually, once they get a little bit of that cadence to move on. And that was really what I'd say our model early on, and we got very, very good at it and very good at putting in the technology in place, too.

As we move the people into the work-at-home environment, we're able to manage it in an amazing virtual environment. Where that has evolved now and one of the clients that I talked about, you know, U.S., it was 100% work-at-home environment, in fact, in a market that we had taken our center offline. So, you know, we had a lease that was expiring, and so we got rid of the center. And so we operated that completely 100% virtual.

And I think that was an evolution of as we got really good on the – you know, knowing how to hire and get the right, you know, right people sourced to then take the training element in a pure virtual environment. And our results speak for themselves. So, you know, it kind of is a little bit of an accordion and started in a more in center and now we have the ability to do this pure virtual.

Tobey Sommer -- Truist Securities -- Analyst

Thank you very much.

Operator

Our next question comes from the line of Ashwin Shirvaikar from Citi. Your question, please.

Ashwin Shirvaikar -- Citi -- Analyst

Thank you. Hi, Bob. hi, Karl. So I guess, you know, given what you said, Bob, with regards to sort of the benefit of work from home, not just on margins but also on the ability to attract and retain talent, can you give us some longer-term views on sort of the sustainability of work from home post-pandemic? How are you thinking about that? Is there -- what's the balance there between work from home and agents that go into a workplace?

Bob Dechant -- Chief Executive Officer

Sure. And I -- and when I talk about this, I also want to make sure we talk, you know, into really in two buckets. One is in the U.S. because that has definite different dynamics than in emerging markets.

And so our belief in the U.S. and our clients are fully onboard on this is work at home is here to stay and here to stay in a large area, in a large way. One of our largest clients, as I said, has now and we've contractually gone to 100% work at home on a permanent basis, allowing us to now take sizable capacity off-line. It's a benefit.

And the reason why is our results have been absolutely stellar. In the overall performance, we do an amazing job. Now we also have other clients that are, what I would say, in the -- they like having the center, but they know that the work at home, having that as a resiliency variable, a scalable variable is really important. And we can deliver -- significantly better deliver on, you know, faster scales, faster ramps, better performance, things like that, and a whole lot more flexibility in there.

And so it's along that continuum. But we really don't have any clients that are saying in the U.S. I want to be 100%, you know, in center. And that gives us great flexibility to our operating model, our margins, but it also gives to performance because that -- the results we're getting are absolutely exceptional.

When I move to emerging markets, most of our clients there are -- prefer in center with a degree of work at home. And so I view that as, you know, kind of a – you know, to be successful there, you need centers, you need brick-and-mortar, with a work-at-home complement. And, you know, those clients typically, you know, I would say, range from, you know, 90% in center to maybe 75% in center but, you know, along that continuum, Ashwin.

Ashwin Shirvaikar -- Citi -- Analyst

Understood. Understood. And just a clarification question on the only client that you've been citing that has had a pandemic impact on the growth rate. When that client comes back, is it -- I mean, in the -- are there revenues lost -- sort of lost revenues? Or are they pushed out revenues in terms of how we should think of future quarters?

Bob Dechant -- Chief Executive Officer

Sure. So the good news is we are now moving into a favorable comparison quarter coming up, our Q4. That's when the pandemic hit them drastically. And so their revenues were cut by, and I don't have the number -- significant, 70% revenues, you know, which then drove our rep -- their need for contact center services went down proportionately.

They are on a consistent buildup now month over month, quarter over quarter. And we're now moving into that quarter of, what I'd say, like-for-like comparisons. And so that will allow us to say the growth of our digital business, of our non-voice, we get like-for-like comparisons. And we're -- as our growth of new economy outside our top -- legacy top three growing in the mid-20 range, you will see that not on an adjusted basis but on a true-comparison basis.

And so we're pretty sure that we'll have those numbers going forward because that's where our growth is coming from the clients that look like that.

Ashwin Shirvaikar -- Citi -- Analyst

Right. So I guess, it's not just a comp issue then. This is a -- sure, the comps get better, but the client itself is also recovering. So that's a benefit.

OK. Got it. Understood.

Bob Dechant -- Chief Executive Officer

Yes. Yes, it will bring -- yes, it will help us drive some of our -- they will help us drive some of the revenue growth going forward. And, you know, they are in a business that is in – you know, right in the middle of really rebounding. As travel opens up, as people, you know, get around and need rides around and things like that, their business is starting to rebound every -- literally every week, every month.

Ashwin Shirvaikar -- Citi -- Analyst

Understood. Thank you.

Operator

Thank you. Our next question comes from the line of Dave Koning from Baird. Your question, please.

Dave Koning -- Robert W. Baird & Co. -- Analyst

Yes. Hey, guys. Thanks. Nice job.

Bob Dechant -- Chief Executive Officer

Thanks, Dave.

Dave Koning -- Robert W. Baird & Co. -- Analyst

And yes, yes. I guess, first of all, just the guidance for the rest of the year now assumes 10% to 12% growth in Q4, which is a lot better than the 7% growth in Q3. Is that -- it seems like a combination of just ongoing wins plus the -- probably the rebound, kind of what Ashwin was asking about just now. And it's on the toughest comp of last year at the same time.

Can we kind of assume that this type of acceleration is leading into a pretty good situation for fiscal '22 kind of in that same 10%-plus range?

Bob Dechant -- Chief Executive Officer

Yeah. So Dave, you know, we've been growing at that 10%, you know, right around there. And we expect to continue to be around that rate. Obviously, our goal is to accelerate that.

A lot of that – you know, there's a lot of variables that play into that. One is the speed with which your new ramps take place. And we've been really fast. I mean when I talked in my remarks about, you know, ramping to 675 folks in 75 days, that's a faster ramp for anybody.

So we have those things that are taking place. And then you offset that with kind of your telco, you know, kind of some of the headwinds in the telco. And then there is one variable, you know, one other variable that's out there, which is the -- here in the states, obviously, we feel good about where the pandemic is and, you know, the vaccines. In these emerging markets, unfortunately, we don't have any operation in India but, you know, very aware of that, and some of these other markets are hit.

So those are the variables we're dealing with right now real time in Q4. We think we'll be dealing with them in early Q1, Q2 of FY '22. We feel like the overall structure of the business is built for strong growth. And so we're just kind of assessing that, and we'll probably look a little conservative that in -- when we talk about FY '22 in our next quarter.

But, you know, in general, we feel our new logo machine and our ability to win in the base is really good. And lastly, Dave, we still haven't lost any material clients since I've been here. So that's a strong piece for us, too.

Dave Koning -- Robert W. Baird & Co. -- Analyst

Yes. That's all good. And then maybe the other one, just on EBITDA for Q4, just the way you're guiding, it seems like Q4, 11% to 12% margin is just kind of what the implied guidance is. The whole year has been 14%, 15%.

Why is that again that the margins will be down in Q4? And then we can assume it'll go right back. I think Tobey asked about that, but we should assume it kind of gets back to normal or better over time, right?

Bob Dechant -- Chief Executive Officer

Yes. And Karl, maybe you want to -- I'll defer over to you, Karl, if you want to comment on that.

Karl Gabel -- Chief Financial Officer

Sure, sure. Dave, a good question. Just to follow up what Bob said as far as -- and what you said. When you look at the revenue, we reaffirm guidance on the revenue.

And then overall, when you look at that range, it's roughly about a 10% year-over-year increase. And, you know, when we look at it, if there's potential COVID impacts in Q4 items like that, we just decided not to change the adjusted EBITDA guidance at this point. So right now, we reaffirmed the guidance. We mentioned what we went through on the revenue.

But with some potential impacts that you could have, we've decided not to change the adjusted EBITDA guidance.

Dave Koning -- Robert W. Baird & Co. -- Analyst

Got you. OK. Thank you.

Bob Dechant -- Chief Executive Officer

Yes. And Dave, you know, look, our -- I think we talked last quarter, hey, we were really excited to punch through 15% EBITDA. And -- but Q2, as everybody knows, you know, that calendar year, Q4 is big quarter, a lot of the seasonal ramps and all of that stuff. So for us to continue to be above 15% and had 15.3% for this quarter is really good.

We're really excited that this thing didn't fall back down. Our goal is to keep pushing and keep that. So, you know, a lot of work to be done, a lot of work to be done. And we're hopeful we'll be able to deliver, you know, a strong finish to the year.

Dave Koning -- Robert W. Baird & Co. -- Analyst

Yes. Great job on that. Thanks.

Operator

Thank you. Our next question comes from the line of Arvind Ramnani from Piper. Your question, please. You might have your phone on mute.

Arvind Ramnani -- Piper Sandler -- Analyst

Yes. Hi. Yes.

Bob Dechant -- Chief Executive Officer

Yes. Arvind. How are you doing? Yeah, we can hear you now.

Arvind Ramnani -- Piper Sandler -- Analyst

I'm doing good. I'm doing good. Congrats on a good quarter. I know you've talked about this on the call a couple of times, but I wanted to revisit it.

You've had a number of external factors sort of come through in the last like 18 months. So -- and I'm just trying to figure out like, you know, kind of the longer-term growth rates and operational impact. So the way I look at it is, one, as you indicated on the call, the pandemic has intensified the use of digital channels. And this was something you were anyway optimized for even before the pandemic.

Number two, your operations are put to the test, and the thoroughness was really well tested in 2020. Then three, you have this work from home, which has increased talent availability. And finally, of course, as a public company, you've become a much more well-known brand. And there's probably another couple of sort of big-ticket items I've missed.

But when I look at these four factors, I would think like your medium- to longer-term growth rate, as well as your operations in terms of like hiring talent and managing talent has changed significantly than maybe 18 months ago, two months -- or two years ago. If you can maybe just kind of talk about how you're thinking about like the medium- to long-term growth rate.

Bob Dechant -- Chief Executive Officer

Sure, Arvind. And you just highlighted our year -- 18 months, whatever, you know, 12 -- really the last 12 months, which has just been an amazing whirlwind. You know, not the least of which is, you know, becoming a public company, but it's -- it is nonstop new challenges coming in -- coming after us, you know, every day COVID-related, you know, clients-related, you know, talk about fintech. And we all watch everything that's going on in the world of fintech and the challenges that are there, that they also include cryptocurrency.

I mean it is just, you know, opportunities and arrows are coming nonstop. And what I am probably most proud about ibex and this team is we've been able to deal and have not been fazed by any of these. We've reacted. We've -- and then figured out how we can actually turn everything into an opportunity for us.

That is the traits that I believe our clients are looking for. And back to some of the questions on pipeline, numerous deals, I'm sitting with absolutely big, you know, leading blue-chip, digitally transforming-type companies that are saying, we are moving away from the multibillion-dollar players. We are looking for companies that, ibex, you fit the bill right. And there's a few others out there that are -- that certainly fit that well.

So with a lot of confidence, my team and I as we're looking out over the three-year time frame, we're looking at how do we accelerate growth here. And I think all of those areas, plus us now having a lot bigger brand recognition as a public company, which was one of the reasons we did decide to IPO, those elements are lining up. And so I – you know, our goal is to, you know, really use all of those to create an acceleration vector here on what has been great growth rates. And you will see, I believe the mathematics of this are, as kind of those legacy guys become smaller and smaller and telco becomes smaller and smaller, just think of the size of the rest of the business that is growing mid-25s to 30%.

That becomes a higher percentage of the business. That's why we're so excited about this business. That's how we're thinking about this. And that's what the -- that's really the team and I that – you know, that's the journey that, you know, we're trying to get to.

Arvind Ramnani -- Piper Sandler -- Analyst

Terrific. And not to you put in the spot on this earnings call, but maybe on the next earnings call. You know, if you are able to share, you know, sort of how you're thinking about medium- and long-term growth, you know, in light of this. I'm sure it'll take some analysis and kind of thought to see what you're comfortable sharing, but I think that will be welcomed by everybody.

Bob Dechant -- Chief Executive Officer

That's a great suggestion, and I think we will work and see what best forum to go do that. And certainly, you know, around that time frame, we will have -- I think we'll be in a good position. And so why don't we take that as a to-do and figure out what the best way, you know, to go about that.

Arvind Ramnani -- Piper Sandler -- Analyst

Fantastic. Thank you.

Operator

This does conclude the question-and-answer session of today's program. I'd like to hand the program back to management for any further remarks.

Bob Dechant -- Chief Executive Officer

Sure. And thanks, Jonathan, and I appreciate all you've done today. So hey, look, just in closing, I really like to say, and you've heard it, we really like our competitive position in this space and the momentum we have. And we'll look forward to keeping you posted as we close out FY '21 and move on to FY '22, which we're really excited about.

So thanks all for your participation, and stay healthy. Thank you.

Operator

[Operator signoff]

Duration: 71 minutes

Call participants:

Brinlea Johnson -- Investor Relations Contact

Bob Dechant -- Chief Executive Officer

Karl Gabel -- Chief Financial Officer

Dan Perlin -- RBC Capital Markets -- Analyst

Tobey Sommer -- Truist Securities -- Analyst

Ashwin Shirvaikar -- Citi -- Analyst

Dave Koning -- Robert W. Baird & Co. -- Analyst

Arvind Ramnani -- Piper Sandler -- Analyst

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