Shares of IBEX Limited (IBEX +2.35%) fell 9.2% on Friday after the global business-process outsourcing company announced weaker-than-expected quarterly results.
NASDAQ: IBEX
Key Data Points
IBEX grapples with soft volumes from existing clients
For its fiscal second-quarter 2024 ended Dec. 31, 2023, IBEX's revenue declined 4.8% year over year to $132.6 million, translating to adjusted (non-GAAP) net income of $8 million, or $0.44 per share -- well below estimates for earnings of $0.50 per share. .
IBEX did win eight new clients during the quarter, compared to seven in last year's fiscal Q2, bringing its first-half new-client wins to 12. But CEO Bob Dechant noted that the company's top and bottom lines were impacted by soft volumes with several existing clients.
What's next for IBEX stock?
IBEX is increasing the size of its sales organization and enhancing AI capabilities in an effort to drive growth going forward, and believes its recent client wins and pipeline growth are beginning to reflect those efforts.
In the meantime, IBEX lowered its guidance to call for full fiscal-year 2024 revenue of between $505 million and $510 million (down from $525 million to $535 million previously), with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin in the range of 12% to 13% (down from 13% before).
In the end, IBEX might well be positioned to resume growing if its expanded salesforce and AI initiatives continue to bear fruit. But this was a disappointing quarter coupled with an incremental guidance reduction, and the stock is responding in kind.
