Q3 2021 Ibex Ltd Earnings Call
Yeah.
Yeah.
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 speaker's presentation. There will be a question and answer session to ask a question during the session and you'll need to press star one.
Your telephone as a reminder, today's program may be recorded and now I'd like to introduce your host for todays program Ms. Brittany Johnson with the Blue shirt group. Please go ahead.
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 growth and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward looking statements reflect our opinion as of the day of this call and we undertake no.
And to revise this information and the result of new developments, which may occur.
These 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 from.
More detailed description of our risk factors. Please review our annual report on form 20-F filed with the Securities and Exchange Commission.
I'll turn it over to Bob decade, Yeah.
Thank you Brittany.
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 is Carl and I share our business overview and the financial results.
First and foremost we hope all of you are staying healthy and safe day.
And Dennis Martin just 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 and.
In the face of this global crisis, IBEX has continued to execute and outperform expectations.
Critical factor and our success is our people.
Without our employees and 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 and 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 and.
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 seven 6%.
Adjusted EBITDA increased 12% to $16 7 million.
Resulting in record EBITDA margin performance at 15, 3%.
And non-GAAP EPS increased 32 cents from.
25 cents per share.
Our leadership position and B P. O two point, though continues to fuel our differentiation and the delivery of our innovative solutions.
Coming off of our seasonal ramps and Q2, we had a strong quarter of growth and winning key new logos.
We benefited from an extraordinary performance by our sales teams achieved.
Achieving 10 wins in the quarter net.
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, and the Philippines and the U S.
It is also important to note IBEX is ability to capture market share.
And Fintech and a rapidly growing health care vertical, including wins with payers providers pharmacy pharmaceutical and humanitarian organizations and.
And just two short years. These two verticals loan have grown to greater than 15% of company and revenues.
We believe these important achievements will position buybacks for a very strong and successful.
And in 'twenty, one, enabling us to reaffirm our guidance, while creating solid momentum and and exceptional growth path heading into our FY 2020 two.
As we continue to grow and diversify our solid base of new and existing customers revenues outside our top three legacy clients is growing rapidly.
This is being driven by sizable activity and our key verticals and.
It has helped us reduce concentration on the telco sector to under 30%.
To further showcase this new client growth trajectory.
Our legacy Tech and telco with 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 and revenue.
And the last 12 months and is growing at a rapid clip of 29%.
Needless to say the return on our investment and 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 'twenty, one we were recognized by Great places to work for and exceptional workplace culture for a second year in a row.
IBEX was also recognized as the best place to work and Central America, and the Caribbean Best.
Best workplace in Nicaragua, and best workplace for women and Central America and the Caribbean.
These accolades are being reflected internally within the company as well.
A recent I voice survey.
Measured employee sentiment towards engagement culture commitment and work satisfaction.
Nearly 90% of our employees responded with the 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 steamed Frost and Sullivan Nearshore company of the year Award, which highlighted our innovative P. P. O 2.0 approach to CX outsourcing and serves as a testament to the vision strategy leadership execution and culture of either.
Ex.
In addition, and.
And most importantly, we earned several distinctive awards from our clients based on our consistent performance in voice of customer and.
And N P S 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.
And this includes naming ball, it's top performing site.
With additional recognition over consecutive months for outstanding customer engagement over digital and voice support channels.
In fact, IBEX book Hall is now one six customer obsession awards.
This company also recognized IBEX as Jamaica, and Nicaragua operations as top sites for several of its lines of business.
And for the same client IBEX was also 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 seat ex across the entire customer journey.
This is where <unk> to point out our people our wave ex technology continues to outpace the competition.
IBEX 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 ex 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.
And.
The experience economy continues to drive more personalized interactions and 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.
And the pandemic is force a lot of businesses to rethink how they operate in terms of how they engage with their customers.
And their employees for that matter and how they evolve their customer experiences and how they perform in todays digital environment.
This as you know is what I call P. P O two point, though.
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 and 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.
Our 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.
And while being fast and flexible for these new economy brands.
And we are winning by placing the customer first and.
Everything we do.
Meaning we start with them, we understand their business challenges that innovate and build on their behalf.
Not only are we winning major deals with this customer first mentality.
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 and 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.
And this company was looking to diversify from a heavy Manila centric concentration.
And because of often unplanned and unprecedented volume spikes, we're 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 and a provincial Philippine market.
They chose IBEX within original plan to launch a conservative timeline and conservative ramp plan.
However, the bull run on crypto currency that started in late December 2020 changed everything.
IBEX needed to rapidly pivot from and original pragmatic plan, two and aggressive one where over 100 agents needed onboarding and 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, we're all about mass scaling superior speed to proficiency and agile scheduling.
IBEX successfully scaled to over 630 agents within 75 days with 100% attendance and 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 and the fintech space.
The second example.
And you're providing customer service and technical support to one of the largest and fastest growing mobile and best thing 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 scale and customer satisfaction.
Specifically IBEX solution is tailored to this high growth new economy clients.
We scaled to over 200 U S based agents and less than 60 days, while meeting and exceeding the clients' enterprise key performance indicators.
We were also the first partner to launch this client and 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 correlate of analysis on customer satisfaction metrics.
We also embedded waived ex within the training process, increasing agent speed to proficiency.
And positively impacting and P S.
I'd like to recognize our operational teams, who have been absolutely extraordinary and 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 helpful and it's around the world and.
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 and 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 from our clients.
This will enable us to begin taking considerable capacity offline in the U S. Immediately. The end result is significant improvements on margins for IDEXX in the U S.
<unk>, we've been successful working with new clients in the U S, where we have been raising wages for our agents with out having an impact to our cost structure as our B P. O to O 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 postponed damage. We believe this trend will continue as we target new economy clients focused on brand and CX.
And finally, even while operating and a global pandemic.
We are launching new centers around the globe and amazing pace.
And 800 seats completing the built at Buildout of our New G Tech Center in Jamaica and.
Further expansion of our Prudential behalf, Philippines, where we added another 566.
Before I conclude I do want to touch on ESG at IMAX.
Our company culture.
Is one of our key competitive differentiators.
Including fostering a more diverse and inclusive workforce.
Our share goals values and attitudes and 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 and the company.
Further the impact of women throughout IBEX and create a gender diversified culture.
And I am proud to say that 35% of our directors and above are women.
In addition, <unk>.
<unk> is active and the Rainbow movement project <unk>.
Designed to support LGBTQ 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.
Previously indicated.
<unk> recently had been recognized as best place to work and Nicaragua for women in Central America, and Caribbean among other accolades and while there's much work to do I'm excited about our initiatives and remain committed in this regard and we will continue to evolve our culture and our values.
To reflect the communities where we operate.
In summary, IBEX continues to lead the PPO 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.
We are dramatically increasing market share across our installed base, while expanding across new lines of businesses services and geographies.
Honored to serve as CEO of this company and support our clients into this new era and 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 IDEXX.
We will accomplish this through our people our culture and our technology and.
And by making it easy for our clients to do business with us.
I will now turn the call over to Carl.
Thank you Bob and good afternoon, everyone. Thank you for joining the call today.
As Bob highlighted.
And to attract new logos, coupled with focus on accelerated things 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're very optimistic about the outlook of the business and believe our business model aligns with our day to day level on our strategic growth initiatives, while creating strong returns for our shareholders.
Revenue of $108 8 million increased by seven 6%.
<unk> to the year ago quarter.
New economy revenue grew six 3%.
Non voice revenue increased 10, 2%.
And digital revenue increased one 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.
Non voice increased by 31, 8% and.
And digital growth was 10, 5%.
Next quarter.
<unk> adverse impact that the pandemic had on this point well homed.
Revenue fiscal year to date was $334 8 million up 10% from Nepal.
Yes.
Net loss and the third quarter was <unk> 2 million compared to net income of $4 5 million from the same period last year.
On a non-GAAP basis, adjusted net income was 6 million versus $4 7 million and the prior year quarter.
Non-GAAP pro forma fully diluted adjusted earnings per share was 32, and a third quarter of 2021 versus 25 in the prior year quarter based on 18 8 million shares and 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 and our offshore and near shore geographies.
And growth and our higher margin services, such as non voice and digital services.
Spike increased cost related to becoming a public company.
In addition, we have significantly improved our onshore margins and the third quarter.
Through our flexible work at home model.
And which has led to lower attrition and improved productivity.
Cheeseman, and 15% or greater adjusted EBITDA margin for the second quarter and a role is a significant milestone for the company.
Turning to client mix and the third quarter.
And our client concentration continues to decrease quarter over quarter.
And Q3 fiscal year 'twenty one.
Top three legacy claims represented 34, 1% and <unk>.
<unk> revenue.
Down from 43, 6% and.
At the same period last year.
And the revenue generated from clients outside of the legacy top III increased by 25, 9%.
And are the main drivers and the overall revenue growth.
One other quick market telecommunications decreased to 29, 1% of revenue from.
And six 3% and the prior year quarter, whereas retail and e-commerce increased to 19, 7% of revenue.
And 16, 5%.
Same period last year.
Additionally, technology increased 15, 5% of revenue from 13%.
<unk> increased to nine 6% of revenue from 7% and.
And healthcare increase and a four 7% of revenue from three 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 and cash flow from operations, excluding working capital change and non recurring expenses of $1 7 million Euro and yen.
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 increase during the remainder of fiscal year 2021, as the temporary decrease related to a key claim is expect to keep our gross.
The company's balance sheet remains strong with $62 6 million and cash compared to 21 9 million as of June 32020.
Strengthened by the net proceeds of the IPO in August.
Total capital expenditure.
Which includes amounts financed and the period if any.
And was $6 6 million or 6% of revenue.
Third quarter of 'twenty, and 'twenty, one versus $2 1 million or two 1% of revenue and a year ago quarter.
We added.
1360 workstations this quarter.
560, and the Philippines, and the remaining 800 seats and Jamaica that I mentioned last quarter.
On a normalized basis, excluding the effects of the warrant fair value adjustment on.
And fourth 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.
<unk> began to benefit the company this quarter.
For the current fiscal year, we continue to expect a normalized effective tax rate to be between 17 and 20%.
We are pleased to report that <unk> has.
Excessively exited bankruptcy on April 14th of 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.
Largest impact has been operational in nature.
And nearly all related to the complexities insurer and staff can continue to be safe and productive whether at home or and the new socially distance 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 and the Philippines. This year.
And as a result, we incurred nonrecurring expenses and approximately $1 1 million and the third.
Cool.
And from $12 3 million and the first quarter.
We expect to continue and carrying costs related to the ongoing public transportation disruptions and the whole teams.
And of this calendar year.
Turning now to our full year 2021 volumes.
And our strong performance year to date, we are reaffirming our guidance for both revenue and adjusted EBITDA.
We are expecting revenue of 445 million and $448 million and adjusted EBITDA of $62 million to 63 five.
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 and EPA to point out.
Blood and digitally transform our clients customer experience is buoyed by our people and their relentless focus on our customers along with investment and future proof technology, such as our wave ex suite of capabilities.
Our success and evidence by the pursuit and award of course, a critical business from clients, who are focused on enhancing and leveraging our customer experience is a key competitive differentiator for their business and as a result, we continue to deliver impressive results.
With that.
Bob and I will now take questions.
Later, please open the line.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your Touchtone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key our first question comes from the line of Dan Perlin from RBC capital markets. Your question. Please.
Thanks, Good evening guys I.
And you touched on this a little bit, but I'm curious the talent acquisition.
And kind of situation in and the broader it market and even in some of the areas that you.
Our and it does sound like it's a challenging market and aggregate you mentioned, maybe that you're not seeing some of those your strategy and so a little bit different. So maybe you could speak to that and and I'm wondering given that.
That might not be as big an issue for you are you seeing incremental demand because you are able to fill those seats.
Sure Dan and thanks for joining the call today and great question and.
And so.
We're all aware of.
The U S market and how the various.
Checks from the government et cetera are pretty stressful and people getting.
Getting people into work or.
The jobs that are open.
Our approach what we've done is in the markets that we've really been selling into and the U S.
<unk> been.
Working.
And with what I'll say very competitive wages and so.
Which I think are.
A little bit different than our competitors or and so we're going in with what I think are very competitive wages with a great value proposition of the heavy work at home environment, giving a whole lot of flexibility to that.
To that potential employee.
And then a few partly that would be really cool brands that we're winning it creates a great job.
And so.
Sure.
And people you know and my peers and I'll, let <unk> talk about the challenges that there were.
We're not seeing that and we're not seeing that because of combination of that and the fact that.
I refer to it as our people.
<unk> focus clients that are really focused on ensuring you deliver a great experience and.
And not focused on.
Let me try to.
Just grind on the lowest prices.
In the marketplace and the combination of those really allow us to structure great job people are taking them, they're staying with us and the result is our margin structure and the U S is has improved significantly.
And over the last quarter from where we have been.
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 inside of that pipeline and how we should be thinking about.
The impact to mix as we think about maybe even heading into and to next year you got it and it seems like you have a pretty good jumping off point it at this level, but I'd love to hear about the current pipeline. Thank you sure yes sure and.
For us.
Pipeline for US is so so important getting out in front of what I'll call Mark key brands and.
And I'd like to refer to this as the deals that were going on or they are.
On Broadway deal and so these are not all the way deals and these are high profile deals at any of my competitors would love to go after.
<unk> been windows and that pipeline continues to get strong strong growth strong. Our performance. This year is going to be significantly higher than any year. We've had new logo revenue and I expect that to continue and.
You can continue to accelerate into 2022.
The the look of them or the new economy brands digitally transforming blue chips.
And again.
They're big and Fintech.
We have great traction going in and.
And health care.
And.
And then and the whole e-commerce.
E Commerce ecosystem, so when I fast forward out and just feel really really positive and excited about the.
Traction that we had the results that we had and how that will impact our business going forward.
That's great. Thank you.
Thank you. Our next question comes from the line of Tobey Sommer from <unk> Securities. Your question. Please.
Thanks.
Wanted to ask a question for you about the.
Expense and kind of margin trajectory you just reported the highest margin here and a while.
Ever.
We as you see things normalizing and I know that debt term applies to multiple facets of the business.
Is that normalization process and upward or downward bias on margins.
Tobey Thanks for joining and that's a fantastic question.
There was a lot of.
There are a lot of puts and takes inside that.
We talked about the costs that we're incurring on transportation.
Those are fairly significant especially in a market like the Philippines, but those and also occur and markets like Jamaica as well.
And.
And then there are incremental costs on kind of COVID-19 testing and and things like that.
And clearly offset by what I'll call.
Big reductions in and.
Although we are now back to you know we have clients that are coming to our centers and.
My sales team is now out in front of clients face to face meeting. So we're kind of evolving beyond just pure zone and.
So those are a lot of puts and takes.
I think the way I think about this is it's kind of probably about.
And with all of that in there.
It's probably about.
Kind of equal to may be positive for the for the business, but it's not all.
And there are pluses and minuses, so equal to a little bit positive.
And as a follow up I wanted to ask you about.
How are you.
And how you've improved the process too.
And <unk>.
Remotely onboard new talent.
Sort of.
Today here or early and in 2021.
Versus.
And when you started you know.
So a little more than a year ago.
And at least on a full blown basis, and if you could compare and contrast that a little bit that'd be helpful. Thanks.
And if I could just to make sure.
Are you talking about.
And of the Onboarding of clients or more of the boarding our agents that need to get your age and they're just internal channel to serve clients.
Perfect sure.
So.
Our.
Onboarding processes.
Our ideal model is too.
What I'll call more of a hub and spoke model.
We're hiring interviewing hiring and that early onboarding and a pure virtual environment, but we like the idea of bringing the teams into our <unk>.
Centers.
To start the training process.
And in the early phase of their.
Their career is where we can to have them and the brick and mortar place to then eventually once they get a little bit to that cadence.
To move on and that was really what I'll say our model.
Early on and we got very very good at it and.
And very good at.
Putting the technology and place too as we move to people and to the work at home environment, we're able to manage it.
And amazing virtual environment.
Where that has evolved now and one of the clients and I talked about you.
U S.
100% work at home and.
Environment and in fact in a market that we had taken our center offline. So we have 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 and evolution of as we've got really good on the.
Knowing how to hire.
And get the right.
And the right people sourced two then.
And then take the training element and a pure virtual environment and our results speak for themselves so kind of as a.
A little bit of an accordion and started and you know more and center and ours, we have the ability to do this pure virtual.
Thank you very much.
Thank you. Our next question comes from the line of Ashwin <unk> from Citi. Your question. Please.
Thank you.
Okay.
Sure.
Hey, So I guess, given what you said.
With regards to.
With regards to sort of the benefit of.
Work from home.
Not just on margins, but but also on the ability to attract and retain talent.
Yes.
Can you give us some longer term views and on.
And sort of the sustainability.
Work from home post pandemic, how are you thinking about that is there and whats the balance there.
Between work from home and agents that go into a workplace.
Sure and I.
And when I talk about this I always want to make sure we're talking to.
And in two buckets, one is and the U S. Because that is definitely a different dynamics and in emerging markets and so on.
How can we see the U S and our clients are.
Our.
Fully onboard on this is.
Work at home is here to stay and here to stay and a large area and in a large way.
One of our largest clients as I said is now and we.
Contractually going to 100% work at home.
On a.
Permanent basis, allowing us to now.
Sizable capacity offline.
Benefit and the reason why is our results have been absolutely stellar.
<unk>.
And in the overall performance, we do an amazing job.
Now we also have other clients debt.
And that are.
What I would say in the they like having the center.
But they know that the work at home and having that as a resiliency variable scalable variable is really important and.
And you can deliver significantly better deliver on.
Faster scales.
Faster ramps and better performance things like that and a whole lot more flexibility and there and so it's along that continuum, but we really don't have any clients that are saying and the U S. So it wont be 100%.
And in center and that gives us great flexibility.
Our operating model our margins will also gives two performance because that debt.
The results, we're getting are absolutely exceptional.
And I move to emerging markets most of our clients there are.
Prefer in center.
With a degree.
Work at home.
And so I view that as kind of a.
Yeah.
To be successful there you need centers brick and.
And border with a work at home complement and.
And those those.
As clients typically I would say range from.
And 90% and center to maybe 75% et cetera, but along that continuum.
Understood understood and just a clarification question on the <unk>.
And the client that you've been citing.
And that has had a pandemic and impact on R&D growth.
When when the client comes back is it to me and indeed, the revenues lost sort of lost revenues or are they pushed out.
And use in terms of how we should think of future quarters.
Sure. So the good news is we're now moving into a favorable.
<unk> and quarter coming up our Q4, that's when the pandemic hit them to hit them drastically and so their their revenues were cut by and.
Don't have significant 70 per cent.
Revenues, which then drove out.
Need for contact Center services went down proportionately they are on a consistent buildup now month over month quarter over quarter, and we are now moving into that.
The quarter.
And I'd say like for like comparisons and so that will allow us to say.
Growth of our digital business other non voice, we get like for like comparisons and.
As our growth of new economy and our.
And outside our top legacy top three growing and the mid 20 range you will see that.
Not on an adjusted basis, but on a true true comparison basis, and so we're pretty sure that we'll we'll have those numbers going forward, because that's where our growth is coming from our clients and that looked like that.
And I guess, it's not just accomplish and then this is this is a share of the comps get better and the decline.
And is also the coding so that's correct.
Benefit okay understood yeah, yeah, it'll bring yes, it will help us drive some of our they will help us drive some of the.
Revenue growth going forward and.
They are in a in a business that is.
And right in the middle of really rebounding as travel opens up as people.
Get around and need rides around and things like that.
And your business is starting to starting to rebound.
Every every literally every week every month.
Understood. Thank you.
Thank you. Our next question comes from the line of Dave Koning from Baird. Your question. Please.
Yeah, Hey, guys. Thanks nice job.
And yeah.
Yeah, Yeah 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 and Q3.
Is is that it seems like a combination of just the ongoing wins plus the probably the rebound kind of what Ashton 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 and leading into a pretty good situation for fiscal 'twenty two kind of in that same 10% plus range.
Yes, so Dave we've been growing.
And at that 10% right around there and.
And.
We expect to continue to be around that rate. Obviously, our goal is to accelerate debt a lot of debt. 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 ramping to <unk>.
675, folks and 75 days, that's a fast ramp for any.
And the body.
And so we have those things that are that are taking place and then you offset that with.
And kind of your telco.
Some of the headwinds and the telco and then there is one variable.
One other variable that's out there which is.
The.
Here in the states, obviously, we feel good about where the pandemic is and the vaccines and these emerging markets and Fortunately, we don't have any operation in India, but very aware of that and some of these other markets.
So those are the variables, we're dealing with right now real time and Q4, we think we'll be dealing with them early.
Q1, Q2 of FY 'twenty two.
And we feel like the overall structure of the business is.
Built for strong growth.
And so.
So, we're just kind of assessing that and will.
We will probably look a little conservative debt.
And when we talk about FY 'twenty, two and their next and our net.
Each quarter, but and.
General and we feel.
New logo machine and our ability to win.
And the win and the base is a is really good and lastly day, we still Havent lost.
Any material clients since I've been here. So that's that's a strong piece for us too.
Yeah, and it's all good.
And then.
Maybe the other one just on EBITDA for Q4, just the way you're guiding it it seems like Q4, 11, and 12% margin and just kind of what the implied guidance is the whole year's spend 14, and 15% why is that again that the margins will be down in Q4 and then.
And we can assume it will 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.
Yeah, and Karl maybe you want to.
Ill defer over to you Carl if you want to you want to comment on that.
Sure Dave.
David Good question just to follow up.
And with Bob said as far as and what.
And you say when you look at the revenue and we reaffirmed guidance on the revenue and overall when you look at that range, it's roughly about a 10% and year over year increase.
And when we look at it and if theres potential COVID-19 impacts.
In Q4 items like that we just decided not to change the adjusted EBITDA guidance at this point so right now.
And we reaffirmed the guidance.
We mentioned, what we went through and the revenue.
And some potential impacts that you could have we decided not to change the adjusted EBITDA guidance.
Gotcha, Okay. Thank you.
And they've looked at our.
I think we talked last quarter and Pete we're really excited to punch through 15% EBITDA and.
And but our Q2 was everybody knows you know the calendar year Q4s.
Big quarter one.
The seasonal ramps and all of that stuff. So for us to continue to be above 15 and had 15 three for this quarter.
Is really good we're really excited that this thing didn't fall back down and our goal.
Our goal is to keep pushing keep.
Keep pushing and.
Keep that so.
A lot of work to be done lot of work to be done and we're hopeful we'll be able to deliver.
Deliver a strong finish to the year.
Yeah, great job on that thanks.
Yeah.
Thank you. Our next question comes from the line of RV and remnant from Piper Your question. Please.
You might have your auto and on mute.
Yes, yes.
And they are and how are you doing yeah. We can hear you now and.
And Greg and.
Congrats on a good quarter.
And 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.
And sort of.
Over the last 18 months.
So and I'm, just trying to figure out kind of the longer term.
Growth rates and operational impact so the way I look at it as.
One.
As you indicate on the call the pandemic hasn't and intensified.
Intensified the use of digital channel.
And and this was something you were anyway and optimized for even before the pandemic.
And number two.
Ah patients that are put to the test and that title and I suppose.
Really well tested and 2020.
And three you have this work from home with the increased talent availability and and finally of course as a public company.
Become a much more well known brand.
And there's probably another couple of big.
Big ticket items have missed but you know what and I look at it.
Four factors and I would think like you or.
Medium to longer term growth rate.
And operations in terms of like hiring talent and managing talent has has changed significantly then.
And maybe 18 months ago.
Two years ago.
If you can if you can maybe just kind of talk about how you are.
And I'm thinking about like the medium to long term growth rate.
Sure Arvind and.
And you just highlighted all year.
18 months, whatever 12 really the last 12 months, which has just been and amazing World wind.
Not the least of which is becoming a public company, but it's it is non stop.
New challenges coming and coming after us.
Every day.
COVID-19 related clients related.
Talked about Fintech and <unk>.
And watch everything that's going on and the world of Fintech and the challenges that are there and they also include crypto currency.
It is just.
Opt.
Opportunities and arrows are coming non stop and what I and probably most proud about about IBEX and his team is we've been able to deal and have not been faced by any other any of these.
And we've reacted.
<unk>.
And then figure out how we can actually turn everything into.
And opportunity for us.
That is the traits that I believe our clients are looking for.
And back to some other questions on pipeline.
Numerous steels I'm sitting with absolutely.
Okay.
Leading blue chip digitally transforming type companies are saying, we are moving away from the multibillion dollar players.
We are looking for companies that.
IBEX you fit the bill win and there was a few other sudden or bad debt.
That certainly fit that well.
So with a lot of confidence my team and I and so 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.
Bigger brand recognition as a public company, which was one of the reasons we did decide to.
P O those elements are lining up and so.
Our goal is to.
Is to really.
Use all of those too.
And to create and.
Acceleration vector here on what has been great growth rates and you will see.
I believe the mathematics of the Saar.
And 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 25% to 30% debt 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.
And that's really the team and and that's.
And that's a journey that we're.
We're trying to get to.
Perfect.
And not to put in the spot on this earnings call, but maybe on the next earnings call.
Got it.
Sure.
And you know sort of how you are thinking about medium and long term growth.
And in light of this I'm sure and take some analysis and.
Kind of thought to see what would be comfortable sharing but but I think I think there would be.
Welcome to everybody.
Hi.
Great Great suggestion, and I think we will work and see what's best for them to go to go do that and certainly.
Around that timeframe, we will have.
I think we'll be in a good position and so.
Why don't we take that as a.
Is it to do and figure out what the best way to go about debt.
And perfect. Thank you.
Thank you and 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.
Sure and.
Thanks, Jonathan and I appreciate all you've done today. So just in closing I really like to say and you've heard it we really like our competitive position and this space and the momentum we have and we'll look forward to keeping you posted as we close out FY 'twenty, one and move on to 'twenty FY 'twenty, two which we're real excited.
And about so thanks, all for your participation and and stay healthy. Thank you.
Okay.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Yeah.
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