conducted as a presentation followed by Q&A. If you would like to participate in the Q&A, you can submit your question at the bottom of your screen, and we will address the questions following the presentation. With that, I'll hand it over to you, Bob. Welcome.
Great. Thanks, Anja, and appreciate everybody joining us today. Again, Bob Dechant, CEO of IBEX. I've been at the helm here more than 11 years, and the journey that we've built and the transformation of this business into best-in-class has been great, something we're really proud of. Taylor?
Hello, everyone. I'm Taylor Greenwald, the CFO at IBEX. Been here three years. It's been a tremendous journey and been in the industry for approaching 30 years now, 25, 30 years.
Great. Thanks, Taylor. Look, we're excited. Hopefully, we'll get through this kind of quickly and leave plenty of time for Q&A on the back end. Let me start, share with you IBEX and what we've built here. Fundamentally, we are a BPO, business process outsourcer, that focuses in on the customer experience space, CX, outsourced contact centers, et cetera. What we have, we have amazing, what I'll call trophy clients. What we do historically is we have 40,000 agents that connect their great brands to their customers when there's an issue, a question, a concern, a sales opportunity, healthcare membership question around benefits, around care, things like that. We do this across an amazing set of clients, across an amazing set of verticals that include e-commerce, healthcare, fintechs, et cetera. Just real quickly, we just finished our fiscal year at the end of June.
We announced this a couple of weeks ago. We had an amazing year on top of a fantastic FY 2025. We've posted an amazing journey over my 11 years. Since IPO in August of 2020, we've had just fantastic results, and they keep getting stronger and better. This past year, we grew top line 15%. EBITDA expanded basically the same. EPS doubled that at about 28%. What I like to say is through the entire P&L, there's a lot of strength. Significant margin expansion over the years, ever since our IPO, and we see continued margin expansion into the future. We have the best balance sheet in the industry. We're generating strong free cash flow, and we have a net cash position. We have zero debt on the books.
If you look at our competitors, the majority of them are highly leveraged because they've built their business solely through acquisitions, and we've built our business 100% organically over the last 11 years, and we continue to see that as the best pathway to growth. Let me kind of move on and maybe just from a market standpoint. This market is a very, very large market. It's about a $350 billion spend on contact center services from clients on a global basis. What's interesting is about 1/3 of that is outsourced, and so that's about the space that we operate in the outsourced, is about $100 billion. The in-house is still today in somewhere between 65% and 70%.
That, over the long haul, will be continued opportunity because more and more over the years, clients continue to look to outsourcing as a way to take cost out of their business and a way to do it better and more efficiently. If you look at the outsource space, it's very fragmented. There's what I call the list of 10 multibillion dollar providers in this space. Collectively, they add up to only 35% of the market. Then you have high fragmentation in the other 65%. How we look at this is this is all upside opportunity, TAM for us to go after.
We've been going into the land of the giants, the multibillion dollar players, and as I like to say, stealing their lunch money, beating them into these clients, then outperforming them where they've been the incumbents, taking market share from them, and rinse and repeat and continue to do that. Why are we able to do that? I kind of look at this way, is those billion-dollar players have been built as labor arbitrage-driven businesses. I call that BPO 1.0. Price is their key play, operating in many geographies. A common characteristic is they'll refer to their agents as butts in seats. We, on the other hand, have created a compelling value proposition for clients that actually are looking for better.
They actually believe that customer care is the most important differentiator, high-quality support is the most important differentiator that they have, and they're willing to invest into that. They look at the decision process very different than what this industry was and what our competitors have been built for over the years. We look at this as what we bring to the equation is truly differentiated capabilities that include things like omnichannel, net voice quality, kind of things like that, lifetime value of the customer, things like that. I'll get into more details about what our differentiation is. If you contrast the two, you have negative growth companies, declining margins, and highly leveraged balance sheets because of all the M&A.
If you look at the leaders in, and it's a small landscape of those, but double-digit growth, expanding EBITDA, and a really healthy balance sheet. Those are the key telltales of the difference of the two, in my opinion. Look, what we've built is an amazing flywheel. This flywheel is what I'll call built on our ability to land and expand. Win trophy new clients with our differentiation, and then outperform them once we become a partner. Outperform the legacy players, and then, as I say, take market share from them based on our ability to out-execute those guys. Our differentiation we define in three buckets: culture, our tech stack, and deep analytics. It's really interesting. I've yet to meet a BPO that doesn't say we have the best culture in the industry. The only difference is nobody actually validates that.
It's just a buzzword on a slide. We, on the other hand, actually validate it. We have historically done employee net promoter surveys on an annual basis, and we have been in the 76, 77 employee net promoter, which is world-class. Our competitors don't publish it. I would render a guess that they're somewhere, the big guys that are lethargic, they're in the negatives. They're probably - 20. Some of the other players might be up to 20. What that means is we have employees that are actively engaged in our business. They love our business. They stay with us. They don't leave, they don't attrit, and they show up every day to deliver great experiences. Our most recent survey, we went up to 82, which is unheard of. That is best in class across any industry.
We validate that our culture, which matters, these are the brand ambassadors for these great, is best in class, and it isn't even close. We have built a tech stack, we call it Wave iX, that helps us recruit, train agents, bring them into production better than anybody else. These are purpose-built applications that enable us to out-execute our competition. You put culture and you put a tech stack that's better than anybody, that wins every day in every geography. What we've built, which nobody else in the industry, is an amazing best-in-class business insights organization that does analytics, that helps us work with our clients and work with ourselves to become better operationally, but then engage our clients to add value and look at where points of friction are amongst their customer journeys. What are those pain points?
And we can collaboratively look at those and try to solve those to be a stronger, better partner. This flywheel is enabling us to win new logos faster than anybody in the industry, take market share faster than anybody in the industry from our competitors, and then retain our clients better than anybody in the industry. My proof points are as follows. Our new logo engine continues to be on fire. In our Q4, we brought in nine new logos, so it keeps getting stronger. This gets better, and that makes a big impact into our financials. We grew our top 10 clients 22%. If you go to our top 25, 35 clients, it's like 15%. Those businesses, where is that growth coming? From the hide of our multibillion dollar competitors. That's the proof point that we are out-executing them.
We have less than 1% revenue churn from our clients. So think about this. Of all the clients we have, take less than 1% of that revenue is clients that are going out the door. So we're growing our base and have nothing going out the back door. Now we validate this with our client net promoter, and we have a world-class 71 client net promoter, which is best of class in the industry. This is the flywheel that we have, that we put front and center out in the market, and we use our performance of what we're doing, that I shared in slide one, versus our competitors that are not growing, margins down, highly leveraged balance sheet, and we're winning every day. So now that's the flywheel that we've built for our traditional business, the BPO 2.0 business that's outperforming.
Now, in this space, the fundamental question is: Is AI going to crush this industry? Is AI going to sit and take away all of the agent volume that's out in the industry? Well, I'll say this. AI is absolutely a compelling solution. We have seen inside with, even with our growth numbers of 15%, we have seen our clients implement AI solutions that have had a material impact into their volumes that go to human agents. One of our top five clients, they implemented an AI solution. In two quarters, 20% of their total volumes went to AI. That means that what happens is the human agents, our traditional side of our business, has a headwind in it that says volume's going to go down.
So now to address this, what we did is we went aggressively, which our competitors are not doing, and we're the only BPO that has a solution like this in the market. We went and put a strategic partnership with Sierra, which is the number one AI agent company for conversational AI, human AI. We've now married the best AI engine with the best-in-class BPO, leveraging our business insights to create what I say is compelling AI solutions. As a data point, MIT wrote an article that said 95% of AI agent solutions are failing. Failing in terms of ROI or delivering customer satisfaction to us as consumers. They're right. Now, what we've done is by taking Sierra and working with what we have in our business insights organization, we have taken this to market, and we are delivering the and.
In my last earnings call, I shared four case studies of where we are delivering and delivering the and. Philippine Airlines, in six weeks, we won a bake-off against big players, beat them all, delivered today 25% containment at a CSAT level that is higher than their human agent CSAT. Over 4.7 on a 5.0 scale. Brand-new client who we do not even work with, BJ's, we did the same thing. In 41 days, we delivered this AI solution that is containing 40% of their volume with greater than 4.7 CSAT on a 5.0. We are delivering the and. Both of these solutions that we are bringing to bear are incremental to our revenue. Oh, by the way, this solution is a tech solution which brings double the margin structure of our traditional human business. Our traditional business that we built is a 30% gross margin business.
We believe that the AI solution and what we are seeing in the early innings is double that with our Sierra solution. Now we have a compelling solution that answers the question: Can you continue to grow, and can you continue to take margin up and to the right? This is transformational, and it is having a cachet into our business that is accelerating our new logo engine and our new logo win rate. Who are we doing this for? Leaders in the industry. I look and say we are winning on the high-profile deals, the on-Broadway deals. Who are we competing against? All of those multibillion dollar players. I need to look no further than what we are doing or what they are doing on their financial results to say we are outperforming them, and as I like to say, it is not even close.
At the end of the day, I think we have an amazing compelling thesis. Amazing financial from growth in revenue all the way down the P&L to the balance sheet, to the new logo engine, to our competitive moat that our competitors are not able to even get close to in the way of culture that impacts our numbers. Then we are future-proofed with Sierra in the world of AI. With that, Taylor, I am going to bounce it over to you, and maybe you can talk through some of the key things that we have done over in our financials.
Thank you, Bob. As Bob mentioned, we just wrapped up our fiscal year 2026 in June. What I have on this chart is our last results for our last six fiscal years. What you can see is that we have great leverage throughout the P&L. If you look at revenue, our five-year annual compounded growth rate is 5%. We have even done better the past two years with a 13% annual compounded growth rate.
Then if you look at our adjusted EBITDA, even though our revenue compounded growth rate is 8% over the past five years, our EBITDA is growing at 12% over the past five years. So getting good leverage as we expand margins. You go down to the bottom left corner with adjusted EPS, that is growing even faster at 21%. That reflects our share repurchase program, where we have been actively repurchasing shares in the market.
And then the bottom right-hand corner, free cash flow. You can see, back in FY 2021, we had a negative free cash flow, and every year since then, we have grown it, and it is strong, and it is predictable. We hit a record in FY 2026 and hope to hit another one in FY 2027. Moving ahead to our results for our most recent fiscal year that ended in June. These are our GAAP results. As Bob Dechant already mentioned, revenue grew 15%. Our net income grew 25% from a GAAP basis, and our EPS grew 33%. Similarly, if you look at revenue, we are growing among multiple verticals. It is not just single-threaded, but we are growing among multiple verticals. We are also growing in multiple geographies. Offshore is very strong for us, which carries the highest margin. Also growing in U.S.
As we work our way down to the EPS, you can see we are getting nice leverage from our share repurchases as our diluted shares outstanding have declined year-over-year. Moving ahead to our non-GAAP results. They mirror our GAAP results. Adjusted EBITDA grew 14%. We continue to grow our more profitable revenue streams, which is driving margins. Also, we are doing a very good job leveraging our SG&A and growing revenue at a faster pace than our SG&A. Moving forward, one of the things that we are very proud of is the diversity within our business model. If you look, we have six key vertical markets, and all six are roughly between 10% and 25% of our overall revenue. We are not over-indexed into any one vertical market.
They are all growing nicely for us outside of the telecom vertical, which is down slightly, and that is by design. That is a legacy vertical that carries the lowest margins, and we do not actively chase business in the telecom sector. But we have great diversity among the vertical markets and also among clients within those vertical markets. Moving ahead to our balance sheet. Bob Dechant already touched base that we have a very healthy, pristine balance sheet. No debt. About $30 million, a little over $30 million of cash. How do we use our capital? We use our capital, really the two main avenues for leveraging our capital have been site expansion to support our growth, and about 4% of our revenues are reinvested into the business, expanding sites. We are not building ahead of demand, but we are building to meet demand.
About 2.5% of that 4% is for growth, site expansion, and about 1.5% is related to maintenance. We have been very active in share repurchase. We repurchased 500,000 shares in FY 2026. If you look over the past three years, we have repurchased 5.7 million shares, or about 30% of our shares outstanding. I think we have repurchased those 5.7 million shares for a little less than $20 a share. So it has been very accretive for our shareholders and a good investment for our business. Moving ahead into the next slide. A lot of momentum in the business. Now we are looking ahead to FY 2027. We just issued our FY 2027 guidance, and we expect the double-digit revenue to continue in FY 2027. Our guidance is for 9%-11% growth for revenue.
EBITDA margins are going to expand and grow a little bit faster than our revenue, and our CapEx requirement or investment will be about the same as it was the previous year. If you look at our first quarter in fiscal year 2027, which is, I guess, going to end in a couple of weeks. It is hard to believe we are already there, end of September. We have greater visibility near term, as you would imagine, and so we even have more comfortable going out with stronger growth rates for first quarter of 11%-12% growth in first quarter. You can see that we are getting good leverage on margins as our adjusted EBITDA is growing at a faster rate of 13%-18%. The business is healthy, there is a lot of momentum, and we see that momentum continuing into fiscal year 2027.
With that, I think Bob and I would love to take some questions.
Yeah.
Great. Thank you so much, Bob and Taylor. That was a nice overview. For the audience, if you would like to participate in the Q&A, you can submit your question in the Q&A function. I am just curious, as we see those questions populate, this strong double-digit growth that you have been delivering over the last couple of quarters has been phenomenal. In terms of the 2027 guidance, how much of that growth is supported by expansion with existing clients versus adding new logos?
Oh, really good. Yeah, appreciate that question. Our flywheel has three really important elements: winning market share, bringing in new logos, and then expanding those new logos early on at a very fast rate. I think when we did the math, I think about 60% of the growth will be in the base. Somewhere around 25% will be expanding those new logos that we won this past year, because what we have built is a 10-year track record of about 3x growth from year one to year two on the new logo cohort. So what does that mean? So if we win new logos in, say, FY 2023, when we look at FY 2024, what did they do? It is 3x what it did year one and continues to grow. So that flywheel is really cool.
It is like 60%, 25%, and then the remainder would be then the new logos that are new to us in FY 2027, which will then move the needle in a big way based on our 10-year track record in 2028. We kind of feel like we have built this engine that is geared towards continual growth.
With that said, you think you can sustain this double-digit growth beyond 2027 as well, it sounds like?
Yeah, we do. We are guiding again to call it 10% growth. Just as a backdrop, this past three quarters, this past year, we had three beat-and- raises. We kind of take a conservative view. We have good visibility to the two quarters out. Obviously, we are almost at the end of Q1, so obviously, good visibility to this quarter, but also next quarter. Now we are starting to get visibility into the second half of our year. We feel good about that. Hopefully, we can continue down the path of healthy growth, and hopefully, we can kind of continue on that cadence. Now, Taylor, consecutive quarters of double-digit growth is
It has been six quarters of double-digit growth, and if you look at our guide for Q1, we expect to grow at a double-digit rate in Q1 as well, which would make it seven quarters.
Right.
And then the second quarter.
That is right.
Yeah.
Yeah.
In terms of the growth of the-
We will give visibility there in November, which is not far away.
Is there a seasonality in your growth, or? Because it looks like
Thank you for that question, Anja. That's a really good question. Let me peel back. If you think the nature of our business of e-commerce, what's the big time of year for e-commerce? Black Friday through Christmas, through the holiday season and all of that. We historically in this quarter, in our September quarter, start doing a lot of ramping up, then we bring in droves of agents for the retail world. Our largest customer's Amazon, right? That is publicly disclosed. Think about how much goes through Amazon. So massive ramping. Historically, we have had a Q1 to Q2 real strong growth curve and all. Historically, though, Q2 to Q3 and Q4 has fallen off, as all of that peak volume for e-commerce goes away.
Interesting data point is the last two years, we have diversified our business so well that we have actually been able to not have that sequential Q2 to Q3 and Q4 decline. I think the decline was probably historically like $8 million-$10 million, on this sequential decline. Now, we would grow our business year-over-year, but we'd have this sequential decline, which is not great in how you effectively use your facilities, your capacity, et cetera. We have now been flat sequentially, which is strong growth as measured year-over-year. That's been because of the great diversification that we've done. Now we're actually then able to efficiently use all of our capacity, which we think delivers stronger results in our Q3s and Q4s and stuff like that.
We're excited about how we just continually win across this theater, and now we're not so exposed to that big e-commerce holiday curve.
Interesting. Another question from me before we go over to the audience. If we look at that growth expectations, is it mostly driven by growth in the AI agent or in human agent? What does the margin look like there, and what does that mean for your overall margins going forward?
Yeah. Look, we are historically all the way through to last quarter, this current quarter, the AI agent piece is still in the early innings, so it really isn't moving the needle on growth percentages or even moving the needle on margin. We're doing this in our traditional business, but laying that foundation, the yellow brick road, if you will, towards that.
I believe what's going to happen is that through the course of the four quarters of this year, we're going to exit the year because that growth is starting to really occur. Those are commercially becoming relevant for us. Start adding those up with what we've done. We have over 10 wins today on the AI front, AI agent front. By exit Q4, I think we're going to start seeing that moving our needle, helping top line and bottom line, and having an impact in there.
That's kind of how I think about this.
Okay. Thank you. A question here from the audience. "Congratulations on what you have built. If possible, can you please articulate why Sierra needs to partner with a company like IBEX? I would love to understand the value proposition from their view.
Sure. Fantastic question. Let me just give you a little bit of the journey of this relationship. I was privileged to be introduced to the founders, Clay Bavor and Bret Taylor, in November of last year, or I think it was actually October of last year. We aligned amazingly, and they viewed a BPO partner brings what they don't have to bear, what they don't have as a competency in their business. Just think about their business. Best technologists in the world, right? Can't hold a candle to them on our side of the equation. What they don't have is 25 years of customer journeys, of live in the CX space, and they don't have the business insights organization that we've built to journey map. Understanding journey mapping is a really important ingredient, part of the equation for successful AI.
You have technologists that are now trying to build journeys without having the journeys and the organization to do this. We have about 700, 800 folks that are in our QA and business insights organization. For all of our clients, all 75 of those million-dollar-plus clients, we do this journey mapping just as part of course. What I told the organization about a year ago is start mapping those into, think of quadrants. On one axis, it's volume of contacts, and on the other, it's complexity. Now we have profile, created, what are the high volume, low complexity journeys for this client? That's information that we have that I don't believe a technology company has. When we put those together, we are now able to compete, kind of create that, these are the journeys we should start out on.
Let's take the low-hanging fruit. What we've been able to do is do two things, get the deployments done faster than With BJ's Wholesale, it was 41 days from when we started to when we went out of proof of concept to full production, and 40% of their journey is automated with an amazing CSAT. That's something that the AI company, whether it's Sierra, Decagon, go on the lines, they don't have that capability. That is one of the most important things that we have that other BPOs don't have. They have not invested into that, and they're struggling. They can't because they're getting crushed right now, so it's kind of like they're handcuffed. We've built this, and this thing's in place now for seven years as a company that we've done this, and it is really good, really mature.
You put those two things together, and I apologize for the long narrative, but this really matters. You put those two things together, they have the AI IP, and we have the IP on the knowhow and how to do that. We are not a reseller of Sierra. We actually take their engine, and we are the solution provider. We are bringing the technology guys to do the integration into their CCaaS solutions and their core systems. We are bringing the journey analysts, we are bringing the AI engineers, and then we're kind of doing that. We think it's a very compelling solution, and from a Sierra solution, what does it do? Well, when you're a 200x revenue valued company, more revenue, more deployments, and fast path to scale matters.
If I was through their lens, they are saying, "IBEX is bringing us deals that we were not out in front of in a big way," number one, incremental revenue, and then they are bringing the ability to get and deploy through them fast path to scale rather than kind of a slow multi-quarter proof of concept. We are getting out of proof of concept fast, so now they are hitting scale. They kind of have the new logo, get the new logo, and fast path to revenue. If you think about a 200x revenue valuation, that is pretty compelling of what we are doing, I think, to drive massive increased value for them as a business. Hope that makes sense.
No, that was good insights there. We are out of time, but I am going to squeeze in one last question before we conclude. You were talking about you have been quite active on the buyback side, and the average price of your buybacks were at, I think you said around $20, and you have a quite nice performance from there now. Are you still going to be active on the buyback side, or-
We are. We have a program that had roughly $18 million at the end of June, that continues for right until next May. We are still active and still have an authorization for the board to repurchase shares.
Look, we are very confident in our ability to grow, very confident in our ability to continue to drive margin, and we are really confident in our ability to have this AI solution be meaningful and credible. If you just look at all the metrics that we have, those financial metrics, even though our share price is doing fantastic from where it was and certainly versus our industry competitors, we think there is a lot of upside on that because of double-digit growth, margin expansion, free cash flow strong, pristine balance sheet. The valuation of that is like, I do not think we are touching that. That is why we and the board think that continued share buyback, even though we are at a great price historically, it is a good investment. We believe in what we have built here.
Well, we're looking forward to be following you on that side. Before we hand it over to you for concluding remarks, I just want to mention to the audience that I believe you have a quite full one-on-one schedule, but I'm sure that if anyone would like to touch base with the management, you can reach out to them directly or to us at Sidoti, and we'll put you in touch. I'm sure there's a lot of follow-up questions to this presentation. With that, I'll hand it over to you, Bob, for some closing remarks.
Great. Thanks, Anja, and thanks to Sidoti for putting this together and just compelling conversations that we've had. What we found is really great questions that we've been entertaining today, which is great. Hopefully, you guys can see the confidence in what we've built here and that this thing is really strong. We believe this. We have a history of out-executing the industry and out-executing what we said, and that's important. One thing you will have is kind of the metrics that back it up that we put front and center as validation, our proof points in what we're doing here. We believe our proof points are very real, and we're excited to share those, and we think we're going to continue that. Thanks, all.
Okay. Thank you. Thank you, everyone.
Thank you