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Business Risks
•Our business is dependent on key clients;
•Our profitability largely depends on maintaining efficient asset utilization levels, pricing our solutions appropriately, and managing costs, particularly through our contracts with customers;
•We must comply with the quality standards required by our clients under our agreements;
•Our clients or potential clients may consolidate or enter into or further expand insourcing activities in the future, and current trends toward outsourcing services and/or outsourcing activities may reverse;
•We may be unable to continue to anticipate our clients’ needs by adapting to market and technology trends or to successfully convert visitors to our customer acquisition websites into purchasers or subscribers;
•We face risks related to future acquisitions of other companies in pursuit of growth;
•We must adequately protect our intellectual property and proprietary information;
Financial, Accounting and Economic Risks
•We may not be able to fund our working capital requirements and new investments;
•Our operating results may fluctuate from quarter to quarter due to various factors;
•We may be impacted by unfavorable economic conditions;
•Clients that represent a large portion of our accounts receivable balance may be unable or unwilling to pay such balances in a timely manner;
•Our existing debt covenants may affect our flexibility in operating, developing and expanding our business;
•If our goodwill or intangible assets become impaired, we could be required to record a significant charge to earnings;
•Our ability to use our U.S. net operating loss carry forwards may be subject to limitation;
Operations Risk
•Our business relies heavily on technology, telephone and computer systems as well as third-party telecommunications providers;
•We may be unable to effectively adopt Artificial Intelligence into our offerings;
•Our business is heavily dependent upon our international operations, particularly in the Philippines, Jamaica, Pakistan and Nicaragua;
•We rely on the attraction, retention, and motivation of qualified senior management, employees, and agents to support our success and operations;
•Natural events, health epidemics (including the outbreak of COVID-19), wars, widespread civil unrest, terrorist attacks and other acts of violence involving any of the countries in which we or our clients have operations could adversely affect our operations and client confidence;
•Fluctuations against the U.S. dollar in the local currencies in the countries in which we operate could have a material effect on our results of operations;
•We depend upon internet search engines to attract a significant portion of the consumers who visit our customer acquisition websites, and we would be harmed if we are unable to advertise on search engines on a cost-effective basis;
•We have entered into certain related-party transactions and may continue to rely on related parties for certain key development and support activities;
•Our facilities operate on leasehold property, and our inability to renew our leases on commercially acceptable terms or at all may adversely affect our results of operations.
Legal and Regulatory Risks
•Our global operations and customers expose us to numerous legal and regulatory requirements;
•Unauthorized or improper disclosure of personal information, breach of privacy, whether inadvertent or as the result of a cyber-attack or improperly by our employees, could result in liability and harm us;
•Others could claim that we infringe on their intellectual property rights or violate contractual protections;
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Risks Related to Being Incorporated in Bermuda
•We may be impacted by tax matters, new legislation, and actions by taxing authorities;
•We may become subject to taxes in Bermuda after 2035;
•Bermuda law differs from the laws in effect in the United States and may afford less protection to holders of our common shares;
•Any U.S. or other foreign judgments against us may be difficult to enforce against us in Bermuda;
Risks Related to Our Common Shares
•We are a “controlled company” within the meaning of the rules of Nasdaq and, as a result, qualify for, and intend to rely on, exemptions from certain corporate governance requirements;
•Our largest shareholder, The Resource Group International Limited, and its major shareholder, TRG Pakistan Limited, have substantial control over us;
•The anticipated strategic and financial benefits of our relationship with Amazon may not be realized;
•Our future earnings and earnings per share could be adversely impacted by the Amazon Warrant and if Amazon exercises its right to acquire our common shares pursuant to the Amazon Warrant, it will dilute the ownership interests of our then-existing shareholders and could adversely affect the market price of our common shares;
•We are an emerging growth company, and the reduced disclosure requirements applicable to emerging markets growth companies may make our common shares less attractive to investors;
•The transition from foreign private issuer to U.S. domestic issuer status effective from July 1, 2023, requires us to comply with the U.S. domestic reporting requirements under the Exchange Act and will result in significant additional compliance activity and likely increased costs and expenses;
•Our results of operations and the price of our common shares could be adversely affected if we are unable to maintain effective control over financial reporting:
•Certain U.S. holders of our common shares may suffer adverse U.S. tax consequences if we are characterized as a passive foreign investment company;
•A significant portion of our total outstanding shares may be sold into the market in the near future, causing a decrease in the market price of our common shares;
•We have the ability to issue preferred shares without shareholder approval; and
•We may not pay any dividends. Accordingly, investors may only realize future gains on their investments if the price of their common shares increases, which may never occur.
AVAILABLE INFORMATION
The Company is subject to the reporting and information requirements of the Exchange Act, and as a result, it is obligated to file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, as well as proxy and information statements and other information with the SEC. The Company makes these filings available free of charge on its website (https://www.ibex.co) as soon as reasonably practicable after it electronically files them with, or furnishes them to, the SEC. Information on the Company’s website does not constitute part of this Form 10-K. In addition, the SEC maintains a website (http://www.sec.gov) that contains the reports and other information the Company electronically files with, or furnishes to, the SEC.
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PART I
Unless otherwise indicated or the context otherwise requires, all references in this Form 10-K to the terms “ibex,” “IBEX,” “IBEX Limited,” the “Company,” “we,” “us,” and “our” refer to IBEX Limited and our wholly-owned subsidiaries for all periods presented in this Form 10-K.
ITEM 1. BUSINESS
Company Overview
Ibex is a leading provider in global business process outsourcing and end-to-end customer engagement technology solutions that helps drive extraordinary customer experiences (“CX”) for the world’s most recognized brands. We combine our strong heritage of delivering world-class CX operations delivery with best-in-class services and solutions that span omnichannel customer engagement and support, digital marketing and customer experience management to help our clients measure customer sentiment and deliver a superior CX to their end-customers.
Leveraging our proprietary technology platform, company culture and operational excellence, ibex helps more than 130 clients create innovative and differentiated customer experiences to help increase loyalty, enhance brand awareness and drive revenue in an era of rapid change and digital transformation.
Our Service Offerings
The services we provide for clients are digital and traditional omni-channel capabilities. We have designed a differentiated suite of digital and operational solutions meant to seamlessly manage interactions throughout the phases of the customer lifecycle, across multiple channels, customized to a client’s specific needs.
Our services cover three areas: Digital & Omni-Channel Customer Experience (ibex Connect), Digital Marketing and E-Commerce (ibex Digital) and Digital CX surveys and analytics (ibex CX).
•ibex Connect
Our Connect business lies at the core of our offerings and generates the majority of the Company’s revenue. This business unit delivers differentiated customer service (assisting our clients’ customers with information about our clients’ and their products or services), technical support (providing specialized teams to provide information, assistance and technical guidance to our clients’ customers on a specific product or service), revenue generation (upselling and cross selling) and other value-added outsourced back office services (finance and accounting, marketing support, sales operations, and human resources administration) to our clients. We deploy these capabilities through a true omni-channel CX model, which integrates voice, email, chat, SMS, social media and other communication applications.
•ibex Digital
Our ibex Digital suite of solutions works with consumer-facing businesses to help them build, grow and scale technology-driven customer acquisition solutions, while helping drive digital transformation. We offer digital marketing, e-commerce technology, and platform solutions for some of the largest and fastest growing brands, helping them build new customer acquisition channels, increase acquired customers, and often do both at a reduced cost.
•ibex CX
Our CX business measures, monitors and manages our clients’ holistic customer experiences. By offering a 360-degree CX approach, our clients can harness the power of the data and customer feedback to differentiate themselves within today’s “customer expectation economy.” We enable our clients to improve retention of their customers, identify and manage service issues in real time, predict future behavior and outcomes, derive impact analysis scenarios and assign “action plans” throughout the enterprise.
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Our Culture
Ibex is built around an agent-first culture, developed and delivered through a combination of branded sites, technology-enabled recruiting and hiring, geographically and culturally specific benefits, and world-class employee engagement. Ibex offers a unique employee experience that includes a full range of activities and events for employees year-round, including annual employee VIP events, ibex Idol global talent competition, ibex Sirens beauty pageant celebrating LGBTQIA+ employees, Customer Service Week and ongoing employee wellness programs. This culture resonates with our employees across the globe, where we score an Employee Net Promoter Score (“eNPS”) of 68, and externally, where we have been recognized as:
•2023 Philippines Best Employer Brand Award – Philippines Leadership Congress and Awards
•2023 America's Greatest Workplaces for Diversity – Newsweek
•2023 Philippines’ Best Employers – Philippine Daily Inquirer/Statista
•Best BPO and Gender Diversity and Inclusivity in Pakistan – Pakistan Software Houses Association (P@SHA) ICT Awards 2022
•Best Place to Work in Nicaragua 2020, 2021, 2022 – Great Place to Work
•Best Place to Work for Women in Central America and Caribbean 2021 & 2022 – Great Place to Work
Our Technology
The foundation for ibex service offerings is our WaveX technology platform. WaveX is a differentiated suite of digital and technology solutions designed to power enhanced agent interactions, exceptional client CX, and overall better performance. Our technology helps clients drive insights and manage interactions across their entire customer journey. We believe this capability allows us to provide innovative, automated and customizable solutions to our clients more efficiently versus a pure labor arbitrage-based delivery model.
Our Business Insights
Ibex’s WaveX technology and analytics insight platform suite improves customer interactions, customer insights, contact center performance and client outcomes. These solutions are deployed across more than 90 client engagements, where we deliver enhanced analytics and insights and process improvements across recruiting, hiring, training, management, and customer experience.
Our Flexible Operating Delivery Model
Our global delivery model is built on onshore (continental United States), nearshore (Nicaragua, Honduras and Jamaica) and offshore (Philippines and Pakistan) customer experience delivery centers, and includes a unique ability to support work-at-home capabilities in any region. We operate in the following geographies for our service offerings:
Customer Engagement
We operate 31 delivery centers located in the United States, Philippines, Jamaica, Nicaragua, Pakistan, and Honduras. As of June 30, 2023, we have approximately 24,000 agents across these centers.
Customer Acquisition
We operate four acquisition-focused Centers of Excellence, one in Jamaica, one in the Philippines, and two in Pakistan, which are focused on customer acquisition on behalf of our clients. As of June 30, 2023, the number of agents dedicated to customer acquisition was more than 200.
Customer Experience Technology Solutions
We deliver our CX technology solutions to our clients primarily through a cloud-based delivery model. Our Analytics solution is an add-on solution, which includes technology such as omni-channel speech analytics utilizing artificial intelligence (AI) along with business analysts who provide various insights.
Driven by our position in the digital-first market, in the last three fiscal years, we have experienced over 55% growth in our on-site nearshore and offshore capacity while shrinking our domestic on-site capacity by almost half. As of June 30, 2023, 94% of our total on-site capacity resides in our high-growth high margin nearshore
and offshore markets, which are ideally placed for clients who are either digital-first or those who are digitally transforming their business.
Our Strategic Approach
Our strategy is to place a high priority on delivering great customer experiences across the customer lifecycle and to focus on clients who view CX as a competitive differentiator. We have transformed our business from a traditional business process outsourcer (BPO) of commoditized call center support to a technology-led provider and partner of choice.
Companies are looking for enhanced solutions beyond pure labor arbitrage. They require partners that can enhance their brand and customer loyalty. Key attributes include tech-led solutions, a highly connected culture and superior level of employee engagement, elevated branding, and a fast and effective path to operational proficiency. Our approach focuses on high growth clients that are experiencing increased demand for their products and services. In addition, we serve companies that are transforming their CX to a digital-first model. These target clients are looking for partners that can deliver a digital-first experience to their customers, while enhancing their brand and customer loyalty, at scale. We call this BPO 2.0, and believe ibex is at the forefront of delivering these differentiated solutions at scale across our geographies.