Welcome to the IBEX First Quarter FY 2026 Earnings Conference Call. [Operator Instructions] To note, there is an accompanying earnings presentation available on the ibex Investor Relations website at investors.ibex.co. I will now turn this conference over to Mr. Michael Darwal, Head of Investor Relations for ibex.

Good afternoon, and thank you for joining us today. Before we begin, I want to remind you that matters discussed on today's call may include forward-looking statements related to our operating 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 opinion 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, which 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 10-K filed with the U.S. Securities and Exchange Commission on September 11, 2025, and any other risk factors we include in subsequent filings with the SEC. With that, I will now turn the call over to IBEX CEO, Bob Dechant.

Thanks, Mike. Good afternoon, and thank you all for joining us today as we share our first quarter fiscal year 2026 results. Before I speak to our first quarter results, I want to start by saying that our thoughts and prayers are with the people of Jamaica who are dealing with the devastation left behind by Hurricane Melissa. I would also like to say how proud I am of our ibex Jamaica team who has shown enormous courage and resilience through this tragedy and have worked tirelessly to care for our employees while getting us operational within 24 hours of the hurricane in our Portmore and Kingston sites and as of Monday this week in our Ocho Rios site. I would also like to highlight the great support we have received from our clients who have offered assistance alongside our ibex Cares initiatives to help those who are significantly impacted. Lastly, the BPO community in Jamaica is a tight knit community, and our thoughts and prayers go out to our Jamaican BPO peers and their people. I am pleased to report that ibex carried the momentum we built throughout fiscal 2025 into 2026, delivering an outstanding first quarter with revenue growth of 16.5% and adjusted EPS growth of 74% as we continue to separate ourselves from the pack in the BPO market. Our sustained double-digit revenue growth highlights our competitive differentiation in the CX space. We continue to drive exceptional operational delivery for our existing clients, enabling us to win significant market share from our competition. I am equally proud of our new logo engine that continues to win trophy clients, positioning us well for continued growth and margin expansion. And I'm excited on the progress we have made in our AI automate and translation deployments for our clients. Collectively,…

Thank you, Bob, and good afternoon, everyone. Thank you for joining the call today. In my discussions of our first quarter fiscal year 2026 financial results, references to revenue, net income and net cash generated from operations are on a U.S. GAAP basis, while adjusted net income, adjusted earnings per share, adjusted EBITDA and free cash flow are on a non-GAAP basis. Reconciliations of our U.S. GAAP to non-GAAP measures are included in the tables attached to our earnings press release. Turning to our results. Our first quarter results marked our strongest start to a fiscal year. We achieved record first quarter revenue, adjusted EBITDA, EPS, adjusted EPS and free cash flow. First quarter revenue was $151.2 million, an increase of 16.5% from $129.7 million in the prior year quarter. Revenue growth was driven by vertical growth in retail and e-commerce of 25%, HealthTech of 19.5% and travel, transportation and logistics of 15.4% and was partially offset by an expected decline in telecommunications, our smallest vertical of 22.5%. Importantly, our fintech vertical reached an inflection point in the first quarter and grew 3.4%. And with recent wins, we are confident in the positive trajectory of fintech going forward. Our focused efforts to grow our higher-margin delivery locations and services continues to have a favorable impact on bottom line results. We are really excited that we're winning in all markets and as a result, growing revenue in all geographies. Our highest margin offshore revenues grew 20% in the quarter. Our nearshore locations grew 7% and our onshore region grew 21%, driven by growth of our high-margin digital acquisition services. Revenue mix in our higher-margin digital and omnichannel services continues to strengthen, growing 25% to 82% of our total revenue versus prior year quarter. We expect that we will continue to be…

[Operator Instructions] Our first question comes from David Koning with Baird.

Great job again, and you're doing exactly what you said, winning share with some of the new offerings. So congrats on all that.

Thanks, Dave. Yes, we're really proud of the quarter, proud of the role we're on.

Yes. Yes. Great. Well, maybe first off, what have you seen -- we've had this Gen AI kind of swirling around for really a few years now. And is it becoming a catalyst both for the industry and for you guys or more for you than the industry? Or maybe talk a little bit -- maybe also just add in how much of revenue is it now? And maybe where is it going in a few years?

Sure. So let me kind of break those up into two parts, Dave, if that's okay. When I look at through the ibex lens, the whole AI, the excitement and also the risks that people have talked about this relative to this industry. I think for ibex, it's been all positive. And let me explain on that a little bit. We have leaned in harder, faster, I believe, than anybody in the industry on AI. And that's -- I would say, there's two dimensions to that. One where we are deploying AI internally to help us execute better, to provide tools and capabilities for our agents to deliver better for our teams to run the business more effectively, efficiently and drive better performance on our client KPIs. We're further along than anybody. And that's why I think one of the reasons we continue to outperform and then take significant market share. So that is a boom for ibex because of what we are doing above and beyond anybody else. On the other side, the second dimension I look is the -- more around using AI for customer experiences, right, where you automate experiences, AI for language translation, et cetera. Again, I think that we have leaned further into that than anybody else. We're not afraid of what that might do to our business. I feel like much of the market is very cautious and hesitant about leaning in. We're leaning in and our clients are seeing that we have a unique end-to-end model that really goes from AI all the way through to a human agent to provide an integrated and seamless solution for them. To me, I think that puts us in a really ideal position. And when clients are making decisions, they look at that and they say, this is the type of partner that we want because not only can they execute today on the BPO side, but they're looking forward and they're future-proofed basically in their model. They can -- we can grow and evolve with them as AI gets deployed more. So it's a real competitive advantage for us, Dave. And I believe that, that's something that is when you look at what our results are, when you look at the growth rates that we're doing, the margin expansion, et cetera, I think that's an output of that. Now to your question about how much of that is? We're still real early in the game. So it's not moving the needle on a whole lot of revenue and margin expansion yet, but we're positioned well. And we expect probably by the end of fourth quarter of this year and into FY '27, you'll start seeing that being another vector of growth and margin expansion that will move the needle for us.

Yes. Got you. And maybe just a follow-up. Gross margins were a little down in Q1, and I think you're holding full year margin about intact. You're raising revenue, raising EBITDA, but margin about intact. Is that -- is some of this a function of just all the investment going into AI? And I know your benefits from offshoring and AI ultimately is better margin, but maybe right now, it's a little lower as you invest?

Yes, Taylor, I'll throw that over to you.

Yes. No, absolutely. So you're right. Our margins are -- for the year, we're projecting our EBITDA margin to be about 13%. So that's up a bit from the prior year. And what you're seeing and what we're seeing is we're getting a lot of operating leverage out of our SG&A costs because we're able to hold our SG&A costs relatively flat while our revenue is growing at a much faster pace. So seeing good leverage on the SG&A line. Gross margins are down a bit, particularly in Q1 and a bit in Q2, and you saw it in Q1. And really, a couple of impacts there. One, where as you know, we're ramping in India, so still making investments and aren't at the long-term margins we anticipate that we'll get to in India. And then probably more impactful in Q1 and Q2, it's a good problem to have. We have more wins, which mean more training revenue. And as you know, we defer the train revenue, but experience the costs upfront. So we are seeing a little bit of headwind on the gross margin line on that as well. But long term, we feel very good about gross margin, as Bob said, the vectors of growth in terms of the offshore geographies and then once we start getting a more meaningful impact from AI should certainly have a positive long-term trend on gross margins.

I would now like to turn the call back over to Bob Dechant for any closing remarks.

Josh, thanks. And everybody, I appreciate you listening. I'm really proud of this team, proud of the consistent performance quarter-over-quarter that we continue to deliver as we separate ourselves from this industry, from our competitors. I'm also proud of what they've been doing in responding to emergencies and issues like we incurred in Jamaica with Hurricane Melissa. And even in markets like the Philippines, there's been a whole lot going on there with typhoons as well as earthquakes, and that team has -- my team has delivered and kept us amazingly resilient for that. I want to thank them all for that because they are the best in the industry. And with that, thank you all for listening, and we look forward to talking to you next quarter. Good night.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.