IBEX Ltd
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
IBEX$49.52+15.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001720420-26-000011
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001720420-26-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 143 previous paragraphs and 122 current paragraphs.
57 unchanged; 46 reworded; 18 added; 37 removed; 3 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
During the three months ended September 30, 2026, the Company delivered strong financial results and experienced broad-based growth including in our top three verticals: HealthTech, Travel, Transportation & Logistics, and Retail & E-commerce. Our growth continues to be driven by outstanding performance within our embedded base clients, along with four new client wins during the current quarter, and our ability to drive innovative AI solutions across our clients. We continued to geographically optimize our delivery centers during the current quarter which included an increase in headcount in our offshore regions by approximately 3,500 employees when compared to the prior year quarter. Our continued focus and investments in our clients, talent, and technology resulted in revenue growth of 15.9% during the three months ended September 30, 2026, while increasing our net income margin to 8.4% and adjusted EBITDA margin to 14.4%, when compared to the prior year quarter.
Current report
Client Business Performance
Current report
Since 2020, we have enabled work-at-home seats, particularly onshore, which has allowed us to rationalize a number of delivery center locations, particularly in the United States. Capacity Utilization is an efficiency metric used within our business. We define Capacity Utilization as the number of on-site workstations in use plus the number of work at home seats divided by the number of on-site workstations, for the period under consideration, across all facilities in the region.
Current report
Our business performance is subject to seasonal fluctuations. Seasonality may cause quarterly results to vary, and results for an individual quarter may not be indicative of full-year results or comparable with other quarters.
Current report
Interest expense during the three months ended September 30, 2026 was $0.2 million, consistent with the prior year quarter, and consisted primarily of the commitment fee on the non-utilized portion of our existing credit facilities, amortization of deferred debt issuance costs, and interest on finance leases.
Current report
HSBC Credit Facilities
Current report
The HSBC Credit Facilities consist of the U.S. Credit Facility, the UAE Facilities, and the related amendments.
Current report
U.S Credit Facility
Current report
On September 8, 2026 (the “Amendment Effective Date”), the Company's subsidiary, Ibex Global Solutions Inc. ("Ibex US"), the Company, Ibex Global Limited, the other borrowers party thereto from time to time, the other guarantors party thereto from time to time, and the lenders party thereto from time to time entered into Amendment No. 1 (the “First Amendment”) to the Company's credit agreement with HSBC Bank USA, National Association, as administrative agent. This credit agreement provides for a $25 million secured revolving credit facility (the "U.S. Credit Facility"). The First Amendment extends the maturity date of the U.S. Credit Facility to the earlier of October 22, 2029 and the termination or maturity of the obligations under the Amended UAE Credit Agreement (as defined below).
Current report
In addition, the First Amendment provides that: (i) a closing fee at 0.20% of the facility is payable at the time of accepting the First Amendment; and (ii) a commitment fee at 0.30% per annum will be payable on the non-utilized portion of the U.S. Credit Facility.
Current report
Borrowings under the U.S. Credit Facility bear interest at a per annum rate equal to term Secured Overnight Financing Rate (“SOFR”) plus 2%, or equal to alternate base rate plus 1%. The U.S. Credit Facility is secured by substantially all of the assets of Ibex US and its wholly owned subsidiaries and guaranteed by the wholly owned U.S. subsidiaries of Ibex US, with an additional guaranty by the Company and Ibex Global Limited.
Current report
UAE Facilities
Current report
On the Amendment Effective Date, Ibex Global FZ-LLC (the "UAE Company") entered into: (i) an amended facility offer letter (the “Amended FOL”); together with (ii) the general terms and conditions applicable to corporate banking credit facilities; and (iii) the letter of deviation (collectively, the “Amended UAE Credit Agreement”), in each case, with HSBC UAE. The Amended FOL provides for an increase in the total credit facility from $50,305,957 to $51,050,000, consisting of a committed $50 million post shipment seller revolving loan credit facility ("UAE Loan Facility"), a $1 million in bid and performance bond guarantees ("Bond Guarantees"), and a $50,000 commercial card facility ("Commercial Card Facility" and collectively, the “Amended UAE Facilities”). The final repayment date for the Amended UAE Credit Agreement was extended to October 22, 2029.
Current report
The Amended FOL provides that: (i) a processing fee at 0.20% of the Amended UAE Facilities is payable at the time of accepting the Amended FOL; and (ii) a commitment fee at 0.30% per annum will be payable by the UAE Company on the non-utilized portion of the UAE Loan Facility.
Current report
Borrowings under the UAE Loan Facility bear interest at a per annum rate equal to 3-month term SOFR plus 2%. The Commercial Card Facility is subject to HSBC UAE’s standard commercial card terms and conditions. The Bond Guarantees are subject to HSBC UAE’s standard commercial terms and conditions.
Current report
To secure the Amended UAE Facilities, the UAE Company entered into a Security Agreement in favor of HSBC UAE in the amount of $58,905,000 in secured assets, consisting of the UAE Company’s accounts receivable and their proceeds. In addition, the Company provided an amended irrevocable and unconditional guarantee in favor of HSBC UAE with respect to all monies and liabilities owing or incurred by the UAE Company in favor of HSBC UAE. There were no changes made to the interest rate for borrowings under the UAE Loan Facility, other material terms, or financial and non-financial covenants.
Current report
For a full description of the HSBC Credit Facilities, see Note 5, "Debt" to the consolidated financial statements.
Current report
During the three months ended September 30, 2026 and 2025, we expended $5.0 million and $0.6 million, respectively, on financing activities. The net increase in cash used in financing activities of $4.4 million was primarily driven by an increase in share repurchase activities of $1.7 million, an increase in payments for taxes related to net share settlement of equity awards of $1.1 million, and lower cash receipts from stock transactions of $1.5 million, when compared to the prior year quarter.
Removed paragraphs (37)
Previous report
During the three and nine months ended March 31, 2026, the Company delivered strong financial results, and experienced growth with leading clients in our HealthTech, Retail & E-commerce, Travel, Transportation & Logistics, Technology, and Other verticals, partially offset by decreases in our Telecommunications vertical. The business performed well in several important areas this quarter, including total revenues, profitability, cash from operating activities, client and vertical diversification, and continued expansion including eight new client wins in strategic verticals year-to-date.
Previous report
The Company delivered revenues of $479.8 million during the nine months ended March 31, 2026, a 16.7% increase compared to the same period in the prior year due to growth from existing and new clients launched throughout fiscal 2025 and fiscal 2026. Net income during the nine months ended March 31, 2026 was $37.6 million, a 37.8% increase from $27.3 million during the same period in the prior year. Fully diluted earnings per share for the nine months ended March 31, 2026 of $2.54, a 49.6% increase from $1.70 during the prior year period.
Previous report
The increases in net income and fully diluted earnings per share for both the three and nine months ended March 31, 2026 were driven by revenue growth in our higher margin offshore regions resulting in improved overall operating margins. The increase in fully diluted earnings per share during the nine months ended March 31, 2026 was also driven by fewer diluted shares outstanding compared to the same period in the prior year.
Previous report
Client’s Underlying Business Performance
Previous report
As demand for delivery locations has grown and continued to shift towards lower cost geographies during the nine months ended March 31, 2026, we are in the process of building additional capacity in our offshore regions. We also continue to realize cost savings as we geographically optimize our delivery centers in higher cost regions.
Previous report
Our business performance is subject to seasonal fluctuations. These seasonal effects cause differences in revenues and expenses among the various quarters of any financial year, which means that the individual quarters should not be directly compared with each other or be used to predict annual financial results.
Previous report
Payroll and related costs were $84.8 million during the three months ended March 31, 2026, an increase of $12.4 million, or 17.1%, compared to the prior year quarter, due to additional headcount to support increased revenues during the current year quarter and severance costs of $0.7 million due to migrating volume from our nearshore to offshore regions. As a percent of revenue, payroll costs were 51.5% during the three months ended March 31, 2026, consistent with the prior year quarter.
Previous report
Local transportation expenses were $2.1 million, an increase of $0.4 million, or 26.4%, compared to the prior year period. These increases were primarily due to increased transportation needs in offshore regions to support increasing revenue during the current year quarter.
Previous report
Interest expense during the three months ended March 31, 2026 was $0.2 million, a decrease of $0.2 million, and consisted primarily of interest on borrowings and finance leases.
Previous report
Nine Months Ended March 31, 2026 and 2025
Previous report
Revenue
Previous report
Our revenue was $479.8 million for the nine months ended March 31, 2026, an increase of $68.7 million, or 16.7%, compared to the same period in the prior year. This increase was primarily driven by increases in our HealthTech vertical of $22.9 million, or 37.2%, Retail & E-commerce vertical of $17.8 million, or 16.5%, Travel, Transportation & Logistics vertical of $9.7 million, or 16.9%, Technology vertical of $8.1 million, or 25.0%, and Other vertical of $22.0 million, or 46.1%, due to growth in our digital acquisition business, compared to the same period in the prior year. These increases were partially offset by decreases in the Telecommunications vertical of $13.0 million, or 22.9%, compared to the prior year period.
Previous report
As a percentage of total revenue, our HealthTech vertical increased to 17.6% compared to 15.0%, our Technology vertical increased to 8.5% compared to 7.9%, and our Other vertical increased to 14.5% compared to 11.6% in the prior year period. Our Retail & E-commerce vertical and our Travel, Transportation & Logistics vertical remained consistent at 26.3% and 14.0%, respectively, compared to the prior year period. Conversely, our Telecommunications vertical decreased to 9.1% for the nine months ended March 31, 2026 compared to 13.8% in the prior year period.
Previous report
Operating Expenses
Previous report
Cost of services
Previous report
Cost of services was $338.8 million during the nine months ended March 31, 2026, an increase of $54.0 million, or 19.0%, compared to the prior year period. The increase in cost of services was primarily due to increases in payroll and related costs, reseller commissions and lead expenses, IT, facility, and local transportation expenses.
Previous report
IT expenses were $7.1 million during the nine months ended March 31, 2026, an increase of $2.3 million or 48.9%, compared to the prior year period, primarily due to additional software license fees.
Previous report
Facility expenses were $40.1 million during the nine months ended March 31, 2026, an increase of $4.1 million, or 11.3%, compared to the prior year period, primarily driven by expansions in our offshore regions.
Previous report
Local transportation expenses were $6.4 million during the nine months ended March 31, 2026, an increase of $1.4 million or 27.2%, compared to the prior year period, driven primarily by transportation needs in offshore regions to support increasing revenues during the current year.
Previous report
SG&A expense
Previous report
SG&A expense was $81.5 million during the nine months ended March 31, 2026, an increase of $2.6 million, or 3.2%, compared to the prior year period. The increase was driven by higher payroll and related costs of $6.1 million due to higher performance-based incentives and new hires to support growth, stock-based compensation of $1.2 million due to new grants issued during the current year, and higher IT expenses of $1.2 million due to additional software license fees. These increases were partially offset by favorable foreign currency impacts of $3.3 million, lower legal and professional fees of $1.6 million, and lower telecommunication, insurance, facilities and other site related expenses of $0.8 million compared to the prior year period.
Previous report
D&A expense
Previous report
D&A expense was $14.3 million during the nine months ended March 31, 2026, an increase of $1.3 million or 10.1%, compared to the prior year period. The increase was primarily due to new capital additions in our offshore regions partially offset by lower depreciation expense resulting from an increase in fully depreciated assets. As a percentage of revenue, D&A decreased to 3.0% during the nine months ended March 31, 2026 compared to 3.2% in the prior year period.
Previous report
Income from operations
Previous report
Income from operations was $45.1 million during the nine months ended March 31, 2026 compared to $34.3 million during the prior year period. The operating margin was 9.4% for nine months ended March 31, 2026, up from 8.4% for the prior year period. The increase was primarily driven by margin expansion as we continued to realize growth in our higher margin offshore regions.
Previous report
Interest income
Previous report
Interest expense
Previous report
Interest expense during the nine months ended March 31, 2026 was $0.7 million, a decrease of $0.5 million, or 39.8%, primarily due to expenses incurred during the prior year period including the loss on extinguishment related to the termination of our PNC Credit Facility and interest expense on the convertible promissory note which was repaid during fiscal 2025.
Previous report
Provision for Income Taxes
Previous report
1 The tax impact of each adjustment is calculated using the effective tax rate in the relevant jurisdictions.
Previous report
JOBS Act Accounting Election
Previous report
We qualify as an emerging growth company ("EGC") pursuant to the provisions of the JOBS Act. The JOBS Act permits an EGC like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use the extended transition period until we are no longer an EGC (which we expect will occur on June 30, 2026) or until we choose to opt out of the extended transition period affirmatively and irrevocably. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements applicable to public companies.
Previous report
In connection with the HSBC Credit Facilities, the Company had deferred debt issuance costs of $0.6 million, which are included in other current assets and other non-current assets in the consolidated balance sheets as of March 31, 2026.
Previous report
During the nine months ended March 31, 2025, the Company also entered into a purchase agreement with The Resource Group International Limited ("TRGI"), pursuant to which the Company purchased from TRGI 3,562,341 common shares of the Company for an aggregate price of $70 million, of which $45 million was paid in cash and $25 million was paid in the form of a convertible promissory note.
Previous report
During the nine months ended March 31, 2026, we incurred expenditures of $24.6 million on investing activities primarily driven by expansions in our offshore regions and purchases of IT and telecommunications equipment.
Previous report
During the nine months ended March 31, 2026, we expended $9.5 million on financing activities, of which $10.1 million related to the repurchase of our common shares and $0.8 million related to principal payments on our finance leases, partially offset by net cash receipts of $1.5 million from stock transactions.
Previous report
During the nine months ended March 31, 2025, we expended $54.4 million on financing activities, of which $76.4 million related to the repurchase of our common shares and $0.6 million related to principal payments on our finance leases, partially offset by net draws of $19.1 million from our HSBC Credit Facilities and net cash receipts of $3.5 million from stock transactions.
Reworded paragraphs (46)
Previous wording
This Form 10-Q includes certain historical consolidated financial and other data for IBEX Limited ("ibex," "we," "us," "our" or the "Company"). The following discussion provides a narrative of our financial condition and results of operations for the three and nine months ended March 31, 2026 compared to the three and nine months ended March 31, 2025.
Current wording
This Form 10-Q includes certain historical consolidated financial and other data for IBEX Limited ("ibex," "we," "us," "our" or the "Company"). The following discussion provides a narrative of our financial condition and results of operations for the three months ended September 30, 2026 compared to the three months ended September 30, 2025.
Previous wording
ibex delivers innovative business process outsourcing ("BPO"), smart digital marketing, online acquisition technology, end-to-end customer engagement, and Artificial Intelligence ("AI") solutions to help companies acquire, engage, and retain valuable customers. ibex operates a global customer experiences ("CX") delivery center model consisting of 32 delivery centers around the world, while deploying next-generation technology to drive superior customer experiences for many of the world’s leading companies across various verticals, including Retail & E-commerce, HealthTech, FinTech, Utilities, and Travel, Transportation & Logistics. ibex leverages its diverse global team of approximately 36,000 employees together with industry-leading technology, including its Wave iX platform, to manage customer interactions on behalf of our clients, driving a truly differentiated customer experience.
Current wording
ibex delivers innovative business process outsourcing ("BPO"), smart digital marketing, online acquisition technology, end-to-end customer engagement, and Artificial Intelligence ("AI") solutions to help companies acquire, engage, and retain valuable customers. ibex operates a global customer experiences ("CX") delivery center model consisting of 30 delivery centers around the world, while deploying next-generation technology to drive superior customer experiences for many of the world’s leading companies across various verticals, including Retail & E-commerce, HealthTech, Telecommunication, FinTech, Travel, Transportation & Logistics, Technology and others. ibex leverages its diverse global team of approximately 39,000 employees together with industry-leading technology, including its Wave iX platform, to manage customer interactions on behalf of our clients, driving a truly differentiated customer experience.
Previous wording
The Company delivered revenues of $164.4 million during the three months ended March 31, 2026, a 16.8% increase compared to the prior year quarter due to growth across our key verticals and digital acquisition business. Net income during the three months ended March 31, 2026 was $13.3 million, a 27.3% increase from $10.5 million during the same quarter in the prior year. Fully diluted earnings per share for the three months ended March 31, 2026 of $0.89, increased from $0.73 during the prior year quarter.
Current wording
The Company delivered revenues of $175.2 million during the three months ended September 30, 2026, a 15.9% increase compared to the prior year quarter due to growth across our key verticals and digital acquisition business, and deployment of AI solutions across clients. Net income during the three months ended September 30, 2026 was $14.8 million, a 22.7% increase from $12.0 million during the same quarter in the prior year. Fully diluted earnings per share for the three months ended September 30, 2026 of $0.99, increased from $0.82 during the prior year quarter. These increases during the three months ended September 30, 2026 were driven by revenue growth in our higher margin offshore regions and digital acquisition business resulting in improved overall operating margins.
Previous wording
Macroeconomic factors, including but not limited to, inflation and interest rates, global economic and geopolitical uncertainty, changes in foreign currency exchange rates, and the impact of these factors on our clients and their customers, could impact our financial results. Some of our customers have increased their focus on cost reduction, resulting in decisions to shift work from onshore sites to offshore sites, which may impact our revenues and operations in the near term. However, we also believe that they present opportunities with both new and existing clients, as companies maintain a focus on cost reduction and look for new solutions and delivery options.
Current wording
Macroeconomic factors, including but not limited to, inflation and interest rates, global economic and geopolitical uncertainty, changes in foreign currency exchange rates, and the impact of these factors on our clients and their customers, could impact our financial results. Some of our customers have increased their focus on cost reduction, resulting in decisions to shift work from onshore and nearshore sites to offshore sites, which may impact our revenues and operations in the near term. However, we also believe these trends may also create opportunities with both new and existing clients as companies maintain a focus on cost reduction and look for new solutions and alternative delivery models.
Previous wording
With the increasing applicability of AI in enhancing business processes, the BPO industry is increasingly evaluating and starting to integrate AI into its range of solutions to improve the customer experience, serve an increasing number of consumers, and drive efficiencies throughout the customer journey. We are moving aggressively to leverage generative AI in our business, both internally and in consumer-facing interactions. Our Wave iX technology has a three-pronged AI strategy, which continues to keep ibex at the forefront of this digital transformation. Our internal solutions are focused on increasing agent productivity and the quality of our services by leveraging AI across the agent lifecycle to improve recruiting, hiring, training, and coaching. We are leveraging AI to better understand and improve customer journeys at every step, providing deeper customer insights to tailor client solutions and elevate their customers' experiences. Finally, we are putting AI agents in front of the customer journey with voice and chat solutions to automate low-complexity transactions, enable smoother, more effective and efficient, seamless AI to human agent interactions, and provide real-time translation solutions.
Current wording
With the increasing applicability of AI in enhancing business processes, the BPO industry is increasingly evaluating and integrating AI into its range of solutions to improve the customer experience, serve an increasing number of consumers, and drive efficiencies throughout the customer journey. We are moving aggressively to evaluate and deploy generative AI across internal and client-facing use cases. Our Wave iX technology has a three-pronged AI strategy and combines ibex-developed capabilities with third-party models, platforms and infrastructure, which continues to keep ibex at the forefront of this digital transformation. Our proprietary internal solutions are focused on increasing agent productivity and the quality of our services by leveraging AI across the agent lifecycle to improve recruiting, hiring, training, and coaching. We are leveraging AI to better understand and improve customer journeys at every step, providing deeper customer insights to tailor client solutions and elevate their customers' experiences. Finally, leveraging our deep customer experience knowledge and extensive data and analytics on specific customer journeys, we are putting highly customized AI agents in front of the customer journey with voice and chat solutions to automate low-complexity transactions, enable smoother, more effective and efficient, seamless AI to human agent interactions, and provide real-time translation solutions.
Previous wording
With the combination of our company’s decades of experience across BPO and CX solutions, the strength of our internal technologies, our unique stable of best-in-class AI-tech partners, and the depth and breadth of our business intelligence and business insights team, we feel we are uniquely positioned to deliver on the three key tenets to successfully leverage AI in CX: (1) improving overall customer experience and satisfaction through more effective, efficient, and empathetic AI-to-human solutions, (2) increasing our clients’ ability to serve their end consumers, and (3) driving efficiency, and where beneficial, cost savings along the journey.
Current wording
With the combination of decades of experience across BPO and CX solutions, the strength of our internal technologies, our unique stable of best-in-class AI-tech partners, and the depth and breadth of our business intelligence and business insights team, we feel we are uniquely positioned to deliver on the three key tenets to successfully leverage AI in CX: (1) improving overall customer experience and satisfaction through more effective, efficient, and empathetic AI-to-human solutions, (2) increasing our clients’ ability to serve their end consumers, and (3) driving efficiency, and where beneficial, cost savings along the journey.
Previous wording
We believe we are well positioned to leverage our leadership position in adopting AI technology in the CX sector to create significant value for our clients through the application of AI. Our approach of bringing a combination of our AI-enabled solutions plus a robust set of third-party AI-enabled solutions to our clients positions us to not only be a fast-mover in the market, but also to capture an outsized share of AI-impacted future revenue, minimizing risk to our overall revenue and providing opportunities for future profitability enhancement. While the initial implementation of some AI-enabled solutions may impact revenue directly derived from traditional agent-driven activities, it is our belief that by remaining on the forefront and bringing these solutions to our clients, we will be able to capture a greater share of higher margin AI-enabled revenue work and maintain and grow our overall business and results in the near- and long-term.
Current wording
We believe we are well positioned to leverage our leadership position in adopting AI technology in the CX sector to create significant value for our clients through the application of AI. Our approach of bringing a combination of our AI-enabled solutions plus a robust set of third-party AI agent and AI translation services to our clients positions us to not only be a fast-mover in the market, but also to capture an outsized share of AI-impacted future revenue, which may help with addressing changing requirements while creating opportunities for future revenue and margin growth. At the same time, technology, regulatory requirements and customer adoption continue to evolve, increasing the importance of testing, validation, governance and phased implementation. We continue to use and implement appropriate governance processes and controls for the use of AI, including reviews of third-party AI agent and AI translation services.
Previous wording
Demand for customer interaction services reflects a client’s underlying business performance and priorities. Growth in a client’s business often results in increased demand for our customer engagement solutions. Conversely, a decline in a client’s business generally results in a decrease in demand for our customer engagement solutions, shifting volume to lower cost geographies, and potential increases in demand for our customer acquisition and expansion solutions. The correlation between a client's business performance and demand for outsourced customer interaction solutions can therefore be complex, and depends upon several factors, such as industry consolidation, client investments in growth, and overall macroeconomic environment, all of which can result in short term revenue volatility for outsourcing providers.
Current wording
Demand for customer interaction services reflects a client’s underlying business performance and priorities. Growth in a client’s business often results in increased demand for our customer engagement solutions. Conversely, a decline in a client’s business generally results in a decrease in demand for our customer engagement solutions, shifting volume to lower cost geographies, and potential increases in demand for our customer acquisition and expansion solutions. The correlation between a client's business performance and demand for outsourced customer interaction solutions can therefore be complex, and depends upon several factors, such as industry consolidation, client investments in growth, and the overall macroeconomic environment, all of which can result in short-term revenue volatility for outsourcing providers.
Previous wording
As a significant portion of our customer interaction services are performed by customer-facing agents located in delivery centers, our margins are impacted by the level of capacity utilization in those facilities. We incur substantial fixed costs in operating such facilities. The greater the volume of interactions handled, the higher the utilization level of workstations within those facilities and the revenues generated to cover those fixed costs, thus the greater the percentage operating margin.
Current wording
As a significant portion of our customer interaction services are performed by customer-facing agents located in delivery centers, our margins are impacted by the level of capacity utilization in those facilities. We incur substantial fixed costs in operating such facilities. We strive to optimize our capacity utilization to maximize our operating margin.
Previous wording
Additionally, we have continued to shift towards work at home seats, which has allowed us to rationalize a number of delivery locations in higher cost regions, especially in the United States.
Current wording
During the three months ended September 30, 2026, we continued to build additional capacity in our offshore regions as demand has grown and shifted toward lower cost geographies. Additionally, we have continued to shift towards work-at-home seats, which has allowed us to rationalize a number of delivery locations in higher cost regions, especially in the United States.
Previous wording
When compensation levels of our employees increase, we may not be able to pass on such increased costs to our clients or do so on a timely basis, which tends to depress our operating profit margins if we cannot generate sufficient offsetting productivity gains. We continued to see increasing wage pressure in all of our geographies, in part brought on by the current global inflation and labor shortage, which is increasing competition for contact center agents from other sectors of the economy during the nine months ended March 31, 2026. We were able to offset some of these wage increases with higher agent quality and increased productivity, higher agent retention, and increased client prices under contractual cost of living adjustments ("COLA"). Furthermore, our overall labor cost as a percentage of revenue is impacted by the aforementioned shift in delivery location from onshore delivery centers to offshore centers.
Current wording
When compensation levels of our employees increase, we may not be able to pass on such increased costs to our clients or do so on a timely basis, which tends to depress our operating profit margins if we cannot generate sufficient offsetting productivity gains. During the three months ended September 30, 2026, we continued to see increasing wage pressure in all of our geographies, partially driven by the global inflationary environment and labor shortages. We were able to offset some of these wage increases with improvements in agent quality and productivity, higher agent retention, and price increases under contractual cost-of-living adjustment provisions ("COLA"). Furthermore, our overall labor cost as a percentage of revenue during the three months ended September 30, 2026 was positively impacted by shifts in delivery locations from nearshore delivery centers to offshore centers. We continue to monitor the effects of our actions on revenue, client retention, service-delivery mix, and operating margins.
Previous wording
We generate greater profit margins from our work carried out by agents located in offshore and nearshore regions compared to our work carried out from onshore locations in the United States. As a result, our operating margins are influenced by the proportion of our work delivered from these higher margin locations. Over time we have expanded and further diversified our delivery network by adding facilities in these locations, offering a significant relative cost advantage. Our percentage of workstations in nearshore and offshore geographies is approximately 97% as of March 31, 2026. We regularly evaluate whether to procure additional space or enter into new markets as we continue to add employees and expand geographically to meet the demands of our business.
Current wording
We generate greater profit margins from services delivered from offshore and nearshore regions compared to services delivered from onshore locations. As a result, our operating margins are influenced by the proportion of our work delivered from these higher-margin locations. Over time we have expanded and further diversified our delivery network by adding facilities in these locations, offering a significant relative cost advantage. Our percentage of workstations in nearshore and offshore geographies is approximately 97% as of September 30, 2026. We regularly evaluate whether to procure additional space or enter into new markets as we continue to add employees and expand geographically to meet the demands of our business.
Previous wording
Generally, our clients will re-allocate spend and market share in favor of outsourcing providers who consistently perform better and add more value than their competitors. Such re-allocation of spend can either take place on a short-term basis as higher performing providers are shielded by the client against demand volatility, or on a longer-term basis as the client shifts more and more of its overall outsourcing spend and volume to higher performing providers. Our revenues have generally increased as a result of performance-based market share gains with our existing clients, as well as due to our new client wins.
Current wording
Generally, our clients will allocate spend in favor of outsourcing providers who consistently perform better and add more value than their competitors. Such allocation of spend can either take place on a short-term basis as higher-performing providers are shielded by the client against demand volatility, or on a longer-term basis as the client shifts more and more of its overall outsourcing spend and volume to higher-performing providers. Our revenues have generally increased as a result of performance-based market share gains with our existing clients, as well as from new client wins.
Previous wording
We have a strong track record of winning key new client accounts and as a result of our land and expand strategy, we have been successful in subsequently increasing our revenues with these clients period over period. Historically, our in-year new client wins have generated approximately 2.0x to 3.0x revenue in the second and third years of the engagement.
Current wording
We have a strong track record of winning key new client accounts and as a result of our land and expand strategy, we have been successful in subsequently increasing our revenues with these clients period over period. Based on historical experience, our in-year new client wins have generated approximately 2.0x to 3.0x of initial-year revenue in the second and third years of the engagement.
Previous wording
During the nine months ended March 31, 2026, our largest client accounted for 10%, while our three largest clients accounted for 25% of our consolidated revenues. We believe our client diversification is a strength and mitigates risk.
Current wording
During the three months ended September 30, 2026, our largest client accounted for 9%, while our three largest clients accounted for 23%, of our consolidated revenues. We believe our client diversification is a strength and mitigates risk.
Previous wording
Our revenues are dependent upon both volumes and unit pricing for our services. Client pricing is often expressed in terms of a base price per minute or hour as well as, in limited cases, with bonuses and occasionally penalties depending upon our achievement of certain client objectives. During the fiscal year ended June 30, 2025 and the nine months ended March 31, 2026, the tightening in the global labor market and corresponding wage inflation, as well as increasing facilities expenses have resulted in us pursuing and successfully negotiating price increases or COLA with many of our clients.
Current wording
Our revenues depend on both service volumes and unit pricing. Client pricing is often expressed in terms of a base price per minute or hour as well as, in limited cases, may include bonuses or penalties depending on our achievement of certain client objectives. During the fiscal year ended June 30, 2026 and the three months ended September 30, 2026, the tightening in the global labor market and corresponding wage inflation, as well as increasing facility expenses have resulted in us pursuing and successfully negotiating price increases or COLA with many of our clients.
Previous wording
The current economic environment is also encouraging our clients to consider locating more of their support offshore. Within our customer engagement solutions, pricing for services delivered from onshore locations is higher than pricing for services delivered from offshore locations, largely driven by higher wage levels in onshore locations. Accordingly, a shift in service delivery location from onshore to offshore locations results in a lower price for our clients and a decline in our absolute revenues; however, our margins tend to increase, in percentage and often in absolute terms, as compared to onshore service delivery.
Current wording
The current economic environment is also encouraging our clients to consider locating more of their support offshore. Within our customer engagement solutions, pricing for services delivered from onshore locations is higher than pricing for services delivered from offshore locations, largely driven by higher wage levels in onshore locations. Accordingly, a shift in service delivery location to offshore locations results in a lower price for our clients and a decrease in total revenue; however, our margins tend to increase assuming comparable volumes.
Previous wording
The following summarizes the results of our operations for the three and nine months ended March 31, 2026 and 2025:
Current wording
The following summarizes the results of our operations for the three months ended September 30, 2026 and 2025:
Previous wording
Our revenue was $164.4 million for the three months ended March 31, 2026, an increase of $23.7 million, or 16.8%, compared to the prior year quarter. This increase was primarily driven by increases in our HealthTech vertical of $11.9 million, or 53.7%, Technology vertical of $4.5 million, or 42.6%, Retail & E-commerce vertical of $3.0 million, or 8.3%, Travel, Transportation & Logistics vertical of $3.0 million, or 15.1% and Other vertical of $4.8 million, or 26.5%, due to growth in our digital acquisition business, compared to the prior year quarter. These increases were partially offset by decreases in the Telecommunications vertical of $4.3 million, or 23.1%.
Current wording
Our revenue was $175.2 million for the three months ended September 30, 2026, an increase of $24.0 million, or 15.9%, compared to the prior year quarter. This increase was primarily driven by increases in our HealthTech vertical of $8.7 million, or 39.9%, Travel, Transportation & Logistics vertical of $3.5 million, or 16.4%, Retail & E-commerce vertical of $3.4 million, or 8.7%, Technology vertical of $1.2 million, or 9.8%, and Other vertical of $7.5 million, or 31.1%, due to growth in our digital acquisition business, compared to the prior year quarter. These increases were partially offset by a decrease in the FinTech vertical of $0.3 million, or 1.7%, compared to the prior year quarter.
Previous wording
As a percentage of total revenue, our HealthTech vertical increased to 20.8% compared to 15.8%, our Technology vertical increased to 9.2% compared to 7.5%, and our Other vertical increased to 14.0% compared to 13.0% in the prior year quarter. Conversely, our Telecommunications vertical decreased to 8.6% compared to 13.1%, our Retail & E-commerce vertical decreased to 23.9% compared to 25.8%, and our Travel, Transportation & Logistics remained consistent at 13.8% compared to the prior year quarter.
Current wording
As a percentage of total revenue, our HealthTech vertical increased to 17.5% compared to 14.5%, and our Other vertical increased to 18.1% compared to 16.0% during the prior year quarter. Conversely, our Retail & E-commerce vertical decreased to 24.6% compared to 26.3%, our Technology vertical decreased to 7.6% compared to 8.0%, and our FinTech vertical decreased to 9.3% compared to 11.0%. Our Travel, Transportation & Logistics vertical remained consistent at 14.1% compared to the prior year quarter.
Previous wording
Cost of services was $115.6 million during the three months ended March 31, 2026, an increase of $19.6 million, or 20.4%, compared to the prior year quarter. The increase in cost of services was primarily due to increases in payroll and related costs, reseller commissions and lead expenses, IT, facility expenses, and local transportation expenses.
Current wording
Cost of services was $122.0 million during the three months ended September 30, 2026, an increase of $15.4 million, or 14.4%, compared to the prior year quarter. The increase in cost of services was primarily due to increases in payroll and related costs, reseller commissions and lead expenses, IT, and facility expenses.
Previous wording
Payroll and related costs were $250.0 million during the nine months ended March 31, 2026, an increase of $33.0 million, or 15.2%, compared to the prior year period, due to additional headcount to support increased revenues during the current year and severance costs of $0.7 million due to migrating volume from our nearshore to offshore regions. As a percent of revenue, payroll cost decreased to 52.1% during the nine months ended March 31, 2026 compared to 52.8% during the prior year period, reflecting the continuing trend towards lower cost, higher margin regions.
Current wording
Payroll and related costs were $87.1 million during the three months ended September 30, 2026, an increase of $9.1 million, or 11.7%, compared to the prior year quarter, due to additional headcount to support increased revenues during the current year quarter. As a percent of revenue, payroll costs decreased to 49.7% during the three months ended September 30, 2026, compared to 51.6% during the prior year quarter, reflecting the continuing trend towards lower cost, higher margin regions.
Previous wording
Reseller commissions and lead expenses were $8.7 million during the three months ended March 31, 2026, an increase of $3.2 million, or 57.3%, compared to the prior year quarter. These increases were primarily due to increases in the utilization of our third-party affiliates for inbound inquiries as well as search engine costs in connection with increased revenues in our higher margin digital sales and marketing efforts.
Current wording
Reseller commissions and lead expenses were $11.5 million during the three months ended September 30, 2026, an increase of $3.2 million, or 38.1%, compared to the prior year quarter. These increases were primarily due to increases in the utilization of our third-party affiliates for inbound inquiries as well as search engine costs in connection with increased revenues in our higher margin digital sales and marketing efforts.
Previous wording
IT expenses were $2.8 million during the three months ended March 31, 2026, an increase of $1.0 million, or 53.6%, compared to the prior year quarter, primarily due to additional software license fees.
Current wording
IT expenses were $4.1 million during the three months ended September 30, 2026, an increase of $2.1 million, or 107.1%, compared to the prior year quarter, primarily due to additional software and AI license fees.
Previous wording
Facility expenses were $13.8 million during the three months ended March 31, 2026, an increase of $2.3 million, or 19.6%, compared to the prior year quarter, primarily driven by expansions in our offshore regions.
Current wording
Facility expenses were $14.1 million during the three months ended September 30, 2026, an increase of $1.1 million, or 8.3%, compared to the prior year quarter, primarily driven by expansions in our offshore regions and higher utility expenses during the current year quarter.
Previous wording
SG&A expense was $27.5 million during the three months ended March 31, 2026, an increase of $0.4 million, or 1.5%, compared to the prior year quarter. The change was driven by increased payroll and related costs of $2.5 million due to higher performance-based incentives and new hires to support growth, as well as higher IT expenses of $0.3 million due to additional software license fees. These increases were partially offset by favorable foreign currency impacts of $1.0 million, lower legal and professional fees and facilities expenses of $0.9 million and lower stock-based compensation expenses of $0.5 million compared to the prior year quarter.
Current wording
SG&A expense was $30.1 million during the three months ended September 30, 2026, an increase of $3.6 million, or 13.5%, compared to the prior year quarter. The increase was driven by higher payroll and related costs of $2.3 million due to higher performance-based incentives and new hires to support growth, higher stock-based compensation expenses of $0.5 million primarily due to new grants issued during the prior year, higher IT expenses of $0.3 million due to additional software license fees, and unfavorable foreign currency impacts of $0.4 million.
Previous wording
D&A expense was $5.2 million during the three months ended March 31, 2026, an increase of $0.8 million, or 19.4% compared to the prior year quarter. The increase was primarily due to new capital additions partially offset by lower depreciation expense resulting from an increase in fully depreciated assets. As a percentage of revenue, D&A was 3.1% during the three months ended March 31, 2026, consistent with 3.1% during the prior year quarter.
Current wording
D&A expense was $4.9 million during the three months ended September 30, 2026, an increase of $0.5 million, or 11.3%, compared to the prior year quarter. The increase was primarily due to higher depreciation in our offshore regions due to expansions and capital additions, partially offset by lower depreciation in our nearshore regions due to the closure of two nearshore sites during the prior year. As a percentage of revenue, D&A was 2.8% during the three months ended September 30, 2026, consistent with the prior year quarter.
Previous wording
Income from operations was $16.2 million during the three months ended March 31, 2026 compared to $13.3 million during the prior year quarter. The operating margin was 9.8% for three months ended March 31, 2026, up from 9.5% for the prior year quarter. The increase was primarily driven by margin expansion as we continued to realize growth in our higher margin offshore regions compared to the prior year quarter.
Current wording
Income from operations was $18.3 million during the three months ended September 30, 2026 compared to $13.7 million during the prior year quarter. The operating margin for the three months ended September 30, 2026 was 10.4%, up from 9.1% during the prior year quarter. These increases were primarily driven by margin expansion as we continued to realize growth in our higher margin offshore regions compared to the prior year quarter.
Previous wording
Interest income during the three months ended March 31, 2026 was $0.06 million, compared to $0.03 million during the prior year quarter and consisted primarily of income from invested funds.
Current wording
Interest income during the three months ended September 30, 2026 was $0.2 million compared to $0.03 million during the prior year quarter and consisted primarily of income from invested funds.
Previous wording
Income tax expense was $2.6 million during the three months ended March 31, 2026, an increase of $0.2 million when compared with the prior year quarter, primarily due to higher pre-tax income in the current year quarter. The effective tax rate was 16.6% and 19.2% for the three months ended March 31, 2026 and 2025, respectively. The change in effective tax rates between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and favorable discrete tax benefits in the current year quarter.
Current wording
Income tax expense was $3.5 million during the three months ended September 30, 2026, an increase of $2.0 million when compared with the prior year quarter, primarily due to higher pre-tax income in the current year quarter and a higher effective tax rate. The effective tax rate was 19.1% and 10.9% for the three months ended September 30, 2026 and 2025, respectively. The change in effective tax rates between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and favorable discrete tax benefits recognized during the prior year quarter.
Previous wording
We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance, as we believe that these non-GAAP financial measures provide a more helpful depiction of our performance of the business by encompassing only relevant and manageable events, enabling us to evaluate and plan more effectively for the future. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies, have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our operating results as reported in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"). Non-GAAP financial measures and ratios are not measurements of our performance, financial condition or liquidity under U.S. GAAP and should not be considered as alternatives to operating profit or net income / (loss) or as alternatives to cash flow from operating, investing or financing activities for the period, or any other performance measures, derived in accordance with U.S. GAAP.
Current wording
We present non-GAAP financial measures because we believe that they and other similar measures are widely used by certain investors, securities analysts and other interested parties as supplemental measures of performance and liquidity. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as evaluate our underlying historical performance, as we believe that these non-GAAP financial measures provide a more helpful depiction of our performance of the business by encompassing only relevant and manageable events, enabling us to evaluate and plan more effectively for the future. The non-GAAP financial measures may not be comparable to other similarly titled measures of other companies, have limitations as analytical tools, and should not be considered in isolation or as a substitute for analysis of our operating results as reported in accordance with U.S. GAAP. Non-GAAP financial measures and ratios are not measurements of our performance, financial condition or liquidity under U.S. GAAP and should not be considered as alternatives to operating profit or net income / (loss) or as alternatives to cash flow from operating, investing or financing activities for the period, or any other performance measures, derived in accordance with U.S. GAAP.
Previous wording
Adjusted net income is a non-GAAP profitability measure that represents net income before the effect of the following items: severance costs, foreign currency gains and losses, and stock-based compensation expense, net of the tax impact of such adjustments. We define adjusted net income margin as adjusted net income divided by revenue. We define adjusted earnings per share as adjusted net income divided by weighted average diluted shares outstanding.
Current wording
Adjusted net income is a non-GAAP profitability measure that represents net income before the effect of the following items: severance costs, impairment losses, gains or losses on asset disposals, gains or losses on lease terminations, foreign currency gains and losses, and stock-based compensation expense, net of the tax impact of such adjustments. We define adjusted net income margin as adjusted net income divided by revenue. We define adjusted earnings per share as adjusted net income divided by weighted average diluted shares outstanding.
Previous wording
EBITDA is a non-GAAP profitability measure that represents net income before the effect of the following items: interest expense, income tax expense, and D&A. Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before the effect of the following items: severance costs, interest income, foreign currency gains and losses, and stock-based compensation expense. Adjusted EBITDA margin is a non-GAAP profitability measure that represents adjusted EBITDA divided by revenue.
Current wording
EBITDA is a non-GAAP profitability measure that represents net income before the effect of the following items: interest expense, income tax expense, and D&A. Adjusted EBITDA is a non-GAAP profitability measure that represents EBITDA before the effect of the following items: interest income, severance costs, impairment losses, gains or losses on asset disposals, gains or losses on lease terminations, foreign currency gains and losses, and stock-based compensation expense. Adjusted EBITDA margin is a non-GAAP profitability measure that represents adjusted EBITDA divided by revenue.
Previous wording
•EBITDA, adjusted EBITDA and adjusted EBITDA marginare not intended to be a measure of free cash flow for our discretionary use, as they do not reflect: (i) changes in, or cash requirements for, our working capital needs; (ii) debt service requirements; (iii) tax payments that may represent a reduction in cash available to us; and (iv) other cash costs that may recur in the future;
Current wording
•EBITDA, adjusted EBITDA and adjusted EBITDA marginare not intended to be a measure of free cash flow for our discretionary use, as they do not reflect: (i) changes in, or cash requirements for, our working capital needs; (ii) debt service requirements; (iii) tax payments that may represent a reduction in cash available to us; and (iv) other cash costs that may recur in the future; and
Previous wording
Net income margin was 8.1% for the three months ended March 31, 2026 compared to 7.4% during the prior year quarter. Net income margin was 7.8% for the nine months ended March 31, 2026 compared to 6.6% during the prior year period. These increases were primarily driven by revenue growth in our higher margin offshore regions and lower SG&A expenses as a percentage of revenue, partially offset by increases in income tax and depreciation expense compared to the same periods in the prior year.
Current wording
Net income margin was 8.4% for the three months ended September 30, 2026 compared to 8.0% during the prior year quarter. This increase was primarily driven by revenue growth in our higher margin offshore regions and digital acquisition business, as well as lower SG&A expenses as a percentage of revenue, partially offset by higher income tax expense, compared to the prior year quarter.
Previous wording
Adjusted EBITDA margin was 13.4% for the three months ended March 31, 2026 compared to 13.8% during the prior year quarter. This decrease was primarily driven by the temporary impact of migrating volume from our nearshore to offshore regions, partially offset by lower SG&A expenses, compared to the same quarter in the prior year. Adjusted EBITDA margin was 13.0% for the nine months ended March 31, 2026 compared to 12.5% during the prior year period. This increase was primarily driven by revenue growth in our higher margin offshore regions and lower SG&A expenses as a percentage of revenue.
Current wording
Adjusted EBITDA margin was 14.4% for the three months ended September 30, 2026 compared to 12.9% during the prior year quarter. This increase was primarily driven by the aforementioned revenue growth in our higher margin offshore regions and lower SG&A expenses as a percentage of revenue.
Previous wording
Net cash provided by operating activities during the three and nine months ended March 31, 2026 was $11.9 million and $34.2 million, respectively, compared to $8.8 million and $17.7 million, respectively, during the prior year periods. Free cash flow during the three and nine months ended March 31, 2026 was $6.6 million and $9.5 million, respectively, compared to $3.6 million and $4.5 million, respectively, during the prior year periods. The planned increase in capital expenditures during the current year was driven by expansions in our offshore regions to meet demand and purchases of IT and telecommunications equipment.
Current wording
Net cash provided by operating activities during the three months ended September 30, 2026 was $16.3 million compared to $15.7 million during the prior year quarter. Free cash flow during the three months ended September 30, 2026 was $9.2 million compared to $8.0 million during the prior year quarter. The capital expenditures during the current quarter were driven by $4.6 million related to facilities expansions in our offshore regions and $2.6 million related to purchases of IT and telecommunications equipment to support growth.
Previous wording
Net cash is a non-GAAP liquidity measure that represents cash and cash equivalents less total debt. We believe that net cash provides useful information to investors in understanding and evaluating our ability to pay off debt. Our use of net cash has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for analysis of our financial results as reported under GAAP. Further, other companies, including companies in our industry, may adjust their cash or debt differently, which may reduce the value of net cash as a comparative measure.
Current wording
Net cash is a non-GAAP liquidity measure that represents cash and cash equivalents less total debt. We believe that net cash provides useful information to investors in understanding and evaluating our ability to pay off debt. Our use of net cash has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. Further, other companies, including companies in our industry, may adjust their cash or debt differently, which may reduce the value of net cash as a comparative measure.
Previous wording
As of March 31, 2026, our principal sources of liquidity were cash and cash equivalents totaling $15.4 million, cash flows from operations, and the unused availability under our existing credit facilities with HSBC Bank USA, National Association and HSBC Bank Middle East Limited (collectively, the "HSBC Credit Facilities") of $67.1 million.
Current wording
As of September 30, 2026, our principal sources of liquidity were cash and cash equivalents totaling $36.7 million, cash flows from operations, and the unused availability under our existing credit facilities with HSBC Bank USA, National Association and HSBC Bank Middle East Limited ("HSBC UAE") (collectively, the "HSBC Credit Facilities" as defined and described below) of $68.3 million.
Previous wording
As of March 31, 2026, our total indebtedness was $1.4 million, consisting of our finance leases. We were in compliance with all debt covenants as of March 31, 2026. Refer to Note 5, "Debt" in the consolidated financial statements included in this Form 10-Q for additional information on our debt.
Current wording
As of September 30, 2026, our total indebtedness was $1.7 million, consisting of our finance leases. We were in compliance with all debt covenants as of September 30, 2026. Refer to Note 5, "Debt" in the consolidated financial statements included in this Form 10-Q for additional information on our debt.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
While the initial implementation of AI technology may impact revenue directly derived from traditional agent-driven activities, it is our expectation that by remaining on the forefront and bringing these solutions to our clients, we will be able to capture a greater share of higher margin AI revenue work to maintain, complement, and grow our overall business and results in the near- and long-term.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Reseller commissions and lead expenses were $24.5 million during the nine months ended March 31, 2026, an increase of $11.5 million, or 88.0%, compared to the prior year period. These increases were primarily due to increases in the utilization of our third-party affiliates for inbound inquiries as well as search engine costs in connection with increased revenue in our higher margin digital sales and marketing efforts.
Previous report — wording carried elsewhere
Interest income during the nine months ended March 31, 2026 was $0.2 million, compared to $0.9 million during the prior year period, and consisted primarily of income from invested funds.
Previous report — wording carried elsewhere
Income tax expense was $7.0 million during the nine months ended March 31, 2026, consistent with the prior year period. The effective tax rate was 15.7% and 20.0% for the nine months ended March 31, 2026 and 2025, respectively. The changes in effective tax rates between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and discrete items, including discrete tax benefits from stock-based compensation recorded in the current period.