IBEX Ltd 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS IBEX LIMITED Page Report of Independent Registered Public Accounting Firm ( Deloitte & Touche LLP , Tampa, Florida ; PCAOB ID Number 34 ) 64 Consolidated B alance Sheets 65 Consolidated Statements of Comprehensive Income 66 Consolidated Statements of Stockholders’ Equity 67 Consolidated Statements of Cash Flows 68 Notes to the Consolidated Financial Statements 69 63 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of IBEX Limited Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of IBEX Limited and subsidiaries (the "Company") as of June 30, 2024 and 2023, the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows, for each of the three years in the period ended June 30, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we expres s no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Deloitte & Touche LLP Tampa, Florida September 12, 2024 We have served as the Company's auditor since 2021. 64 Table of Contents IBEX LIMITED AND SUBSIDIARIES Consolidated Balance Sheets (in thousands, except share data) June 30, 2024 June 30, 2023 Assets Current assets Cash and cash equivalents $ 62,720 $ 57,429 Accounts receivable, net of allowance of $ 72 and $ 120 98,366 86,364 Prepaid expenses 7,712 6,616 Due from related parties 192 43 Tax advances and receivables 9,080 5,965 Other current assets 1,888 2,190 Total current assets 179,958 158,607 Non-current assets Property and equipment, net 29,862 41,151 Operating lease assets 59,145 70,919 Goodwill 11,832 11,832 Deferred tax asset, net 4,285 4,585 Other non-current assets 8,822 6,230 Total non-current assets 113,946 134,717 Total assets $ 293,904 $ 293,324 Liabilities and stockholders' equity Current liabilities Accounts payable and accrued liabilities $ 16,719 $ 18,705 Accrued payroll and employee-related liabilities 30,674 29,360 Current deferred revenue 4,749 6,413 Current operating lease liabilities 12,051 13,036 Current maturities of long-term debt 660 413 Due to related parties 60 2,314 Income taxes payable 6,083 3,020 Total current liabilities 70,996 73,261 Non-current liabilities Non-current deferred revenue 1,128 1,383 Non-current operating lease liabilities 53,441 64,854 Long-term debt 867 600 Other non-current liabilities 1,673 3,262 Total non-current liabilities 57,109 70,099 Total liabilities 128,105 143,360 Commitments (Note 9) Stockholders' equity Common stock: par value $ 0.0001 , 108,057,967 shares authorized, 17,017,476 and 18,280,419 shares outstanding as of June 30, 2024 and 2023, respectively 2 2 Additional paid-in capital 210,200 204,734 Treasury stock at cost: 1,567,552 and 245,447 shares as of June 30, 2024 and 2023, respectively ( 25,367 ) ( 3,682 ) Accumulated other comprehensive loss ( 7,913 ) ( 6,312 ) Accumulated deficit ( 11,123 ) ( 44,778 ) Total stockholders' equity 165,799 149,964 Total liabilities and stockholders' equity $ 293,904 $ 293,324 See accompanying notes to consolidated financial statements. 65 Table of Contents IBEX LIMITED AND SUBSIDIARIES Consolidated Statements of Comprehensive Income (in thousands, except share data) Year Ended June 30, 2024 2023 2022 Revenue $ 508,569 $ 523,118 $ 492,851 Cost of services (exclusive of depreciation and amortization presented separately below) 356,536 374,992 373,973 Selling, general and administrative 93,143 88,663 80,153 Depreciation and amortization 19,461 18,985 18,100 Total operating expenses 469,140 482,640 472,226 Income from operations 39,429 40,478 20,625 Interest income 2,071 640 43 Interest expense ( 514 ) ( 792 ) ( 1,289 ) Income before income taxes 40,986 40,326 19,379 Provision for income tax (expense) / benefit ( 7,331 ) ( 8,744 ) 2,077 Net income $ 33,655 $ 31,582 $ 21,456 Other comprehensive income / (loss) Foreign currency translation adjustments $ ( 1,623 ) $ ( 2,234 ) $ ( 2,281 ) Unrealized (loss) / gain on cash flow hedging instruments, net of tax ( 111 ) 515 ( 323 ) Actuarial gain / (loss) on defined benefit plan 133 ( 31 ) 440 Total other comprehensive loss ( 1,601 ) ( 1,750 ) ( 2,164 ) Total comprehensive income $ 32,054 $ 29,832 $ 19,292 Net income per share Basic $ 1.90 $ 1.74 $ 1.18 Diluted $ 1.84 $ 1.67 $ 1.15 Weighted average common shares outstanding Basic 17,704 18,200 18,232 Diluted 18,255 18,893 18,724 See accompanying notes to consolidated financial statements. 66 Table of Contents IBEX LIMITED AND SUBSIDIARIES Consolidated Statements of Stockholders’ Equity (in thousands) Common shares Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive Income / (Loss) Accumulated Deficit Total Stockholders' Equity Shares Amount Amount Balance, June 30, 2021 18,399 $ 2 — $ 194,961 $ ( 2,398 ) $ ( 97,816 ) $ 94,749 Net income for the period ended June 30, 2022 — — — — — 21,456 21,456 Foreign currency translation adjustment — — — — ( 2,281 ) — ( 2,281 ) Changes in fair value of cash flow hedges — — — — ( 323 ) — ( 323 ) Purchase of treasury shares ( 228 ) — ( 3,406 ) — — — ( 3,406 ) Changes in defined benefit plan — — — — 440 — 440 Issue of restricted common shares 73 — — — — — — Provision for common stock warrants — — — 970 — — 970 Issue of common shares related to option issuances 3 — — 35 — — 35 Stock based compensation expense — — — 1,818 — — 1,818 Balance, June 30, 2022 18,247 $ 2 ( 3,406 ) $ 197,785 $ ( 4,562 ) $ ( 76,360 ) $ 113,459 Net income for the period ended June 30, 2023 — — — — — 31,582 31,582 Foreign currency translation adjustment — — — — ( 2,234 ) — ( 2,234 ) Changes in fair value of cash flow hedges — — — — 515 — 515 Purchase of treasury shares ( 18 ) — ( 276 ) — — — ( 276 ) Changes in defined benefit plan — — — — ( 31 ) — ( 31 ) Forfeiture of restricted common shares ( 72 ) — — — — — — Provision for common stock warrants — — — 1,090 — — 1,090 Issue of common shares related to option issuances 123 — — 2,053 — — 2,053 Stock based compensation expense — — — 3,806 — — 3,806 Balance, June 30, 2023 18,280 $ 2 ( 3,682 ) $ 204,734 $ ( 6,312 ) $ ( 44,778 ) $ 149,964 Net income for the period ended June 30, 2024 — — — — — 33,655 33,655 Foreign currency translation adjustment — — — — ( 1,623 ) — ( 1,623 ) Changes in fair value of cash flow hedges — — — — ( 111 ) — ( 111 ) Purchase of treasury shares ( 1,322 ) — ( 21,685 ) — — — ( 21,685 ) Changes in defined benefit plan — — — — 133 — 133 Provision for common stock warrants — — — 1,183 — — 1,183 Issue of common shares related to option issuances 59 — — 366 — — 366 Stock based compensation expense — — — 3,917 — — 3,917 Balance, June 30, 2024 17,017 $ 2 ( 25,367 ) $ 210,200 $ ( 7,913 ) $ ( 11,123 ) $ 165,799 See accompanying notes to consolidated financial statements. 67 Table of Contents IBEX LIMITED AND SUBSIDIARIES Consolidated Statements of Cash Flows (in thousands) June 30, 2024 June 30, 2023 June 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 33,655 $ 31,582 $ 21,456 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 19,461 18,985 18,100 Noncash lease expense 13,205 14,456 14,066 Warrant contra revenue 1,183 1,090 970 Deferred income tax provision / (benefit) 344 4,529 ( 5,170 ) Share-based compensation expense 3,765 4,606 1,851 Allowance of expected credit losses 33 295 — Impairment losses 1,532 — — Loss on lease terminations — 251 — Gain on sale of subsidiaries — ( 246 ) — Change in assets and liabilities: Increase in accounts receivable ( 12,068 ) ( 12,297 ) ( 9,705 ) (Increase) / decrease in prepaid expenses and other current assets ( 7,517 ) 1,467 3,551 (Decrease) / increase in accounts payable and accrued liabilities ( 2,246 ) ( 3,753 ) 2,307 (Decrease) / increase in deferred revenue ( 1,919 ) ( 4,797 ) 5,506 Decrease in operating lease liabilities ( 13,528 ) ( 14,309 ) ( 12,926 ) Net cash inflow from operating activities 35,900 41,859 40,006 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment ( 8,855 ) ( 18,952 ) ( 25,919 ) Cash outflow from sale of subsidiaries, net of cash received — ( 85 ) — Net cash outflow from investing activities ( 8,855 ) ( 19,037 ) ( 25,919 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from line of credit 238 43,448 88,117 Repayments of line of credit ( 291 ) ( 54,597 ) ( 99,227 ) Repayment of debt — ( 3,795 ) ( 6,834 ) Proceeds from the exercise of options 366 2,053 35 Principal payments on finance leases ( 490 ) ( 447 ) ( 818 ) Purchase of treasury shares ( 21,556 ) ( 276 ) ( 3,406 ) Net cash outflow from financing activities ( 21,733 ) ( 13,614 ) ( 22,133 ) Effects of exchange rate difference on cash and cash equivalents ( 21 ) ( 610 ) ( 965 ) Net increase / (decrease) in cash and cash equivalents 5,291 8,598 ( 9,011 ) Cash and cash equivalents at beginning of the year 57,429 48,831 57,842 Cash and cash equivalents at end of the year $ 62,720 $ 57,429 $ 48,831 Supplemental cash flow disclosures Cash paid for interest $ 514 $ 152 $ 1,246 Cash paid for income taxes $ 7,688 $ 4,283 $ 2,160 Supplemental non-cash disclosures Change in accounts payable related to fixed assets $ ( 548 ) $ ( 621 ) $ 1,631 See accompanying notes to consolidated financial statements. 68 Table of Contents IBEX LIMITED AND SUBSIDIARIES Notes to the Consolidated Financial Statements (in thousands, except share data) 1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES OVERVIEW IBEX Limited (“IBEX” and together with its subsidiaries, the “Company,” “ibex,” “we,” “us,” or “our”) was incorporated on February 28, 2017 in Hamilton, Bermuda. Our registered office in Bermuda is Crawford House, 50 Cedar Avenue, Hamilton HM 11, Bermuda. We are a “controlled company” within the meaning of the rules of Nasdaq, with The Resource Group International Limited (“TRGI”) being our controlling shareholder. TRG Pakistan Limited holds a controlling interest in TRGI. On August 7, 2020, the Company was admitted to trade on the Nasdaq Global Market under the ticker symbol “IBEX.” The Company is an end-to-end provider of technology-enabled customer lifecycle experience (“CLX”) solutions. Through the Company’s integrated CLX platform, a comprehensive portfolio of solutions is offered to optimize customer acquisition, engagement, expansion and experience for clients. The Company leverages sophisticated technology and proprietary analytics, in combination with its global footprint and business process outsourcing expertise, to protect and enhance clients’ brands. The Company manages nearly 169 million interactions each year with consumers on behalf of clients through an omni-channel approach, using voice, web, chat and email. 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. In addition 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 our clients, helping them build new customer acquisition channels, increase acquired customers, and often do both at a reduced cost. We also have a small suite of what we call CX services which measures, monitors and manages our clients’ holistic customer experiences. Operating segments An operating segment is defined as a component of a company for which separate financial information is available and which is regularly evaluated by the chief operating decision maker (“CODM”) for the purpose of making decisions regarding resource allocation and performance assessment. The Company’s CODM is the chief executive officer (“CEO”). The Company’s CODM reviews consolidated financial results to make decisions, allocate resources and assess performance. Therefore, the Company has determined that it operates in a single operating and reportable segment. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation and principles of consolidation On December 31, 2022, we determined that we no longer met the criteria to remain a foreign private issuer. Effective July 1, 2023, the Company became a domestic filer and we are required to file periodic reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, and to follow other rules as required. The Company’s consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for the fiscal years ended June 30, 2024 69 Table of Contents and 2023, and retrospectively for the fiscal year ended June 30, 2022 and include the financial results of all wholly-owned subsidiaries. When the Company does not have majority ownership in an entity but exerts significant influence over that entity, the Company accounts for the entity under the equity method of a ccounting. All intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. Use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Significant items subject to such estimates and assumptions include useful lives for property and equipment; impairment of long-lived assets, operating lease assets and liabilities, goodwill, and other intangible assets; allowance for credit losses; valuation allowances for deferred tax assets and other receivables; fair value of share-based compensation, warrants, and derivatives, and legal provisions. The Company bases its estimates on historical experience and other assumptions it believes are reasonable, including the use of outside experts as necessary, and updates these estimates on an ongoing basis and as new events occur, more experience is acquired and/or more information is obtained. Actual results could differ materially from these estimates. Foreign currency matters These financial statements are presented in U.S. dollars, which is the functional and presentation currency of IBEX Limited. Certain of the Company’s subsidiaries have a functional currency other than the U.S. dollar. The assets and liabilities of these subsidiaries are translated into U.S. dollars at period-end exchange rates. Income and expense items are translated at the monthly average exchange rates during the period in which the items occur. Translation gains and losses are recorded in accumulated other comprehensive income (loss) ("AOCI"), a component of stockholders' equity, and included in net earnings only upon sale or liquidation of the underlying foreign subsidiary or affiliated company. Foreign currency transaction gains and losses are recognized in selling, general and administrative expense and are based on differences between foreign exchange rates on the transaction date and on the settlement date. Revenue recognition The Company recognizes revenues for services for which control has transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring the promised services. This process involves identifying the customer contract, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it (a) provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and (b) is separately identified in the contract. The Company considers a performance obligation satisfied as it provides services to a customer, meaning the customer has the ability to direct the use and obtain the benefit of the service. Revenues from contact center services, which consist of customer service, technical support and other value-added outsourced back-office services, are recognized as the services are performed on the basis of the number of billable minutes or hours, contractual rates, and other contractually agreed metrics, if applicable. Certain of our client contracts include bonus and penalty provisions. Revenues related to training that occurs upon commencement of a new client contract or statement of work are deferred and recognized on a straight-line basis over the estimated life of the client program, as it is not considered to have a standalone value to the customer. The related expenses are expensed as incurred. Revenues are recognized over time as performance obligations are satisfied and in the period in which the Company has a right to invoice, net of discounts, incentives, and/or penalties as per contractual terms. Bonuses and penalties accrue for the current billing period and do not depend on future performance. In some cases, we may estimate these bonuses or penalties using the “most likely amount” method based on actual data and historical experience. Revenues from digital services are recognized at a point in time upon the successful consumer activation or purchase of clients’ services. We utilize third parties in the satisfaction of this performance obligation; however, because we retain control over these third parties and are solely responsible for the risk and reward associated 70 Table of Contents with this performance obligation, we have determined that we are the principal in these transactions and therefore recognize revenue on a gross basis. Revenues from CX software-as-a-service products are recognized over time based on the term of the subscription. Set-up fees to customize the customer experience solution for client’s specific needs are deferred and recognized on a straight-line basis over the term of the subscription. Revenues related to additional consulting services are recognized over the period as the related services are performed on a per hour basis. All of our contracts include the right to invoice for services on a monthly basis. None of our contracts include significant termination penalties, and generally may be terminated for convenience at any time with a short notice period (generally 30 to 120 days). The Company generally does not incur significant upfront costs to fulfill or obtain a contract that would qualify for capitalization under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers . Cash and cash equivalents Cash and cash equivalents includes highly liquid investments with initial maturities of three months or less and include money market funds. The carrying value of cash and cash equivalents approximates fair value because of the short-term maturity of those instruments. The majority of the Company’s cash and cash equivalents are deposited with financial institutions located in the U.S. and may at times exceed insured limits. Trade receivables Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the statements of cash flows. In accordance with Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326) , the Company estimates its credit losses using the lifetime expected credit loss model. The allowance for credit losses is calculated quarterly based on the Company’s historical loss percentages, net of recoveries. In addition to the evaluation of historical losses, the Company considers current and future economic conditions and events such as changes in customer credit quality and liquidity. The Company will write-off accounts receivable against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Concentration of credit risk The Company is exposed to credit risk in the normal course of business, primarily related to accounts receivable and derivative instruments. Historically, the losses related to credit risk have been immaterial. The Company regularly monitors its credit risk to mitigate losses. The Company evaluates the creditworthiness of its clients prior to and throughout the life of the client relationship. The Company does not believe it is exposed to more than a nominal amount of credit risk in its derivative instruments as all of its counterparties are investment-grade financial institutions. Tax advances and receivables Tax advances and receivables consist primarily of refundable sales and use taxes and income tax prepayments. Other assets Other current assets and other non-current assets consist primarily of refundable security deposits, loans and advances receivable, and derivative assets. 71 Table of Contents Property and equipment, net Property and equipment and assets leased under financing leases are carried at cost at the acquisition date and are depreciated using the straight-line method over their estimated useful lives as follows: Property and equipment Useful economic life Leasehold improvements Lesser of life of the asset or expected lease term Furniture, fixture and office equipment 3 - 5 years Computer equipment and software 3 years Vehicles 3 - 5 years Property and equipment assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is assessed by a comparison of the carrying amount of the asset to the estimated future undiscounted net cash flows expected to be generated by the asset. If estimated future undiscounted net cash flows are less than the carrying value of the asset, an impairment loss is recognized to the extent its carrying value exceeds its estimated fair value. During the year ended June 30, 2024, we determined that the estimated fair value for certain assets at two of our delivery locations no longer exceeded their carrying value. The fair value of these assets was based on various assumptions including our ability to redeploy and utilize the assets at other sites. We recognized impairment losses related to leasehold improvements, furniture & fixtures, and computer equipment of $ 1.3 million during the year ended June 30, 2024, which is included in selling, general and administrative expense in the consolidated statements of comprehensive income. There were no impairment losses recognized during the years ended June 30, 2023 or 2022. Leases The Company determines whether an arrangement contains a lease at inception in accordance with the provisions of ASC 842, Leases. Operating leases are included in operating lease assets and current and non-current operating lease liabilities, and assets leased under finance leases are included in property and equipment, net and current and long-term debt in the consolidated balance sheets. Operating lease assets represent the Company’s right to use an underlying asset for the lease term, and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating leases with initial terms in excess of twelve months are recognized at the commencement date based on the present value of lease payments over the lease term. The operating lease asset is adjusted for lease incentives, prepaid lease payments and initial direct costs. Operating lease expense is recognized on a straight-line basis over the lease term in cost of services or selling, general and administrative expense, as applicable. The Company has lease agreements for office space with lease and non-lease components. The Company has elected to combine lease and non-lease components. Certain of the Company’s lease agreements include rental payments that adjust periodically based on an index or rate, generally the applicable Consumer Price Index. The operating lease liability is measured using the prevailing index or rate at the measurement date (i.e., the commencement date). Incremental payments due to changes to the index- and rate-based lease payments are expensed as incurred. For purposes of calculating operating lease liabilities, the lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. The Company’s capital investment, relationships with clients serviced at the site, and employee recruitment potential are some of the factors it considers when determining whether it will exercise its option to extend a lease. The Company determines the incremental borrowing rates based on information available at the lease commencement date. The incremental borrowing rate is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Interest on finance leases is included in interest expense, net, in the consolidated statements of comprehensive income. We apply judgment in estimating the incremental borrowing rate 72 Table of Contents including considering the term of the lease, the currency in which the lease is denominated, and the impact of collateral and our credit risk on the rate. The Company has elected the short-term lease recognition exemption for all asset classes. Leases with a term of twelve months or less are expensed as incurred in the consolidated statements of comprehensive income as cost of services or selling, general and administrative expense as applicable. For finance leases, the right of use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. The right of use asset is subsequently amortized using the straight-line method from the lease commencement date to the earlier of the end of the useful life of the underlying asset or the end of the lease term. The lease liability is initially measured in the same manner and date as for operating leases and is subsequently measured at amortized cost using the effective interest method. During the year ended June 30, 2024, we determined that the estimated fair value for one of our operating leases no longer exceeded its carrying value. The fair value of the lease asset was based on various assumptions including market-based factors and our ability to utilize the site in the future. We recognized an impairment loss on the operating lease asset of $ 0.3 million during the year ended June 30, 2024, which is included in selling, general and administrative expense in the consolidated statements of comprehensive income. There were no impairment losses recognized during the years ended June 30, 2023 or 2022. Goodwill Goodwill represents the excess of the cost of a business combination over the total acquisition date fair value of the identifiable assets, liabilities and contingent liabilities acquired. Goodwill is not amortized but is tested for impairment at the reporting unit level, on an annual basis or more frequently, if events occur or circumstances change indicating potential impairment. The Company annually tests goodwill for impairment on June 30. In evaluating goodwill for impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Qualitative factors that the Company considers include, but are not limited to, macroeconomic and industry conditions, overall financial performance and other relevant entity-specific events. If the Company bypasses the qualitative assessment, or if the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then the Company performs a quantitative goodwill impairment test to identify potential goodwill impairment and measures the amount of goodwill impairment it will recognize, if any. In the quantitative goodwill impairment test, the Company compares the estimated fair value of the reporting unit with its related carrying value. If the estimated fair value exceeds the carrying amount, no further analysis is needed. If, however, the reporting unit’s estimated fair value is less than its carrying amount, the Company records an impairment for the difference between the estimated fair value and the carrying value. The Company uses an internally developed discounted cash flow model that includes estimates of projected revenues, expenses and related cash flows based on assumed long-term growth rates and demand trends, expected future investments to grow new units, and estimated discount rates. The Company bases these assumptions on its historical data and experience, industry projections, and micro and macro general economic condition projections and expectations. No impairments were recorded during the years ended June 30, 2024, 2023 or 2022. Other intangible assets The Company has indefinite-lived intangible assets consisting of trademarks. The Company evaluates indefinite-lived intangible assets for possible impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Similar to goodwill, the Company may first use a qualitative analysis to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. The qualitative analysis will include a review of changes in economic, market and industry conditions, business strategy, and financial performance, among others, to determine if there would be a significant decline to the fair value of an indefinite-lived intangible asset. If a quantitative analysis is 73 Table of Contents completed, an indefinite-lived intangible asset is evaluated for possible impairment by comparing the fair value of the asset with its carrying value. An impairment charge is recorded if the asset’s carrying value exceeds its estimated fair value. No impairments were recorded during the years ended June 30, 2024, 2023 or 2022. Other intangible assets are included in other non-current assets on the consolidated balance sheets. Derivatives The Company accounts for financial derivative instruments under ASC 815, Derivatives and Hedging . The Company generally utilizes options with expirations of 12 months or less to reduce its foreign currency exposure due to exchange rate fluctuations on forecasted operating cash flows denominated in non-functional foreign currencies. In using derivative financial instruments to hedge these exposures, the Company exposes itself to counterparty credit risk. The Company designates these derivatives as cash flow hedges. To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedging activities. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective on a prospective and retrospective basis. When it is determined that a derivative has ceased to be a highly effective hedge or if a forecasted hedged item is no longer probable of occurring, or if the Company de-designates a derivative as a hedge, the Company discontinues hedge accounting and records all gains and losses in earnings. For cash flow hedges, the entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is reported in AOCI until the hedged transaction affects earnings. At that time, this amount is reclassified from AOCI and recognized within cost of services or selling, general and administrative expenses, or interest expense, net, as applicable. Cash flows related to derivative contracts are classified within the operating section in the consolidated statements of cash flows. Contingencies The Company is subject to claims and lawsuits filed in the ordinary course of business. Although management does not believe that any such proceedings will have material adverse effect on its consolidated financial position, results of operations, or cash flows, no assurances to that effect can be given based on the uncertainty of litigation and demands of third parties. The Company records a liability for pending litigation and claims where losses are both probable and can be reasonably estimated. Legal fees are expensed as incurred. Employee benefits (a) Defined contribution plans The Company sponsors a 401(k) plan in the U.S. under which the Company makes matching contributions for eligible employees up to 4 % of compensation. All Company matching contributions are immediately vested. The Company operates defined contribution plans in other countries as allowed or required by law. For the years ending June 30, 2024, 2023, and 2022, the Company incurred plan expenses of $ 1.4 million, $ 1.2 million, and $ 1.0 million, respectively, which is recorded in selling, general and administrative expenses. (b) Defined benefit plan The Company records amounts relating to its defined benefit plans based on calculations that incorporate various actuarial and other assumptions, including discount rates, mortality, assumed rates of return, compensation increases and turnover rates. Remeasurement changes are reflected in AOCI. Current service costs are recorded in the period to which they relate. Prior service cost, if any, resulting from an amendment to a plan is recognized and amortized over the remaining period of service of the covered employees. 74 Table of Contents The Company reviews and adjusts its assumptions annually based on current rates and trends. The Company believes that the assumptions utilized in recording its obligation under the plan are reasonable based on its experience and market conditions. As of June 30, 2024 and 2023, defined benefit obligations of $ 1.3 million and $ 1.2 million, respectively, were included in other non-current liabilities in the consolidated balance sheets, and amounts recognized in the consolidated statements of comprehensive income for the years ended June 30, 2024, 2023, and 2022 were $ 0.3 million, $ 0.4 million, and $ 0.4 million, respectively. Share-based compensation plans The Company accounts for its share-based awards in accordance with provisions of ASC 718, Compensation - Stock Compensation . The Company calculates the fair value of option awards using the Black-Scholes model. For equity-classified awards, total compensation cost is based on the grant date fair value. For liability-classified awards, total compensation cost is based on the fair value of the award on the date the award is granted and is subsequently re-measured at each reporting date until settlement. The Company recognizes share-based compensation expense over the requisite vesting period using a graded vesting model. Awards to employees and directors may contain service, performance and/or market vesting conditions. For unvested awards with performance conditions, the Company assesses the probability of attaining the performance conditions at each reporting period. Awards that are deemed probable of attainment are recognized in expense over the requisite service period. The Company accounts for forfeitures as they occur. Warrant to purchase common shares The Company accounts for a warrant to purchase its common shares as an equity instrument in accordance with the provisions of ASU No. 2019-08, Compensation – Stock Compensation (Topic 718) and ASC 606, which requires entities to measure and classify share-based payment awards granted to a customer by applying the guidance under Topic 718, as of January 1, 2019. On the grant date, the Company measured the warrant using a Black-Scholes option pricing model. There was no immediate vesting upon execution of the warrant. Contra-revenue and equity are recorded as revenue is recognized. The Company has elected a policy to estimate forfeitures for non-employee equity grants. At each reporting period, the Company assesses the likelihood of additional vesting in accordance with service or performance conditions included in the warrant terms. The Company revises its estimates for additional contra-revenue when it is probable that additional shares will vest. Income taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are also recognized for the estimated future effects of tax loss carry forwards. The effect of changes in tax rates on deferred taxes is recognized in the period in which the enactment dates change. We recognize deferred tax assets to the extent that we determine that these assets are more likely than not to be realized. In making such a determination, we consider the available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. The Company records valuation allowances against its deferred tax assets based on whether it is more likely than not that the deferred tax assets will be realized. If we determine that we are able to realize our deferred tax assets in the future in excess of their net recorded amount, we will make an adjustment to the valuation allowance. We record uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that met the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. 75 Table of Contents We recognize interest and penalties related to uncertain tax positions in income tax expense in the consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheets. Share repurchase programs The Company’s board of directors (the “Board”) may authorize share repurchases of the Company’s common shares. Purchases made pursuant to these authorizations may be carried out through open market transactions, negotiated purchases or otherwise, at times and in such amounts as the Company deems appropriate. Shares repurchased under such authorizations are held in treasury for general corporate purposes, including issuances under various employee share-based award plans. When Company shares are repurchased, the amount of the consideration paid (including directly attributable costs, net of any tax effects) is recognized as a deduction of additional paid in capital. Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are subsequently sold or reissued, the amount received is recognized as an increase in additional paid in capital, and any resulting surplus or deficit on the transaction is reclassified to accumulated deficit. The Board will review the repurchase program periodically and may authorize adjustment of its terms and size, and suspend or discontinue the program. The Company has funded and expects to fund future repurchases with its existing cash balance. The share repurchase programs do not obligate the Company to acquire any particular amount of common shares. See Note 14. “Stockholders’ Equity” for more information on share repurchases. Equity method investment The Company uses the equity method to account for its investment in a company if the investment provides the Company with the ability to exercise significant influence over, but not control of, the operating and financial policies of the investee. The Company’s consolidated net income includes the Company’s proportionate share of the net income or loss of the investee. The Company’s judgment regarding the level of influence over its equity method investee includes considering key factors such as the Company’s ownership interest, representation on the Board and participation in policy-making decisions of the investee and material intercompany transactions. The Company has elected to classify distributions from its investee based on the cumulative earnings approach. See Note 17. “Investment in Joint Venture” for more information. Cloud Computing Software Implementation Costs The Company incurs costs to implement cloud computing arrangements that are hosted by a third-party vendor. In accordance with ASC 350-40, Goodwill and Other, Internal-Use Software, for cloud computing arrangements that meet the definition of a service contract, the Company capitalizes qualifying implementation costs incurred during the application development stage in other non-current assets. Capitalized costs are primarily comprised of third-party consulting fees, direct labor, and related expenses. Capitalization of these costs concludes once the project is substantially complete and the software is ready for the Company's intended use. Once available for its intended use, the capitalized costs will be amortized on a straight-line basis over the term of the associated hosting arrangement including periods covered by an option to extend, and are included in selling, general and administrative expenses in the consolidated statements of comprehensive income. Costs related to data conversion, overhead, general and administrative activities, and training are expensed as incurred. Post-configuration training and maintenance costs are expensed as incurred. The Company capitalized $ 3.5 million during the year ended June 30, 2024. There were no costs capitalized during the year ended June 30, 2023 . 76 Table of Contents Other postemployment benefits During the year ended June 30, 2024, the Company eliminated certain positions that it considered redundant and incurred approximately $ 1.6 million in severance costs, of which $ 1.4 million is recorded in selling, general and administrative expense and $ 0.2 million is recorded in cost of services in the consolidated statements of comprehensive income. As of June 30, 2024, $ 0.8 million was accrued and is expected to be paid by July 30, 2025. Emerging Growth Company The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Accordingly, the Company has the option to adopt new or revised accounting guidance either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies pursuant to Section 13(a) of the Exchange Act. The Company has elected to use the extended transition period until we are no longer an emerging growth company or until we choose to opt out of the extended transition period affirmatively and irrevocably. Recently Issued Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The amendments in ASU No. 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the new guidance on the disclosures to our consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign), and (3) the income tax expense or benefit from continuing operations (separated by federal, state and foreign). This update also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The amendments in ASU No. 2023-09 are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of the new guidance on the disclosures to our consolidated financial statements. In March 2024, the SEC issued its final climate disclosure rules, which require the disclosure of climate-related information in annual reports and registration statements. The rules require disclosure in the audited financial statements of certain effects of severe weather events and other natural conditions above certain financial thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates, if material. Disclosure requirements will begin phasing in for fiscal years beginning on or after January 1, 2025. On April 4, 2024, the SEC determined to voluntarily stay the final rules pending certain legal challenges. We are currently evaluating the impact of the new rules on the disclosures to our consolidated financial statements. 2. REVENUE FROM CONTRACTS WITH CUSTOMERS The majority of the Company’s revenues are derived from contracts with customers who are located in the United States of America (the “United States” or “U.S.”). However, the Company delivers most of its services from regional customer experience delivery centers that are located in geographies outside of the United States. 77 Table of Contents Our global delivery model is built on regional customer experience delivery centers and includes a unique ability to support work-at-home capabilities in any region that we currently operate. The Company generated its revenue from clients based in the United States and other countries as below: ($000s) June 30, 2024 June 30, 2023 June 30, 2022 Revenue United States $ 493,015 $ 509,170 $ 476,092 Other countries 15,554 13,948 16,759 Total $ 508,569 $ 523,118 $ 492,851 The following table presents the breakdown of the Company’s revenues by geographical location, based on where the services are provided for the years ended: ($000s) June 30, 2024 June 30, 2023 June 30, 2022 Revenue Onshore (United States) $ 120,153 $ 145,401 $ 167,925 Offshore (Philippines, Pakistan) 244,825 221,913 186,902 Nearshore (Jamaica, Nicaragua, Honduras) 143,591 155,804 138,024 Total $ 508,569 $ 523,118 $ 492,851 The following table presents the breakdown of the Company’s revenue by pattern of revenue recognition for the years ended: ($000s) June 30, 2024 June 30, 2023 June 30, 2022 Pattern of Revenue recognition Services transferred over time $ 477,663 $ 489,942 $ 455,206 Services transferred at a point in time 30,906 33,176 37,645 $ 508,569 $ 523,118 $ 492,851 The movement in the deferred revenue is as follows: ($000s) June 30, 2024 June 30, 2023 Beginning balance $ 7,796 $ 12,593 Revenue recognized ( 8,509 ) ( 11,329 ) Revenue deferred 6,590 6,532 Ending balance $ 5,877 $ 7,796 78 Table of Contents 3. ACCOUNTS RECEIVABLE AND SIGNIFICANT CLIENT Accounts receivable, net in the accompanying consolidated balance sheets consists of the following: ($000s) June 30, 2024 June 30, 2023 Accounts receivable $ 98,438 $ 86,484 Less: Allowance for credit losses ( 72 ) ( 120 ) Accounts receivable, net $ 98,366 $ 86,364 The Company will write-off accounts receivable against the allowance when it determines a balance is uncollectible, and wrote-off $ 0.1 million and $ 1.4 million for the years ended June 30, 2024 and 2023, respectively. Write-offs for the fiscal year ended June 30, 2022 were not material. Activity in the Company’s allowance for credit losses consists of the following: ($000s) June 30, 2024 June 30, 2023 Beginning balance $ 120 $ 1,290 Provision for credit losses 93 321 Reversal of provision for credit losses ( 60 ) ( 26 ) Uncollectible receivables written off ( 87 ) ( 1,410 ) Effect of foreign exchange 6 ( 55 ) Ending balance $ 72 $ 120 Significant Client During the years ended June 30, 2024 and 2023, the Company had one client that contributed approximately 12 % of total revenue, respectively. As of June 30, 2024 and 2023, the accounts receivable from this client was $ 13.6 million and $ 6.0 million, respectively. To limit the Company’s credit risk with its clients, management regularly monitors the aging of customer receivables, maintains allowances for credit losses and may require prepayment for services from certain clients. Based on currently available information, management does not believe significant credit risk exists as of June 30, 2024. 4. PROPERTY AND EQUIPMENT, NET Property and equipment consists of the following: ($000s) June 30, 2024 June 30, 2023 Leasehold improvements $ 34,421 $ 37,356 Furniture & fixtures 28,842 31,228 Computer equipment 76,283 73,824 Software 21,359 21,057 Vehicles 2,826 1,779 Assets under construction 1,705 435 Property and equipment, gross $ 165,436 $ 165,679 Less: Accumulated depreciation ( 135,574 ) ( 124,528 ) Property and equipment, net $ 29,862 $ 41,151 79 Table of Contents The following table presents the Company’s total property and equipment, net by geographic location: ($000s) June 30, 2024 June 30, 2023 United States $ 5,920 $ 10,751 Philippines 5,667 9,117 Pakistan 6,739 3,923 Jamaica 8,659 13,374 Nicaragua 2,082 3,421 Honduras 795 565 Total $ 29,862 $ 41,151 Depreciation expense, which includes depreciation expense for finance lease assets, for the Company was $ 19.5 million, $ 19.0 million, and $ 18.1 million for the years ended June 30, 2024, 2023, and 2022, respectively. 5. LEASES The Company has operating lease obligations primarily for our delivery centers and finance lease obligations primarily for vehicles and other equipment. Leases typically have initial terms of two to fifteen years , and may include renewal options if the Company is reasonably certain to exercise such options. The components of lease cost are as follows: ($000s) June 30, 2024 June 30, 2023 June 30, 2022 Operating lease cost: Operating lease cost $ 19,753 $ 21,614 $ 21,442 Variable lease cost 2,949 4,127 4,207 Short-term lease cost 211 — — Total operating lease cost $ 22,913 $ 25,741 $ 25,649 Finance lease cost: Amortization of right of use assets $ 653 $ 446 $ 375 Interest on lease liabilities 235 143 93 Total finance lease cost $ 888 $ 589 $ 468 The following table presents supplemental balance sheet information related to leases: ($000s) June 30, 2024 June 30, 2023 Operating lease assets $ 59,145 $ 70,919 Operating lease liabilities, current $ 12,051 $ 13,036 Operating lease liabilities, non-current 53,441 64,854 Total operating lease liabilities $ 65,492 $ 77,890 Finance lease assets, net $ 1,697 $ 929 Finance lease liabilities, current $ 660 $ 361 Finance lease liabilities, non-current 867 600 Total finance lease liabilities $ 1,527 $ 961 80 Table of Contents The following table presents supplemental cash flow information related to leases: ($000s) June 30, 2024 June 30, 2023 June 30, 2021 Cash paid for amounts included in the measurement of lease liabilities $ 13,528 $ 14,309 $ 12,926 Operating cash flows paid for interest portion of finance leases 235 143 93 Financing cash flows paid for principal portion of finance leases 490 447 818 The following table presents supplemental noncash information related to leases: ($000s) June 30, 2024 June 30, 2023 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 6,069 $ 11,281 Finance leases $ 1,040 $ 881 Reduction due to reassessment of lease renewal options Right-of-use assets $ ( 3,656 ) $ — Operating lease liabilities $ ( 3,689 ) $ — June 30, 2024 June 30, 2023 Weighted average remaining lease term (in years) Operating leases 5.1 5.7 Finance leases 2.2 2.6 Weighted average discount rate Operating leases 10.5 % 9.2 % Finance leases 22.3 % 13.4 % The following table presents the maturities of our lease liabilities as of June 30, 2024: ($000s) Operating Leases Finance Leases Year Ending 2025 $ 17,384 $ 916 2026 15,968 701 2027 15,746 304 2028 14,222 — 2029 12,082 — Thereafter 10,815 — Total undiscounted lease payments 86,217 1,921 Less: liability accretion ( 20,725 ) ( 394 ) Total lease liabilities $ 65,492 $ 1,527 81 Table of Contents 6. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The carrying amount of goodwill at both June 30, 2024 and 2023 was $ 11.8 million. During the years ended June 30, 2024 and 2023, the Company performed a qualitative assessment and determined that the estimated fair value of the reporting unit exceeded the carrying value, therefore, no impairment charges were recognized. Other Intangible Assets The carrying amount of indefinite-lived intangible assets (trademarks) at both June 30, 2024 and 2023 was $ 0.7 million and is included in other non-current assets in the consolidated balance sheets. During the years ended June 30, 2024 and 2023, the Company performed a qualitative assessment and determined that no impairment was necessary. 7. DERIVATIVES Foreign exchange contracts From time to time, the Company enters into foreign currency exchange contracts, consisting of offsetting foreign exchange option contracts (“collars”), to mitigate foreign exchange fluctuations on the Philippine Peso (“PHP”) within a certain range and on a certain percentage of its PHP operating costs. The collars are designated as cash flow hedges upon inception, in accordance with ASC 815, in order to match the financial results of the hedges with the forecasted transactions. These contracts cover periods commensurate with the expected exposure, generally three to twelve months . We execute our contracts with our primary banking partner, PNC Bank, National Association (“PNC”). The Company has not experienced any material issues related to derivative counterparty defaults. The following table shows the notional amount and fair value of our foreign exchange cash flow hedging instruments as of June 30, 2024 and 2023: Settlement date Hedged currency Foreign currency rate Notional amount ($000s) Fair Value ($000s) Foreign currency option contracts - liabilities July 8, 2024 through December 19, 2024 PHP 54.00 - 57.50 $ 9,789 Fair value as of June 30, 2023 100 Fair value as of June 30, 2024 335 The fair value of the collars is included in accounts payable and accrued liabilities in the consolidated balance sheets. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognized in AOCI. Amounts previously recognized in AOCI are reclassified to cost of services in the periods in which the hedged expenses occur. Refer to Note 14. "Stockholders' Equity" for further details on the change in fair value of our cash flow hedges and the net gain or loss reclassified to earnings from effective hedges during the years ended June 30, 2024, 2023 and 2022. 82 Table of Contents 8. DEBT Debt consists of the following: ($000s) June 30, 2024 June 30, 2023 Debt PNC Credit Facility $ — $ 52 Finance leases 1,527 961 Total debt $ 1,527 $ 1,013 Less: Current maturities of long-term debt and finance leases ( 660 ) ( 413 ) Total long-term debt $ 867 $ 600 Revolving credit facility PNC Credit Facility In November 2013, the Company’s subsidiary, Ibex Global Solutions, Inc. (formerly known as TRG Customer Solutions, Inc.), entered into the three-year $ 35.0 million revolving credit facility with PNC (as amended, the “PNC Credit Facility”). Between June 2015 and March 2021, the PNC Credit Facility was amended multiple times for increases to the maximum revolving advance amount and extensions of the maturity date. In March 2021, the PNC Credit Facility was amended to join its wholly owned subsidiaries, Digital Globe Services, LLC, TelSatOnline, LLC and 7 Degrees, LLC as borrowers. In September 2021, the PNC Credit Facility was amended to join its wholly owned subsidiary, iSky, LLC as a borrower. In June 2022, the PNC Credit Facility was amended to increase the maximum revolving advance amount to $ 80 million, with the ability to request increases, up to a maximum revolving advance amount of $ 95 million (contingent upon lender approval), change the reference rate used from LIBOR to Term Secured Overnight Financing Rate (“SOFR”) and extend the maturity date to May 2026. In May 2024, the Company's subsidiaries, Ibex Global Solutions, Inc., Digital Globe Services, LLC, TelSatOnline, LLC, 7 Degrees, LLC, and iSky, LLC (collectively, the "Borrowers") entered into the Seventeenth Amendment to the PNC Credit Facility (the "Amendment") with PNC. The Amendment provides PNC's consent to the assignment of certain customer contracts (the "Contract Assignments") by the Borrowers to the Company's subsidiary, Ibex Global FZ-LLC, provided that (i) the contract revenues associated with such Contract Assignments, upon the effectiveness of such Contract Assignments, shall not in the aggregate be greater than $ 175 million and (ii) the Borrowers comply with additional reporting requirements to PNC. Borrowings under the PNC Credit Facility bear interest at SOFR plus a margin of 1.75 % and/or negative 0.5 % of the PNC Commercial Lending Rate for domestic loans. The PNC Credit Facility also requires a commitment fee of 0.25 % per annum of undrawn commitments to be paid quarterly in arrears. The PNC Credit Facility is guaranteed by IBEX Global Limited and secured by substantially all the assets of the Borrowers. As of June 30, 2024, the Company had $ 79.0 million of borrowing available under the PNC Credit Facility based on eligible collateral. The PNC Credit Facility contains certain financial, operating, and other covenants, including, among other things, covenants restricting additional borrowings, paying any dividends and making certain investments. The Company was in compliance with all debt covenants as of June 30, 2024. 9. COMMITMENTS As of June 30, 2024, the Company is party to non-cancelable purchase obligations that mainly relate to long term telecommunications contracts and enterprise cloud solutions for the continuing operation of our business. The Company has commitments to pay $ 8.7 million in the next twelve months and $ 6.9 million thereafter related to these contracts. 83 Table of Contents 10. WARRANT On November 13, 2017, and as subsequently amended, the Company issued to Amazon.com NV Investment Holdings LLC, a subsidiary of Amazon.com, Inc. (“Amazon”), a 10-year warrant to acquire approximately 1,674,017 common shares (the "warrant shares"), representing 10.0 % of our equity on a fully diluted basis at the time of the warrant’s issuance. The warrant is exercisable at a price per share of $ 9.42 . The warrant provides for net share settlement, that if elected by the holder, will reduce the number of shares issued upon exercise to reflect the net settlement of the exercise price. The warrant is classified as an equity instrument in accordance with ASU No. 2019-08, which was adopted retroactively on July 1, 2020. The Company determined the grant date fair value of the warrant using the Black-Scholes option pricing model. The warrant shares vest on the satisfaction of specified milestones tied to Amazon’s purchase of services from the Company during a seven-and-a-half-year period ended on June 30, 2024. The vesting is partially accelerated in the event of a reorganization transaction (as defined in the warrant). Amazon is entitled to customary shelf and piggy-back registration rights with respect to the shares issued upon exercise of the warrant. Amazon may not transfer the warrant except to a wholly-owned subsidiary of Amazon. As of June 30, 2024 and 2023, 1,171,812 and 1,004,410 warrant shares were vested, respectively. To date, the warrant has not been exercised, expired or cancelled. The Company recorded contra revenue of approximately $ 1.2 million, $ 1.1 million, and $ 1.0 million during the years ended June 30, 2024, 2023, and 2022, respectively. 11. SHARE BASED COMPENSATION The following tables summarize the components of share-based compensation expense recognized in the Company’s consolidated statements of comprehensive income, both by line item and by plan: Year ended June 30, 2024 2023 2022 Cost of services $ 76 $ 298 $ 105 Selling, general and administrative 3,689 4,308 1,746 Total stock compensation expense $ 3,765 $ 4,606 $ 1,851 Year ended June 30, 2024 2023 2022 Phantom Stock Plans $ ( 152 ) $ 800 $ 33 2018 Restricted Share Plan — ( 7 ) 6 2020 Long Term Incentive Plan 3,917 3,813 1,812 Total stock compensation expense $ 3,765 $ 4,606 $ 1,851 Phantom Stock Plans In 2018, the Company adopted phantom stock plans (“Phantom Stock Plans”) in certain of its operating countries, which provide for grants of “phantom stock options” to certain executive officers and employees in those countries. Each phantom stock option provides the participant with a contractual right to receive an amount equal to the difference between the fair market value of a vested common share of the Company at the time of exercise and the exercise price of the option per share. The maximum number of phantom stock options available for issuance under the Phantom Stock Plans is 600,000 . The Phantom Stock Plans shall continue until the earlier of June 30, 2025 or termination by the Company’s Board pursuant to the terms of the plans. 84 Table of Contents The following table summarizes the phantom stock option activity for the year ended June 30, 2024: Share options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate intrinsic value (thousands) Outstanding as of June 30, 2023 211,350 $ 22.18 8.38 $ 188 Granted 56,000 15.64 9.76 Exercised ( 639 ) 6.81 3.65 7 Forfeited / expired ( 8,460 ) 25.88 8.51 Outstanding as of June 30, 2024 258,251 $ 20.68 7.86 $ 113 Vested and exercisable as of June 30, 2024 147,459 $ 20.89 6.84 $ 83 The weighted average fair value of the phantom stock options outstanding as of June 30, 2024, 2023, and 2022 was $ 5.71 , $ 8.33 , and $ 5.59 respectively. The total pre-tax intrinsic value of the options exercised during the years ended June 30, 2024, 2023, and 2022 was $ 0.0 million, $ 0.6 million , and $ 0.2 million , respectively. The liability for outstanding phantom stock options as of June 30, 2024 and 2023 was $ 1.0 million a nd $ 1.2 million, respectively, and is included in accrued liabilities and other non-current liabilities in the consolidated balance sheets. Phantom stock option awards vest based on service conditions. The Company has elected to use the Black-Scholes model to calculate the fair value of Phantom stock options. The Black-Scholes model requires the use of certain estimates and assumptions that affect the fair value of options in the consolidated statement of profit or loss. These include the price per share, expected term, expected volatility, expected dividend yield and the risk-free interest rate. June 30, 2024 June 30, 2023 June 30, 2022 Expected term 1.40 - 6.12 years 1.40 - 6.12 years 1.40 - 5.66 years Expected volatility 36.12 % - 37.87 % 33.41 % - 36.33 % 32.60 % - 37.20 % Expected dividend yield 0.00 % 0.00 % 0.00 % Risk-free interest rate 4.33 % - 4.90 % 4.05 % to 4.87 % 3.01 % - 3.03 % The assumptions used in the Black-Scholes model are estimated as follows: • Expected dividend yield: Zero percent , as we do not anticipate paying dividends on our common shares. • Expected volatility: Based on the historical stock price volatility of comparable publicly-traded companies in our peer group. • Risk-free interest rate: Based on the U.S. Treasury yield curve in effect at the date of valuation. • Expected term: Estimated based on the simplified method as we do not have adequate historical data. As of June 30, 2024, the unrecognized compensation expense associated with the phantom stock plans is $ 0.5 million, which will be recognized over the remaining weighted average vesting period of 3.54 years using a graded vesting model . 2018 Restricted Share Plan On December 21, 2018, our Board and shareholders approved and adopted the Company’s 2018 Restricted Share Plan (the “2018 RSA Plan”). As of May 20, 2020, the Company will not issue further shares under the 2018 RSA Plan and the remaining shares of 707,535 were transferred to the 2020 Long Term Incentive Plan. 85 Table of Contents Executive Leadership Team awards Performance-based restricted stock awards (“RSA”) were granted under the 2018 RSA Plan to executive leadership team employees and vested based on certain performance criteria, which have all been met, in addition to service conditions. A summary of the unvested RSAs is as follows: Shares Weighted Average Grant Date Fair Value Unvested as of June 30, 2023 6,284 $ 0.61 Granted — — Vested ( 6,284 ) 0.61 Forfeitures / cancellations / expirations — — Unvested as of June 30, 2024 — $ — 2020 Long Term Incentive Plan On May 20, 2020, our Board and shareholders approved and adopted the Company’s 2020 Long Term Incentive Plan, with an amendment and restatement effective January 14, 2022 (the “2020 LTIP”). The number of common shares that we may issue with respect to awards granted under the 2020 LTIP will not exceed an aggregate of 1,987,326 shares. The 2020 LTIP provides for grants of stock options and restricted stock units. Stock options The Company granted stock options to new and existing employees and members of the Board over the last four fiscal years. These awards are subject to service-based, and in some cases, performance- and market-based vesting conditions and generally vest in monthly, quarterly, or annual installments over two to four years . The stock options typically expire ten years after they are granted. The following table summarizes the stock option activity for the year ended June 30, 2024: Share options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate intrinsic value (thousands) Outstanding as of June 30, 2023 941,599 $ 18.78 7.89 $ 3,501 Granted 142,000 15.62 9.75 Exercised ( 28,548 ) 12.82 6.04 101 Forfeited / expired ( 98,668 ) 19.45 7.74 Outstanding as of June 30, 2024 956,383 $ 18.31 7.25 $ 962 Vested and exercisable as of June 30, 2024 635,935 $ 17.29 6.46 $ 850 The weighted-average grant-date fair value of options granted during the years ended June 30, 2024, 2023, and 2022 was $ 6.70 , $ 10.37 , and $ 6.04 , respectively. The total pre-tax intrinsic value of the options exercised during the years ended June 30, 2024, 2023, and 2022 was $ 0.1 million, $ 1.0 million, and $ 0.0 million , respectively. 86 Table of Contents We use the Black-Scholes model to determine the grant-date fair value of the stock options, which was estimated using the following assumptions: June 30, 2024 June 30, 2023 June 30, 2022 Expected term 6.12 years 6.12 years 6.08 - 7.00 years Expected volatility 35.49 % - 35.87 % 32.89 % - 33.39 % 31.30 % - 31.54 % Expected dividend yield 0.00 % 0.00 % 0.00 % Risk-free interest rate 4.24 % to 4.33 % 3.75 % to 4.11 % 1.28 % to 2.00 % The assumptions used in the Black-Scholes model are estimated as follows: • Expected dividend yield: Zero percent , as we do not anticipate paying dividends on our common shares. • Expected volatility: Based on the historical stock price volatility of comparable publicly-traded companies in our peer group. • Risk-free interest rate: Based on the U.S. Treasury yield curve in effect at the time of grant. • Expected term: Estimated based on the simplified method as we do not have adequate historical data. Restricted stock units The Company granted restricted stock units (“RSU”) over the last three fiscal years, which vest based on service conditions over four years . The Company granted restricted stock units that are subject to service and performance conditions over the last three fiscal years, which are referred to as performance-based restricted stock units (“PRSU”). Performance triggers are based on revenue or EBITDA targets. If such targets are met, awards begin vesting on a three-year schedule. If targets are not met, no shares will vest. The Company calculated the fair value of the RSU and PRSU awards based on the closing price of the Company’s common shares on the date of grant, and records compensation expense over the vesting period using a graded vesting model. The weighted average grant-date fair value of awards granted during the years ended June 30, 2024 and 2022 w as $ 17.13 and $ 16.71 , res pectively. There were no awards granted during the year ended June 30, 2023. The total fair value of RSU and PRSU awards vested during the years ended June 30, 2024, 2023, and 2022 was $ 0.3 million , $ 0.6 million and $ 0.0 million , respectively. A summary of the unvested RSU and PRSU activity for the year ended June 30, 2024 is as follows: Shares Weighted Average Grant Date Fair Value Unvested as of June 30, 2023 545,181 $ 16.28 Granted 50,000 17.13 Vested ( 14,902 ) 16.28 Forfeitures / cancellations / expirations ( 8,898 ) 16.28 Unvested as of June 30, 2024 571,381 $ 16.35 As of June 30, 2024, there was app roximately $ 5.7 million of total unrecognized compensation expense related to the 2020 LTIP options, RSU, and PRSU awards, which will be recognized over the remaining weighted average vesting period of 2.92 years using a graded vesting model. 87 Table of Contents 12. FAIR VALUE The fair value hierarchy prioritized the input to valuation techniques used to measure fair value. The hierarchy requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs. The levels of the fair value hierarchy are as follows: Level 1: Quoted prices for identical instruments traded in active markets. Level 2: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3: Unobservable inputs that cannot be supported by market activity and that are significant to the fair value of the asset, liability, or equity such as the use of certain pricing models, discounted cash flow models and similar techniques that use significant unobservable inputs. The carrying value of our cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, accrued payroll and employee-related liabilities, approximate fair value because of their short-term nature. The Company measures its debt at carrying value including accrued interest, which approximates fair value because of its short-term nature. Derivatives designated as cash flow hedges The values of our derivative instruments are derived from pricing models using inputs based upon market information, including contractual terms, market prices and yield curves. The inputs to the valuation pricing models are observable in the market, and as such the derivatives are classified as Level 2 in the fair value hierarchy. Phantom stock awards The Company uses the Black-Scholes option pricing model to value our phantom stock awards. All inputs to the model are derived from active market information for identical or similar instruments, including stock price, volatility, and interest rates. The inputs to the valuation pricing models are observable in the market, and as such the phantom stock awards are classified as Level 2 in the fair value hierarchy. The following is a summary of the Company’s fair value measurements on a recurring basis as of June 30, 2024 and 2023: As of June 30, 2024 Fair Value Measurements Using ($000s) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities Cash flow hedge - foreign currency collars, net $ — $ 335 $ — Phantom stock options — 1,014 — Total liabilities $ — $ 1,349 $ — 88 Table of Contents As of June 30, 2023 Fair Value Measurements Using ($000s) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities Cash flow hedge - foreign currency collars, net $ — $ 100 $ — Phantom stock options — 1,173 — Total liabilities $ — $ 1,273 $ — These balances are included in accounts payable and accrued liabilities and other non-current liabilities in the consolidated balance sheets. There were no transfers between the different hierarchy levels in the years ended June 30, 2024 and 2023 . 13. INCOME TAXES Income before income taxes includes the following components: ($000s) 2024 2023 2022 United States $ 18,492 $ 21,938 $ 1,996 Foreign 22,494 18,388 17,383 Total $ 40,986 $ 40,326 $ 19,379 The major components of the provision for income tax expense (benefit) are as follows: ($000s) June 30, 2024 June 30, 2023 June 30, 2022 Current tax expense: Federal $ 3,203 $ 385 $ — State 1,532 487 647 Foreign 2,241 3,467 2,575 Total current expense $ 6,976 $ 4,339 $ 3,222 Deferred tax: Federal ( 124 ) 4,019 ( 3,759 ) State 155 843 ( 1,025 ) Foreign 324 ( 457 ) ( 515 ) Total deferred expense (benefit) $ 355 $ 4,405 $ ( 5,299 ) Provision for income tax expense (benefit) $ 7,331 $ 8,744 $ ( 2,077 ) The Company’s income tax provision includes the results of the Company’s U.S. operations and its various foreign operations including subsidiaries based in the United Kingdom, European Union, Canada, Jamaica, Nicaragua, Pakistan, Senegal, Honduras, and the Philippines. Historically, the Company’s Bermuda-based companies are not subject to income tax as there is no corporate income tax in Bermuda. On December 27, 2023 the Bermuda Corporate Income Tax Act 2023 was passed which provides for a 15% corporate tax rate beginning on or after January 1, 2025 for companies with revenue in excess of 750 million Euros. The Company is evaluating the impact of this legislation, but it does not anticipate that it will have a material impact on the Company’s operations. 89 Table of Contents Differences between U.S. federal statutory income tax rates and our effective tax rates for the years ended June 30, 2024, 2023, and 2022 are as follows: June 30, 2024 June 30, 2023 June 30, 2022 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal deduction 2.8 % 1.4 % 3.0 % Foreign rate differential ( 4.7 ) % ( 5.7 ) % ( 8.6 ) % Non-deductible expenses / exempt income 1.0 % 1.2 % 1.5 % Employment and other tax credits ( 1.8 ) % ( 2.9 ) % ( 7.7 ) % Prior year provision / other items 0.5 % 3.1 % 0.4 % Unrecognized losses utilized during the year — % — % ( 0.7 ) % Change in valuation allowance ( 0.9 ) % 3.6 % ( 19.6 ) % Effective tax rate percentage 17.9 % 21.7 % ( 10.7 ) % The effective tax rate was 17.9 % and 21.7 % for the fiscal years ended June 30, 2024 and 2023, respectively. The decrease in the effective tax rate between these periods was primarily attributable to changes in revenue mix across our taxable jurisdictions and discrete items recorded in the prior year. We have been granted “Tax Holidays” as an incentive to attract foreign investment by the governments of Nicaragua, Pakistan, Honduras, Jamaica, and certain qualifying locations in the Philippines. Generally, a Tax Holiday is an agreement between us and a foreign government under which we receive certain tax benefits in that country. In Nicaragua, we have been granted approval of exemption from income taxes until 2025, which can be extended for another 10 years upon application. In Pakistan, we have been granted approval for an indefinite exemption from income taxes on all exported IT services. In Honduras, we have been granted approval of exemption from income taxes under the Free Tax Zone Law until 2033. In Jamaica, we have been granted the Special Economic Zone (SEZ) developer status for multiple sites, which provides the Company with various tax incentives under the Jamaica SEZ Act including lower income tax rates. The Tax Holidays for our qualifying Philippines facilities expire at staggered dates through 2031. Our Tax Holidays could be eliminated if there are future changes in our operations or the governmental authorities approve legislation to modify the Tax Holidays in the various taxing jurisdictions. The aggregate reduction in income tax expense due to the above Tax Holidays was $ 5.4 million, $ 3.4 million, and $ 2.7 million for the years ended June 30, 2024, 2023, and 2022, respectively. The aggregate reduction in income tax expense per diluted share was $ 0.18 , $ 0.18 , and $ 0.15 for the years ended June 30, 2024, 2023, and 2022, respectively. 90 Table of Contents Significant components of deferred tax assets and liabilities included in the consolidated balance sheets are as follows: ($000s) June 30, 2024 June 30, 2023 Deferred tax assets Provision for credit losses $ — $ 99 Provision for employee benefits and other expenses 1,724 755 Tax credit carryforwards — 2,427 Section 174 research and development capitalization 1,116 589 Net operating losses 1,879 2,394 Property and equipment, net 687 534 Intangible assets — 3 Lease liability (right of use assets) 5,048 6,547 Net unrealized loss on hedging 103 56 Total deferred tax assets $ 10,557 $ 13,404 Valuation allowance ( 1,127 ) ( 1,463 ) Total deferred tax assets, net of valuation allowance $ 9,430 $ 11,941 Deferred tax liabilities Property and equipment, net $ — $ ( 732 ) Right of use assets ( 3,957 ) ( 5,440 ) Intangible assets ( 1,178 ) ( 1,184 ) Other liability ( 10 ) — Total deferred tax liabilities $ ( 5,145 ) $ ( 7,356 ) Net deferred tax assets and liabilities $ 4,285 $ 4,585 The Company had no U.S. gross federal net operating loss carry forwards as of June 30, 2024 and 2023, respectively, and gross state net operating loss carry forwards of approximately $ 12.4 million and $ 15.1 million, as of June 30, 2024 and 2023, respectively, which may be available to offset state income tax liabilities in the future. The state net operating losses will expire based on each state income tax laws. The Company’s Canadian subsidiary has net operating loss carry forward of $ 2.1 million as of June 30, 2024 and 2023, respectively, which will begin to expire in 2028. The Company’s UK and European subsidiaries have net operating loss carry forward of $ 2.2 million and $ 3.4 million, as of June 30, 2024 and 2023, respectively, which can be carried forward indefinitely. These amounts are estimated amounts for the year ended June 30, 2024, and based on the income tax returns filed for the year ended June 30, 2023. The Company assesses the available positive and negative evidence whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. On the basis of this evaluation, valuation allowances of $ 1.1 million and $ 1.5 million have been recorded as of June 30, 2024 and 2023, respectively, to recognize only the portion of the Company’s deferred tax assets that are expected to be realized in certain foreign taxing jurisdictions. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present. We do not provide for deferred taxes on the excess of the financial reporting basis over the tax basis in our investments in foreign subsidiaries that are essentially permanent in duration or not subject to taxation in the U.S. or in the local country. The Company is subject to income tax in several jurisdictions and significant judgment is required in determining the provision for income taxes. During the ordinary course of business, there are transactions and 91 Table of Contents calculations for which the ultimate tax determination is uncertain. As a result, the Company recognizes tax liabilities based on estimates of whether additional taxes and interest will be due. There are no material uncertain tax treatments that would require adjustment to income tax expense. Under accounting standards for uncertainty in income taxes (ASC 740-10), a company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” in the accounting standards for income taxes refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. There were no unrecognized tax benefits in the years ended June 30, 2024, 2023, and 2022 that, if recognized, would affect the Company’s effective tax rate. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense/(benefit). We have not recorded any interest expense or penalties in income tax expense for the years ended June 30, 2024, 2023 and 2022. We do not have any interest or penalties accrued as of June 30, 2024 and 2023. We file numerous consolidated and separate income tax returns in the U.S. federal and various state jurisdictions as well as in various foreign jurisdictions. Our U.S. federal returns and most state returns for tax years 2020 and forward are subject to examination. Tax return filings in the United Kingdom for the year ended June 2020 and onward are still open for examination. Tax return filings in Canada for the year ended June 2021 and onward are still open for examination. Tax return filings in Luxembourg for the year ended June 2019 and onward are still open for examination as well as Cyprus tax returns for their tax years ending June 2018. In April 2024, one of our foreign jurisdictions received an assessment relating to a fiscal year 2020. As of June 30, 2024, the Company had recorded a reserve of $ 0.2 million related to this assessment. In June 2024, a U.S. subsidiary received a letter from the Internal Revenue Services (“IRS”) requesting information for examination of the year ended June 30, 2022. While we believe that our tax positions are appropriate and in compliance with U.S. federal law, the final determination of any tax, audit, or related litigation could be materially different from our historical tax provisions and accruals. The specific areas of focus for the examination are not yet fully determined. 92 Table of Contents 14. STOCKHOLDERS’ EQUITY AOCI The following table presents changes by component for the years ended June 30, 2024, 2023, and 2022: ($000s) Foreign Currency Translation Adjustment Derivative Valuation Defined Benefit Plan Total Balance as of June 30, 2021 $ ( 1,745 ) $ ( 316 ) $ ( 337 ) $ ( 2,398 ) Foreign currency translation ( 2,281 ) — — ( 2,281 ) Actuarial gains on defined benefit plan — — 287 287 Unrealized losses on cash flow hedges — ( 905 ) — ( 905 ) Reclassifications to earnings — 364 153 517 Tax provision — 218 — 218 Balance as of June 30, 2022 $ ( 4,026 ) $ ( 639 ) $ 103 $ ( 4,562 ) Foreign currency translation ( 2,234 ) — ( 2,234 ) Actuarial losses on defined benefit plan — — ( 120 ) ( 120 ) Unrealized losses on cash flow hedges — ( 479 ) — ( 479 ) Reclassifications to earnings — 1,156 89 1,245 Tax benefit — ( 162 ) — ( 162 ) Balance as of June 30, 2023 $ ( 6,260 ) $ ( 124 ) $ 72 $ ( 6,312 ) Foreign currency translation ( 1,623 ) — — ( 1,623 ) Actuarial gains on defined benefit plan — — 133 133 Unrealized losses on cash flow hedges — ( 412 ) — ( 412 ) Reclassifications to earnings — 257 — 257 Tax provision — 44 — 44 Balance as of June 30, 2024 $ ( 7,883 ) $ ( 235 ) $ 205 $ ( 7,913 ) The following table presents the reclassifications from AOCI to the consolidated statements of comprehensive income: ($000s) For the year ended June 30, Description of AOCI components 2024 2023 2022 Statement of Other Comprehensive Income Classification Foreign currency translation gain $ — $ 173 $ — Selling, general and administrative expense Gains / (losses) on foreign currency hedges $ ( 257 ) $ ( 1,201 ) $ ( 319 ) Cost of services Gains / (losses) on interest rate swap — 45 ( 45 ) Interest expense, net Tax provision ( 44 ) 162 ( 218 ) Provision for income taxes Total derivative valuation $ ( 301 ) $ ( 994 ) $ ( 582 ) Amortization related to defined benefit plan $ — $ ( 89 ) $ ( 153 ) Cost of services 93 Table of Contents Share repurchase programs The Board may authorize share repurchases of the Company’s common shares and the Company had multiple share repurchase plans during the years ended June 30, 2024 and 2023. On May 1, 2024, the Board authorized $ 30 million in share repurchases during the next twelve months (the "2024 Share Repurchase Program"). As of June 30, 2024, the aggregate amount available for repurchase under the 2024 Share Repurchase Program was $ 26.9 million. For the years ended June 30, 2024 and 2023, the Company repurchased 1,322,105 and 17,558 shares, respectively, of its common shares totaling $ 21.7 million, and $ 0.3 million, respectively. All repurchases under these programs were funded with our existing cash balance. 15. WEIGHTED AVERAGE SHARE COUNTS The following table sets forth the components of the computation from basic to diluted earnings per share for net income for the years ended June 30, 2024, 2023, and 2022: (000s) 2024 2023 2022 Shares used in basic earnings per share calculation 17,704 18,200 18,232 Effect of dilutive securities: Employee share-based compensation 81 199 227 Warrant 470 495 265 Total effects of dilutive securities 551 694 492 Shares used in dilutive earnings per share calculation 18,255 18,893 18,724 Shares considered anti-dilutive using the treasury method 549 367 18 16. RELATED PARTY TRANSACTIONS The Company has agreements with multiple companies under the control of our controlling shareholder, TRGI, and with companies which have common directors with us, in the normal course of business. These transactions were executed on mutually agreed terms and include contact center services, back office support services and an office lease. During each of the fiscal years ended June 30, 2024, 2023, and 2022, the Company recognized revenue of $ 0.1 million with these related parties. As of June 30, 2024 and 2023, the Company had accounts receivable of $ 0.2 million and $ 0.0 million, respectively, other non-current assets of $ 1.1 million and $ 1.1 million, respectively, and accounts payable of $ 0.1 million and $ 2.3 million, respectively, with these related parties. 17. INVESTMENT IN JOINT VENTURE The Company has an investment in Lake Ball, LLC to procure and sell commercial leads for its customers. The Company’s ownership interest is 47.5 % and is accounted for under the equity method. The Company’s investment of $ 0.4 million at each of June 30, 2024 and 2023, respectively, is included in other non-current assets in the consolidated balance sheets, while net earnings from the joint venture is included in selling, general, and administrative expense in the consolidated statements of comprehensive income. The table below presents our investment in the joint venture : June 30, ($000s) 2024 2023 Opening balance $ 372 $ 382 Dividends received ( 1,013 ) ( 725 ) Share of profit 1,056 715 Ending balance $ 415 $ 372 94 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Change In Registrant’s Certifying Accountant None. Disagreements With Registrant’s Certifying Accountant None.