Core Viewpoint - The US Federal Reserve has implemented a 25 basis points reduction in its benchmark interest rate, marking the first rate cut since December 2024 [1] Group 1 - The decision to lower the interest rate reflects the Fed's response to economic conditions and aims to support growth [1] - The CME FedWatch Tool indicated market expectations for this rate cut prior to the announcement, showcasing investor sentiment [1]

Core Insights - Climb Channel Solutions has announced a North American Distribution Partnership with Forcepoint, a leader in data security [1] - The partnership aims to combine Climb's channel expertise with Forcepoint's AI-native data security solutions to enhance data protection for organizations [2][3] Company Overview - Climb Channel Solutions is a global specialty technology distributor focusing on various sectors including Security, Data Management, and Cloud solutions [4] - The company emphasizes a data-driven approach to distribution, aiming to accelerate the market entry of emerging technologies [4] Partnership Details - The strategic alliance will enable Climb to offer Forcepoint's intelligent, adaptive data security solutions to a broader range of resellers and customers across North America [2][3] - Forcepoint's platform is designed to automatically protect sensitive data across multiple channels, enhancing security in an AI-driven environment [2][3] Leadership Statements - Tim Puccio from Forcepoint highlighted the need for self-aware data security that adapts to changing risks, which this partnership aims to address [3] - Dale Foster, CEO of Climb, expressed excitement about the partnership, noting its alignment with the evolving needs of enterprises for smarter security solutions [3]

Core Insights - Climb Channel Solutions has formed a strategic partnership with Coro to enhance cybersecurity solutions for a wider market [1][3] - The partnership aims to address the growing demand for scalable cybersecurity solutions among SMBs and distributed enterprises [2][3] Company Overview - Climb Channel Solutions is a global specialty technology distributor focusing on various sectors including Security, Data Management, and Cloud solutions [5] - Coro is recognized as a leading cybersecurity platform for small and midsize businesses, offering a modular approach to security [6][7] Partnership Details - The collaboration emphasizes a channel-first go-to-market strategy, leveraging Climb's expertise and reputation among Managed Service Providers (MSPs) and Value-Added Resellers (VARs) [3] - The partnership is expected to simplify the delivery and management of cybersecurity solutions for partners, enabling them to grow their businesses profitably [4][3] Market Context - The increasing complexity of cyber threats has led to heightened security and compliance pressures for SMBs, creating a significant market opportunity for integrated cybersecurity solutions [2][3] - Coro's platform is designed to automatically detect and remediate security threats, thereby reducing the burden on IT resources [7]

PART I FINANCIAL INFORMATION [**Item 1. Financial Statements (unaudited)**](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements of Climb Global Solutions, Inc. and its subsidiaries for the quarter and six months ended June 30, 2025, including balance sheets, statements of earnings, comprehensive income, stockholders' equity, and cash flows, along with detailed notes on accounting policies and financial performance [**Condensed Consolidated Balance Sheets**](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity at specific reporting dates | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total assets | $420,691 | $469,179 | $(48,488) | -10.33% | | Total liabilities | $315,514 | $378,591 | $(63,077) | -16.66% | | Total stockholders' equity | $105,177 | $90,588 | $14,589 | 16.10% | | Accounts receivable, net | $289,083 | $341,597 | $(52,514) | -15.37% | | Accounts payable and accrued expenses | $307,715 | $370,397 | $(62,682) | -16.92% | [**Condensed Consolidated Statements of Earnings**](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Earnings) This section details the company's financial performance, including net sales, gross profit, and net income over specific periods | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------------------------ | :------------------------------------ | :-------------------- | :------- | | Net sales | $159,284 | $92,076 | $67,208 | 73.00% | | Gross profit | $26,308 | $18,558 | $7,750 | 41.76% | | Income from operations | $7,956 | $4,250 | $3,706 | 87.20% | | Net income | $5,968 | $3,430 | $2,538 | 73.99% | | Income per common share-Diluted | $1.30 | $0.75 | $0.55 | 73.33% | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :-------------------- | :------- | | Net sales | $297,328 | $184,498 | $112,830 | 61.16% | | Gross profit | $49,704 | $35,577 | $14,127 | 39.71% | | Income from operations | $12,733 | $7,753 | $4,980 | 64.23% | | Net income | $9,650 | $6,161 | $3,489 | 56.63% | | Income per common share-Diluted | $2.11 | $1.35 | $0.76 | 56.30% | [**Condensed Consolidated Statements of Comprehensive Income**](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section outlines the company's comprehensive income, including net income and other comprehensive income items | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | :-------------------- | | Net income | $5,968 | $3,430 | $2,538 | | Foreign currency translation adjustments | $3,782 | $(121) | $3,903 | | Comprehensive income | $9,750 | $3,309 | $6,441 | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | :-------------------- | | Net income | $9,650 | $6,161 | $3,489 | | Foreign currency translation adjustments | $5,335 | $(839) | $6,174 | | Comprehensive income | $14,985 | $5,322 | $9,663 | [**Condensed Consolidated Statements of Stockholders' Equity**](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) This section presents changes in stockholders' equity, including additional paid-in capital, retained earnings, and accumulated other comprehensive income | Metric | January 1, 2025 (in thousands) | June 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :----------------------------- | :--------------------------- | :-------------------- | | Additional paid-in capital | $37,977 | $40,043 | $2,066 | | Treasury stock | $(13,337) | $(14,266) | $(929) | | Retained earnings | $68,787 | $76,904 | $8,117 | | Accumulated other comprehensive income (loss) | $(2,892) | $2,443 | $5,335 | | Total stockholders' equity | $90,588 | $105,177 | $14,589 | - Dividends paid were **$0.17 per common share** for both the three and six months ended June 30, 2025 and 2024[22](index=22&type=chunk) [**Condensed Consolidated Statements of Cash Flows**](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the company's cash inflows and outflows from operating, investing, and financing activities | Cash Flow Activity | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | Change (in thousands) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | :-------------------- | | Net cash from operating activities | $6,262 | $21,338 | $(15,076) | | Net cash used in investing activities | $(1,401) | $(2,361) | $960 | | Net cash used in financing activities | $(6,793) | $(6,865) | $72 | | Net increase (decrease) in cash and cash equivalents | $(1,191) | $12,068 | $(13,259) | | Cash and cash equivalents at end of period | $28,587 | $48,363 | $(19,776) | - Key financing activities for the six months ended June 30, 2025, included payments of contingent considerations (**$3,559 thousand**), purchases of treasury stock (**$1,423 thousand**), and dividends paid (**$1,533 thousand**)[24](index=24&type=chunk) [**Notes to Condensed Consolidated Financial Statements**](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [**1. Basis of Presentation**](index=9&type=section&id=1.%20Basis%20of%20Presentation) This note describes the accounting principles and basis used in preparing the unaudited condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP for interim financial information and SEC rules, requiring management estimates and judgments[26](index=26&type=chunk)[27](index=27&type=chunk) - The statements include Climb Global Solutions, Inc. and its wholly-owned subsidiaries, with all intercompany transactions eliminated[28](index=28&type=chunk) [**2. Recently Issued Accounting Standards**](index=9&type=section&id=2.%20Recently%20Issued%20Accounting%20Standards) This note discusses recently issued accounting pronouncements and their potential impact on the company's financial statements - FASB ASU No. 2024-03, 'Expense Disaggregation Disclosures,' is effective for annual periods after **December 15, 2026**, and interim periods after **December 15, 2027**. The Company is currently evaluating its impact[30](index=30&type=chunk) - FASB ASU No. 2023-09, 'Improvements to Income Tax Disclosures,' will be applied prospectively in the Company's annual report on Form 10-K for the fiscal year ending **December 31, 2025**[31](index=31&type=chunk) [**3. Foreign Currency Translation**](index=9&type=section&id=3.%20Foreign%20Currency%20Translation) This note explains the company's policies and impact of foreign currency translation on its financial results - Net sales from foreign operations increased to **$73.7 million** for the six months ended June 30, 2025, from **$51.1 million** in the prior year[33](index=33&type=chunk) - The Company uses foreign exchange contracts, typically forward purchase agreements with terms of no more than **three months**, to hedge foreign currency exposures, not for trading purposes[34](index=34&type=chunk) [**4. Comprehensive Income**](index=11&type=section&id=4.%20Comprehensive%20Income) This note provides details on the components of comprehensive income, including foreign currency translation adjustments - Cumulative translation adjustments are classified within accumulated other comprehensive loss, a separate component of stockholders' equity[36](index=36&type=chunk) [**5. Revenue Recognition**](index=11&type=section&id=5.%20Revenue%20Recognition) This note outlines the company's policies for recognizing revenue from the sale of products and services - Revenue is primarily from the sale of third-party technology products and services, recognized when control is transferred to customers, typically at shipment or fulfillment[36](index=36&type=chunk) - For arrangements where the Company acts as an agent, revenue is recognized as the net fee associated with serving as an agent[37](index=37&type=chunk) - The Company disaggregates operating revenue by segment, geography, and timing of revenue recognition (principal vs. agent)[40](index=40&type=chunk)[41](index=41&type=chunk) [**6. Acquisition**](index=12&type=section&id=6.%20Acquisition) This note details the company's recent acquisition, including purchase price and contingent consideration - On **July 31, 2024**, the Company acquired Douglas Stewart Software & Services, LLC (DSS) for approximately **$20.3 million**, plus a potential post-closing earnout payment[46](index=46&type=chunk) - The fair value of the earn-out liability was reassessed to approximately **$2.4 million** as of June 30, 2025, an increase from the initial **$1.7 million**, with adjustments recognized in earnings[47](index=47&type=chunk) [**7. Goodwill and Other Intangible Assets**](index=13&type=section&id=7.%20Goodwill%20and%20Other%20Intangible%20Assets) This note provides information on the company's goodwill and other intangible assets, including changes and amortization | Metric | December 31, 2024 (in thousands) | June 30, 2025 (in thousands) | Change (in thousands) | | :--------------------------------- | :----------------------------- | :--------------------------- | :-------------------- | | Goodwill | $34,924 | $37,270 | $2,346 | | Other intangibles, net | $36,550 | $35,718 | $(832) | - Total amortization expense for other intangibles, net, was **$2.9 million** for the six months ended June 30, 2025, compared to **$1.4 million** for the same period in 2024[49](index=49&type=chunk) [**8. Right-of-use Asset and Lease Liability**](index=13&type=section&id=8.%20Right-of-use%20Asset%20and%20Lease%20Liability) This note describes the company's right-of-use assets and lease liabilities, including lease terms and discount rates - The weighted-average remaining lease term for operating leases is **3.1 years** as of June 30, 2025, with a weighted-average discount rate of **5.5%**[53](index=53&type=chunk) | Year | Lease Liabilities (in thousands) | | :--- | :----------------------------- | | 2025 (excluding six months ended June 30, 2025) | $431 | | 2026 | $890 | | 2027 | $465 | | 2028 | $245 | | 2029 | $223 | | 2030 | $32 | | Total Lease Liabilities | $1,843 | [**9. Fair Value**](index=14&type=section&id=9.%20Fair%20Value) This note discusses the fair value measurements of the company's financial instruments - The carrying amounts of financial instruments like cash, short-term accounts receivable, accounts payable, and term loan approximate fair value due to their short maturity[54](index=54&type=chunk) [**10. Balance Sheet Detail**](index=14&type=section&id=10.%20Balance%20Sheet%20Detail) This note provides additional detail on specific balance sheet accounts, such as equipment and accounts receivable | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Equipment and leasehold improvements, net | $13,626 | $12,853 | | Accounts receivable long-term, net | $1,209 | $1,174 | | Trade accounts payable | $280,556 | $331,654 | [**11. Credit Facility**](index=15&type=section&id=11.%20Credit%20Facility) This note outlines the company's credit facilities and outstanding loan balances - The Company has a **$50.0 million** revolving credit facility with JPMorgan Chase Bank, N.A., due **May 18, 2028**, with no amounts outstanding as of June 30, 2025[58](index=58&type=chunk)[59](index=59&type=chunk) - A **$2.1 million** term loan with First American Commercial Bancorp, Inc. has **$0.5 million** outstanding as of June 30, 2025, with repayments continuing through **April 2026**[62](index=62&type=chunk)[63](index=63&type=chunk) [**12. Earnings Per Share**](index=16&type=section&id=12.%20Earnings%20Per%20Share) This note details the calculation of basic and diluted earnings per share - Basic and diluted earnings per share are computed using the two-class method, with diluted and basic EPS being the same as restricted shares are the only potentially dilutive security[64](index=64&type=chunk) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Basic net income per share | $1.30 | $0.75 | | Diluted net income per share | $1.30 | $0.75 | | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Basic net income per share | $2.11 | $1.35 | | Diluted net income per share | $2.11 | $1.35 | [**13. Major Customers and Vendors**](index=17&type=section&id=13.%20Major%20Customers%20and%20Vendors) This note identifies major customers and vendors that account for a significant portion of the company's sales or purchases - The Company had no major vendors (accounting for **10% or more** of total purchases) for the three and six months ended June 30, 2025, a change from the prior year[66](index=66&type=chunk) - Three major customers accounted for **24%**, **20%**, and **13%** of net sales for the three months ended June 30, 2025, and **25%**, **13%**, and **13%** for the six months ended June 30, 2025[67](index=67&type=chunk) [**14. Income Taxes**](index=17&type=section&id=14.%20Income%20Taxes) This note provides information on the company's income tax provision and effective tax rates | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Provision for income taxes | $1.8 million | $1.0 million | | Effective tax rate | 22.9% | 22.8% | | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Provision for income taxes | $2.3 million | $1.9 million | | Effective tax rate | 19.5% | 23.6% | - The change in effective tax rate for both periods was primarily impacted by a discrete item for the recognition of excess tax benefits related to share-based compensation[69](index=69&type=chunk) [**15. Stockholders' Equity and Stock Based Compensation**](index=17&type=section&id=15.%20Stockholders'%20Equity%20and%20Stock%20Based%20Compensation) This note details changes in stockholders' equity and information on stock-based compensation arrangements - As of June 30, 2025, **155,991 shares of Common Stock** were available for future award grants under the 2021 Omnibus Incentive Plan[70](index=70&type=chunk) - During the six months ended June 30, 2025, **43,736 Restricted Stock Units (RSUs)** were granted, and **15,471 RSUs** were forfeited[71](index=71&type=chunk) - Total unrecognized compensation costs related to nonvested share-based compensation arrangements were approximately **$5.5 million** as of June 30, 2025, expected to be recognized over a weighted-average period of **2.1 years**[73](index=73&type=chunk) | Metric | Three months ended June 30, 2025 (in thousands) | Three months ended June 30, 2024 (in thousands) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | | Share-based compensation expense | $1,200 | $1,100 | | Metric | Six months ended June 30, 2025 (in thousands) | Six months ended June 30, 2024 (in thousands) | | :--------------------------------- | :---------------------------------- | :---------------------------------- | | Share-based compensation expense | $2,500 | $1,900 | [**16. Commitments and Contingencies**](index=18&type=section&id=16.%20Commitments%20and%20Contingencies) This note describes the company's commitments and potential contingent liabilities - The Executive Severance and Change in Control Plan provides tiered severance benefits to executive officers upon qualifying termination[75](index=75&type=chunk) - As of June 30, 2025, the Company has no standby letters of credit, repurchase obligations, or other commercial commitments, apart from its credit facility[76](index=76&type=chunk) [**17. Segment Information**](index=18&type=section&id=17.%20Segment%20Information) This note provides financial information disaggregated by the company's operating segments - The Company operates in two reportable segments: 'Distribution' (technical software to resellers) and 'Solutions' (cloud solutions, software/hardware reseller, technical services to end users)[79](index=79&type=chunk)[99](index=99&type=chunk) | Segment | Net Sales (Q2 2025, in thousands) | Net Sales (Q2 2024, in thousands) | Change (in thousands) | % Change | | :-------- | :-------------------------------- | :-------------------------------- | :-------------------- | :------- | | Distribution | $153,010 | $87,842 | $65,168 | 74.19% | | Solutions | $6,274 | $4,234 | $2,040 | 48.18% | | Segment | Segment Income (Q2 2025, in thousands) | Segment Income (Q2 2024, in thousands) | Change (in thousands) | % Change | | :-------- | :----------------------------------- | :----------------------------------- | :-------------------- | :------- | | Distribution | $12,942 | $8,148 | $4,794 | 58.84% | | Solutions | $1,647 | $1,573 | $74 | 4.70% | [**18. Fair Value Measurements**](index=22&type=section&id=18.%20Fair%20Value%20Measurements) This note details the company's fair value measurements, categorized into a three-level hierarchy - The Company's fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs for similar instruments), and Level 3 (unobservable inputs, management estimates)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) | Liability | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :---------------- | :----------------------------- | :------------------------------- | | Contingent earn-out | $2,856 | $5,896 | - During the six months ended June 30, 2025, the Company made a **$3.6 million** cash payment for contingent consideration related to the Spinnakar Limited acquisition[95](index=95&type=chunk) [**19. Subsequent Events**](index=24&type=section&id=19.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date - The One, Big, Beautiful Bill Act ('OBBBA') was enacted on **July 4, 2025**, and the Company is evaluating its impact, but it is not currently expected to materially affect the effective tax rate or cash flows in the current fiscal year[97](index=97&type=chunk) [**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance and condition for the three and six months ended June 30, 2025, compared to the prior year. It covers an overview of the business, factors influencing financial results, critical accounting policies, detailed results of operations by segment, and an analysis of liquidity and capital resources [**Overview**](index=24&type=section&id=Overview) This section provides a general description of the company's business model and operational segments - Climb Global Solutions, Inc. is a value-added IT distribution and solutions company, primarily selling software and other third-party IT products and services[99](index=99&type=chunk) - The Company operates through two reportable segments: 'Distribution' (selling to corporate resellers, VARs, consultants, and systems integrators) and 'Solutions' (cloud solutions provider and value-added reseller to end-user customers)[99](index=99&type=chunk) [**Factors Influencing Our Financial Results**](index=24&type=section&id=Factors%20Influencing%20Our%20Financial%20Results) This section discusses key internal and external factors that impact the company's financial performance - Net sales are primarily derived from third-party software licenses, maintenance, and service agreements[101](index=101&type=chunk) - Sales in the Distribution segment are influenced by product lines, reseller channel penetration, product lifecycle, competition, and demand, while Solutions segment sales are driven by sales force effectiveness, customer service, competitive pricing, and flexible payment solutions[101](index=101&type=chunk) - Gross product margins have historically declined due to competition and shifts in product mix, necessitating cost efficiencies like drop shipments and electronic digital interchange[102](index=102&type=chunk) [**Dividend Policy and Share Repurchase Program**](index=25&type=section&id=Dividend%20Policy%20and%20Share%20Repurchase%20Program) This section outlines the company's strategies for returning value to shareholders through dividends and share repurchases - The Company aims to return value to investors through quarterly dividends and share repurchases[106](index=106&type=chunk) | Metric | Three months ended June 30, 2025 (in millions) | Three months ended June 30, 2024 (in millions) | | :--------------------------------- | :------------------------------------ | :------------------------------------ | | Total dividends paid | $0.8 | $0.8 | | Shares repurchased (dollar value) | $0.5 | $0.3 | [**Stock Volatility**](index=25&type=section&id=Stock%20Volatility) This section addresses the potential for significant fluctuations in the company's stock market price - The Company's stock market price is subject to substantial volatility due to conditions impacting the technology, distribution, and services sectors, as well as company-specific factors[107](index=107&type=chunk) [**Inflation**](index=25&type=section&id=Inflation) This section analyzes the historical and potential future impact of inflation on the company's operations and financial results - Historically, the Company has not been adversely affected by inflation due to declining IT product prices driven by rapid technological changes and short product life cycles[108](index=108&type=chunk) - While most price increases could be passed on to customers, competitive pressure may limit this or reduce customer spending[108](index=108&type=chunk) [**Financial Overview**](index=25&type=section&id=Financial%20Overview) This section provides a high-level summary of the company's key financial performance metrics | Metric | Three months ended June 30, 2025 (in millions) | Three months ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :--------------------------------- | :------------------------------------ | :------------------------------------ | :------------------- | :------- | | Net sales | $159.3 | $92.1 | $67.2 | 73% | | Gross profit | $26.3 | $18.6 | $7.7 | 42% | | Selling, general, and administrative expenses | $16.4 | $13.0 | $3.4 | 26% | | Depreciation and amortization expense | $2.0 | $0.9 | $1.1 | 129% | | Net income | $5.9 | $3.4 | $2.5 | 74% | | Diluted income per share | $1.30 | $0.75 | $0.55 | 73% | [**Critical Accounting Policies and Estimates**](index=25&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines the significant judgments and estimates made by management in preparing the consolidated financial statements, including those related to revenue recognition, credit losses, business combinations, goodwill, intangible assets, income taxes, and foreign exchange [**Revenue**](index=26&type=section&id=Revenue) This section details the critical accounting policies and judgments related to revenue recognition - Management exercises significant judgment in determining performance obligations, whether maintenance obligations are distinct from software licenses, and allocating sales prices among distinct performance obligations based on standalone selling prices or market pricing[115](index=115&type=chunk) [**Allowances for Expected Credit Losses**](index=26&type=section&id=Allowances%20for%20Expected%20Credit%20Losses) This section explains the methodology and estimates used for determining allowances for expected credit losses - Estimates for expected credit losses are based on historical experience, accounts receivable aging, current market conditions, and future forecasts of customer payment ability[116](index=116&type=chunk) [**Business Combinations**](index=26&type=section&id=Business%20Combinations) This section describes the accounting treatment for business combinations, including valuation of acquired assets and liabilities - Acquisitions are accounted for under ASC 805, requiring fair value recognition of acquired assets and assumed liabilities, with goodwill measured as the excess of consideration transferred[117](index=117&type=chunk) - Valuation of intangible assets and contingent consideration involves significant estimates, including discount rates, projected cash flows, and expected volatility, often assisted by third-party specialists[118](index=118&type=chunk)[119](index=119&type=chunk) - Contingent consideration is remeasured each reporting period using Level 3 inputs, with changes in fair value recognized in the consolidated statement of earnings[121](index=121&type=chunk) [**Goodwill**](index=26&type=section&id=Goodwill) This section outlines the company's policy for testing goodwill for impairment and related assumptions - Goodwill is tested annually for impairment (as of **October 1**) or when events indicate a potential reduction in fair value, using either a qualitative or quantitative assessment at the reporting unit level[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk) - Determining the fair value of a reporting unit is judgmental, relying on significant estimates and assumptions such as net sales growth rates, gross profit margins, operating margins, and discount rates[126](index=126&type=chunk) [**Intangible Assets**](index=27&type=section&id=Intangible%20Assets) This section details the accounting for intangible assets with determinable lives, including amortization and impairment review - Intangible assets with determinable lives are amortized on a straight-line basis over their estimated useful lives and reviewed for impairment when circumstances indicate the carrying amount may not be recoverable[127](index=127&type=chunk) [**Income Taxes**](index=27&type=section&id=Income%20Taxes) This section explains the company's accounting policies and estimates related to income taxes and deferred tax assets - The Company assesses the need for a valuation allowance related to deferred tax assets by considering future taxable income and feasible tax planning strategies[128](index=128&type=chunk) [**Foreign Exchange**](index=28&type=section&id=Foreign%20Exchange) This section discusses the company's exposure to foreign currency risks and hedging strategies - Foreign currency exposure primarily arises from international transactions where the currency collected differs from the currency used for product purchases[129](index=129&type=chunk) - The Company uses short-term foreign exchange contracts (forward purchase agreements) to mitigate currency risks, not for trading purposes, and recognized an unrealized loss of less than **$0.1 million** as of June 30, 2025[129](index=129&type=chunk) [**Recently Issued Accounting Pronouncements**](index=28&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section provides an update on recently issued accounting standards and their potential impact - The Company is evaluating the impact of recently issued FASB ASUs, including ASU No. 2024-03 on expense disaggregation and ASU No. 2023-09 on income tax disclosures[130](index=130&type=chunk)[131](index=131&type=chunk) [**Results of Operations**](index=28&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the Company's financial performance for the three and six months ended June 30, 2025, compared to the prior year, covering net sales, gross profit, and various expenses, broken down by segment and highlighting key business metrics [**Key Business Metrics**](index=29&type=section&id=Key%20Business%20Metrics) This section presents key financial and operational metrics used by management to assess performance - Management monitors GAAP measures (net sales, gross profit, net income) and non-GAAP measures like adjusted EBITDA and effective margin (adjusted EBITDA as a percentage of gross profit)[133](index=133&type=chunk)[134](index=134&type=chunk) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Adjusted EBITDA (Non-GAAP) | $11,379 thousand | $6,920 thousand | | Effective margin % | 43.3% | 37.3% | | Gross billings | $500,553 thousand | $359,841 thousand | | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------- | :----------------------------- | :----------------------------- | | Adjusted EBITDA (Non-GAAP) | $19,017 thousand | $12,459 thousand | | Effective margin % | 38.3% | 35.0% | | Gross billings | $975,150 thousand | $715,110 thousand | [**Acquisitions**](index=31&type=section&id=Acquisitions) This section discusses the impact of recent acquisitions on the company's operating results - The operating results of DSS, acquired on **July 31, 2024**, are included in the Company's operating results within the Distribution segment from the acquisition date[138](index=138&type=chunk) [**Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024**](index=31&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) This section provides a comparative analysis of the company's financial performance for the three-month periods [**Net Sales and Gross Billings**](index=31&type=section&id=Net%20Sales%20and%20Gross%20Billings%20(3%20months)) This section analyzes changes in net sales and gross billings, including contributing factors | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | % Change | | :--------------------------------- | :-------------------- | :-------------------- | :------------------- | :------- | | Net sales | $159.3 | $92.1 | $67.2 | 73% | | Gross billings | $500.6 | $359.8 | $140.8 | 39% | - Net sales and gross billings increased due to organic growth and the DSS acquisition, with net sales growing faster due to a higher percentage of gross-basis hardware and software products in the current period's mix[139](index=139&type=chunk) | Segment | Net Sales (Q2 2025, in millions) | Net Sales (Q2 2024, in millions) | % Change | | :-------- | :------------------------------- | :------------------------------- | :------- | | Distribution | $153.0 | $87.8 | 74% | | Solutions | $6.3 | $4.2 | 48% | [**Gross Profit**](index=32&type=section&id=Gross%20Profit%20(3%20months)) This section examines the drivers of changes in gross profit and segment-wise contributions - Gross profit increased **42%** to **$26.3 million**, driven by organic growth and a **$2.4 million** contribution from the DSS acquisition[144](index=144&type=chunk) | Segment | Gross Profit (Q2 2025, in millions) | Gross Profit (Q2 2024, in millions) | % Change | | :-------- | :---------------------------------- | :---------------------------------- | :------- | | Distribution | $23.0 | $15.7 | 47% | | Solutions | $3.3 | $2.9 | 13% | | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | | :--------------------------------- | :-------------------- | :-------------------- | | Customer rebates and discounts | $6.3 | $3.2 | | Vendor rebates and discounts | $5.5 | $1.6 | [**Selling, General and Administrative Expenses**](index=32&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20(3%20months)) This section details the changes in selling, general, and administrative expenses and their impact on profitability - SG&A expenses increased **26%** to **$16.4 million**, primarily due to a **$0.9 million** impact from the DSS acquisition and higher employee-related expenses[149](index=149&type=chunk) - SG&A expenses as a percentage of gross billings decreased to **3.3%** in Q2 2025 from **3.6%** in Q2 2024[149](index=149&type=chunk) [**Depreciation and Amortization Expense**](index=32&type=section&id=Depreciation%20and%20Amortization%20Expense%20(3%20months)) This section explains the changes in depreciation and amortization expenses, including acquisition-related impacts - Depreciation and amortization expense increased **129%** to **$2.0 million**, mainly due to amortization of DSS acquired intangible assets, capitalized ERP costs, and increased amortization for a vendor relationship with a shortened life[150](index=150&type=chunk) [**Acquisition Related Costs**](index=33&type=section&id=Acquisition%20Related%20Costs%20(3%20months)) This section outlines the costs incurred in relation to business acquisitions - Acquisition related costs were less than **$0.1 million** in Q2 2025, down from **$0.5 million** in Q2 2024, primarily associated with the DSS acquisition[151](index=151&type=chunk) [**Income Taxes**](index=33&type=section&id=Income%20Taxes%20(3%20months)) This section analyzes the provision for income taxes and factors influencing the effective tax rate - The provision for income taxes was **$1.8 million** in Q2 2025 (effective tax rate of **22.9%**) compared to **$1.0 million** in Q2 2024 (effective tax rate of **22.8%**)[152](index=152&type=chunk) - The effective tax rate was impacted by changes in the mix of taxable income jurisdictions and a discrete item for excess tax benefits related to share-based compensation[152](index=152&type=chunk) [**Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024**](index=33&type=section&id=Six%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024) This section provides a comparative analysis of the company's financial performance for the six-month periods [**Net Sales and Gross Billings**](index=33&type=section&id=Net%20Sales%20and%20Gross%20Billings%20(6%20months)) This section analyzes changes in net sales and gross billings, including contributing factors | Metric | Six months ended June 30, 2025 (in millions) | Six months ended June 30, 2024 (in millions) | Change (in millions) | % Change | | :--------------------------------- | :----------------------------------- | :----------------------------------- | :------------------- | :------- | | Net sales | $297.3 | $184.5 | $112.8 | 61% | | Gross billings | $975.1 | $715.1 | $260.0 | 36% | - Net sales and gross billings increased due to organic growth and the DSS acquisition, with net sales growing faster due to a higher percentage of gross-basis hardware and software products in the current period's mix[153](index=153&type=chunk) | Segment | Net Sales (6 months 2025, in millions) | Net Sales (6 months 2024, in millions) | % Change | | :-------- | :----------------------------------- | :----------------------------------- | :------- | | Distribution | $285.2 | $174.7 | 63% | | Solutions | $12.1 | $9.8 | 24% | [**Gross Profit**](index=34&type=section&id=Gross%20Profit%20(6%20months)) This section examines the drivers of changes in gross profit and segment-wise contributions - Gross profit increased **40%** to **$49.7 million**, driven by organic growth and a **$4.4 million** contribution from the DSS acquisition[158](index=158&type=chunk) | Segment | Gross Profit (6 months 2025, in millions) | Gross Profit (6 months 2024, in millions) | % Change | | :-------- | :------------------------------------ | :------------------------------------ | :------- | | Distribution | $43.4 | $29.9 | 45% | | Solutions | $6.3 | $5.7 | 10% | | Metric | Six months ended June 30, 2025 (in millions) | Six months ended June 30, 2024 (in millions) | | :--------------------------------- | :----------------------------------- | :----------------------------------- | | Customer rebates and discounts | $10.9 | $6.6 | | Vendor rebates and discounts | $10.3 | $3.6 | [**Selling, General and Administrative Expenses**](index=34&type=section&id=Selling,%20General%20and%20Administrative%20Expenses%20(6%20months)) This section details the changes in selling, general, and administrative expenses and their impact on profitability - SG&A expenses increased **30%** to **$33.1 million**, primarily due to a **$2.0 million** impact from the DSS acquisition and higher employee-related expenses[163](index=163&type=chunk) - SG&A expenses as a percentage of gross billings decreased to **3.4%** in the six months ended June 30, 2025, from **3.6%** in the prior year[163](index=163&type=chunk) [**Depreciation and Amortization Expense**](index=34&type=section&id=Depreciation%20and%20Amortization%20Expense%20(6%20months)) This section explains the changes in depreciation and amortization expenses, including acquisition-related impacts - Depreciation and amortization expense increased **114%** to **$3.7 million**, mainly due to amortization of DSS acquired intangible assets, capitalized ERP costs, and increased amortization for a vendor relationship with a shortened life[164](index=164&type=chunk) [**Acquisition Related Costs**](index=35&type=section&id=Acquisition%20Related%20Costs%20(6%20months)) This section outlines the costs incurred in relation to business acquisitions - Acquisition related costs were **$0.1 million** in the six months ended June 30, 2025, down from **$0.6 million** in the prior year, primarily associated with the DSS acquisition[165](index=165&type=chunk) [**Income Taxes**](index=35&type=section&id=Income%20Taxes%20(6%20months)) This section analyzes the provision for income taxes and factors influencing the effective tax rate - The provision for income taxes was **$2.3 million** in the six months ended June 30, 2025 (effective tax rate of **19.5%**) compared to **$1.9 million** in the prior year (effective tax rate of **23.6%**)[166](index=166&type=chunk) - The change in effective tax rate was impacted by a discrete item for excess tax benefits related to share-based compensation and changes in the mix of taxable income jurisdictions[166](index=166&type=chunk) [**Liquidity and Capital Resources**](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations and funding sources - Cash and cash equivalents decreased **4%** to **$28.6 million** as of June 30, 2025, from **$29.8 million** at December 31, 2024[167](index=167&type=chunk) - Net cash provided by operating activities for the six months ended June 30, 2025, was **$6.3 million**, a decrease from **$21.3 million** in the prior year[167](index=167&type=chunk) - Net cash used in financing activities was **$6.8 million**, including **$3.6 million** for contingent considerations, **$1.4 million** for treasury stock purchases, and **$1.5 million** for dividends[169](index=169&type=chunk) - The Company believes its current cash and unused **$50.0 million** revolving credit facility are sufficient to fund working capital and cash requirements for at least the next **12 months**[170](index=170&type=chunk)[173](index=173&type=chunk) [**Foreign Exchange**](index=36&type=section&id=Foreign%20Exchange) This section discusses the company's exposure to foreign currency risks and hedging strategies - The Company's foreign subsidiaries are exposed to fluctuations in the Canadian Dollar, Euro Dollar, and British Pound-to-U.S. Dollar exchange rates[174](index=174&type=chunk) [**Off-Balance Sheet Arrangements**](index=36&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any material off-balance sheet arrangements that could impact the company's financial position - As of June 30, 2025, the Company did not have any off-balance sheet arrangements[175](index=175&type=chunk) [**Item 3. Quantitative and Qualitative Disclosures about Market Risk**](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section details the Company's exposure to market risks, primarily focusing on foreign currency exchange rate fluctuations arising from its international operations in Canada, the United Kingdom, and Europe - The Company is exposed to market risk principally from changes in foreign currency exchange rates[177](index=177&type=chunk) - International operations in Canada, the UK, and Europe subject the Company to both foreign currency transaction risk and currency translation risk, with significant historical fluctuations in exchange rates[178](index=178&type=chunk) [**Item 4. Controls and Procedures**](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025. However, the assessment of internal control over financial reporting for the recently acquired DSS business was excluded due to ongoing integration - The Company's Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[180](index=180&type=chunk) - Management excluded the assessment of internal control over financial reporting for the acquired DSS business for a period not exceeding **one year** from the acquisition date (**July 31, 2024**) due to ongoing integration[181](index=181&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025, except for the DSS acquisition[182](index=182&type=chunk) PART II OTHER INFORMATION [**Item 1. Legal Proceedings**](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently involved in any material litigation, nor is any material litigation threatened, beyond routine claims arising in the ordinary course of business - The Company is not presently subject to any material litigation, nor is any material litigation threatened against it, other than routine litigation in the normal course of business[183](index=183&type=chunk) [**Item 1A. Risk Factors**](index=38&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the comprehensive risk factors detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and states that no material changes to these risks have occurred - There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024[184](index=184&type=chunk) [**Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company did not repurchase any shares of its Common Stock under publicly announced plans during the second quarter of 2025, although some shares were surrendered by employees for tax withholding purposes - The Company did not repurchase any shares of its Common Stock under publicly announced plans during the second quarter of 2025[187](index=187&type=chunk)[189](index=189&type=chunk) - **12,361 shares** were surrendered by employees to satisfy individual tax withholding obligations upon vesting of Restricted Stock Units[187](index=187&type=chunk) - **545,786 shares** remain available for repurchase under the Company's existing share repurchase plans[187](index=187&type=chunk) [**Item 5. Other Information**](index=38&type=section&id=Item%205.%20Other%20Information) No directors or officers of the Company adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025 - None of the Company's directors or officers adopted or terminated a 'Rule 10b5-1 trading arrangement' or 'non-Rule 10b5-1 trading arrangement' during the three months ended June 30, 2025[188](index=188&type=chunk) [**Item 6. Exhibits, Financial Statement Schedules**](index=39&type=section&id=Item%206.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, a separation agreement, various certifications, and the financial information presented in Inline XBRL format - Exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, a Separation Agreement, and certifications pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350[190](index=190&type=chunk) - The financial information from the Quarterly Report is formatted in Inline XBRL (Extensible Business Reporting Language)[190](index=190&type=chunk) [**SIGNATURES**](index=40&type=section&id=SIGNATURES) The Quarterly Report on Form 10-Q was duly signed on July 31, 2025, by Dale Foster, Chief Executive Officer, and Matthew Sullivan, Chief Financial Officer, on behalf of Climb Global Solutions, Inc - The report was signed by Dale Foster, Chief Executive Officer, and Matthew Sullivan, Chief Financial Officer, on **July 31, 2025**[193](index=193&type=chunk)

Financial Data and Key Metrics Changes - Gross billings increased by 39% to $500.6 million compared to $359.8 million in the prior year quarter [13] - Net sales rose by 73% to $159.3 million from $92.1 million, driven by organic growth and contributions from the acquisition of Douglas Stewart Software (DSS) [13] - Net income increased by 74% to $6 million or $1.3 per diluted share, compared to $3.4 million or $0.75 per diluted share in the previous year [14] - Adjusted EBITDA grew by 64% to $11.4 million, with an effective margin increase of 600 basis points to 43.3% [15][16] Business Line Data and Key Metrics Changes - Distribution segment gross billings increased by 40% to $477 million, while solutions segment gross billings rose by 19% to $23.5 million [13] - The acquisition of DSS contributed significantly to the growth, particularly in the education sector as schools prepare for the new academic year [6][14] Market Data and Key Metrics Changes - The company experienced double-digit organic growth in both the US and Europe, indicating a strong market presence [6] - The company evaluated 50 potential vendor partnerships in Q2, moving forward with four, reflecting a disciplined approach to vendor selection [7] Company Strategy and Development Direction - The company is focused on building momentum from the first half of the year by executing strategic priorities, including exploring M&A opportunities that align with long-term vision [12][13] - The appointment of new executives, including a Chief Information Officer and a President of North America, aims to enhance leadership and drive growth [10][11] Management's Comments on Operating Environment and Future Outlook - Management does not foresee economic headwinds affecting business growth, citing a robust pipeline of vendors and continued investment in the IT market [55] - The company remains optimistic about its growth potential, viewing itself as a small player in a large market with significant room for expansion [40][41] Other Important Information - Cash and cash equivalents were $28.6 million as of June 30, 2025, with a working capital increase of $12.2 million during the period [17] - The Board of Directors declared a quarterly dividend of $0.17 per share, payable on August 15, 2025 [17] Q&A Session Summary Question: Did security and data center continue to lead growth in the quarter? - Yes, security and data center remain the top growth areas, with security being the stronger segment [20][21] Question: How did the top 20 vendors perform? - Some vendors in the bottom tier are lagging, but others are performing well, with new entrants expected to impact the second half of the year positively [22] Question: Were there any large deals that contributed to this quarter's strength? - A significant order was pulled into Q2 from Q3, contributing to the strong performance, but organic growth remained robust [25] Question: Are there meaningful synergies from the Douglas Stewart acquisition? - Yes, integration into the ERP system is underway, and the team is already quoting and processing orders [26] Question: Any signs of economic headwinds? - No signs of economic headwinds are observed, with a strong pipeline of vendors and continued investment in the IT market [55]

Core Viewpoint - Climb Global Solutions (CLMB) reported strong quarterly earnings, significantly surpassing consensus estimates, indicating positive financial performance despite recent stock underperformance [1][2][3]. Financial Performance - The company achieved quarterly earnings of $1.39 per share, exceeding the Zacks Consensus Estimate of $0.90 per share, and up from $0.83 per share a year ago, representing an earnings surprise of +54.44% [1] - Climb Global's revenues for the quarter reached $159.28 million, surpassing the Zacks Consensus Estimate by 40.65%, and increased from $92.08 million year-over-year [2] - Over the last four quarters, the company has exceeded consensus EPS estimates three times and topped revenue estimates three times as well [2] Stock Performance and Outlook - Climb Global shares have declined approximately 20.2% year-to-date, contrasting with the S&P 500's gain of 8.3% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the sustainability of earnings expectations [3][4] Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is $1.66 on revenues of $127.7 million, and for the current fiscal year, it is $5.14 on revenues of $545.94 million [7] - The estimate revisions trend for Climb Global was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which Climb Global belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) This section provides an overview of Climb Global Solutions' exceptional financial performance in Q2 2025, highlighting significant growth across key metrics [Summary of Q2 2025 Performance](index=1&type=section&id=Summary%20of%20Q2%202025%20Performance) Climb Global Solutions reported exceptional performance in Q2 2025, with significant year-over-year increases across key financial metrics, including net sales, net income, and adjusted EBITDA, alongside substantial growth in gross billings Q2 2025 Key Financial Performance (in millions) | Metric | Q2 2025 Value | YoY Change | | :----- | :------------ | :--------- | | Net Sales | $159.3 | +73% | | Net Income | $6.0 | +74% | | Diluted EPS | $1.30 | +73.3% | | Adjusted Net Income | $6.4 | +68% | | Adjusted Diluted EPS | $1.39 | +67.5% | | Adjusted EBITDA | $11.4 | +64% | | Gross Billings | $500.6 | +39% | [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) CEO Dale Foster highlighted strong Q2 execution, driven by double-digit organic growth from strengthened customer relationships, new vendor partnerships, and market share expansion, complemented by the acquisition of DSS - Achieved **double-digit organic growth** by strengthening relationships with key customers, bolstering line card with new vendors, and growing market share in the U.S. and Europe[3](index=3&type=chunk) - Benefited from incremental contribution and seasonal strength of Douglas Stewart Software & Services, LLC (DSS), particularly from education customers[3](index=3&type=chunk) - Expects to capture operational efficiencies and enhance scalability with the fully implemented ERP system[4](index=4&type=chunk) - Remains focused on identifying strategic acquisition opportunities to enhance capabilities and complement the existing footprint[4](index=4&type=chunk) [Detailed Second Quarter 2025 Financial Results](index=2&type=section&id=Detailed%20Second%20Quarter%202025%20Financial%20Results) This section provides an in-depth analysis of Climb Global Solutions' financial performance for Q2 2025, detailing net sales, gross profit, operating expenses, net income, and adjusted EBITDA [Net Sales and Gross Billings](index=2&type=section&id=Net%20Sales%20and%20Gross%20Billings) Net sales for Q2 2025 increased significantly by 73% to $159.3 million, driven by both organic growth from new and existing vendors and the contribution from the DSS acquisition Net Sales and Gross Billings (Q2 2025 vs. Q2 2024, in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Sales | $159.3 | $92.1 | +73% | | Gross Billings | $500.6 | $359.8 | +39% | [Gross Profit](index=2&type=section&id=Gross%20Profit) Gross profit for Q2 2025 increased by 42% to $26.3 million, primarily due to organic growth from new and existing vendors in North America and Europe, as well as the contribution from the DSS acquisition Gross Profit (Q2 2025 vs. Q2 2024, in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Gross Profit | $26.3 | $18.6 | +42% | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Selling, general, and administrative (SG&A) expenses increased to $16.4 million in Q2 2025, with $0.9 million attributed to DSS, while SG&A as a percentage of gross billings decreased, indicating improved efficiency SG&A Expenses (Q2 2025 vs. Q2 2024, in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | SG&A Expenses | $16.4 | $13.0 | +26.2% | | SG&A as % of Gross Billings | 3.3% | 3.6% | -0.3 ppts | - DSS acquisition represented **$0.9 million** of the increase in SG&A expenses[9](index=9&type=chunk) [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS) Net income for Q2 2025 increased substantially by 74% to $6.0 million, or $1.30 per diluted share, with adjusted net income also seeing a significant rise of 68% to $6.4 million, or $1.39 per diluted share Net Income and EPS (Q2 2025 vs. Q2 2024, in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Income | $6.0 | $3.4 | +74% | | Diluted EPS | $1.30 | $0.75 | +73.3% | | Adjusted Net Income | $6.4 | $3.8 | +68% | | Adjusted Diluted EPS | $1.39 | $0.83 | +67.5% | [Adjusted EBITDA](index=2&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA increased by 64% to $11.4 million in Q2 2025, driven by organic growth and the DSS acquisition, with the effective margin improving by 600 basis points to 43.3% Adjusted EBITDA (Q2 2025 vs. Q2 2024, in millions) | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Adjusted EBITDA | $11.4 | $6.9 | +64% | | Effective Margin | 43.3% | 37.3% | +600 bps | [Balance Sheet and Liquidity](index=2&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, cash and cash equivalents were $28.6 million, a slight decrease from year-end 2024 due to timing of receivables and payables, while working capital increased by $12.2 million, maintaining a strong liquidity position Key Balance Sheet and Liquidity Metrics (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :----- | :------------ | :----------- | :----- | | Cash and Cash Equivalents | $28.6 | $29.8 | -$1.2 | | Working Capital | N/A | N/A | +$12.2 | | Outstanding Debt | $0.5 | N/A | N/A | | Revolving Credit Facility | $0 (no borrowings) | N/A | N/A | - The decrease in cash was primarily attributed to the timing of receivable collections and payables[12](index=12&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section outlines Climb Global Solutions' use of non-GAAP financial measures, providing reconciliations for adjusted net income and adjusted EBITDA, and detailing the operational metric of gross billings [Overview of Non-GAAP Measures](index=3&type=section&id=Overview%20of%20Non-GAAP%20Measures) Climb Global Solutions uses non-GAAP financial measures, such as adjusted net income and adjusted EBITDA, as supplemental indicators of business performance, which are not substitutes for U.S. GAAP results - Non-GAAP financial measures, including adjusted net income and adjusted EBITDA, are used as supplemental measures of performance[18](index=18&type=chunk) - These measures have limitations and should not be considered in isolation or as substitutes for U.S. GAAP financial results[18](index=18&type=chunk) [Adjusted Net Income Reconciliation](index=8&type=section&id=Adjusted%20Net%20Income%20Reconciliation) Adjusted net income is defined as net income excluding acquisition-related costs (net of income taxes) and the change in fair value of acquisition contingent consideration, totaling $6.357 million for Q2 2025 Adjusted Net Income Reconciliation (Q2 2025 vs. Q2 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | | :----- | :------ | :------ | | Net Income | $5,968 | $3,430 | | Acquisition related costs, net of income taxes | $10 | $352 | | Change in fair value of acquisition contingent consideration | $379 | $0 | | **Adjusted Net Income** | **$6,357** | **$3,782** | | Adjusted net income per common share - diluted | $1.39 | $0.83 | [Adjusted EBITDA Reconciliation](index=7&type=section&id=Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA is reconciled from net income by adding back provision for income taxes, depreciation, amortization, interest, share-based compensation, acquisition-related costs, and change in fair value of acquisition contingent consideration, totaling $11.379 million for Q2 2025 Adjusted EBITDA Reconciliation (Q2 2025 vs. Q2 2024, in thousands) | Metric | Q2 2025 | Q2 2024 | | :----- | :------ | :------ | | Net Income | $5,968 | $3,430 | | Provision for income taxes | $1,774 | $1,012 | | Depreciation and amortization | $1,982 | $865 | | Interest expense | $90 | $60 | | Share-based compensation | $1,173 | $1,084 | | Acquisition related costs | $13 | $469 | | Change in fair value of acquisition contingent consideration | $379 | $0 | | **Adjusted EBITDA** | **$11,379** | **$6,920** | [Gross Billings (Operational Metric)](index=4&type=section&id=Gross%20Billings%20%28Operational%20Metric%29) Gross billings, a key operational metric representing the total dollar value of customer purchases, net of returns and taxes, reached $500.553 million in Q2 2025, with strong contributions from both distribution and solutions segments - **Gross billings** are defined as the total dollar value of customer purchases of goods and services, net of customer returns and credit memos, sales, or other taxes, used to assess transaction volume or market share[19](index=19&type=chunk)[28](index=28&type=chunk) Gross Billings by Segment (Q2 2025 vs. Q2 2024, in thousands) | Segment | Q2 2025 | Q2 2024 | YoY Change | | :------ | :------ | :------ | :--------- | | Distribution Gross Billings | $477,043 | $340,067 | +40.3% | | Solutions Gross Billings | $23,510 | $19,774 | +18.9% | | **Total Gross Billings** | **$500,553** | **$359,841** | **+39.1%** | [Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides essential corporate details, including dividend declarations, company overview, conference call information, forward-looking statements, and contact information for investor relations [Dividend Declaration](index=2&type=section&id=Dividend%20Declaration) Subsequent to the quarter end, Climb's Board of Directors declared a quarterly dividend of $0.17 per share of common stock - A quarterly dividend of **$0.17 per share** of common stock was declared on July 29, 2025[6](index=6&type=chunk) - The dividend is payable on August 15, 2025, to shareholders of record on August 11, 2025[6](index=6&type=chunk) [About Climb Global Solutions](index=3&type=section&id=About%20Climb%20Global%20Solutions) Climb Global Solutions, Inc. is a value-added global IT distribution and solutions company specializing in emerging and innovative technologies, operating across the U.S., Canada, and Europe - Climb Global Solutions is a value-added global IT distribution and solutions company specializing in emerging and innovative technologies[16](index=16&type=chunk) - The company operates across the U.S., Canada, and Europe through business units including Climb Channel Solutions, Grey Matter, and Climb Global Services[16](index=16&type=chunk) - Provides IT distribution and solutions for companies in Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM industries[16](index=16&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) Climb Global Solutions will host a conference call on July 31, 2025, to discuss its second quarter 2025 results, with details provided for participation - A conference call to discuss Q2 2025 results will be held on Thursday, July 31, 2025, at 8:30 a.m. Eastern time[14](index=14&type=chunk) - Dial-in numbers: (800) 225-9448 (toll-free) or (203) 518-9708 (international), Conference ID: CLIMB[14](index=14&type=chunk) - A webcast and replay will be available on the investor relations section of the Company's website[14](index=14&type=chunk)[15](index=15&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The release contains forward-looking statements regarding future operating results and strategic goals, which are subject to various risks and uncertainties, including those related to acquisitions, market conditions, and competitive pressures - Statements in the release, other than historical facts, are 'forward-looking statements' subject to certain risks and uncertainties[20](index=20&type=chunk) - Factors that could cause actual results to differ materially include the ability to recognize anticipated benefits of acquisitions, continued acceptance of distribution channels, market conditions, and competitive pricing pressures[20](index=20&type=chunk) [Company and Investor Relations Contacts](index=4&type=section&id=Company%20and%20Investor%20Relations%20Contacts) Contact information is provided for the company's Chief Financial Officer and for investor relations inquiries - Company Contact: Matthew Sullivan, Chief Financial Officer, (732) 847-2451, MatthewS@ClimbCS.com[21](index=21&type=chunk) - Investor Relations Contact: Sean Mansouri, CFA or Aaron D'Souza, Elevate IR, (720) 330-2829, CLMB@elevate-ir.com[21](index=21&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including balance sheets and statements of income, providing a snapshot of the company's financial position and performance [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets present the company's financial position as of June 30, 2025, and December 31, 2024, showing changes in assets, liabilities, and stockholders' equity Key Balance Sheet Items (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :-------------------- | :------------ | :----------- | | Total Assets | $420,691 | $469,179 | | Total Liabilities | $315,514 | $378,591 | | Total Stockholders' Equity | $105,177 | $90,588 | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The condensed consolidated statements of income detail the company's financial performance for the three and six months ended June 30, 2025, and 2024, highlighting net sales, gross profit, and net income Key Income Statement Items (in thousands) | Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | $159,284 | $92,076 | $297,328 | $184,498 | | Gross Profit | $26,308 | $18,558 | $49,704 | $35,577 | | Income from operations | $7,956 | $4,250 | $12,733 | $7,753 | | Net Income | $5,968 | $3,430 | $9,650 | $6,161 | | Diluted EPS | $1.30 | $0.75 | $2.11 | $1.35 |

Core Insights - Climb Global Solutions, Inc. reported a significant increase in net sales and net income for the second quarter of 2025, with net sales rising 73% to $159.3 million and net income increasing 74% to $6.0 million or $1.30 per share [1][9][6]. Financial Performance - Net sales for Q2 2025 reached $159.3 million, up from $92.1 million in Q2 2024, reflecting double-digit organic growth and contributions from the acquisition of Douglas Stewart Software & Services, LLC (DSS) [6][9]. - Gross billings increased 39% to $500.6 million compared to $359.8 million in the same period last year, with distribution segment gross billings up 40% to $477.0 million and solutions segment gross billings up 19% to $23.5 million [9][31]. - Gross profit rose 42% to $26.3 million from $18.6 million in Q2 2024, driven by organic growth and DSS contributions [7][9]. - Selling, general, and administrative (SG&A) expenses were $16.4 million, up from $13.0 million in the prior year, with SG&A as a percentage of gross billings decreasing to 3.3% from 3.6% [8][9]. - Adjusted EBITDA increased 64% to $11.4 million compared to $6.9 million in Q2 2024, with an effective margin rising 600 basis points to 43.3% [11][9]. Management Commentary - The CEO highlighted the company's focus on core initiatives, resulting in exceptional performance and organic growth through strengthened customer relationships and an expanded vendor lineup [3][4]. - The company plans to leverage its fully implemented ERP system for operational efficiencies and is focused on strategic acquisitions to enhance capabilities [4]. Dividend Declaration - Climb's Board of Directors declared a quarterly dividend of $0.17 per share, payable on August 15, 2025, to shareholders of record on August 11, 2025 [5]. Cash Position and Working Capital - As of June 30, 2025, cash and cash equivalents were $28.6 million, a slight decrease from $29.8 million at the end of 2024, while working capital increased by $12.2 million [12]. - The company had $0.5 million of outstanding debt with no borrowings under its $50 million revolving credit facility [12]. Company Overview - Climb Global Solutions specializes in IT distribution and solutions, operating across the U.S., Canada, and Europe, focusing on emerging technologies in various sectors including security, data management, and cloud services [16].

Core Viewpoint - Climb Global Solutions, Inc. will host a conference call on July 31, 2025, to discuss its financial results for Q2 2025, which ended on June 30, 2025 [1][2]. Group 1: Conference Call Details - The conference call is scheduled for Thursday, July 31, 2025, at 8:30 a.m. Eastern time [2]. - Interested parties can submit questions via email prior to the call [2]. - The call will be accessible through a toll-free number and an international dial-in number, with a specific Conference ID provided [2]. Group 2: Company Overview - Climb Global Solutions, Inc. is a value-added global IT distribution and solutions company focusing on emerging and innovative technologies [4]. - The company operates in the U.S., Canada, and Europe through various business units, including Climb Channel Solutions, Grey Matter, and Climb Global Services [4]. - Climb provides IT distribution and solutions across multiple industries, including Security, Data Management, Connectivity, Storage & HCI, Virtualization & Cloud, and Software & ALM [4].

Core Insights - Climb Channel Solutions has added SiteDocs to its Bluebeam portfolio, enhancing its offerings for the architecture, engineering, and construction (AEC) industry [1][2] - The partnership aims to deliver comprehensive solutions that improve safety and operational efficiency in the construction sector [2][4] - SiteDocs, a safety compliance platform, digitizes safety workflows and provides real-time jobsite visibility, complementing Bluebeam's document management tools [2][3] Company Overview - Climb Channel Solutions is a global specialty technology distributor focused on various sectors including Security, Data Management, and Cloud solutions [6] - The company emphasizes a data-driven approach to distribution, aiming to bring emerging technologies to market more rapidly [6] Product Features - SiteDocs offers tools for real-time documentation, customizable safety forms, and mobile accessibility, which enhance safety management and compliance [9][8] - The integration of SiteDocs with Bluebeam's tools creates a unique solution that connects office and field operations, improving safety standards [3][4] Strategic Importance - The partnership is positioned to address growing regulatory demands and workplace safety concerns, placing Climb, Bluebeam, and SiteDocs at the forefront of innovation in the construction industry [4][5] - Climb's CEO highlighted that adding SiteDocs is a significant move to empower resellers and drive impactful safety outcomes [5]