Core Viewpoint - Investors should prioritize companies with strong cash flow generation over mere profit figures, as cash flow is crucial for a company's survival and growth [1][2][3] Group 1: Importance of Cash Flow - Cash is essential for a company's existence, providing flexibility for decision-making, investments, and overall financial health [2] - Positive cash flow indicates an increase in liquid assets, enabling a company to meet obligations, reinvest, and return wealth to shareholders [4] - A negative cash flow reflects declining liquidity, reducing a company's operational flexibility [4] Group 2: Cash Flow Analysis in Current Environment - In the context of global economic uncertainties and market disruptions, assessing a company's cash-generating efficiency is increasingly relevant [3] - Net cash flow is a key metric to understand how much money a company is actually generating [3] Group 3: Criteria for Stock Selection - Stocks with increasing cash flow over time were screened, focusing on those whose latest cash flow is at least equal to the 5-year average [6] - Additional criteria include a Zacks Rank of 1 (Strong Buy), a current price of at least $5, and a VGM Score of B or better [6][7] Group 4: Selected Stocks - The Marcus Corporation (MCS) operates in lodging and entertainment, with a long-term EPS growth rate of 15% and a VGM Score of B [7][8] - Climb Global Solutions, Inc. (CLMB) specializes in IT distribution and solutions, with a Zacks Consensus Estimate improvement of 26.2% over the past week and a VGM Score of A [8][9] - Graham Corporation (GHM) designs vacuum and heat transfer equipment, with an 8.4% upward revision in fiscal 2025 earnings estimates and a VGM Score of B [9][10] - Euroseas Ltd. (ESEA) operates in the shipping market, with a 13.7% increase in current-year earnings estimates and a VGM Score of B [10][11]

Core Viewpoint - Growth stocks are appealing due to their above-average financial growth, but identifying strong growth stocks is challenging due to inherent volatility and risks [1] Group 1: Company Overview - Climb Global Solutions (CLMB) is identified as a promising growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 23.3%, with projected EPS growth of 52.2% this year, significantly surpassing the industry average of 27.1% [4] Group 2: Financial Metrics - Climb Global's year-over-year cash flow growth is 10.6%, outperforming the industry average of -21.7% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 27.3%, compared to the industry average of 11.9% [6] Group 3: Earnings Estimates - The current-year earnings estimates for Climb Global have increased by 26.2% over the past month, indicating a positive trend in earnings estimate revisions [8] - The combination of strong earnings estimate revisions and a Growth Score of A positions Climb Global for potential outperformance [9][10]

Investors looking for stocks in the Technology Services sector might want to consider either Climb Global Solutions (CLMB) or QXO, Inc. (QXO) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with posit ...

Investors interested in Business Services stocks should always be looking to find the best-performing companies in the group. Climb Global Solutions (CLMB) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Business Services peers, we might be able to answer that question.Climb Global Solutions is one of 307 individual stocks in the Business Ser ...

Financial Performance - Net sales increased by 52%, or $40.8 million, to $119.3 million for the three months ended September 30, 2024, compared to $78.5 million for the same period in the prior year[122]. - Gross profit rose by 70%, or $10.0 million, to $24.3 million for the three months ended September 30, 2024, compared to $14.3 million for the same period in the prior year[122]. - Net income increased by 130%, or $3.1 million, to $5.5 million for the three months ended September 30, 2024, compared to $2.4 million for the same period in the prior year[122]. - Diluted income per share increased by 129%, or $0.67, to $1.19 for the three months ended September 30, 2024, compared to $0.52 for the same period in the prior year[122]. - Adjusted gross billings for the three months ended September 30, 2024, increased 65%, or $183.3 million, to $465.2 million compared to $281.9 million for the same period in the prior year[152]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $22.4 million, compared to $15.4 million for the same period in the prior year[150]. - The effective margin for adjusted EBITDA increased to 37.4% for the nine months ended September 30, 2024, compared to 35.7% for the same period in the prior year[147]. - Net sales for the nine months ended September 30, 2024 increased 24%, or $58.6 million, to $303.8 million compared to $245.2 million in the same period in 2023[165]. - Adjusted gross billings for the nine months ended September 30, 2024 increased 37%, or $317.0 million, to $1,180.3 million compared to $863.3 million in the same period in 2023[165]. - Gross profit for the nine months ended September 30, 2024 increased 39%, or $16.6 million, to $59.8 million compared to $43.2 million in the same period in 2023[170]. Expenses - Selling, general and administrative expenses increased by 38%, or $3.8 million, to $13.9 million for the three months ended September 30, 2024, compared to $10.1 million for the same period in the prior year[122]. - Depreciation and amortization expense increased by 94%, or $0.6 million, to $1.2 million for the three months ended September 30, 2024, compared to $0.6 million for the same period in the prior year[122]. - Customer rebates and discounts for Q3 2024 were $3.9 million, up from $2.8 million in Q3 2023[160]. - SG&A expenses for Q3 2024 increased 38%, or $3.8 million, to $13.9 million compared to $10.1 million in Q3 2023, representing 3.0% of adjusted gross billings[162]. - Depreciation and amortization expense for Q3 2024 increased 94%, or $0.6 million, to $1.2 million compared to $0.6 million in Q3 2023[163]. Sales and Distribution - The company derives the majority of its net sales through the sale of third-party software licenses, maintenance, and service agreements[113]. - Distribution segment net sales for the three months ended September 30, 2024, increased 55%, or $39.7 million, to $111.9 million compared to $72.2 million for the same period in the prior year[154]. - Gross profit for the Distribution segment for the three months ended September 30, 2024, increased 85%, or $9.9 million, to $21.6 million compared to $11.7 million for the same period in the prior year[158]. - Distribution segment net sales for the nine months ended September 30, 2024 increased 26%, or $59.6 million, to $286.5 million compared to $226.9 million in the same period in 2023[167]. Acquisitions and Investments - The Company completed the acquisition of DSS for approximately $20.3 million on July 31, 2024, and Data Solutions for approximately $15.9 million on October 6, 2023[151]. - Net cash used in investing activities during the nine months ended September 30, 2024 was $24.3 million, including $20.7 million for the DSS acquisition[179]. Cash and Liquidity - Cash and cash equivalents as of September 30, 2024 decreased 39%, or $14.2 million, to $22.1 million compared to $36.3 million as of December 31, 2023[178]. Foreign Exchange - The Company recognized an unrealized loss of approximately $0.1 million on foreign exchange contracts outstanding as of September 30, 2024[143]. Customer Concentration - Two major customers accounted for 16% and 13% of total net sales during the three months ended September 30, 2024, compared to 21% and 17% in the prior year[156]. Solutions Segment - Solutions segment gross profit for Q3 2024 increased 4%, or $0.1 million, to $2.7 million compared to $2.6 million in Q3 2023[159].

Financial Data and Key Metrics Changes - Adjusted gross billings (AGB) increased 65% to $465.2 million compared to $281.9 million in the year-ago quarter [15] - Net sales increased 52% to $119.3 million compared to $78.5 million [15] - Gross profit increased 70% to $24.3 million compared to $14.3 million [17] - Net income more than doubled to $5.5 million or $1.19 per diluted share compared to $2.4 million or $0.52 per diluted share for the comparable period in 2023 [20] - Adjusted EBITDA increased 96% to $9.9 million compared to $5.1 million in the prior year quarter [22] Business Line Data and Key Metrics Changes - Growth in AGB was attributed to organic growth from new and existing vendors and contributions from acquisitions, with DSS and DataSolutions combined accounting for $81.3 million or 44% of the growth in AGB [16] - Core business grew by $102 million, representing 56% of the increase and year-over-year growth of 36% [16] - SG&A expenses increased to $13.9 million from $10.1 million, but as a percentage of AGB, it decreased to 3% from 3.6% [19] Market Data and Key Metrics Changes - The company generated double-digit organic growth in both the U.S. and Europe [7] - The company is building its presence in Germany, a key market in Western Europe, with a dedicated team on the ground [10][11] Company Strategy and Development Direction - The company remains focused on leveraging its global infrastructure to drive organic growth while exploring M&A targets that enhance geographic footprint and service offerings [13] - The company plans to continue its M&A strategy, particularly in Western Europe, while maintaining a strong balance sheet [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the pipeline for onboarding new vendors and noted that the macro environment remains strong [41][43] - The company anticipates a strong fourth quarter, driven by budget renewals and a robust operational momentum [40] Other Important Information - The company went live with a new ERP system, which is expected to enhance operations over time [12] - Cash and cash equivalents were $22.1 million as of September 30, 2024, down from $36.3 million at the end of 2023, primarily due to acquisition-related cash payments [23] Q&A Session Summary Question: Did the top 20 vendors grow in line with the overall business? - Management indicated that while not all top 20 vendors grew, the core vendors were driving organic growth [26][27] Question: Is security driving lead growth among technology segments? - Management confirmed that security remains a significant driver, with many vendors focusing on security solutions [29][30] Question: Are adjusted SG&A levels sustainable? - Management aims to keep SG&A as a percentage of AGB in the 3% range, benefiting from scale and leverage [31] Question: Will the DACH region become a priority for acquisition? - Management confirmed that the DACH region is a priority for future acquisitions, supported by local market analysis [32] Question: Will there be a pause before another acquisition? - Management indicated that they plan for 1 to 2 acquisitions per year, depending on the size and opportunity [33] Question: What are the acquisition-related costs for this quarter? - Management clarified that acquisition-related costs were primarily for professional services associated with transactions [36] Question: How does the acquisition mindset impact deal closures? - Management believes that a focus on culture and integration helps in closing more deals [38] Question: Will the fourth quarter be stronger than previous quarters? - Management expects the fourth quarter to be strong, driven by budget renewals and historical trends [40] Question: How is the macro environment perceived? - Management characterized the macro environment as strong, with a solid pipeline for new vendor onboarding [41][43]

Company Performance - Climb Global Solutions (CLMB) reported quarterly earnings of $1.55 per share, exceeding the Zacks Consensus Estimate of $0.85 per share, and up from $0.52 per share a year ago, representing an earnings surprise of 82.35% [1] - The company posted revenues of $119.35 million for the quarter ended September 2024, which was 2.33% below the Zacks Consensus Estimate, compared to $78.46 million in the same quarter last year [2] - Over the last four quarters, Climb Global has surpassed consensus EPS estimates three times, but has only topped consensus revenue estimates once [2] Stock Performance - Climb Global shares have increased approximately 93.9% since the beginning of the year, significantly outperforming the S&P 500's gain of 22.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.96 on revenues of $126.95 million, and for the current fiscal year, it is $3.28 on revenues of $433.63 million [7] Industry Outlook - The Technology Services industry, to which Climb Global belongs, is currently ranked in the top 22% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

Exhibit 99.1 Climb Global Solutions Reports Record Third Quarter 2024 Results Net Income and Adjusted Net Income up more than 2x to $5.5 Million or $1.19 per Share and $7.1 million or $1.55 per share, respectively; Adjusted EBITDA up 96% to $9.9 Million Net Sales up 52% to $119.3 Million, with Adjusted Gross Billings up 65% to $465.2 Million EATONTOWN, N.J., October 30, 2024 – Climb Global Solutions, Inc. (NASDAQ:CLMB) ("Climb", the "Company", "we", or "our"), a value-added global IT channel company providi ...

Core Insights - Climb Channel Solutions has partnered with FinQuery to enhance its North American offerings with FinQuery's AI-powered Software Management platform, which aims to provide companies with better control over their software assets and contracts [1][2] - The collaboration is expected to help organizations achieve cost savings, mitigate risks, and improve operational efficiency by leveraging Climb's extensive distribution network [1][2] Company Overview - Climb Channel Solutions is a global specialty technology distributor focusing on various sectors including Security, Data Management, and Software & Application Lifecycle, committed to transforming distribution through innovative IT technologies and exceptional service [3] - FinQuery, formerly known as LeaseQuery, serves over 36,000 professionals by optimizing decisions in key spending areas such as leases and software subscriptions, utilizing AI-driven software to minimize risk and enhance efficiency [4]

Climb Global Solutions (CLMB) shares rallied 7% in the last trading session to close at $103.77. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 10.4% gain over the past four weeks. The company is benefiting from organic growth, driven by strong relationships with existing partners, signing emerging technology vendors to its line card and delivering on the goals of acquisitions. This computer software reselle ...