Financial Data and Key Metrics Changes - Gross billings increased by 3% to $625.4 million compared to $605 million in the prior year quarter [9] - Net sales in Q4 2025 increased by 20% to $193.8 million, up from $161.8 million, primarily reflecting organic growth from new and existing vendors [10] - Adjusted net income was $7 million, or $1.53 per diluted share, compared to $10.3 million, or $2.26 per diluted share for the year-ago period [11] - Adjusted EBITDA in Q4 2025 was $13 million, down from $16.1 million for the same period in 2024 [12] - Effective margin decreased to 43.6% from 51.5% for the same period in 2024 [12] Business Line Data and Key Metrics Changes - Distribution segment gross billings increased by 4% to $602.3 million, while solution segment gross billings remained flat at $23.1 million [9] Market Data and Key Metrics Changes - In Q4, Climb had 70 partners transact over $13 million in Darktrace product offerings, indicating strong market engagement [6] Company Strategy and Development Direction - The company is focused on accelerating organic growth and pursuing accretive M&A opportunities to strengthen its vendor portfolio and expand its geographic footprint [8][14] - The acquisition of interworks.cloud is expected to enhance cross-sell opportunities and deepen engagement with vendors and reseller partners in the Southeastern Europe region [7] - The company plans to leverage generative AI solutions to improve operational efficiency [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering organic and inorganic growth objectives in 2026, supported by a strong balance sheet and liquidity position [14][15] - The company is adapting to AI disruptions in the market and believes it will maintain a role as a connector of technology in a hybrid environment [20] Other Important Information - The board has decided to suspend the quarterly cash dividend beginning in Q1 2026 to retain capital for growth initiatives and strategic acquisitions [13] - Cash and cash equivalents were $36.6 million as of December 31, 2025, compared to $29.8 million on December 31, 2024 [12] Q&A Session Summary Question: Can you provide scope on the large acquisition from the prior year? - Management indicated that removing the large transaction from Q4 of last year still resulted in high teens organic growth for Q4 compared to the previous year [23] Question: How has the departure of Citrix impacted the quarter? - Management noted that while there was an impact, the team managed to grow at 3% despite a $50 million-$60 million hole, successfully picking up new vendors [25][26] Question: What is the expected run rate for Interworks? - Management stated that the $1 million in EBITDA is a good starting point for Interworks, with expectations for growth as they integrate into the company [27] Question: What is the timeline for cross-selling synergies with Interworks? - Management indicated that onboarding vendors and integrating systems will happen quickly due to shared platforms and existing Microsoft agreements [39] Question: What is the health of the market compared to the prior quarter? - Management noted that there has been no slowdown, with ongoing consolidation among resellers, which is a natural occurrence [40] Question: What is the potential impact of the Fortinet relationship? - Management highlighted that Fortinet has a $2.5 billion addressable market in the US, and they aim to capture 10% of that, potentially leading to $250 million in gross billings by 2027 [49]