Financial Data and Key Metrics Changes - Gross billings increased 52% to $605 million compared to $397 million in the year-ago quarter [20] - Net sales in Q4 2024 increased 51% to $161.8 million from $106.8 million, driven by organic growth and contributions from the acquisition of DSS [21] - Gross profit rose 48% to $31.2 million compared to $21.1 million, with gross profit as a percentage of gross billings at 5.2%, down from 5.3% [22] - Net income increased 33% to $7 million or $1.52 per diluted share, compared to $5.2 million or $1.15 per diluted share for the same period in 2023 [23] - Adjusted net income increased 87% to $10.3 million or $2.26 per diluted share [24] - Adjusted EBITDA increased 75% to $16.1 million, with an effective margin of 51.5%, up from 43.7% [24][25] Business Line Data and Key Metrics Changes - Distribution segment gross billings increased 57% to $582 million, while Solutions segment gross billings decreased 9% to $23 million [20] Market Data and Key Metrics Changes - Security continues to lead growth, making up between 55% and 65% of the portfolio, with new investments flowing into vendors for AI enhancements [38] Company Strategy and Development Direction - The company focuses on organic growth by deepening relationships with existing vendors and signing new emerging vendors [8] - Plans to continue evaluating M&A opportunities to enhance service offerings and expand geographic footprint [17][27] - The implementation of a new ERP system aims to streamline processes and enhance data accessibility [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2025, highlighting a solid foundation for organic growth and improved operating leverage [17] - The exit of Citrix from the channel is viewed as an opportunity to diversify offerings [17] - The company is well-positioned to deliver growth and enhance profitability in 2025 [28] Other Important Information - Cash and cash equivalents were $29.8 million as of December 31, 2024, down from $36.3 million a year earlier, primarily due to the acquisition of DSS [26] - A quarterly dividend of $0.17 per share was declared, payable on March 21, 2025 [27] Q&A Session Summary Question: Did you have any large unexpected deals in the quarter? - Management confirmed a large VAST deal at the end of Q4 contributed positively to the results, alongside strong growth across all divisions [35][36] Question: Did security continue to lead growth amongst your segments? - Yes, security remains a significant portion of the portfolio, with new investments enhancing vendor products [38] Question: How did DSS perform versus your expectations? - DSS performed well year-over-year, although Q4 is not their largest quarter due to their focus on the education market [40] Question: Of the number of vendors added for the year, were all of them productive? - All 13 signed vendors are performing, but management continues to push for better performance from those that were onboarded earlier [42][44]
Climb Solutions(CLMB) - 2024 Q4 - Earnings Call Transcript