Financial Data and Key Metrics Changes - Gross billings in Q1 2025 increased by 34% to $474.6 million compared to $355.3 million in the prior year quarter [12] - Net sales rose by 49% to $138 million from $92.4 million, driven by organic growth and the acquisition of DSS [12] - Net income increased by 35% to $3.7 million or $0.81 per diluted share, compared to $2.7 million or $0.60 per diluted share in Q1 2024 [14] - Adjusted EBITDA grew by 38% to $7.6 million, with an effective margin increase of 20 basis points to 32.7% [15] Business Line Data and Key Metrics Changes - Distribution segment gross billings increased by 36% to $453.6 million, while Solutions segment gross billings rose by 2% to $21 million [12] - SG&A expenses increased to $16.8 million from $12.5 million, with SG&A as a percentage of gross billings remaining flat at 3.5% [13] Market Data and Key Metrics Changes - The company reported solid organic growth in both the U.S. and Europe, indicating a strong market presence [5] - The initial interaction with Darktrace has resulted in a growing pipeline exceeding $30 million in potential gross billings [7] Company Strategy and Development Direction - The company is focused on sustaining momentum and driving organic growth while remaining active in M&A to enhance service offerings [11] - The implementation of a new ERP system is expected to improve efficiency and data insights across global operations [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic environment has not significantly impacted business, with over 80% of operations in the U.S. [23] - The company is optimistic about future growth, particularly with new vendor relationships and ongoing enhancements to operational systems [30] Other Important Information - The Board of Directors declared a quarterly dividend of $0.17 per share, payable on May 16, 2025 [17] - The company recognized Freshworks as its strategic partner of the year during its annual client partner conference [9] Q&A Session Summary Question: Were there any large deals in the quarter or was it broad-based demand? - Management indicated that the growth was broad-based with no standout deals in Q1, although they expect stronger performance in the education sector as the fiscal year progresses [21][22] Question: Has there been any change in sentiment given the uncertain economic environment? - Management reported no significant impact from economic uncertainties, as the majority of their business is U.S.-based [23] Question: Are synergies in Europe starting to materialize? - Management confirmed that synergies are beginning to show, particularly with the integration of DSS into their ERP system [26][27] Question: Did organic growth trends continue into April? - Management refrained from discussing specific April results but expressed optimism about ongoing relationships and growth potential [28][30]
Climb Solutions(CLMB) - 2025 Q1 - Earnings Call Transcript