Financial Data and Key Metrics Changes - Gross billings in Q3 2025 increased by 8% to $504.6 million compared to $465.2 million in the prior year quarter [12] - Net sales in Q3 2025 increased by 35% to $161.3 million compared to $119.3 million, driven by organic growth and contributions from the acquisition of Douglas Stewart Software [12] - Net income in Q3 2025 was $4.7 million or $1.02 per diluted share, down from $5.5 million or $1.19 per diluted share in the prior year [16] - Adjusted EBITDA in Q3 2025 was $10.9 million, slightly down from $11.1 million in the prior year [18] Business Line Data and Key Metrics Changes - Distribution segment gross billings increased by 9% to $481.9 million, while solutions segment gross billings decreased by 5% to $22.7 million [12] - Gross profit as a percentage of gross billings was 5.1%, slightly down from 5.2% in the prior year [13] Market Data and Key Metrics Changes - The European team showed strong execution, particularly in the artificial intelligence market, with the launch of Climb AI Academy to support partners [9][10] - The cybersecurity space continues to lead growth, accounting for over 60% of the company's business [22] Company Strategy and Development Direction - The company is focused on building operational momentum and executing strategic initiatives, including evaluating acquisition opportunities to enhance capabilities and market presence [19] - The company aims to deepen partnerships with existing vendors while selectively adding new ones to maintain innovation and market differentiation [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in closing out 2025 strong, with expectations for another year of record results [11] - There are no significant concerns regarding tariffs impacting the business, although currency fluctuations are monitored [30] Other Important Information - The Board of Directors declared a quarterly dividend of $0.17 per share, payable on November 17, 2025 [19] - The company has a robust balance sheet with cash and cash equivalents of $49.8 million as of September 30, 2025 [18] Q&A Session Summary Question: How would you characterize the quarter? Was the growth broad-based across your top 20? - Management indicated that there were no lumpy deals and organic growth was strong across the majority of vendors [21] Question: Were there any early pay price discounts that impacted margin? - No new relationships on early pay discounts were noted, and the percentage of gross billings remained consistent [24] Question: Is there a similar training program in the U.S. as the one in Europe? - Currently, there is no similar program in the U.S., but plans to roll out a training program are in place [25] Question: What is the impact of tariffs on your business? - There is no significant impact from tariffs, but currency fluctuations are considered [30] Question: Can you explain the notable declines in accounts receivable and accounts payable? - The changes are typical for the business and are expected to normalize in the next quarter [31] Question: What is the seasonality of orders now with DSS? - Seasonality is influenced by the education sector, with strong buying occurring in the summer [38] Question: What caused the 5% decrease in the solutions segment gross billings? - The decrease is attributed to fluctuations in the U.S. side of the business, which has a small team and large customers [40] Question: What are the acquisition-related costs in the quarter? - The costs are related to evaluating potential acquisitions, with a focus on larger deals moving forward [42][45] Question: What is the company's vision for future M&A? - The company is looking at opportunities ranging from $10 million to $40 million, focusing on strategic acquisitions that enhance technical capabilities [48][52]
Climb Solutions(CLMB) - 2025 Q3 - Earnings Call Transcript