Climb Global Solutions, Inc. Q4 FY2024 earnings call

• Core initiatives focused on organic growth by deepening relationships with existing vendors and customers and signing new emerging vendors. - Launched partnerships with Scality, a global leader in cyber-resilient storage software for AI environments, and Smartsheet, a work management platform. - Made progress with the implementation of a new ERP system, seeing improvements in transactional efficiency. - Announced executive leadership changes: Matt Sullivan as CFO, Kim Stevens as CMO, Charles Bass as Chief Alliance Officer, and John McCarthy as Chairman. - Viewed Citrix's public exit as an opportunity to strengthen the mix and diversify offerings.

In the fourth quarter, the Distribution segment's gross billings increased 57% to $582 million, while the Solutions segment's gross billings decreased 9% to $23 million. Net sales in the fourth quarter of 2024 rose 51% to $161.8 million. Gross profit grew 48% to $31.2 million. SG&A expenses in the fourth quarter were $17.1 million. Net income in the fourth quarter increased 33% to $7 million or $1.52 per diluted share. Adjusted net income saw an 87% increase to $10.3 million or $2.26 per diluted share. Adjusted EBITDA in the fourth quarter jumped 75% to $16.1 million.

• Will continue to build on a solid foundation for strong organic growth and improve operating leverage. - Will be active on the M&A front, evaluating accretive targets in North America and overseas. - Strong liquidity position provides flexibility to pursue organic and inorganic growth opportunities and aims to deliver growth and enhance profitability in 2025.

• Forward-looking statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. - Risks are described in the company's filings with the SEC.

Q: Did you have any large unexpected deals in the quarter?

A: Yes. We acquired Spinnakar and had a large VAST deal that came in at the end of Q4 which helped the numbers. Also, there was great growth across all divisions in Q4.

Q: Did security continue to lead growth amongst your segments?

A: It did. Security still makes up between 55% and 65% of our portfolio.

Q: How did DSS perform versus your expectations?

A: They do good. Q4 is not their biggest quarter as they are heavy in the education market, but they were up year-over-year.

Q: Of the number of vendors added for the year, were all of them productive? How would you characterize that?

A: Yes. Of the 13 vendors we signed, they're all up. We still transact with vendors that didn't perform initially but are pushing them to our Climb Elevate team, with some like Scality showing share shift.