CLMB

• Strategic vendor expansion and partnership development

  • Evaluated 34 new brands in Q2 2026, signed agreements with two large vendors: Avanti, a $1 billion annual revenue AI-powered enterprise IT and security platform provider, and CheckMK, a German IT infrastructure monitoring and observability solutions provider
  • Expanded existing key partnerships: broadened LogicMonitor coverage to all of North America, and added Quantum's high-performance storage and data management portfolio to the primary line card
  • Darktrace became one of the company's top 20 vendors within 12 months of onboarding and was the largest growth driver among new vendor relationships in the quarter
  • Fortinet gross billings increased materially quarter-over-quarter from Q1 2026, with management expecting it to become a top 5 vendor within 12 months
  • 19 of the company's top 20 vendors delivered growth in the quarter, benefiting from the February 2026 Interworks acquisition

• Cloud platform development

  • Hired an experienced lead platform architect to develop the technical blueprint for a proprietary cloud purchasing and management platform, which is expected to be completed shortly
  • Adobe will be the first vendor integrated on the new platform, with support for additional vendors planned over time
  • The new platform will address gaps from third-party platform roadmaps and enable more efficient self-service transactions while retaining the company's in-person customer support model

• Interworks acquisition integration

  • Continues integrating the Interworks business into Climb's global platform, preserving local customer and vendor relationships while leveraging Climb's broader regional infrastructure
  • Cross-selling and platform alignment is underway, with the company focusing on expanding shared vendor agreements such as the Microsoft pan-European partnership

• Corporate governance and strategic updates

  • Added Peter Bell, a 35-year veteran of venture capital, technology, and M&A, to the board of directors to support long-term growth strategy
  • Reaffirmed the long-term target announced at the June 2026 Investor Day to more than double FY2025 adjusted EBITDA by 2030, driven by organic growth, deeper partner relationships, operating leverage, and strategic M&A
  • Maintains a strong balance sheet with $56.6 million in cash and no outstanding debt as of June 30, 2026, providing flexibility for strategic investments and M&A

• Management maintains its long-term target of more than doubling FY2025 adjusted EBITDA by 2030
  • Historically, SG&A as a percentage of gross billings and adjusted effective margins improve on a Q1 to Q4 sequential trajectory each year, and management expects this pattern to hold in 2026
  • The second half of 2026 is expected to be stronger than the first half, consistent with the company's historical seasonal trend, with Fortinet expected to be a key growth driver in H2 2026
  • Management's 3-5% target for SG&A as a percentage of gross billings remains 3% longer term, though near-term investments in IT infrastructure have kept the ratio at 3.5% in Q2 2026; these investments are expected to drive higher efficiency in future years
  • Management expects to be able to increase overall company gross margins over time through higher-margin acquisitions in Europe, where market competition is lower and typical distribution margins are 10% to 15% compared to ~5% in North America
  • M&A activity is expected to accelerate in the second half of 2026, with management evaluating larger targets than prior transactions and willing to use debt to fund attractive accretive opportunities focused on European expansion

Climb Global Solutions reports two core operating segments for Q2 2026:

1. Distribution segment: Gross billings increased 8% year-over-year to $562.9 million, accounting for 95.8% of total Q2 2026 gross billings.
2. Solutions segment: Gross billings increased 4% year-over-year to $24.4 million, accounting for 4.2% of total Q2 2026 gross billings.

Aggregate company performance for the quarter: Total gross billings increased 17% YoY to $587.3 million; net sales increased 9% YoY to $174.2 million; gross profit increased 15% YoY to $30.2 million; net income was $5.5 million ($0.30 diluted EPS) compared to $6 million ($0.33 diluted EPS) YoY; adjusted EBITDA was $11.3 million, down slightly from $11.4 million YoY.

• Forward-looking statements are subject to general market, macroeconomic, geopolitical, and regulatory risks that could cause actual results to differ materially from expectations, per standard safe harbor disclosures
• Large individual deals (such as the 2025 Q2 Vast Data transaction) create year-over-year comparability volatility and lumpy revenue performance
• Higher-than-expected near-term SG&A investment could pressure short-term margins, though management expects these investments to drive long-term efficiencies
• Geographic geopolitical and macroeconomic uncertainty in Europe could impact cross-selling and integration progress for the Interworks acquisition, though management has not observed material impacts to date
• M&A execution carries integration and cultural alignment risks, as Climb's business model is heavily dependent on retaining strong vendor and customer relationships at acquired firms

Q: Q2 2025 had large one-time Vast Data deals that created a tough year-over-year comparable. How did Climb perform against this difficult benchmark, and what is Fortinet's growth outlook over the next 12 months?

A: Management confirmed Q2 2026 faced a very tough comparable from large pulled-forward Vast Data deals in the year-ago quarter. Despite this, 19 of Climb's top 20 vendors delivered growth, with Darktrace exceeding expectations and Sophos rebounding strongly from a weak Q1. Fortinet gross billings grew 10x quarter-over-quarter from Q1 2026 after the partnership launched in November 2025, and management expects it to become a top 5 Climb vendor within 12 months, supported by its broad product portfolio and strong underlying company growth.

Q: How much of Q2 2026's higher SG&A is non-recurring, and when will SG&A as a percentage of gross billings fall back toward the 3% target?

A: There was ~$500,000 in non-recurring legal, professional, and IT investment costs in Q2. Sequentially, SG&A as a percentage of gross billings already fell from 3.7% in Q1 to 3.5% in Q2, consistent with historical Q1-to-Q2 improvement. Management's long-term target remains 3%, but near-term intentional investments in IT infrastructure and platform development are pressuring the ratio temporarily; these investments will drive long-term efficiency, and management expects the typical seasonal margin improvement through the end of 2026.

Q: Are geopolitical risks impacting European operations and Interworks cross-selling goals? What is the Q3 gross billings momentum to date?

A: Geopolitical and macro factors have not had any material impact on European operations to date, as Climb remains a small niche player in a large market and does not sell hardware, so it avoids logistics-related disruptions. Interworks cross-selling integration is progressing as scheduled, with teams aligning on shared vendor relationships ahead of platform integration. July 2026 (the first month of Q3) was strong, and management expects the historical trend of a stronger H2 to hold in 2026, with Fortinet as a key growth driver for the remainder of the year.

Q: What is the long-term growth potential for the new Avanti vendor partnership, and what is the update on Climb's proprietary cloud marketplace?

A: Avanti is a ~$1 billion revenue security vendor that management expects to become a top 20 vendor for Climb, aligned with the company's strategy of prioritizing onboarding larger vendors that can move the needle on overall growth. For the cloud marketplace, the technical architecture is nearly complete, with Adobe scheduled as the first integration. Initial platform functionality is expected to launch in Q4 2026, and the proprietary platform will let Climb control its own roadmap for vendor onboarding, improving internal efficiency and customer self-service options while retaining the company's in-person support model.

Q: Has Climb accelerated M&A activity, and is the company pursuing larger deals than in the past?

A: Management confirmed that M&A evaluation activity has accelerated, with the board aligned on pursuing larger targets than prior transactions focused on higher-margin European expansion. Climb currently holds a cash-rich, debt-free balance sheet and is willing to take on leverage to fund attractive, accretive deals that align with the company's cultural and strategic go-to-market model. Management has been developing a pipeline of high-fit targets for several years, with two large opportunities currently under active evaluation.