• Gross Billings: Increased 52% to $605 million compared to $397 million in the prior year quarter.
• Distribution Segment Gross Billings: Increased 57% to $582 million.
• Solution Segment Gross Billings: Decreased 9% to $23 million.
• Net Sales: Increased 51% to $161.8 million compared to $106.8 million.
• Gross Profit: Increased 48% to $31.2 million compared to $21.1 million.
• Gross Profit Margin: 5.2% compared to 5.3% in the prior year period.
• SG&A Expenses: $17.1 million compared to $12.4 million in the prior year period.
• SG&A as a Percentage of Gross Billings: Decreased to 2.8% from 3.1%.
• Net Income: Increased 33% to $7 million or $1.52 per diluted share compared to $5.2 million or $1.15 per diluted share.
• Adjusted Net Income: Increased 87% to $10.3 million or $2.26 per diluted share compared to $5.5 million or $1.21 per diluted share.
• Adjusted EBITDA: Increased 75% to $16.1 million compared to $9.2 million.
• Adjusted EBITDA Margin: Increased 780 basis points to 51.5% from 43.7%.
• Cash and Cash Equivalents: $29.8 million as of December 31, 2024, compared to $36.3 million on December 31, 2023.
• Outstanding Debt: $800,000 with no borrowings under the $50 million revolving credit facility.
• Quarterly Dividend: $0.17 per share declared, payable on March 21, 2025.

• Warning! GuruFocus has detected 3 Warning Signs with CLMB.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Climb Global Solutions Inc (NASDAQ:CLMB) reported a 52% increase in gross billings for Q4 2024, reaching $605 million compared to $397 million in the previous year.
• Net sales for the fourth quarter increased by 51% to $161.8 million, driven by organic growth and contributions from the acquisition of DSS.
• Adjusted EBITDA for Q4 2024 rose by 75% to $16.1 million, reflecting strong performance from new and existing vendors.
• The company successfully launched strategic partnerships with innovative vendors like Scality and Smartsheet, enhancing their product offerings.
• Climb Global Solutions Inc (NASDAQ:CLMB) maintained a strong liquidity position with $29.8 million in cash and cash equivalents, providing flexibility for future growth opportunities.

Negative Points

• Gross profit as a percentage of gross billings slightly decreased to 5.2% from 5.3% in the previous year.
• SG&A expenses increased to $17.1 million in Q4 2024, up from $12.4 million in the same period of 2023, partly due to DSS-related costs.
• The company experienced a decrease in cash and cash equivalents from $36.3 million to $29.8 million, primarily due to acquisition costs and timing of receivables.
• The solution segment's gross billings decreased by 9% to $23 million, indicating challenges in that area.
• Climb Global Solutions Inc (NASDAQ:CLMB) faces the challenge of filling gaps left by the exit of Citrix from the channel, which may impact future revenue streams.

Q & A Highlights

Q: Did Climb Global Solutions have any large, unexpected deals in the quarter? A: Yes, Climb Global Solutions had a significant deal with Spinnaker that contributed to the strong results in Q4. The company also experienced growth across all divisions, with Q4 typically being a larger quarter for software applications and SaaS sales. - Dale Foster, CEO

Q: Did security continue to lead growth among your segments? A: Yes, security remains a major growth driver, making up between 55% and 65% of the portfolio. There is also new investment in AI components to enhance security products, which will be more evident in 2025. - Dale Foster, CEO

Q: How did DSS perform compared to your expectations? A: DSS performed well, although Q4 is not their biggest quarter due to their focus on the education market. They were up year-over-year, but their larger quarters are typically Q2 and Q3. - Dale Foster, CEO

Q: Were all the new vendors added in the year productive? A: All 13 new vendors showed growth, but the company continues to push those that underperform to the Climb Elevate team. The focus is on quickly identifying and moving on from vendors that do not meet expectations. - Dale Foster, CEO

Q: What are the future plans for Climb Global Solutions in terms of growth and expansion? A: Climb Global Solutions plans to continue building on organic growth and improving operating leverage. The company will also evaluate M&A opportunities to enhance solutions offerings and expand geographically in the US and overseas. - Dale Foster, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.