Climb Global Solutions (NASDAQ:CLMB) management highlighted “record results across all key financial metrics” for 2025, alongside a slate of channel and portfolio developments, during its conference call covering fourth-quarter and full-year results ended Dec. 31, 2025.
CEO Dale Foster credited the company’s performance to continued organic growth efforts, including deeper relationships with existing vendors and customers, selective additions to its vendor lineup, and operational efficiency initiatives. CFO Matthew Sullivan walked through quarterly results and discussed balance sheet trends, while management also addressed its decision to suspend the quarterly dividend beginning in the first quarter of 2026.
Vendor strategy: selective additions, Fortinet onboarding, and early momentum with Darktrace
One notable new partnership was Fortinet, which Foster described as quickly becoming a primary onboarding focus. He said the relationship began at the executive level and is aimed at leveraging Climb’s “high-touch” distribution approach to help Fortinet expand into resellers and markets not typically reached through the largest distributors. Foster also framed Fortinet’s U.S. opportunity as a “$2.5 billion addressable market” and said Climb is targeting 10% of that over roughly the next 18 months, adding that he expects Fortinet to be among Climb’s top three vendors “this time next year.”
Climb also discussed continued progress with Darktrace, which Foster noted was in only its second full quarter of activity. In the fourth quarter, Climb had 70 partners transact more than $13 million in Darktrace offerings, and Foster said the company sees additional pipeline ahead as it continues partner enablement efforts.
Acquisition of interworks.cloud expands Southeastern Europe footprint
Earlier in the week, Climb announced the acquisition of interworks.cloud, a Greece-based cloud distributor serving Southeastern Europe, including Greece, Malta, Cyprus, and Bulgaria. Foster said interworks brings more than 600 cloud resellers and managed service providers and a vendor portfolio that includes Acronis, Google Workspace, AnyDesk, Blackwall, and Microsoft.
Foster said the full interworks organization will join Climb and become part of its EMEA go-to-market structure, with continuity of local leadership described as a priority. He said Climb expects the deal to be “immediately accretive” to earnings and Adjusted EBITDA and described cross-selling opportunities as a key rationale as the businesses integrate.
On the Q&A, Foster also discussed Microsoft’s consolidation efforts for distribution worldwide and said Climb and interworks together meet a $30 million threshold associated with maintaining the Microsoft relationship. He said interworks’ experience in cloud marketplace and MSP-focused distribution should help educate Climb’s broader teams, particularly because both organizations use the same Infoterra platform.
Q4 financial performance: net sales up 20%, profitability pressured by prior-year comparables
Sullivan reported that fourth-quarter gross billings increased 3% year over year to $625.4 million. Distribution segment gross billings rose 4% to $602.3 million, while Solutions segment gross billings were flat at $23.1 million.
Net sales increased 20% to $193.8 million, which Sullivan said primarily reflected organic growth from new and existing vendors. He also noted that net sales can fluctuate based on product mix and GAAP revenue recognition, and that the quarter included higher sales of products recognized on a gross basis, which reduced the adjustment from gross billings to net sales.
- Gross profit: $29.8 million, down from $31.2 million, which management attributed to a large, higher-margin vendor transaction in the prior-year period.
- SG&A: $18.2 million, up from $17.1 million; SG&A was 2.9% of gross billings versus 2.8% a year ago.
- Net income: $7.0 million, or $1.52 per diluted share, flat year over year.
- Adjusted net income: $7.0 million, or $1.53 per diluted share, down from $10.3 million, or $2.26 per diluted share.
- Adjusted EBITDA: $13.0 million, down from $16.1 million; Sullivan tied the decline to the same prior-year large vendor transaction and related compensation dynamics included in the prior year’s Adjusted EBITDA add-backs.
- Effective margin: 43.6% of gross profit, down from 51.5%.
In response to analyst questions about the unusually large transaction in the year-ago quarter, management said that excluding that transaction, recurring and organic growth in the fourth quarter was still in the “high teens” compared with the prior year, and that was true on both gross billings and EBITDA.
Balance sheet, working capital timing, and dividend suspension
Climb ended 2025 with $36.6 million in cash and cash equivalents, up from $29.8 million at the end of 2024. Working capital increased $27.7 million, which Sullivan said was primarily due to timing of receivable collections and payables. The company reported $200,000 in outstanding debt and no borrowings under its $50 million revolving credit facility.
Sullivan said the board determined to suspend the quarterly cash dividend beginning in the first quarter of 2026 to retain capital for organic growth initiatives and acquisitions and to strengthen financial flexibility. Foster reiterated support for the decision, describing it as part of a broader capital allocation strategy focused on reinvestment, operational efficiency, and M&A. In the Q&A, Foster also said the dividend change aligns with an active acquisition pipeline, indicating the company expects to complete “one or two” acquisitions in 2026, while noting there are “a lot of deals” under discussion.
Operational efficiency, AI tools, and management’s view on AI market disruption
Foster said Climb is building internal generative AI solutions intended to improve team efficiency, alongside broader process streamlining and automation efforts. He described ongoing work following the company’s ERP implementation and said new CIO Vishal (hired roughly seven to eight months earlier) is focused on accelerating efficiency improvements, including through connector projects (such as EDI, XML, and APIs).
Foster also addressed recent “AI disruption” concerns, arguing that adoption may accelerate faster than cloud did but that the end state is likely to be hybrid. He said Climb’s role as a connector between technology builders and users positions it to pivot as market needs change, whether the market shifts toward standalone AI systems, agents, hybrid SaaS, or platform models.
About Climb Global Solutions (NASDAQ:CLMB)
Climb Global Solutions Inc operates as a value-added information technology (IT) distribution and solutions company in the United States, Canada, Europe, the United Kingdom, and internationally. It operates in two segments, Distribution and Solutions. The company distributes technical software to corporate and value-added resellers, consultants, and systems integrators under the name Climb Channel Solutions; and provides cloud solutions and resells software, hardware, and services under the name Grey Matter.
