What Climb Global Solutions (CLMB) Said on Its Q3 Earnings Call

Key Points

• Record Q3 performance: Gross billings rose 40% year over year to $706.4 million, while net sales increased 37% to $220.3 million. Net income climbed 69% to $7.9 million, and adjusted EBITDA rose 35% to $14.7 million.
• Growth was broad-based: 19 of Climb’s 20 largest vendors grew sequentially, with cybersecurity accounting for roughly 70% of business. Management also highlighted Darktrace’s $100 million vendor run rate and expanding opportunities with larger “challenger” vendors.
• Expansion and outlook remain strong: Climb acquired France-based NeoVAD after quarter-end, continued investing in automation and a cloud marketplace, and ended the quarter with $66.9 million in cash and no debt. Management expects another record year and cited a robust acquisition pipeline, particularly in Europe.

Climb Global Solutions NASDAQ: CLMB reported record third-quarter results for the period ended Sept. 30, 2026, with management citing broad-based vendor growth, expanding European operations and continued investment in automation and cloud infrastructure.

Gross billings rose 40% year over year to a quarterly record of $706.4 million, while net sales increased 37% to $220.3 million. Gross profit grew 28% to $33 million. Net income increased 69% to $7.9 million, or $0.43 per diluted share, compared with $4.7 million, or $0.25 per diluted share, a year earlier.

Adjusted EBITDA rose 35% to $14.7 million, and adjusted net income increased 34% to $8 million, or $0.43 per diluted share. Effective margin, defined by the company as adjusted EBITDA as a percentage of gross profit, increased 230 basis points to 44.6%.

Vendor Growth Drives Record Quarter

CEO Dale Foster said the company experienced sequential growth from 19 of its 20 largest vendors during the quarter. He identified Adobe as the one top-20 vendor that was relatively flat, while noting that it remained an important relationship.

“It is really the core piece of our vendors that are growing at this clip,” Foster said, adding that the quarter did not include major one-time transactions.

CFO Matthew Sullivan said the majority of gross-billings and gross-profit growth came from existing vendor relationships. He said recently acquired InterWorks performed in line with the company’s plan and that Fortinet was meeting Climb’s internal expectations for 2026.

Foster also pointed to momentum among vendors that had been added in prior years. He said cybersecurity company Darktrace had reached a $100 million run rate as a vendor relationship. Climb said approximately 70% of its business is in cybersecurity, an area Foster said is benefiting from organizations’ focus on securing networks and technology environments.

During the quarter, Climb evaluated 32 potential new brands and signed one agreement, with Harmonic Security. Foster described Harmonic as a cybersecurity company focused on helping organizations securely adopt and scale artificial intelligence technologies.

Expanding Opportunity With Larger “Challenger” Vendors

Management said Climb is seeing a growing opportunity to work with more established technology providers, which it refers to as “challenger vendors.” Foster said these companies may seek a more focused distribution partner to expand their channel reach, build reseller engagement and improve efficiency.

The strategy is intended to supplement, rather than replace, Climb’s focus on emerging technology vendors. Foster said larger vendors can provide a more meaningful revenue opportunity, particularly where a vendor is moving business from a direct-sales model into distribution or shifting share from other distributors.

He said the company has held discussions with vendors that have substantial volumes of unmanaged business and are seeking a channel strategy. Foster also said private equity owners of technology vendors are increasingly pushing management teams to improve efficiency, which can support a transition from direct sales toward channel distribution.

Climb said it serves roughly 7,000 to 7,500 unique resellers globally, according to Foster.

European Acquisition and Marketplace Investments

Subsequent to the quarter’s end, Climb acquired NeoVAD, a France-based distributor. Foster said NeoVAD’s team will remain with the company and will operate under Climb’s European leadership. He said NeoVAD has largely exclusive vendor relationships in France and also sells into other French-speaking markets.

Sullivan said NeoVAD’s gross-profit margins are in the low-double-digit percentage range, slightly above Climb’s existing European business and consistent with the margin profile discussed for InterWorks. Foster said European margins are generally higher than Climb’s North American margins, which he characterized as mid-single digit.

Management said NeoVAD’s growth accelerated during the past two years after it signed several strong vendor lines. Foster said four existing Climb vendors had already contacted the company following the acquisition announcement about potential opportunities in France.

Climb also continues to invest in enterprise resource planning systems, workflow automation and a cloud marketplace. Foster said the marketplace will provide a platform through which managed service providers and resellers can purchase, provision and manage cloud subscriptions. The company expects to discuss the initiative further in the first quarter.

Foster said the platform is being designed around the needs of Climb’s vendors and customers and is intended to reduce manual work, improve transaction speed and allow sales teams to focus more on selling. He said the company expects the number of vendors using the platform to increase over the next year as vendors develop the needed connectivity.

Margins, Balance Sheet and Outlook

Selling, general and administrative expense rose to $20.9 million from $16.2 million, reflecting InterWorks-related costs, variable sales compensation and investments in information technology and automation. However, SG&A as a percentage of gross billings declined to 3% from 3.2%.

SG&A as a percentage of gross profit improved to 63.2%, down from 68.5% in the second quarter and 76.7% in the first quarter. Sullivan said the company implemented cost-saving initiatives during the third quarter and expects to remain in its historical low-40% range for full-year effective margin.

Cash and cash equivalents totaled $66.9 million at Sept. 30, up from $36.6 million at the end of 2025. Climb had no debt and no borrowings under its $50 million revolving credit facility.

Foster said Climb expects to deliver another record year and reported that October was tracking ahead of the prior year’s fourth quarter. He also said the company sees a robust acquisition pipeline, with Europe remaining a focus alongside other potential regions, including Africa and the Middle East.

About Climb Global Solutions (NASDAQ:CLMB)

Climb Global Solutions, Inc NASDAQ: CLMB is a global value-added distributor of information technology products and services. The company connects technology vendors with resellers, managed service providers, systems integrators and other channel partners, helping them market and deliver specialized technology solutions to business and government customers.

Climb's portfolio includes cybersecurity, networking, data management, virtualization, cloud computing, software development and other enterprise technology solutions.

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