Can Fortinet's growth eclipse Darktrace's pace, and what are the expectations for Fortinet over the next 12 months?

Fortinet's gross billings grew 10x from Q1 to Q2. Management expects Fortinet to become one of their top 5 vendors within the next year, citing strong integration, QBRs, and Fortinet's broad technology portfolio (firewalls to security cameras). “it was a 10x factor from Q1 of this year to Q2 of this year... I think I said it be 1 of our top 5 vendors probably this time next year.”

How much of the SG&A increase was non-recurring, and what is the outlook for SG&A for the rest of the year?

Approximately $500,000 of Q2 SG&A was non-recurring, related to legal/professional fees and IT infrastructure investments. SG&A as a percentage of gross billings declined from 3.7% in Q1 to 3.5% in Q2, consistent with historical Q1-Q2 trends. Management aims for 3% but prioritizes strategic investments for long-term efficiency. “in the quarter, we had about $500,000 of what I would call nonrecurring type expenses.”

Update on the lifting of Fortinet's restrictions on certain customer opportunities and success with those customers.

Restrictions on the top 50 customers were lifted on May 4th. The focus is on net new business and leveraging Climb's in-region, in-territory sales force to build relationships and streamline the buying experience. While not a "light switch," a natural progression of business is expected as relationships build. “So we were restricted until May 4 of this year. I think it was the top 50 customers. They didn't want disruption. The goal with Fortinet has always been for net new business.”

CLMB

Climb Global Solutions (CLMB) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Jul 30, 2026

Source: earnings call transcript

Executive summary

Climb Global Solutions Q2 FY26 — Double-Digit Organic Growth and Strategic Vendor Expansion

Climb Global Solutions delivered strong Q2 FY26 results, driven by double-digit organic growth across its vendor portfolio and strategic acquisitions like Interworks. The company expanded its line card with new high-value vendors and progressed on its cloud platform development, while also navigating increased operating expenses due to strategic investments in IT infrastructure and M&A integration. Management remains focused on organic growth, selective vendor expansion, and accretive M&A, particularly in Europe, leveraging a robust balance sheet.

Highlights

Generated double-digit organic growth with 19 of top 20 vendors.
Gross billings increased 17% to $587.3 million.
Net sales increased 9% to $174.2 million.
Gross profit increased 15% to $30.2 million.
Cash and cash equivalents increased to $56.6 million as of June 30, 2026, from $36.6 million on December 31, 2025.
Signed new agreements with Ivanti (approx. $1 billion annual revenue) and Check MK, and expanded relationships with Logic Monitor and Quantum.

Concerns

Net income decreased to $5.5 million ($0.30 per diluted share) from $6.0 million ($0.33 per diluted share) YoY.
Adjusted net income decreased to $5.5 million ($0.30 per diluted share) from $6.4 million ($0.35 per diluted share) YoY.
Adjusted EBITDA decreased to $11.3 million from $11.4 million YoY.
SG&A expenses increased to $20.7 million from $16.4 million YoY, primarily due to Interworks, variable sales compensation, higher legal/professional fees, and IT infrastructure investments.
Effective margin (Adjusted EBITDA as % of gross profit) decreased to 37.5% from 43.3% YoY.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EBITDA	more than double FY 2025 adjusted EBITDA high materiality	FY2030	High
Fortinet vendor relationship ranking	1 of our top 5 vendors medium materiality	FY2027	High
Cloud platform technical blueprint completion	complete soon medium materiality	Q4 · 2026	High
Second half of year performance	always stronger than our first half medium materiality	H2 FY26 · 2026	High
Fortinet contribution	a driver medium materiality	Q3 and Q4 FY26 · 2026	High
New vendor announcement	another 1 we'll announce in a couple of weeks medium materiality	Q3 · 2026	High
Ivanti vendor relationship ranking	definitely a top 20 vendor medium materiality	long-term	High
SG&A as percentage of gross billings	get that down to 3% medium materiality	near term · 2027	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Distribution Distribution segment gross billings increased 8% to $562.9 million. Gross billings: $562.9 millionGross billings growth YoY: 8%	—	—	—	—
Solutions Solutions segment gross billings increased 4% to $24.4 million. Gross billings: $24.4 millionGross billings growth YoY: 4%	—	—	—	—

Orderbook & backlog

Gross billings $587.3 million Q2 FY26

increased 17% YoY

Distribution segment gross billings increased 8% to $562.9 million while Solutions segment gross billings increased 4% to $24.4 million.

Product announcements

Product	Type	Timeline
Ivanti	launch	Q2 FY26
Check MK	launch	Q2 FY26
Logic Monitor	expansion	Q2 FY26
Quantum	launch	Q2 FY26

Deals & partnerships

Interworks Integration into broader global platform.

benefited from our acquisition of Interworks and continue to integrate Interworks into our broader global platform.

Ivanti Expand channel access to Ivanti's autonomous endpoint management offering. approximately $1 billion in annual revenue (Ivanti's revenue)

Our first agreement was with Ivanti, a Utah-based global enterprise IT and security software company... Through this relationship, Climb will expand channel access to Ivanti's autonomous endpoint management offering...

Check MK Provide comprehensive IT infrastructure monitoring and observability solutions.

We also signed a company called Check MK, a German-based provider of comprehensive IT infrastructure monitoring and observability solutions.

Logic Monitor Broadened relationship from select customers to all of North America.

we broadened our relationship with Logic monitor from a few select customers to all of North America, giving our partners more access to its AI-powered hybrid observability platform.

Quantum Launched Quantum's portfolio including high-performance storage, AI-enabled workflow management, and long-term data preservation solutions.

We also launched Quantum on our primary line card. In Q2, Quantum's portfolio includes high-performance storage, AI-enabled workflow management and long-term data preservation solutions designed to help public and private sector end users manage data growth and storage constraints.

Risks & headwinds

Increased SG&A expenses Q2 FY26, with some investments continuing into Q3

$20.7 million in Q2 FY26, up from $16.4 million in Q2 FY25

Mitigation:Strategic investments in IT infrastructure for long-term efficiency, cost-cutting measures being implemented. Management aims for SG&A as % of gross billings to return to 3%.

Tough comparable period for Q2 FY26 Q2 FY26

Prior year included a "$30 million deal with Vast data" and another pulled into Q2.

Mitigation:Strong performance from other top vendors (19 of 20 grew), diversified vendor portfolio.

Higher effective tax rate Q2 FY26 and going forward

Impacted net income and adjusted net income in Q2 FY26.

Mitigation:Due to less discrete favorable impact from restricted stock vesting compared to prior years; implies a more normalized tax rate going forward.

What to watch in Q3 FY26

Fortinet vendor relationship ranking

next year

Current 10x growth Q1 to Q2

Target 1 of our top 5 vendors

Why it matters

Fortinet is expected to be a significant growth driver, and its ramp-up is key to overall performance.

I think I said it be 1 of our top 5 vendors probably this time next year.

Find out whether CLMB delivers this. Inve re-checks your case every morning.

Q&A highlights

How tough was the Q2 comparable given large Vast Data deals in the prior year?

Management acknowledged a tough comparable due to a $30 million Vast Data deal in Q2 last year and another pulled into Q2. However, strong performance from other top vendors, with 19 of 20 growing, helped offset this. Darktrace and other performers showed significant momentum.

“we knew it was going to be a tough comp going into Q2 because we had a $30 million deal with Vast data and then another 1 that was going to be in Q3 got pulled into Q2.”

asked by Keith Housum · answered by Dale Foster

2 min read 6 chapters

Detailed narrative

Strategic Initiatives & Vendor Expansion

Climb executed several strategic initiatives in Q2, including driving double-digit organic growth with 19 of its top 20 vendors. The company focuses on strengthening existing partnerships and identifying emerging technologies, evaluating 34 new brands and signing agreements with only two: Ivanti (a global enterprise IT and security software company with ~ $1 billion annual revenue) and Check MK (a German-based provider of IT infrastructure monitoring solutions).

Expanded Vendor Relationships

Climb also expanded two existing relationships, broadening its partnership with Logic Monitor to all of North America and launching Quantum on its primary line card. These expansions illustrate a strategy of focused go-to-market, investment as demand develops, and expanded support as opportunities grow.

Darktrace became a top 20 vendor and a major growth driver within 12 months, and Fortinet's gross billings increased materially from Q1, with expectations for it to become a top 5 vendor.

Cloud Platform Development

The company is making progress on its cloud platform, designed to create a more efficient way for customers and partners to purchase, manage, and renew cloud-based software. An experienced platform architect was hired to develop the initial structure and technical blueprint, expected to be completed in Q4 FY26, with Adobe being one of the first vendors for integration.

Interworks Integration & M&A Strategy

Climb continues to integrate Interworks into its global platform, preserving local expertise while leveraging Climb's broader infrastructure. The company outlined long-term goals at its Investor Day, including more than doubling FY25 adjusted EBITDA by 2030. Looking ahead, Climb is focused on organic growth, selective line card expansion, and evaluating accretive M&A opportunities, with Europe as a key focus area, supported by a strong balance sheet.

SG&A Investments and Efficiency

SG&A expenses increased due to Interworks integration, variable sales compensation, higher legal/professional fees, and strategic investments in IT infrastructure. Management views these investments as crucial for long-term efficiency and future growth, aiming to improve workflows and strengthen operating infrastructure, despite the near-term impact on the SG&A percentage of gross billings.

Geopolitical and Macro Environment

Management noted that geopolitical factors have not had a significant impact on sentiment in Europe, attributing this to Climb's relatively small size in the market and its focus on specific reseller niches. The company is not in the hardware business, which insulates it from logistics issues, and has not seen material impacts from broader macro trends.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.