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    CLMB
    Earnings call· Jun 2026(Q2 FY26)

    Climb Global Solutions Q2 FY26 earnings call CLMB

    Jul 30, 2026 Source

    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

    6

    • 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

    5

    • 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

    8
    CategoryTargetConfidence
    Adjusted EBITDA
    more than double FY 2025 adjusted EBITDA
    high materiality
    High
    Fortinet vendor relationship ranking
    1 of our top 5 vendors
    medium materiality
    High
    Cloud platform technical blueprint completion
    complete soon
    medium materiality
    High
    Second half of year performance
    always stronger than our first half
    medium materiality
    High
    Fortinet contribution
    a driver
    medium materiality
    High
    New vendor announcement
    another 1 we'll announce in a couple of weeks
    medium materiality
    High
    Ivanti vendor relationship ranking
    definitely a top 20 vendor
    medium materiality
    High
    SG&A as percentage of gross billings
    get that down to 3%
    medium materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    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%
    		————

    Operational metrics

    13
    Gross billings
    $587.3 millionup 17% YoY
    Q2 FY26

    gross billings in the second quarter of 2026 increased 17% to $587.3 million compared to $500.6 million in the year ago quarter.

    Net sales
    $174.2 millionup 9% YoY
    Q2 FY26

    Net sales in the second quarter of 2026 increased 9% to $174.2 million compared to $159.3 million in the prior year period.

    Gross profit
    $30.2 millionup 15% YoY
    Q2 FY26

    Gross profit in the second quarter of 2026 increased 15% to $30.2 million compared to $26.3 million for the same period in 2025.

    SG&A expenses
    $20.7 millionup from $16.4 million YoY
    Q2 FY26

    Selling, general and administrative expenses in the second quarter of 2026 were $20.7 million compared to $16.4 million in the prior year period. The year-over-year increase primarily reflects SG&A associated with Interworks and variable sales compensation attributed to the growth in gross profit. SG&A in Q2 2026 was also impacted by higher legal and professional fees as well as increased investments in IT infrastructure designed to improve workflows, strengthen our operating infrastructure and drive efficiencies across our global sales organization to support future growth.

    SG&A as percentage of gross billings
    3.5%vs 3.3% YoY
    Q2 FY26

    SG&A as a percentage of gross billings was 3.5% for the second quarter of 2026 compared to 3.3% for the prior year period.

    Non-GAAP EPS
    $0.30down from $0.35 YoY
    Q2 FY26

    Adjusted net income was $5.5 million or $0.30 per diluted share compared to $6.4 million or $0.35 per diluted share for the year ago period.

    Adjusted EBITDA
    $11.3 milliondown from $11.4 million YoY
    Q2 FY26

    Adjusted EBITDA in the second quarter of 2026 was $11.3 million compared to $11.4 million in the same period in 2025.

    Effective margin
    37.5%vs 43.3% YoY
    Q2 FY26

    Effective margin, which is defined as adjusted EBITDA as a percentage of gross profit was 37.5% compared to 43.3% for the same period in 2025.

    Cash and investments balance
    $56.6 millionup from $36.6 million as of Dec 31, 2025
    as of June 30, 2026

    Cash and cash equivalents were $56.6 million as of June 30, 2026 compared to $36.6 million on December 31, 2025.

    Vendor count
    84up from 48 in 2022
    current

    in 2022, we had 48 vendors that made up about 90% of our of our adjusted gross billings. And today, 84 vendors make up 98%.

    Large vendor count
    45up from 22 in 2022
    current

    we have 45 vendors that make -- that do more than $10 million in sales. And in 2022, we had only 22 vendors in 2022 that did $10 million or more.

    Fortinet gross billings growth
    10xvs Q1 FY26
    Q2 FY26

    it was a 10x factor from Q1 of this year to Q2 of this year.

    Non-recurring SG&A expenses
    $500,000
    Q2 FY26

    in the quarter, we had about $500,000 of what I would call nonrecurring type expenses.

    Industry KPIs

    6
    MetricValueDetails
    M a contributioncontribution from our acquisition of Interworks
    Orders book to bill$587.3 millionUSD
    Segment revenue growthDistribution: 8%; Solutions: 4%%
    Design wins product cycle rampsDarktrace became 1 of our top 20 vendorsvendor ranking
    End market revenue mix organic growthdouble-digit organic growth%
    Operating margin incremental leverage37.5%%

    Orderbook & backlog

    1
    Gross billings$587.3 millionQ2 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

    4
    ProductTypeDetails
    Ivantilaunch
    Check MKlaunch
    Logic Monitorexpansion
    Quantumlaunch

    Deals & partnerships

    5
    InterworksIntegration into broader global platform.

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

    IvantiExpand 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 MKProvide 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 MonitorBroadened 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.

    QuantumLaunched 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

    3
    Increased SG&A expensesQ2 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 FY26Q2 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 rateQ2 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

    5

    Fortinet vendor relationship ranking

    next year
    Current10x growth Q1 to Q2
    Target1 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.

    Q&A highlights

    6

    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 read6 chapters

    Detailed Narrative

    01

    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).

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.