Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Climb Global Solutions Inc (CLMB, Financial) reported a 34% increase in gross billings for Q1 2025, reaching $474.6 million compared to the previous year.
- Net sales increased by 49% to $138 million, driven by organic growth and contributions from the acquisition of DSS.
- The company signed a significant contract with Darktrace, a cybersecurity firm, which has already generated a $30 million pipeline in potential gross bills.
- Climb Global Solutions Inc (CLMB) is making progress with its new ERP system, improving efficiency and transactional speed across global operations.
- The company declared a quarterly dividend of $0.17 per share, reflecting confidence in its financial health and commitment to returning value to shareholders.
Negative Points
- SG&A expenses increased to $16.8 million from $12.5 million, with DSS accounting for $1.1 million of the increase.
- The company faces challenges in filling the gap left by the loss of Citrix as a vendor, although mitigations are underway.
- Despite growth, the company acknowledges that some vendor relationships, like with Darktrace, take a long time to develop and execute.
- The economic environment remains uncertain, and while tariffs have not significantly impacted the company yet, they remain a potential risk.
- The integration of acquired companies into the ERP system has been a complex process, though it is now largely complete.
Q & A Highlights
Q: Were there any large deals in the quarter that you may want to call out, or was it broad-based demand?
A: It was pretty much broad-based. We did have the additional advantage of DSS, but nothing specific stood out for Q1. Our bigger brands are growing at a higher rate, and some emerging brands are also performing well. - Dale Foster, CEO
Q: Has there been any change in sentiment given the uncertain economic environment, and how might tariffs impact your business?
A: We haven't seen a significant impact from tariffs as over 80% of our business is in the US, and we deal in US dollars. Overseas, most of our business is in the UK and Ireland, so the impact is minimal. - Dale Foster, CEO
Q: Are you starting to see some of the synergies you were hoping for in Europe?
A: Yes, we are seeing synergies. We have reorganized our team in Europe, and all divisions are now on one ERP system, which is positive for our operations. - Dale Foster, CEO
Q: Did organic growth in April trend as it did in Q1?
A: We don't typically discuss future specifics, but we are excited about our relationship with Darktrace, which officially launched on April 1st. This partnership is expected to significantly contribute to our growth. - Dale Foster, CEO
Q: Are there any additional remarks or updates?
A: A big shout-out to the Climb team for their efforts with the ERP system. We are now focused on fine-tuning our operations, and everything is moving in the right direction. - Dale Foster, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
