Oct 29, 2026 earnings call — Record quarter and European acquisition
Gross billings increased 40% to a quarterly record of $706.4 million in Q3.
Revenue $0.2B (est $0.2B) · EPS $0.43 (est $0.38)
Key quotes
"During the quarter, we evaluated 32 new net brands but signed an agreement with only one, Harmonic Security, reflecting on our disciplined approach to our vendor selections."
"Separately, we are investing in the developing of our own cloud marketplace, which will provide a centralized platform for MSP and reseller partners to purchase, provision, and manage cloud subscriptions."
"Subsequent to quarter end, we expanded our European presence through the acquisition of NeoVAD, bolstering our position in France with a highly complementary team, reseller network, and vendor portfolio."
Analyst Q&A 4
NeoVAD margins and growth rates
Q (Keith Housum · Northcoast): Analyst asked whether NeoVAD's margin profile differs from Climb's and whether their historical growth matches Climb's. He also asked if NeoVAD management will stay and whether the quarter's results showed any one-time items or a change in reseller count.
A: Management said NeoVAD has higher margins than North America and aligns with other European acquisitions, in the low double-digit gross profit percentages. They said NeoVAD's growth has accelerated recently after signing vendor lines, the full NeoVAD team will stay on, and the quarter was broad-based with 19 of our top 20 brands growing. They track reseller counts and report about 7,000-7,500 unique resellers worldwide.
"So it is slightly higher than our existing European business, but it is in those low double-digit gross profit percentages." — Matthew Sullivan (CFO)
Organic growth, margins, and marketplace plans
Q (Vincent Colicchio · Barrington): Analyst asked if the stronger organic growth will continue and how much of the effective margin improvement is structural. He also asked whether ERP and marketplace investments will show up in margin in 2027 and requested NeoVAD revenue details.
A: Management said they expect a record year and they do not see the quarter as a one-time bump; many vendors are performing well. They said effective margin on a full fiscal year basis is in the low 40% range and they executed cost initiatives that lowered SG&A versus gross profit. Investments in ERP and a cloud marketplace should improve effective margin via efficiency, but they have not disclosed NeoVAD revenue contribution yet and will provide more detail later.
"So when you look at it on a full fiscal year basis, we are in that low 40% range." — Matthew Sullivan (CFO)
Marketplace purpose, timing, and impact
Q (Bill Dezellem · Tieton Capital): Analyst asked whether the marketplace/platform will let resellers self-serve (reducing Climb Elevate work) and why building the marketplace took time. He also asked if newer technology makes the eventual product better.
A: Management said the platform is purpose-built for how Climb goes to market and will serve core customers while extending Climb Elevate. They explained delays were because vendors were not ready to connect (APIs/EDI) and the timing is now as vendors prepare to integrate; architecture and vendor connectivity were the main focus before coding. They have hired experienced people (CIO Vishal and Ben Ryan) and expect the platform to automate back-office work so sales teams can focus on selling.
"It's purpose-built for how Climb goes to market." — Dale Foster (CEO)
Growth sources, Q4 seasonality, and acquisitions
Q (Howard Root · Fairhope Capital): Analyst asked how the gross billings increase breaks down between InterWorks, new vendors like Fortinet, and expansion of current lines. He also asked whether Q4 remains the strongest quarter and about M&A appetite going forward.
A: Management said the majority of the expansion came from existing vendor relationships; InterWorks performed on plan and Fortinet is on target. They said Q4 remains the strongest quarter and that about 80-some percent of the business is renewals. On M&A, they are targeting two to three companies per year, have four companies at the top of their list now, can pursue larger deals, and they did not take debt on the recent acquisition.
"The bulk of that, the majority of that expansion is from existing vendor relationships." — Matthew Sullivan (CFO)