Climb Global Solutions, Inc. (CLMB) July 2026 Capital Markets Day Transcript

Good morning, everyone. Thank you for joining us today, investors. Thanks for the Climb team to join us this morning with the opening bell as we rang it in the NASDAQ. So thanks for everybody coming up. Just for everybody, there's some nervous people in the back. Our bus didn't show up in New Jersey, so everybody had to figure their own way to get here. So everybody was able to make it. So thank you again. I'd like to thank the marketing team for everything they do. And our teams inside Climb know this very well. for events that they perform, any things that we do, touching our customers, our vendors, they get involved, and then events like this. So I appreciate that. NASDAQ has been great to us, allowing us to do the opening bell and then setting us up for Investor Day where we could get you in. Investors, thank you. Our bankers, thank you. And I know we have some PE firms in the room as well to just hear our story. A lot of you know the story, but you know the story from myself and Matt Sullivan, right? And now you get to get a bigger, broader part of the story from the rest of the exec team. So you're going to hear them for the first hour. So the first hour, I'll get through the safe harbor stuff. The first hour is going to be the team, and then we'll do lunch. The second hour is going to be about where we're going to take the company. I always like to say that if you want to know what's going to happen, take a look at the last three years. We're going to be a little bit more aggressive than we were three years ago on our acquisition play. And also, with our technology players, you'll meet Vishal, our CIO, as far as what we're going to do as far as efficiencies go. So with that, I'm going to kick off a couple slides. And this is, I started eight years ago here. I took over six years ago. This is what we did as a company. And it's some pretty simple things. Focus on being a sales-first company. That's the first thing. And part of the sales-first company is compensation plans. Change the compensation plan very quickly to the sales. So it actually lined with our customer base, and it went line in our go-to-market. Vendor recruiting is a priority. It is the lifeblood of a distributor. So you're going to hear a lot about distribution and how we go to market. So that is the lifeblood. So we went for vendors. We get questions a lot from investors as far as, you know, why did you only pick two when you interviewed 30 companies? And Charles will give you the details on that, but that is the lifeblood. I talked about changing compensation plans. brought a field sales force and this is something that our competitors have but they typically have in overlay fashion where they have different layers for different technology sections segments inside their business and climb you'll see that you know and you can meet some of the sellers that are here it's one throat to choke when you're at a bar at a reseller at a DMR they know who to go to a climb to get anything done use of our balance sheet we've done six acquisitions in six years. We plan to accelerate that. You'll see some targets on some of the presentations, and we've done them all with cash. We have no debt in the company. We're pretty attractive that way from a balance sheet. I think the argument back to us would be we're not good stewards of our capital. We probably should be putting some debt on the company to acquire faster if there's good targets. Headquartered in Eatontown, New Jersey, and offices throughout the world, and our latest one is South Africa, and you'll hear from Gerard and his background. So here's what we say. Here's what we say to our vendors, our customers, and our Climb team, and that is we sell speed. How fast and how many eyeballs can we get on your technology products into the market, and how fast can we transact it and how fast we collect? If you look into the numbers, our networking capital, we have a very strong negative networking capital because we are paying slower than we're collecting. Some of it has to do with our biggest customers that give us options to collect faster. So very important as we use our cash flow as far as we grow the company that way. With that, this is our exec team that you'll get to see in person today, and I'm going to start off with Charles Bass, and he'll talk about vendors.

Yeah, that was complimentary. Thank you, Dale. So, again, Charles Bass, I'm responsible for vendor alliances, And what I hope to do in the next 10 minutes is talk about three things. Dale asked me to talk to you about what we're looking for in vendor partners and how I do that. And then I'll spend some time talking about how we actually do that. And then we'll talk about how we onboard before I pass it over to Vishal. But if you'll indulge me, what I wanted to do first is maybe take two minutes and give you the strategy behind it. actually got some really interesting questions before we started. And I want to try to answer why we're, you know, I kind of give you some context maybe for how we do that. And I need to kind of tell you about where we live and how we kind of came about to the strategy we're on. So it's going to be important to know kind of where we live, especially from a North American standpoint. When this management team came in eight years ago, we were a sub $400 million dollar distributor undergrowing the market with no discernible strategy, right? And there were three players in North America that had consolidated and bought most of the players in the market. That was Ingram Micro, TD Cenex, and Arrow Electronics. And what those guys all had in common was some pretty impressive things. Number one, they were all over $30 billion in sales because they had consolidated and gobbled up a lot of the competition. Number two, and quite impressively, they were all transacting more than 30,000 VARs and MSPs. Number three, they're all transacting more than 1,000 brands, in some cases more than 4,500 brands. But here's the hook. They have a very similar strategy. And all those guys were having the vast majority of their gross margin, the vast majority of their revenue come from a very small minority of their brands. They were all focused on these giant leaders like Cisco, Microsoft, HP, Dell. And, look, it was a common theme for us to say to each other, we're not going to out Ingram Ingram today. We, as a management team, had to look at ourselves and say, okay, what's the play that we're going to have to go be more successful than this company had been? And, look, Ingram was selling more toner and printer cartridges than we were selling product, right? And so we decided we were going to go look at the market and figure out where Ingram was failing and go, you know, run a classic red ocean, blue ocean strategy where we're going to go where they aren't and we're going to go try to, you know, get to the market that was the most underserved. And so in North America, the way to do that was to go to the challenger or the emerging part of the market. Now, very different than Europe. There's probably between 50 and 70 distributors in Europe that run a limited line card, um you know service enabled play but in north american centric which we fairly we are fairly much today that was the play that was left to us so let me kind of describe what our strategy was using a a 30 year old slide from gartner probably the most used slide in in the world if you're not familiar gartner would use this slide to describe markets the x-axis for completeness of vision was usually a euphemism for do you solve a problem or problems and how well you do that the the y-axis was typically the ability to execute was usually meant are you selling a lot or a little and early on in our in our cycle we were focused on selling niche players and some visionaries and some smaller guys because that's what was left for us but as our brand began to grow as we began to have more success we climbed up the food chain and we began to focus squarely on challengers. So while all of our competitors are focused on Gartner upper right on the leadership quadrant, we're focused on the Gartner upper left. Everything we do all day every day is finding challengers who are taking bites out of leaders, and that's the play we're on. So when I look for a brand, I'm looking for a guy taking a bite out of Cisco, not Cisco. I'm looking for a guy taking a bite out of NetApp, not NetApp. That's what our play looks like. So when you look at what our model looks like, again, it's a similar model. There's a common model. This is a fairly normal play. We're the only guy in North America running this play. Not an uncommon play in EMEA. We went down, I should give you a little bit of history. We started with about a little bit under 500 brands in 2018. We've squeezed our line car down from about 465 brands to about 100 brands. 70 of our brands make up 95% of our sales. And each year, I add between 12 and 18 brands to the line card. And each year, I remove between 18 and 36 brands from the line card. So while we're refreshing our line card every year, we're also removing brands from the line card, adding them to our sister company called Climb elevate and trying to find the next challenger successful brand like avanti or dark trace or another successful brand the the success metrics that have been you know really tried and true for us this will come as a surprise to some of you it's i don't actually look for the next the best mousetrap we don't actually make decisions based on how cool technology is we're looking for brands that are successful in distribution. So what we found through success and failure is what really wins for us is companies that first are distribution first. Routes to market, channel mechanics, and execution are the things that make the most sense for us in terms of picking a brand. So I look for companies that are more than 50% distribution. Our success rate with companies that are less than 50% distribution is close to 0%. The second thing is I look for companies with really successful channel mechanics. And when I say channel mechanics, I typically mean a price model built for the channel, a margin model built for the channel, and basic partner programs built for the channel, like how they treat their partners and how they interact with their partners. And then third and probably most important is how they plan to execute with their partners in terms of cross-selling and up-selling with other brands on our line card. Those are the metrics that have proven to us to be the most successful with our brands. And then as we went down from 500 brands to 100 brands, we picked six different brand categories. We could have picked 60. We could have picked 16. We picked a total of six. Security has emerged as the most important, and they really haven't changed a great deal. A lot of people say, hey, when are you going to add AI as a brand or when are you going to change that? Candidly, AI has emerged as a piece of each one of these six categories, and so we probably aren't going to look to change our cross-sell brand categories over time. When I look at the sources, our sources have candidly changed quite a bit over the last several years. Early on, we had to aggressively go find brands to consider for Climb. And we had to cold call. We had to use the market to go find places. Today, far more brands come to us than we can even evaluate. I evaluate about 600 brands per year. Maybe 400 brands are net new evaluations each year. About 200 brands are re-evaluations or companies we've evaluated in the past that come back through the cycle again because they've changed their routes to market or their management team or something like that. And of those 600, again, we'll pick about 12 to 18 that we onboard for Climb. We also use existing relationships. A lot of times our joke is we'll bet on the jockeys, not the horses. If we're successful with a management team and they move to another company, we'll obviously look at those guys on the next time they come around. Pretty common for us. We've developed a pretty tried and true methodology. We look at financials. We look at corporate questions. We look at marketing questions. We look at operational questions. But what we found is that our questions that go through, again, channel mechanics, routes to market, and execution questions are far more correlated to success and failure than anything else in product. I would be happy to talk about some of those in detail, but we ask the exact same 92 questions each and every time we evaluate a company. It's proven to be pretty successful for us. final thing i'll talk about was the last thing they'll ask me to talk through is also a process driven play that what we do when we onboard a net new brand the goal for us is to use the exact same onboarding process once a month um it doesn't work like that we think that we're going to be able to do that each and every time and that we'll onboard one guy a month but sometimes we try to digest a gigantic player like a fortinet or a billion dollar player like an Avanti, and we'll have to basically skip a month to get our sales guys time to actually digest or understand a particular brand. But the concept is the same each and every time. A lot of folks think that the, so there's four points to what we do when we onboard. We do an operational onboarding, we do an educational onboarding called enablement onboarding, we do a marketing onboarding, and then we do field engagement. The operational stuff can be done in hours not days it's everything that is required to be able to transact it's loading skews it's understanding the linkages between ap ar getting our system ready and being able to quote and ship product it's pretty simple and vishal will talk about that on when he's up next but we do that in again hours not days it's fairly simple it's one of the easiest things we do it usually surprises people from an enablement standpoint we've actually got this down to a pretty you know we actually run the enablement play by our job descriptions. The most important folks for us, what every single vendor wants from me is access to our VARs and our MSPs. The guys that own the VARs and MSPs are our field sellers that you'll meet today. So we do one training for our field guys that's focused on value proposition and how they go access our VARs and MSPs. We do a separate training for our inside guy that's focused on the quote to ship process, how to get resources. That usually takes days, not weeks, to go do that part. The third piece is the marketing onboarding. Look, we have some brands that spend literally $100,000 a month with us and do quite a bit of things in marketing. There's a four-part marketing onboarding. We have some brands that spend no dollars in marketing that are very successful with us. So it depends on what companies want from us. We have an excellent marketing organization that has a bunch of different offerings, but I won't spend time on that. But I will say it's a huge advantage for us. All of our competitors use marketing as a profit center. And many brands come to us because they feel like Ingram, Tech Data, Cinex, and Arrow are picking their pockets and forcing them to buy some terrible marketing as part of their distribution experience. They love coming to us with options on marketing where we'll admittedly make some money on marketing, but it's not a forced play for them. And then finally, the last thing we do is field engagement. Candidly, operations, marketing, and enablement are all, candidly, table stakes for field engagements. We win or lose when we onboard a new brand by engaging with the brand that we're onboarding in front of a VAR. What everybody wants from me is to access, you know, Mike Tolerchio is our guy in Colorado. They want Mike Tolerchio to walk with their rep into Sanity Solutions and tell their value proposition to Sanity Solutions, reach into Sandy Solutions in user population and find net new opportunities. That's the value they want from us. That's what they can't do from Ingram Micro because Ingram Micro has 4,500 brands and we have 100, right? That's the value they see from us as Klein. And that's what we're going to basically try to do 12 times to 18 times a year. So that's what our play looks like. I know I went through that fairly quickly, but I'm going to go ahead and introduce Fashal. Hopefully, if some of you have questions on some of the plays that we run, how that looks, We'll get time during lunch to go through some of the details on that. So Vishal, let me have you come up.

Thanks, Charles. Good morning, everyone. Vishal Pushpa, CIO. Joint Climb just one year back. I mean, last year in June. So didn't spend a lot of time, but enough to understand what we are doing, what challenges we are facing, where Dale wants to take the company, and then what we can do from technology perspective to help enable him, his leadership team, his sales team to get there. From technology standpoint, our strategy is very simple. It's three-pronged, focus on efficiency, drive experience, secure the environment. We spend almost three years, I think probably 2022 to 2025 or late 2024, doing a large transformation with ERP. We had a lot of disjointed system, unclean data going through that exercise what we did that we consolidated all the system of records together and ensured that we have one source of truth of everything and that allowed us to look at the data differently and that's what led into our next level of transformation is okay now we have data how can we bring AI and other automation framework to drive more efficiency so I'm going to talk a little bit more about what we are doing. But the intent there is overall from lead to cash perspective, how can we move faster? Charles said that our coding is easy. Our goal is how to make it further, you know, or easier than what it is right now. The second part of the focus area is driving experience. We do a lot of things. We have a lot of, you know, we are very focused with our vendor but one complaint or one challenge with our resellers and customers are they do not have access of information when they want. Our end-to-end operations runs on email phone calls which is great. I mean we are a relationship driven company but then when they need something if they want information, they want opportunity, we want to give them on their end. So we'll talk a little bit more about what we are trying to do and the last one is of course you know securing the environment. Everyone is nervous right now with AI and what's happening. Then we are trying to, you know, onboard larger vendors and larger customers. They are concerned, hey, what is your footprint? How are you going to ensure that our data is secure? You know, you are not doing uncompliant stuff. So some of the focus there. When talking about AI or, you know, what I call AI-enabled process efficiency, first, like, explain, we put system of record, we did ERP transformation great now the question was what I can do with that system and the data what we have from all the way lead to cash and how can we ensure that we can do probably double the business what we are doing now with the same level of staff and that's what our focus is when it comes to the back-end operation fulfillment and cash we are being very intentional in figuring out where we have mundane tasks putting agents you know allowing people to use AI tools within the boundary of compliance, definitely discouraging any kind of intellectual tourism, you know, doing that. But on the front end, and that's where our focus area is right now, on the front end side, we are now transforming our overall CRM and marketing footprint. Charles just said that marketing is our profit center. Our vendors look for that. We are trying to bring, excuse me, sorry about that. We're trying to bring, you know, better systems, better infrastructure for our entire marketing team so that they can do their job efficiently, but more importantly, they can connect their data from go-to-market, from the lead to the opportunity, all the way to the coating. The other piece is coating. That is our biggest time consumption. Even if it is easy, that's where in the operation we spend most amount of time. Just to give you a perspective, last year we have produced probably almost 1.1 million coat, and 95% of them was created manually through an email manually entering the data into the system. A lot of time consumed. The human element still have to be there. That's what we do. We build relationship. But we can save all those time where we are spending like entering the data into the system, figuring out errors and everything. We are right now in process of building our own in-house AI-powered coding system, which will be going live somewhere in the month of October or November, which will allow our entire insight team to get more efficient, potentially by 30 to 40%. That's our prediction right now. So we are putting a lot of effort there. The overall goal is reduce that manual touch point and ultimately increase the deal velocity. The second piece which I want to touch is the experience sector, right? We, as we speak, we started working on that. We are in the process of building our own customer experience platform which should be up and running somewhere probably by q1 next year the intent is twofold one as we transact end-to-end we want to give our customer every access of data they can have you know majority of our business is software and if you look at that we transact licenses you know but we cannot tell our customer what are your licenses it's it's actually not even in a format they can right now renewal is another part of the business where you know we struggle right now when it's a struggle like we do better than all of our competitor but internally when we look at our own efficiency it's a long process from our customer figuring out what has to get renewed then our internal team figuring out how it has to get done our intent here is that provider i want to say this probably amazon like experience where our reseller can log in and see everything and then put a request of the code, put a call out for an existing order, call a renewal and everything. But on top of that, also act as a marketplace for our MSP providers and everyone else. So our focus right now, and like I said, we already started working on this and potentially by Q1 of 2027, this should be up and running for at least some targeted vendor. Last one, safeguarding the ecosystem. I think Dale said, right, we were 400 million or so in 2020. Now we are transacting around 2 billion or so. We are onboarding larger resellers. We are onboarding larger vendors, and they all are asking the same question. How should we trust you? How do we know that our data is safe? Now, we can always tell, hey, we have great security protocols. We have all kinds of, you know, firewalls and everything. That alone is not enough. So what we are trying to do is that we are trying to get into some of the difficult certification on industry standard certification. We are in process of getting certified on SOC 2. We are also going after NIST 800-171, which will also allow us to sell or distribute to federal market, state, local education, and all. We are focusing on ISO 27001. We are already certified in AMIA. We are now trying to get into North America as well as we are getting to CMMC because a lot of our resellers are already so federal and government And we want to ensure that they are not in trouble because as a distributor we are not certified So we are going after all these things to ensure that our risk is reduced But also open up the market access, right, you know from resellers perspective as well as vendor perspective So just conclude our focus again focus on efficiency, you know ensure our you know margin footprint looks better focus on experience to open up new market space new channels new customer base and also provide our msp's and vendors a level of confidence that once we go

to climb our business gonna grow and then gain the trust of the industry so thank you everyone gerard and carlos hi good morning everybody uh great to be here my name is gerard brophy i'm actually based in London, and my responsibilities are really to look after the international business, really from a regional growth, vendor growth, different brands, portfolios in different regions, and really just the strategy throughout AMIA. Also assist Dale with targeting the right type of acquisition targets, really, in the different regions across AMIA.

Excellent. And good afternoon, everybody. Carlos Rodriguez, president here for North America. I've been with Climb now just almost six years from their first acquisition of a North American distributor called Interwork Technologies, where I managed our North American go-to-market. Came over to Climb to really help build out our sales team here in North America, both on the Canadian side, as well as the U.S. side, and get deeper with our vendor partners.

I just wanted to start really on the model of distribution, how it's been evolving over the last three years and where we think and we feel, and certainly investing our focus into where the future of distribution is going to. I'm pleased to say it's all very positive in all the trends that we're doing. If you look on the left-hand side, that was more the traditional model on go-to market, just the usual vendor distributor channel and all the way through down to the end customer. But on the right-hand side, this is really how we believe the future is starting to look. And it's really powered by the likes of data, services, digital platforms in the market. And it's really putting us as a distributor right at the epicenter, if you like, of the ecosystem. And that's been accelerated by things like hyperscalers, you know, different marketplaces, consultants, AI agencies, types of things coming in. We're investing our time and energy into building out the MSPs, larger resellers, et cetera. One thing that's really interesting is the end customer. If you look on the right-hand side, the end customer is always driven by the resellers. I think one of the biggest frustrations a lot of the vendors have at the moment is they can't get the access to the end customers as quickly as they can. And I think one of the reasons as a channel partners, there's a lot of selling existing to existing customers, so existing technology to existing customers. So for us, it really gives us an opportunity of helping the vendors. A lot of the vendors are actually investing a lot of MDF money into distribution to try and drive end-user demand. And one of the reasons they're doing that is really from a solution sell. So we can put a number of our vendors together into a solution and really fix the end users' problems. So rather than trying to sell point product at this stage, selling solutions is a much easier and beneficial way of getting into the resellers and selling that. So just next slide here. The good news is it's putting us in a fantastic place. These numbers here up on stage really are, I mean, up on the board, is the Q1 revenue for the top six publicly quoted distributors. What you can see is 22% year-on-year growth from revenue, 60% up on profit, and most importantly, from a share price perspective, it's gone up 20%. Not too dissimilar to our numbers and how we're growing through the year. So this is a very exciting figure for us, number and a future growth. This slide actually comes from Omdia, so I haven't just pulled it off the internet. It actually comes from Omdia. But there's a number of specific trends that are actually driving this behavior. These trends are the likes of digital and platform acceleration. We heard from Charles earlier around consolidation of vendors, rationalization of vendors. You know, our competition, oh, looking at, you know, we mentioned 4,000. There's often, in a mere, they're probably coming out, they've got 12, 13, 14,000 vendors on their books. Why does a vendor want to be part of that? We rationalize down to seven or consolidate down to 70 different brands, making up 95% of our revenues. Very exciting. One thing to actually do take note of, I think a lot of these numbers may be slightly skewed because of the shortage of hardware. So when you look at the bigger competitors with us, it doesn't really affect us as much because we're pretty much a software distributor. But if you look at the big guys shifting the likes of laptops, a lot of infrastructure piece, that hardware shortage, there's a lot of, not pre-buying, but forward buying, I guess, of this hardware so their customers aren't stuck at the end of the year with a shortage of hardware. That may well be skewing these numbers, I think, but from our perspective, it's very exciting because we primarily are a software driver of distribution of the vendors. Oh, move on. I'll cover that one.

Perfect. So I'll just jump into this next one, and this is really about what the climb advantage is, right? And there's one thing I think everybody here needs to understand, that we win when our partners win, both our resellers and our vendor partners in the channel. And we've built our team specifically to help our partners win faster. Dale talked about speed, and what does that mean? So one, at the forefront, we have our partner-first mindset, really focused in on driving partner success. And what that means is that we align both with our resellers go-to-market as well as our vendors go-to-market and make sure that we're going to market together as one unit, where a lot of times different distributors and so forth we'll work with our vendor partners in different models instead of together jointly and that's what we bring as well as building long-term relationships. The second one is around the high growth vendors. Charles mentioned this earlier we strategically looked at our main line card narrowed it down to a hundred with 70 focus vendors and that's so that we can get deeper with those vendors with our teams have the expertise to be able to support our resellers the first time when we're engaged with them when we're out in the market with them when we're in the field and as they're looking for new solutions, they can count on our teams to really be that trusted source for them so that they can come to distribution versus having to go directly to vendors individually. The third one is really around our engaged sales team. And Charles mentioned this as well earlier. Our field teams have one of the best relationships out there in the regions with our reseller partners and our vendor partners. And the reason for that is they're out in the field. They're on site at our resellers weekly. They're partnered with them. They're aligned with their go-to-market. They understand the barriers that they're up against trying to sell to their end customers, sales constraints with their teams, and really help fill in those gaps with those partners, as well as bringing our vendor partners to our resellers on site to really have that go-to-market planning. And we find that's what's really helping us drive and grow business and these long-term relationships. The fourth one is really around new business initiatives. You heard this a little bit earlier, really using business intelligence to help grow our business. And what we've done and what we continue to do is look at our database, understand who our end customer base is, understand our vendors and their target vertical markets, understand our reseller strength, use that data to really align our vendors and resellers in the market to grow the business and move faster out there. The fifth one here is really about fast and reliable support. You know this is the day-to-day, this is the quote to order, this is how we support our partners and what we pride ourselves as industry-leading SLAs and supports. We support our partners within four-hour SLAs from a response time, education time, really getting back to them so that they know where they stand and where their business is and that's How we continue to win is bringing that speed to our partners. And then lastly, the technology enablement. You heard Vishal talk about that earlier. Everything right now is talking about platforms. Our top partners are looking for integrations, APIs, EDI, renewal integration, quote automation. All of that integrations is what we're building, and we're going to market fast with our partners. Now, the next step, when you take a look at our field team and how we've built our field team and our sales team in general, it's purpose-built. It's really around relationships. We know relationships is what wins the business and builds the business. And frankly, I think relationships is the new competitive edge out there with technology going out there. So when you take a look at how we built our relationships in North America, we have 19 field sellers, and that's across 13 regions. We have two regional VPs that we just promoted last week to help drive and grow and mentor our territory teams. Now, what's special about these teams is, as I mentioned earlier, they're out in the field. They're engaged with the resellers. They're having real conversations. They're part of their go-to-markets. They're involved with our vendor teams. They're out in the field. They're bringing our vendor teams into our reseller partners, talking about go-to-markets. And I'll tell you, what we hear so much is, hey, we haven't had a DISTY rep in our account to visit us in forever, right? Even with our vendor partners, our latest relationship, when you take a look at Fortinet and our partnership with them, we've now gone to all their local offices where other distributors aren't present, and they are now hosting their QBRs, their business planning in our offices over the next three weeks. We have five of them. So we're getting deeper and closer with teams aligning to their go-to markets and really being strong, and that's the value that our field team brings in. The next step when you take a look at it are vendor managers. So our vendor managers are essentially our funded vendor heads at our company. They're funded by our top vendors. If you take a look, we have 26 of our strategic vendors that fund that team. That team's roughly 90% funded. These guys are the specialists. They know the vendor solutions inside and out. Again, it's making Climb as the distributor the first point of contact for our resellers versus our partners having to go directly to the vendors. And that's an important part of earning their trust and building their business. The second part about this team, and it's so large, is that we're completely aligned with our vendors. Our vendors are investing in us. They want us to be successful. They want to grow their business with us. We're aligned on their go-to-markets. We take a look at our top reseller partners and gain the mindshare of our vendors to focus on our partners, go-to-market, MDF, co-op, dollar funds, really figuring out how to drive new business through our group versus our competitors.

Yeah, and I think just for me, I think it's important that we give our vendors parity and our resellers parity across the globe. So, you know, whether Charles and his team sign a vendor here in the U.S. or we sign one in Europe and we obviously send them across the different continents, it's important that we've got the same model from our go-to market and the sales perspective. And I think ever since, you know, since the acquisitions have occurred, we've definitely modeled our sales teams to really mirror what they're doing in the U.S. And it helps our resellers too. So, you know, we've got some global resellers like the CDW, Insight, SHR, these types of resellers. It's important that they can have point of context right across the globe. And when a vendor wants to go to market and really push it, you know, from a marketing perspective, we can actually give them a one-stop shop from a global perspective. And I know our competition can't do that because of the different P&Ls they run through Europe. Whereas we'd like to think we're nimble enough that we can offer that service. Yeah, that's a great point.

And then when you take a look at our two teams and how the teams work together, it's really how do we bring our field sellers, our vendor managers, into one cohesive team to accelerate the business and the channel. So there's four key areas that we look at. One is around demand creation, right? We look at our field sellers. They're really on-site, working with our reseller partners, working with their sales team, identifying end-user opportunities, doing account mapping, and really driving that pipeline at that level. Then we back that up with our vendor team. They really bring in, they activate the vendor funding, they collaborate with our vendor sales reps, bring them into opportunities into our accounts, drive campaigns, and launch a number of initiatives to keep the mind share with our partners, and really just accelerate and build pipeline faster for our company. right the second one is around account growth right and we really work with our field reps and they work with our resellers they do account planning figure out where the gaps are in their portfolio where they want to go to market how they're going to market different verticals that may be ideal for them to go after that they're strong in or that they lack in that we can help bring together they team then up with our vendor managers and align our reseller strategies with our vendor strategies that are going after the same markets and really building the business in the same areas as our partners and we go to market together with our reseller and our vendors and that really just brings a stronger performance from our resellers. We're seeing double digit growth when we truly align both go to markets. The third one is really around deal execution. This is where our field teams are actively engaged with our resellers. They're driving deals forward they understand where we are they're negotiating credit terms the deal size moving forward making sure that everything is aligned they team up with our vendor managers that then track that pipeline but track it alongside of our vendor sales reps as well so it's in their forecast it's at their end of quarter end of month targeting we're making sure we're an integral part and that makes sure that makes sure that no deals slip to a competitor of ours, and that we know exactly what's coming in and closing, and that gives us higher win rates across the board when we do that with our vendor partners. And then lastly, enablement. This is where our field reps are in the offices, working with our resellers, understanding their vendor portfolio, understanding their gaps, understanding the opportunity out there in the industry on our vendor portfolio, our emerging partners, our strong top partners that will really fill that gap for of the resellers, they will then bring in our vendor managers that will come in, enable, do demos, do pre-sale support, post-sale support, be that line item for that reseller to engage with and move their business further along and that really helps us expand accounts further. Now the next part is really around regional expansion and if we take a look at where our focus is in North America, we've doubled down in a couple areas. One, bringing in our regional VPs, right? We now have Mike Tolercio for the West, and then we have Jessica Lindoff for the East. They're really going to be managing our field teams, getting closer, getting into our top reseller accounts, building those relationships, identifying the opportunities, and really driving forward with that. We've expanded into MSP division. We had our MSP teams managing over 1,500 of our MSPs throughout our territories and different regions. we've now built a dedicated team to go after the MSP business and continue to drive that growth and also bring a different level of service tied to with our platform as we start launching our marketplace and moving forward. We also invested in our territories. I think one thing we consistently do is evaluate our territories that are out there, look for the highest opportunity for growth and where we can expand in different regions that have a high potential of opportunity for our teams. We've split out California into NorCal and to SoCal to really increase the business there. We're starting to see an uptake in double-digit growth there with our partners, allowing us to get deeper with stronger reseller partners in those regions. And then lastly, this is where we're seeing a ton of success come from, is really doubling down on those enterprise partners in the North American region. Really, we take a look at WWT, also CDW. They're the top 10 solution providers that are here in North America. They have the highest opportunity within customers. With WWT, we've built a strategic team around that. We brought in Kip Thompson, which is now managing that line, working with our inside teams. We're starting to see our sales double, triple as we move forward and tremendous growth. And the fact that we put that dedicated body around those lines allows us and allows our vendors to focus more around with us because our competition doesn't have that. CDW, this is our largest partner, one of the largest service providers in North America, led by probably one of the strongest field reps I've seen, Nathan Wysocki. He's been on that account for more than 10 plus years, really knows how to build and build relationships. We've now built out that team to a team of four to really go after and build out the different regions, the different verticals, and really get deeper within those accounts. And as Charles mentioned earlier, our vendors are coming to us wanting to get into these large national accounts, CDW, SHI, Insight, and our relationships are getting them in the door to move faster.

Yeah, I'll just move it across to Amir. And I think it's important to take a step back. Oh, sorry. I think it's important to take a step back and have a look at the strategy of the business. So when Dale did come in, the strategy was, yes, we talked about consolidation of vendors. But, you know, from an M&A perspective, North America primarily quite consolidated. A lot of the big disties have been hoovered up. So EMEA was the, you know, the market to really go after. So, you know, originally the lifeboat business really had a business in Amsterdam, small internal, three or four people. and they just used to really procure some software products, the likes of Intel, et cetera, to a number of different countries. Since the strategy changed and the acquisition was key to growing the business, we've acquired three businesses in the UK and Ireland, you can see. So we've got three offices in the UK and Ireland. This is a bit of a combination, this slide, of acquisitions as well as organic growth. So a number of the regions we've actually invested ahead of the curve with an idea we're going to scale out the business from an organic perspective while still keeping an eye on the targets for those regions. We've still got the Amsterdam business. We've actually grown that out quite significantly and now trades with all of Benelux and Nordics. We have a team in Paris. We've got an office in Paris as well. That market is one of the biggest opportunities, I think, for a lot of American vendors as well as Israeli vendors. They tend to try and stay away from that market because the French are quite pernickety in the way they work, so you need to have French people. You also can't hire teams and teams of people in France. It's very difficult to get rid of them if they're the wrong people. But we've also opened up in Germany. We've got an office in Munich. That's very exciting for us, and obviously the latest acquisition in Athens. Exciting for me. You can probably hear I've got a bit of a South African accent. For me, it's exciting. We've actually, we've organically grown. We set up a business two months ago in South Africa. We've got a team of eight people out there. One of our key vendors in Sophos, our largest vendor from a revenue perspective, they've decided to really work with us in the region. And it's not just South Africa. All the sub-Saharan South Africa is key to it. We've hired some really strategic people in that region who have already worked distribution there. So we're looking for big things coming out of that market. Very exciting market. I'm sure you're all aware, but the amount of cash that's being invested into East and West Africa, certainly from a data center perspective, is through the roof. A lot of the governments are funding a lot of the IT startups and data centers. So for us being in there and giving our vendors the opportunity to scale is very exciting indeed. We continue to look for, you know, the next target. Dale is obviously talking to a number of targets at the moment, and that's an exciting part of our growth. But, you know, from a regional perspective, key regions, obviously, are things like the Middle East for us. We definitely need to focus in on the Middle East, but there's a number of exciting conversations going on right across the board. Excellent.

And so when you take a look at everything we've been talking about is really around building relationships, getting deeper with our resellers, aligning with our vendors. And is that really driving the growth that we want to see here in North America? And when we take a look at our first half of the year, what does that mean for us? What have we accomplished? So really, you take a look at where did we win on RFPs, relationships, vendor partnerships. Alone in the first half, we did $350 million in large-scale RFP wins and also about vendor transitions and engagements in the channels. Those were primarily RFP wins and new relationships with CDW, SHI, WWT, and Optiv. And I think one of our larger wins there was really around the Optiv account and taking that account to the next level. And we're talking about bringing an account from a $20 million account to a $120-plus million account with us over this next year. And those are the large enterprise wins that we're really getting underneath and bringing our relationships to develop. We have another 10, 15 accounts that we're building those same relationships and going to market and bidding on those RFPs and so forth. The second part is around the strategic vendor momentum. These are our staple vendors in the growth. And if I take a look at these five vendors alone, in the first half of the year, we grew almost 72 million with these vendors year over year. And that, again, comes from alignment. Our vendor management team collaborating with it. Our field team being out there in the field, bringing their vendor reps into new accounts, new resellers and moving forward. And that's the momentum that we're building here and taking forward into the second half.

Yeah, and just from an AMIA perspective, I'll just put up three accounts there from a success perspective. The first one, Softcat. Softcat is the largest reseller in the United Kingdom. We have, over the last three to four years, have been successful in doing well over $100 million with them on an annual basis based around one of our vendors in Vast. That's obviously grown significantly through other vendors, that relationship, so things are going well there. I think we spoke a little earlier around end-user demand. This is a great example of where distribution can get involved and open up some doors. So one of the large accounts there was actually opened up by us, by CLIM, which enables us to maintain higher margins on the larger deals and stay in the fight, if you like. So, again, pushing that end-user demand is pushing up our margin. SEC, that's a French win for us. SEC is a massive account in France. There's a public platform, I guess you could say, that's called UGAP, and all public spend goes through UGAP in France. So that's a $3 billion opportunity that all runs through SEC. We've managed to sign up with them and get the contract finalized, and we're starting to trade quite a lot of our vendors through that. So that's very exciting. First distribution, I had to put that up because that's the biggest reseller. First distribution is the name of the company, but they have a reseller called First Technology. They're the largest reseller in South Africa, and they've, again, signed up to give us, effectively it'll be a third of our income over the next 12 to 18 months, which is very exciting. Perfect. Excellent. And then one more slide. Myself and Carlos often go over seven minutes, so bear with us. That's great. I think I always put the word relevance to what we do. I believe us as an organization tries to stay ahead of everybody else and remain relevant for our resellers. AI, you know, 18 months ago we sat down, we recognized there was a massive opportunity for us within AI. We looked at building out our own solutions. We realized we're not an AI company. You've obviously heard from Vishal earlier about what we're doing from an AI perspective on tooling. But we looked at ourselves and said, what are we? What do we actually do? We're an enabler. We're a trainer of resellers effectively. So what we put together was we put together, we named it the Skyward Project. And what it is, it's effectively six steps to AI readiness for all our resellers. Because the reality is, even though AI is talked about everywhere, from an enterprise level, a lot of people don't know what they want to do with their data. So ultimately, it's achieving that outcome. People are on different levels and different steps. So we created our first step, which is effectively our AI academy. and that's training people from entry level to people who are geniuses in AI and sitting down with these enterprise and SMB companies and saying, like, what are you trying to achieve? It's a journey. We're actually on a journey. We need to get somewhere. It's not a quick fix product that you're going to stick in and it's going to work. So we want to take them on that journey. So that's number one. We actually go in vendor neutral when we talk about the Skyward project and ironically what happens there, we get a lot of end user interest as well. So end users and resellers come to a lot of our events and webinars. once we have them in there, then we open up the technology because we only really make money when we sell technology. So this is not a money earner. It's been irrelevant and given access to whoever we want. So really, secondly, we open up and we give them a true ISO certification that enables them to go to their resellers and discuss what their outcomes and bring them in. We also then, from a third perspective, we all know every AI opportunity is a new use case. We partner with a third party called Unframe. They have a number of different use cases, hundreds and hundreds of different use cases which are relevant to every individual case that we see. So we take them on that journey. Also got user group. We set up a user group. Remember, cloud came to market and things like HCL and these types of things. We had to set up user groups for people to kind of push ideas against each other. We're not selling anything. We're just having these conversations with peers at a certain level, we start to generate that interest. Risk and compliance, we spoke about it again, Vishal. Certainly in Europe at the moment, governance compliance is key to everything. You've got Cyber Resilience Act coming out on the 1st of September. All our vendors, American vendors and Israeli members, have to be compliant. If they're not, even us as a distributor could face fines. So it's up to us to educate and make sure they're compliant. It's a key part of that. And then, obviously, our marketing team, I think we have one of the best marketing teams around, and we can help our resellers go to market from an AI perspective. So, again, slightly over our seven minutes. Sorry, I apologize for that. We actually cut out five slides. I'm going to introduce Brian and Tim.

So, good morning, everybody. My name is Tim Popovich. I am responsible for sales and operations here in North America. I've been with Climb for the better part of 23 years.

We are still good morning. I just have to check after the guys run over. So good morning, everybody. Brian Davis, I'm VP of Sales for Climb in our UK and Irish region. I've been with the business since an acquisition in October of 23 and have 27 years in the industry.

Excellent. So Brian and I are here to talk to you guys about inside sales and operations. And as you can see from behind me, there are a lot of different groups of inside sales, right? So we have our national accounts that Carlos just spoke about in CDW, SHI, Insight, and Worldwide Technologies. Everybody else kind of falls into this little VAR segment, and there's about 7,000 VARs that we do work with in territory. We have our MSP team that we also mentioned. The two that I really want to point out are our Elevate team and our Basecamp. And, you know, we mentioned that we have about 100 brands on our main line card. When we moved our line card from 400-plus or less than 500 vendors down to 100, we didn't just fire those vendors. They were revenue-generating vendors. So what we did is we had calved off Elevate, which is run by Michael Bernstein here, and we transact in a fulfillment fashion. So these fulfillment vendors do not get access to our field sellers. They don't get the ability to participate in our marketing and events. And we don't maintain their price books, right? They are truly a one-off vendor that we provide fulfillment for. Many of these companies, and especially the larger guys, they call it long-tail management. They also want to only focus on the lines that bring them money. But if they're participating in an RFP for one of their big end users, whether it be Exxon or Citgo or somebody else, Bank of America, they have to procure everything. They just can't procure some things. So they look to climb to procure all of those products. And that's what our Elevate group is for. The other group is Basecamp, and that is mostly our order entry group. We utilize EDI as a technology, and we have over 20 reseller partners that are on EDI. All of those orders are coming in based on quotes that the inside sales teams have created, and our Basecamp group are the ones that process those orders and send them off to our vendors. We put a few notes down here. Fast response equals faster results. We are by far the quickest company in this industry to provide a quote back to any customer. You'll see on a future slide that we have a four-hour SLA. However, we get most of our things done within two hours. As Michelle automates our system, that's probably going to become a shorter time frame. Our reps have been here for a long period of time. I've been here for almost 23 years, and I think I might be the fourth longest or have the fourth longest longevity in our company, in this room, right? So we have people that have developed relationships with our partners, and those people have stayed at those resellers where we have really furthered the relationship because we've just known each other for that long, right? We say that quoting's not hard, but it can be. We have 100 different vendors, and they all have different rules of engagement. They have standard pricing. They have deal registration pricing. They have special pricing. Some people require, you know, information, periods of performance. There is a lot of data that goes into a quote. All that data will be shrunk and make us faster as we automate through Vishal. All of our inside sales reps are sales certified, and they're experienced within the groups that they exist. So Carlos mentioned we have 19 field sellers. Each of those field sellers are backed by four to five, and in some cases six or seven, inside sales reps that support that speed. But our inside sales org is where the speed comes from, and that's part of the other reason why we win outside of relationships.

Thanks, Tim. So, what we're looking at here is our EMEA inside sales footprint across seven locally based teams in seven markets. We have a team in the UK, a team in Dublin, Ireland, a Benelux team covering the Netherlands, Belgium, and Luxembourg, a France-based team, a DAC team covering Germany, Switzerland, and Austria, but also into Poland and up into the Baltics, a Greece team covering that southern Mediterranean region, and our most recent office, our South Africa team in Johannesburg, covering, as Gerard mentioned, all of sub-Saharan Africa. What's important to note is these teams are local to their customers. They're local to our vendor teams that are in those regions, and they understand the local buying cultures, which are very different across each country in this region. And by being local, we're able to drive speed. What a customer in this region wants is they want the distributor to come back quickly, accurately and knowledgeably with the information they need to win business from their customer. And Climb are the best distributor to deliver this. And that's why, consistently, we're winning over reseller partners across the region. Like, we've all heard that adage that people buy from people. Let me tell you, French people really do only buy from French people. But it's actually more than that. Our value to the market is we understand how to sell to the German mid-market. We understand if a vendor wants to access the public sector in France and how to get them into that market. If one of our vendors wants to go sell to the NHS in the United Kingdom, we know which partners hold the right accreditations and are on the right framework agreements to give them access to those accounts. So using our teams and the knowledge within our teams accelerates our vendor partners' route to market locally. While our teams are local, our operations sits in a shared services engine centralized within our UK and Irish business. That encompasses our sales operations, our procurement and our vendor operations. That provides a consistency of experience to all of our vendors as we sell across the region. It also provides consistency for any partners we're working with in our North American business that want to access or service customers in the EMEA region. It's the same experience across EMEA as they get in our North American business. when we moved into south africa we didn't scale out a new sales support team we didn't scale out a new finance team a new procurement team in the region we just extended the capability what we already had the the cost for us or the marginal cost for us to enter a new region in is a fraction of the cost of what it costs us to enter our first region in emea and that operating efficiency, the revenue is generated from that flow straight to the bottom line. Within our shared services engine, we also have a lot of experience. People within the business, as Tim mentioned, tenure. Everybody has a very long tenure in their business, so they understand not only the buying culture, as I mentioned earlier, but the challenges with actually doing business in specific regions. That is exacerbated not too long ago by Brexit in the UK, where all of a sudden it became a lot more difficult for some of our vendor partners to manage the shipment of hardware into the UK or into the EMEA region. By having logistics facilities in both Dublin within the EU and in the UK, we can facilitate both markets seamlessly without any disruption to our vendors or our customers.

I mean, I'll just say it's easier to buy than it is to build, especially, you know, internationally. And our speed to market has been minimalized so greatly being on a unified global system. Okay, so these are just some sats. I really want to talk about the scalable commercial engine. But, you know, as you can see, we've processed almost 271,000 orders across the past trailing 12 months. And as Vishal noted, there's about five quotes for every order that we place. There's a lot of options that these customers are considering. We've worked with more than or almost 800 different vendors, which means Michael Bernstein's Elevate Group is transacting with almost 700 of those. But the commercial engine and the scalability, you know, it's easy to add a new vendor and then plug them into a machine that's already running. We can sell things that are more than just software if we really wanted to, but we'll probably just stick to our specialization. We can plug them into a partner ecosystem that we've already shown and that we've already proved works. And as long as Charles is working through, you know, his vendor profile and signing those guys that have more than 50% of a distribution viewpoint, those guys are going to plug right in and be equally as successful, right? Our inside sales growth engine is simple. We add people as we do more business, right? And there's always a revenue threshold that tells us, hey, you know, there's X amount of quotes, there's X amount of orders, there's X amount of revenue coming in. And this is the time that we go and we add. Take the bottom two.

Yeah, so very similar from the EMEA perspective. You know, the numbers you're seeing here on orders processed, like these aren't projections. This is real throughput through our business, through our teams. And the teams that are there at the moment already in the territory can scale from almost 50,000 orders processed to the next 100,000 very efficiently. So we're not growing by just getting bigger, we're truly scaling our business in EMEA across the region. We transacted with almost 360 different vendor partners, very similar to the North American story. A focus within a small number of large vendors that we work with in each region. And that can be a very different picture when you move around the different regions within Europe. We're working with different vendors in some countries, a wider number of vendors in others. So that's allowing us to develop bespoke, localised go-to-market in each of the regions we're operating across the EMEA region, which is really important. From our reseller and MSP base, almost 3,500 customers we sell to. The hardest part is always acquiring a new customer. With the number of vendors we have, we're all about now monetizing repeatedly the customer base we have, then compounding that and driving that compounded growth in the region. Again, speed gives you share. So having a fast SLA, looking after the sellers within your customer base with fast and accurate response will bring business to you repeatedly. And often what happens is, you know, the reps in those reselling partners just won't even bother going to our competitors because they know the service they get from Climb is far superior. And effectively, what we've built is this scalable, capital-efficient engine across all of our business. One where we can take one of the new vendors that Charles talked about earlier, take that vendor into our existing partner ecosystem, leveraging the field and vendor teams that Carlos and Gerard talked about earlier as well. putting our inside sales engine behind that everybody putting their shoulder to the wheel and driving incremental growth for climb but also for our customers and our vendor partners okay so inside sales and operations is is really blocking and tackling right it's it's the necessity

behind how we go and we sell so our our entire thing is speed and accuracy and even for as fast as we are people would like us to be faster right the amount of email that we have incoming is insane the partner portal the reseller portal that vashal talked about it's a self-service portal it's going to help you know minimize the amount of things that we have coming in we also like to utilize our own self-service portals when vendors offer them we can go we can grab quotations quicker we can get that out to our reseller partners quicker right which leads to a quicker sale our automation and I'll tell you down here we utilize XML EDI API and soon marketplace to get to our customers right this receiving a quote from a vendor in a PDF copying it and paste it into your own quote tool is it's long it takes a long period of time if you have a 60 or 70 line item quote it's going to take you an hour to do a quote right with XML we can take that file we can drag it and drop it into our quote tool and every line item automatically appears for us to do right then our inside sales reps job changes from creating the quote to reviewing the quote for accuracy and sending it out it allows us to upsell and cross sell other products that we can now add to the quote and that's really a key for us our bid wins Carlos had mentioned that we had already won $350 million worth of business across the CDW, Optiv, and a couple other bids. We're probably the sixth biggest distributor in North America. There's a reason why people choose to work with us, right? It's the relationships that we own. It's the speed in which we work on the inside, the accuracy of the quotes that we provide, and how quickly we can help them close a sale. we win because of our relationships and because of our speed we don't have the biggest rebates we're not the biggest distributor out there right they probably have other technologies they just don't do it better vendor exclusivity yeah i thought i'd give you a couple of examples of what's been happening in our region with a vendor exclusivity so um one of our largest partners, Sophos and our North American business, made a decision this year in our Irish market

to terminate the relationship that they had with two existing distributors in that region and replace them with Climb as a sole exclusive distributor in that region. And that was because, first of all, they've had an amazing experience working with Climb in a North American business. Secondly, we have the same systems and platform globally, so they trusted and knew that they would get the same operational experience with us. And thirdly, our go-to-market strategy in the MIA region delivered what they needed from a growth point of view in new customer acquisition and new partner acquisition in that territory, which had kind of slowed with their existing model. And this is something that we're seeing recurring over and over again now. And we're part of multiple conversations every month with vendors who are looking to talk to us. Either they're dissatisfied with their current incumbent distributor in the region or one of the countries within the region. Or they're looking to enter a market and enter a market for the first time. And given the experience they've had with us in other markets, they choose us from the beginning to have an exclusive relationship. That allows us to continue to invest in or to expand our investment initially in those technologies. So we have more people from the get-go on the ground to support that vendor in region.

Yeah, exclusivity is hard to come by. There's very few vendors out there, whether they're selling direct or selling, you know, through a distribution model. Nobody wants to put all their eggs in one basket, right? And then if you think about that in North America versus internationally, they really don't want to do that because generally different distributors exist internationally. But we've managed to secure a bunch, and I think it's all of the things that Brian talked about, right? You look at Ingram and TD Cynics and Arrow. We call those guys broad line because they offer so much. we're more specialty right and every vendor wants to have a broad line and a specialty distributor but after working through specialty they just kind of always want specialty because it delivers that much more so we're able to accomplish that both in north america and internationally so i think next we'd like to bring up matt whitten who's going to talk about our solutions in our marketplace So real quick, yeah, Carlos and Gerard went too long.

That's why we're moving around. And they always do that. I want anybody else to understand what persnickety means. I don't know what that means on that side. So, yeah, we'll have to forget that. I'm busting on the French. So what we're going to do is we're going to go to lunch now. Matt Witten will kick off, and then we'll get into the numbers. The second hour is going to be really where Climb's going to be going, which I know that is a lot of the reason you guys are here, understanding us, where we are, but where we're going to go in the next three to four years. So let's go all get to lunch. One thing that was mentioned as far as a lot of the sales teams here, and the last thing is Sandy Vico has got to be upset that she wasn't on that one slide, Carlos. I have no idea. I know. I could feel the heat coming there. So, you know, please intermingle with our teams. We have vendor manager directors here, our field sellers, our operations, our credit, everybody. Please get to know everybody and pick their brains on what we're doing internally in Climb. We'll be back in an hour.

Hey, everyone.

Is that working? Yep.

Awesome. Thank you very much. I hope you all had a nice lunch. We've saved the best bit till now because, yeah, we thought that would. I'm going to talk a little bit about parts of the business that maybe some of you aren't quite as familiar with. So I'm Matt Whitton. I'm the COO in EMEA, and as part of that, I also run our Grey Matter brand globally. I joined the business about five and a half years ago as part of the CDF acquisition over in the UK that happened. But I've been with the company now 26 years, so a long-timer, as Tim was talking about earlier on. So what is our solutions business? It is Grey Matter, which sells mainly to ISVs, so to developers that are building IP to sell on. We sell both to them and through them. And then there's Climb Global Services as well that I'll go into a bit more detail with now. So, starting with the numbers. Our solutions business, although in 2025 the AGB was about $90 million, so not a massive part of our business, from a revenue standpoint, from profitability, it punches above its weight. So, yeah, from 4.6% of our AGB drives about 13.5% of our gross profit. We're able to do that because of the way that we work. Like, it's where you add more value, right, you can retain more margin. So, Grey Matter, as I said, sells to ISVs, but what does it sell? So, majority, about 86% of what Grey Matter does is Microsoft, but there's some niche areas of that where we work there. So, where you've seen the vendors that the other guys have talked about earlier on. In Europe, we are a Microsoft distributor. I'll go into some more details about that a bit later on. but grey matter essentially help developers to build an application provide them the tools to do that these are people that are adopting ai as fast as you can take it right that they're people that are quick to adapt and adopt new technologies and to see how they can can build their business but then they need somewhere for that to run they need some people to help them secure that because when they're working software is their business they really understand what they're talking about and our sales people are marketing people working much the same way as the climb team the operations that you've seen earlier on but they're working with these companies that are using the technology to help build their business and go forward climb global services serves both Grey Matter and the Climb Channel Solutions part of our business, and it serves that with pre-sale support. It serves that with post-sale support, so first and second line, whatever the vendors are needing, Climb Global Services can provide that into our major vendors. They also help drive licensed sales. That's what we're all here really to do. So they do migrations, optimization, in some circumstances, manage services. So helping MSPs adopt those technologies early stages before they build up that themselves. So we're training MSPs and resellers to scale that as they look to grow. And they also give us the technical certifications that we need that many vendors require. Certainly, yes, that's for Microsoft, but for many other vendors as well, to either be a distributor, to be a partner in some way or other, and have increased margins. So that gives us our credentials. One area with Microsoft, that they now have a frontier distribution program, and we are very well placed to become a frontier distributor because of our services business that we have there. And what that will mean is that we're, again, able to retain more margin, get leads, be able to build that business as we go forward. And then the third piece I'm going to talk about as well is the client marketplace. So, again, you've seen some bits of that. In Europe, we already have a well-established marketplace that is in operation. This is, again, centered around our Microsoft business, but also with other vendors that we have there. and this is really helping us serve a market that otherwise would not be profitable for us to do so. So when we're working with MSPs where there's a low average sell value where the margins wouldn't otherwise support us putting headcount against that, having these partners self-serve, much like a PAX 8 sort of model if you want to look at it in that way, but then we have the support personnel around that so we still have that personal touch but we have those marketplaces there too. So, delving a little bit more into gray matter and how we go to market. So, we're working with ISVs, independent software vendors, vendors, we'd call them in Climbland, right? So, we're helping them to build their application, providing them the tools to do that, as we've already said, and then mainly go to market on the Microsoft Cloud. So, they're building, they're deploying to Azure. We help them sell, then we grow from that consumption revenue that's going to come back from that. um also so the two things that come up in any conversation that we have ai ai ai i've already touched on the fact that uh developers are among the first people to to adopt ai and uh it turns out that everybody needs more code they want to generate more um software that they can take to market but then okay how are they going to scale that um does it commercially make sense and we can help them with that by going to market through the azure marketplace we then need to also help support them to manage their cloud spend so what's their fin ops strategy how can we support them to have a sustainable business going forward are they secure so we have a seven layer security assessment that we run these isvs through as well and that really looks at all areas of the security stack and bringing in different client vendors. It's a great cross-sell opportunity that we have there to open that up and help take our vendors into these ISVs as customers. A couple of stats on the bottom there. So, Grey Matters business, 65% of it is true recurring. This is not just subscription renewals that you've got out there. This is 65% of the business, as we come in, is going to come through every year, and 40% of that is monthly billing. So we're seeing a real shift to a recurring model that is, it's moved to annual over the years, and now it's moving to monthly, and we're seeing that really drive growth. And then I'd like to just touch on a couple of niches as well that we work in. So we are a mapping distributor. So that's Microsoft Bing Maps, that's Here Technologies, that's TomTom, So some areas that you probably haven't heard of or touched on for some time, but this is where developers use APIs to bring location intelligence into their applications. They need a distributor to really serve that market. We fill that gap, and we're able to retain great margins because of the pre-sales service that we offer around that, which really pushes up our GP. And then in other licensing areas as well, So a couple of examples on there is Splarb, which is a Microsoft licensing scheme for hosters, and ISV Royalty, which is for if you're embedding SQL Server or some other Microsoft tool into an on-premise application, then we are distributors for that as well. It's not that exciting to other providers, so it's an area we've really been able to grow that across Europe and use that to bring more MSPs and more ISPs into our stack. so stepping away from the the gray matter part of our business and really focusing on microsoft as a uh as a vendor that we work with clearly not a challenger um when we look at the where that they stand in that that gartner matrix however the opportunity in europe is is huge both for us all up but especially with our microsoft business there so we are i'll say it again we are microsoft distributors in europe um both originally um we climb already were and then through the interworks cloud acquisition that we've made that's really bolstered our numbers there now where microsoft use distribution uh under their csp licensing scheme that they term it really to to serve that sme market and so that is growing year on year uh and we're it's looking like out to 2035 that's going to grow 20 percent every year now that's exciting for us and obviously we are not a huge part of that market as it stands there is our growth opportunity there is huge microsoft are looking to disc deeds to serve more of that market as well so they're already um they've driven some consolidation by making resellers which is this direct bill threshold piece here they've got to be transacting at least a million dollars a year to be a direct partner with Microsoft. We know that's going to increase as time goes on, as they move more and more of these smaller partners through distribution, so that's a great opportunity for us to pick up on this business. And what we're really offering to those partners is, yes, the marketplace, but then we're also, as you look at the areas where Microsoft want to grow the business, which is where they put their largest rebates that is very much around ai it's around their co-pilot it's around security and that is where our climb global services business really comes into place that's how that's driving that extra margin back into our business and there are other areas as well where this partnership can help us take our existing vendors out to market so these two two more acronyms unfortunately for you so rio and mpo so reseller enabled offers and multi-party private offers are ways that microsoft are offering traditional climb vendors and obviously many others as well routes to uh sell to end users via um via as your spend essentially so they're getting enterprise customers to sign up for for a mac so they they get them sign up to uh they're have a certain amount of visual spend they can retire that using us and using climb vendors to do that so through this partnership in this understanding not only is it in itself a good business opportunity for us but it is for our vendors too and again in europe microsoft really underpins our msp messaging so as we're going out to market our msp business microsoft is the cornerstone of that and then we're able to add on margin add on value but through the other more niche or more emerging technologies that we're able to cross sell into those msps once we get them onto our platform then doing that attached so is a lot easier and year on year we've grown so over the last six months against the previous six months we've grown our agb on microsoft in europe by 45 that's excluding the interworks acquisition interworks are also growing at an accelerated rate since they've become part of our business so it's an exciting place to be it is different um to to the rest of our our business but it's it's going to grow and i can see this being really a part of our acquisition strategy in europe as we go forward and across the Middle East and Africa as well, because as we have these tools, we have these platforms, we have these expertises in place, it's very easy for us to scale that. So, quick bit on interworks.cloud, they only sell via the marketplace. I feel like I'm saying marketplace far too often, but there you go. So, we already use the same technology to do that. So from an integration point of view, this is very easy for us. We're already integrating the teams. They're working together to add value there. So they don't quote. They think it's crazy that we do five quotes for every sale that we do. They're like, why do you do that? Why don't you just sell for a marketplace? So we're also educating them on the wider climb business. So across southern Europe, there is a good cross-sell opportunity for us there, taking the existing Climb vendors through their sales team and through their marketplace as well. All of their business is recurring, and they retain about 5% EBITDA, so it's a good, profitable distribution business that they have there. The fact that they're in Greece, they're in Malta, they're in Cyprus, they're in Bulgaria, these are not areas that have high penetration from the more broad-line distributors. So, again, we're able to retain more of the margin that we make there. And, yeah, 74% of their business is Microsoft. The next biggest is Acronis that's in there, which ties in nicely to our North American business. They're a certified Acronis training center and very well thought of by them. So they're going to help us take the Acronis brand right across the rest of Europe, help us build that out. um i've covered marketplace enough as i've i've already said but i think the the piece that i would like to uh pick out on that it's a must every disc day needs a great marketplace and we're already there as vichelle covered earlier on it's only going to get better and we're going to add more value here um to what our resellers and our msps really need um but i think an important part when you're working in countries where language is different where tax rules are different where there are more complications around that having a consistent marketplace infrastructure that you can then localize it's really going to help us go to market uh a lot quicker uh as we add new regions or expand across existing ones uh and it lowers the cost of entry for us because we just need a few sales people and we use the uh the existing climb and the Interworks go-to-market that we have there. A great MSP lead generation and conversion system, the stats there, which I won't quite quote now as part of this, but we're looking to make sure that that's driven by the Greek team because they're already doing a fantastic job of that. We think we can drive great growth as we move through the rest of 2026 and beyond. And now it's time for lunch. Right, let's go. I'd like to bring Dale up. Thank you.

When Matt's coming up here, we're getting into the finance part of things, but I want to recap from this morning just some things that I think you could see that were a strain through a lot of the presentations, and that is the distribution is becoming way back, you know, much more in vogue. As we were going through different cycles, it's coming back where we are seeing private equity companies, we're seeing investment companies pushing their teams to get more efficient. The channel already exists out there, both the distribution channel and the VAR channel. Why would you go direct to the end user and spend all those dollars? They look at it from every nickel and dime, and it's good for us because we are seeing so many more targets. Charles, he could probably use a team or two or three just to look at the incoming vendors and then us trying to vet through them as fast as possible. So just the strain that is exciting to us as we continue to grow in these next four or five years that we're going to talk about. And I'll let Matt kick off on control.

Good afternoon, everyone. So the next few slides we'll talk about 2026 and beyond going out as far as 2030. Just to level set for those who have followed along are very well aware of the key metrics that we track to, but those are gross billings, gross profit, and adjusted EBITDA. And then further down from that, we track gross profit percentage, which is the gross profit dollars as a percentage of gross billings, and effective margin, which is the adjusted EBITDA dollars as a percentage of gross profit dollars. um from from a perspective we've we filed this presentation uh with an ak earlier today so included in there is the appendices that reconcile the gross billings which we call a key operational metric to net sales and also reconciles uh adjusted ebitda to net income similar to how we do in our earnings releases and in our quarterly filings. So just starting with 2025, we did 2.1 billion in gross billings, 105.3 million in gross profit, and 42.9 million in adjusted EBITDA. Breaking down those gross billings and gross profit numbers a little further, 1.75 billion of those gross billings were generated in North America, while 350 million were generated in EMEA, which breaks down to 83% in North America and 17% in EMEA. As far as gross profit goes, about 77 million of that was generated in North America, while 28 million was generated in EMEA. So 73% for North America and 27% for EMEA. The difference is the higher margin profile, which is a key point to keep in mind as Dale gets to some of our future goals in the next couple slides. But in 2025, we generated 4.5% gross profit margin in North America, where in EMEA, it was 8.1%. So a much higher profile as you're competing against regional distributors in EMEA, as opposed to, you know, here, some of the larger broad lines for the most part. So the first step, you know, we kind of did as we're modeling this out is model out to 2026. And from an organic perspective, we've looked at the top and bottom line, all three numbers here, gross billings, gross profit, and adjusted EBITDA, growing at about 10%. And then on top of that, we've layered in, which we'll get into a bit more again in future slides on the acquisition strategy, we've layered in an aspirational target on top of what we've already completed this year and then and the target profile that we used for that is similar to the interworks acquisition that we completed earlier in 2026 so they have a much higher uh gross profit percentage than we do here in north america and even in our existing um our existing amia business And to get through to there, we ended up with $2.3 billion as our gross billings target for 2026, $119 million for gross profit, and adjusted EBITDA of $48.5 million. And to sense check all of that, to date, year-to-date results with our top 15 vendors are tracking at a higher growth percentage than that 10% that we used here in this model. And then looking ahead, we carried this out all the way through 2030. Again, we use that same top line growth rate of 10% on gross billings and gross profit. And we used a higher growth rate on adjusted EBITDA, which the theme of today is we continue to get more efficient, gain operating leverages, our operations become more efficient, more of those gross profit dollars will flow through to adjusted EBITDA. And then, highlighted here, we'll talk about acquisitions in a later slide, but how we get to those gross billing growth metrics in 27 through 2030, is we continue to, a number of things. We continue to deepen our relationships with existing vendors. So today, we have 45 vendors globally that we do more than $10 million in gross billings with. If we look back to 2022, that was about 22 vendors, so significant growth there. As of today, about 80 vendors represent 90% of our total consolidated gross billings, and looking back to 2022, that was about 50 vendors. So there's deepening the relationships with the existing vendors that we have. Also, we continue to sign disruptive vendors like we have over the past few quarters. You know, some notable ones there, Darktrace in early 2025, they now represent one of our top 20 vendors globally. The Fortinet vendor relationship that we signed at the end of 2025 that we've talked a bit about on recent earnings calls, that relationship continues to ramp up today. And then lastly, the Ivanti relationship that we just announced a couple weeks back. We're very bullish on what that can provide to us in 2026 and beyond. On top of that, we continue to maintain a very diligent focus on credit. Eva Pinto leads our global credit team. To date, we have $3.65 billion of credit extended to customers globally, whereas our bad debt expense is $100,000 to $200,000 annually. So we continue to keep a very diligent focus on that while we are growing with these existing vendors. And then lastly, on top of all this, we have the acquisition activity that we plan to execute upon, which I'll pass it over to Dale here. Thanks, Matt.

So acquisitions, right? We've talked about them. We've done six in six years. we're going to get much more aggressive with this. We had a lot of things going on in the last couple years with our ERP. We needed to have a platform globally that we could actually add acquired companies to and be able to platformize them in North America and Europe as our two bases and then grow from there because what we want to see is marketing and sales in regions like we talked about in regions in the US. We want them there but we want our operations and all our back office you know North America and Europe and those two spots. So I can tell you with acquisitions, the M&A team is standing right here. It's Matt and I, right? We use our teams. We use our vendors for picking targets, for looking at what's out there. Our teams run into different distributors or compete against them. We'll take a look at those, but we have a pretty robust target list. But what it takes the most of is the energy to actually do it, right? I mean, once you get involved in it, it takes a lot of energy. We have consultants that we use from the legal side from the financial side tax side to make all this happen we want to just get this more into a repeatable exercise on some of these smaller distributors that we want to acquire and we have a strategic plan for acquiring and I'll take you through that and if you just please remember Matt's first slide when he talked about how is it possible that it's 17% of the gross profit or 17% of the adjusted gross billings is overseas but 27% of the profit is coming from overseas and we want to continue to double down on that the acquisitions in the United States have already happened there's very few targets left the roll-up happened of 40 distributors over the last 20 years if you look at Europe and beyond there's probably hundreds that we could actually and look at and target that fit us perfectly as far as software security you know in our little ecosystem so we do have the energy to do that. So why? We're an opportunistic company. The team knows, even though we have a budget set, if we see something like a Fortinet that's not in our budget and we're going to have to spend dollars to get that or to spend dollars to take it to market, we will do that. If we look at and say, hey, we want to split territories because we got to a certain amount, we know the cost is going to come to climb first and then we'll start seeing the results. So we'll split territories, and we're just a very opportunistic team. Vendors, they want faster expansion, and part of the acquisition play is that technology starts in North America and moves to the rest of the world. It's just how it is. If you talk to our vendors, the majority of them are 60% in North America all the time, and the rest is, you know, of course, the rest of the world. But what happens, and it's our life as many in this room, we're at Ingram. It took Ingram 18 months to two years to launch vendors in other areas, right? They were just launching them in the U.S. and then eventually go to their other teams. We think we can launch and we sign global agreements. Charles signs an agreement globally. We think we can launch and if the team wants them in those regions, we can launch them within weeks of launching in the U.S. So much faster to market, much faster ahead of our competition. Reduce multiples. The reason I put this in there is because we want to buy companies at a reduced multiple that we're trading at and we've been very successful at that our multiple of course has gone up and down as you've seen but our acquisitions are typically you know between four and eight on a multiple scale margin expansion i already talked about that uh distributors in region so here's what happens with the big three the big three are in regions around the world but what they did is they set up shop someplace and then they just have some you know basically uh agents that are out there trying to sell in country, and they just do an okay job with it if you're selling Cisco or HP, but not when you get down the line card into vendors that we compete with them against. So we think we can do a good job with that. Solutions and services, Matt went and talked about that. We do our shared services between our gray matter technical team and the climb teams. So Matt heads up both of those, but that's on our radar. Should we look at a services company to get us stickier with our vendors, sticky with our customers. I just don't want to compete with my customers, you know, if they're doing the services already. Where are we going to go? We're going to go into Europe, as we already have. Matt showed a target on there that we're going after now. The DAC region, we have a team there, and if you remember, Gerard mentioned that sometimes we'll just invest in that territory, get to know the landscape, and then we'll look for an acquisition target there. The Nordics, France, And I'll just mention the Greeks, you know, we acquired them. It was opportunistic for us to make sure we maintain our Microsoft relationship at a $30 million rate. We know that that number is going up. What Matt didn't mention is that our trailing 12 months between our combined groups now is in the $40 million range. We'll continue to grow because we know that Microsoft is going to put another bar and everybody consolidate underneath probably $60 million. So anyway, we've already been prospecting in the Middle East. We have some targets in LATAM. We're we're nervous about the market. We'll be very careful there and then APAC We've looked at this years ago and now that John McCarthy our chairman's not in the room. I can say it out loud That you know that I was I was shunned from going there because I'd have to get on a plane to fix thing And I fix things I said okay, I would have to fix something in Europe maybe and get on a plane So that's back on the table. We'll look at those distributors there And I'll go back to some things Charles tells our teams all the time there could be two or three climbs that two to four billion dollars each and we still went running into each other or we'd still have that much more opportunity there's that much to go after there's that many vendors looking for a route to market that we provide and we see it as just opportunistic that way the first thing that most every target that we've acquired or have talked to when they're not in the states their number one thing is it's so hard to sign vendors, right? The vendors are not coming to them in their regions. The vendors, you know, they have to go find them. They have to spend time in the States. We're finding it easier and easier to sign in the States and move to a global contract. So that's another reason for our optimism. I'll let you kick off the next one.

So then, you know, over here we have our return on invested capital. So when you look back at the company historically before we started on our acquisition journey back in in 2020 the return on invested capital was in the eight to ten percent range as we've we've layered in here kind of where all the different acquisitions took place over time and there's ebbs and flows depending on you know earnings in a given quarter but every single one of these acquisitions have been accretive to the company's business for the six that we've completed to date yeah and I was thinking about when the guys were speaking.

So just real quick of the exec team. So Interworks, Carlos came from there, Matt Witten from CDF, Gerard from Spinnaker, and Brian from Data Solutions. And then we have Stamatis and Grace on that side. So the exec team makes up, they become part of the Climb family. And that's, like I said this morning to the team, it's part of our culture that we build. We bring the team members in, make them part of our family, and then we become a one-climb go-to-market.

And that's part of the vetting process we do as we go through the M&A process as well. You know, as we identify a target, not only do we want to make sure that they're a cultural fit for us, we want to make sure that they're a cultural fit, that they fit in our culture as well. And, you know, Brian, Matt, Gerard, and Carlos, they're the perfect examples to talk to as we go through that process.

And then, you know, if you look at the logos underneath the ROIC slide, those are vendors that we have acquired, you know, through acquisitions. And then the ones on the bottom are vendors that we've moved through territories, right? The goal is, like we started with our acquisition plan, is that we want to sign vendors in the U.S. and move them to the rest of our regions. We've had some come back to us. We've had some that Charles pushed over and then they came back. I think it was canonical, right, that you pushed over to the Europeans and then came back. So we want to see more of this cross-pollination between the different regions and eventually, you know, of course, be one region. Go to the next one. So highly competitive. I've talked about the big three disties. If you don't know them, Ingram Micro, Cinectec Data, they're both $60 billion plus. And then Arrow is in that $40 billion range. Margin is competitive, and that's why we're seeing the margin compression in North America has always been there. We have to compete with them. And you're saying, wait a second, you're selling emerging tech. Sometimes they have it, sometimes they don't. But it's a mindset of the resellers in North America that – I'm sorry, the mindset of the vendors that are like, hey, we know that distribution should cost me between 3% and 5%. And it's just the pressure that we have just signing a new vendor line right off the bat that that's the expectations that are out there because they're factoring in what is it going to cost me to the reseller market and beyond. So that's why we have it here more than we have it anywhere else. And that's, I think if we looked at that one time, the big three, the majority of their sales is also North America. So this is a little messy slide, but I want to talk about it and go back to what Mao was saying before. You know, as far as North America, gross billings, 1.9, 87%, gross profit, 76% of it. This is what the organic growth play is for us to 2030 that Matt made up. So what do we want to do? We want to have an equal number of sales outside of America that we do in America. So if you think about it, right, I think you said 4.3%, right, is our gross margin in North America, 8.1. Almost all of our targets are over 10% in margin that they have. So if I can play that game, I can almost 1.5 times my margin as an overall company. Because if you think about it, if I can acquire companies and build outside of the U.S. at $1.9 billion, I'm going to move my margin profile up into the sevens and eights, which is definitely a game changer for us as a company and the drop through. One thing I will caveat is that, and Vishal is a very, he just runs the same kind of mindset that I run as far as how can we do this more efficiently. We've got to stay as efficient as we are in North America as we expand to other regions. If not, we're just going to be basically on the hamster wheel. So here's what we're doing. So when Matt put the slide up before, our forecast plan is we're going to acquire up to $100 million in companies from here on out, right, through 2030. There's some big targets out there that are way over $100 million a year. There's some that are smaller, and we're going to be opportunistic in territories. But if we look at it, they're going to be all outside of the U.S. There is still a couple sleepers in the U.S., so I won't say that, you know, we can or can't get that done, but they would be strategic companies that we look and acquire. We think this is doable to do, you know, $100 million in acquisitions a year. It might take two or three acquisitions to do that to get to $100 million, or we'll have one year on some targets that could be $400 million or $500 million. We talked about it before, and that is, you know, we have no debt in the company. We've done all acquisitions with cash. Should we take on debt? I would argue we probably should on certain acquisitions if it makes sense. Should we use equity that we're gonna shy away from that? I mean, we feel like we're underpriced right now. We wouldn't use that, but we would get a lot of input from Sean, team, and a lot of you before we do things like that. But that is where we're gonna go and that's how we're gonna forecast the numbers out. So Matt showed you all the organic side. Now we're going to show you, you know, bolting on acquisitions and some efficiencies with that. So here's the back to the slide, the $2.3 billion in organic growth, 10% a year flatlined out. Target one that we're working on right now, and this is what it looks like for 2030, right? So this is organic, 10% growth, and then putting on $100 million for the next four years. So we think that we can basically double our EBITDA by 2030. And I can tell you that we've made this pretty conservative for what our internal forecasts are, but we think this is something that you should see where we're gonna go, kind of a mindset that our exec team has going forward and where we're gonna take climate. We don't, of course, there'll be headwinds along the way. We always deal with those, but this is our plan for the next four years. With that, we're gonna go right to Q&A. So with that, can I have the exec guys come up so that you guys can answer questions that Matt and I might miss out on? So go ahead. We're ready for them.

So it makes sense with where your stock is.

So we've had a couple that we've looked at that wanted to roll. We just, and back to what Matt said, you know, we want to get to know the exec teams at the targets because sometimes we've walked away because it's not a good fit for us, right? You can just tell culturally we will not get along. I've got to be careful. There's one specific target that we just hit it off, and I'm like, how is this possible? You know, because it was just a totally different region, and it's like, this is so in our stream and culture, so we are going down the road much farther with them. But back to that, we had a couple that looked at taking equity because they think we're underpriced. They would take the equity thinking with that bolt on, they were going to move our stock price up. So it really depends on the seller. Right now, we've never issued any equity. We've only done it with all cash and taking over. We've done earn outs on multiple deals. But you're right. We are thinly traded. You know, we got pushback, of course, by doing our stock split and killing the dividend. We wanted to get it out of the way and just get it behind us. But we think we'll get back to where we were a year ago. Oh, I'm sorry.

If the webcast picked up anything on John McCarthy, I apologize. yeah dale you're talking about doing uh significantly larger acquisitions and there's a lot of rationale to that scale you know your scale business etc you've had success in their past acquisitions um but the risk will go up right if you're doing bigger deals so maybe you could tell us whether some of the lessons learned you've from previous deals that should give us comfort?

So my, well, you know what? I can ask some of these guys that have been acquired, right? I mean, we can talk about that. I think some of it we need to get to know that team. And back to how we do vetting, it's pretty easy for us to do it because we can talk to our vendors and ask them about a distributor in a region. We can learn more about them than you can imagine through a distributor. Then we go to our sales teams and find a reseller that buys from them and see what the experience is there But then it really depends on what that exec team looks like is the like for in Brian's instant instance We knew that the the owner was going to move on how good are his next lieutenants down? Are they good do they have the same philosophy? We do go to market, you know, what's the vendor relationships? You can vet that out pretty quickly in the marketplace. So are we going to make a mistake? We're going to do our damnedest not to make that mistake on acquiring somebody. But you're right. There's two targets that are plus $500 million that are on our list that would be more transformative to us. We'll take more time with that. I don't know if you guys want to talk about being acquired and how bad it was.

Well, I will. So real quick, we'll be careful on this one. When I think about the acquisitions and the acquisitions we made over the years and the successful ones and the ones that maybe took a little longer to integrate into our group, I think we've taken the right steps to build out a platform globally for our teams so that when we go and acquire companies moving forward, we quickly integrate them into our systems, into our culture, into our people and roll it out into our teams. I think the faster we actually integrate our acquisitions into the rest of our teams and our management teams, the more successful we're going to be when we're launched. I remember when we first got acquired, we integrated instantly. Within a few months, we were already integrated and our teams were amalgamated. A little different in North America, but I think that is going to be where we'll succeed. And with the new platforms that Michelle's building out, it's going to make that much easier.

Yeah, and when we have vendors in common, it's even better, right? Like Sophos, you know, doing stuff like that, the vendors that we're so tight with. For instance, Sophos, I mean, we have more market share in the U.S. than the other big disties almost combined, I think. So for us, when Sophos pushes us into a region, they give us the targets and say, hey, this is one good, this is bad. You'll see if you guys get along because they know our culture as well at Climb.

I can jump in. I'm at Dale 221. Charles and Dale came across to meet me in London. I was the main shareholder of the Spinnaker, and I wasn't looking to sell the business at all because we'd only been trading for three and a half years. We did have a brand that was very attractive to climb. And after meeting the guys, it felt like a really good fit, genuinely felt like a really good fit. For me, obviously, being a smaller business, de-risking future growth was really relevant. I think one of the vendors that came with the Spinnaker business is now a global brand for us. It was just a UK brand at that stage. It's now a global brand and it's a significant driver in the revenue. But the scale and the size of it, my business, which was Spinnaker, would have probably lost that brand because we didn't have the scale and the size or investment to go along with it. So the attraction for Climb going into smaller disties is there just to de-risk the growth, de-risk the losing out in some of the key vendors. And I'm still here, three and a half years in, just because I'm allowed to speak more than seven minutes on the stage. But I think when we're doing acquisitions, all of us who've been involved with it can genuinely go and speak to the owners of the business and talk about the culture. And it's a bit of a cliche from a culture perspective on many businesses, but genuinely within this business, that is very much the case.

And that is our IP, right? It's the relationships we have, vendors, customers, and each other is the IP of the company. We do not make anything. But back to your point, Vince, and that is you're right. Small deals can be very expensive, right, because you still have legal and all the other things that go with it. So we are looking upstream, just like we're looking upstream in vendors that we want to bring on. You know, Charles and I argue a lot. Where are you? Because it's like, okay, is this vendor really going to move the needle? Will it move the needle in 10 months, 15 months? You know, where is it going to be? And if it's not, then, you know, it's a tougher one. What's the margin profile? There's all those games. We do the same thing on an acquisition. Is it strategic in a territory? Is it strategic for vendors that we can take those vendors once signed into other regions? So we play a lot of the numbers games before we go ahead with it. But we are looking significantly upstream at larger acquisitions.

Thanks for all the color. And a quick one for Matt. Are you assuming better geographic cross-selling in your organic outlook than you have today?

We're assuming consistent cross-pollination across the geographies that we have today. Okay, yeah, thank you.

Hi guys, thank you for the target. I'm trying to gauge whether this 20-30 target is a two-foot hurdle, four-foot hurdle, or a six-foot hurdle for you guys. Are you trying to clear, you know, is it something that is kind of relatively easy, you're pretty confident in, that it's, you know, or is it a pretty, you know, is it challenging?

Is it pushing you? could you do better yeah i i think it would be so as we we mentioned earlier before internally we think it's a bit on the conservative side we think we can achieve this uh strategy it's our first jump of putting guidance out there which we haven't done in the past uh so we'll continue to fine-tune that as as we move along but internally we do think it's a very achievable uh goal for 2030 because we talk about low double digits as far as organic growth so that's why we flat-lined to 10%, right?

And then in the acquisition play, we just know the targets we're already talking to and the ones that are out there. And then we're getting so much income from, like Gerard said, some of these smaller distributors that are going through some tough growth stages that need more vendors, and they see the combination with climb that we can do that and not selling out. If I look at it, if you're Ingram here, $60 billion, what is a $30 million distributor going to do for you. It's going to do nothing unless it's strategic. But somebody like a $30 million to $60 million distributor makes a lot of sense for us. So we see the targets and we still see the growth of the product mix of our vendor portfolio. And emerging vendors should be growing at that rate. But then if you look at some of our bigger vendors, they're not going to grow. The bigger you are, the harder it is to double. But then I look at Fortinet, and Fortinet is a company's growing one at 14 to 16 percent on that side so we have a lot way to get a long way to go with them in that relationship the other thing is that we don't talk about and vendors don't like to hear this because they never want to say it but it's share shift right once we get to um a more efficient model and we think we're we're halfway there we get more efficient than our competitors we'll get more share shift of existing business and it's the easiest less expensive route to market to pick up business is just being better than everybody else, not going out the net new.

Do you think the challenge will be the organic part or the acquisition part for your target?

Good question. I haven't thought about that. I mean, I would say organic will be, or the inorganic, the acquisition will be the tougher piece because of the timing, how long it takes. Some of them we think we can wrap in very quickly. Other ones are just going to take more time. The larger they get, you know, they'll just take but there's a couple of big ones out there that could solve my $400 million in one fell swoop, so.

Thank you.

Thanks, guys. Appreciate the detail here. Matt, just one question for you, then I'd know to follow up. You were talking about the top 15 vendors. I just want to make sure I understand it. You said the top 15 vendors are growing above the 10% that you're saying there, and that's gross billions right now, correct? Gross billions. Okay, great. Appreciate that. And just Carlos, maybe a little bit of color on the one slide. You were talking about in terms of the, I think it was trailing 12-month increase with like $335 million in buildings. Maybe talk a little bit more about, you know, what was the drivers of that at those four, I think, VARs that you had listed up there. Was it share shift? Is it taking up new vendors? But, you know, what was the driver of that, you know, significant growth there?

Yeah, no, that's a good one. So it was a mix of both of those, right? So one was our relationships with our existing vendors and being able to go out to bid and bid on the business with the likes like Optiv, CDW, Worldwide Technology, and share ship that business over to us. And that really came from twofold. Our relationship with both that reseller partner, getting deep, building the emerging vendors with them, helping them drive net new business, which is earning us a shot at the rest of the business. And then two, our relationships at our vendor levels, right? We've earned the trust that we can support their business. So in a lot of these wins that we've had, our vendors have backed us as the distribution of choice and primary distributor for their lines at these larger partners and now we're in the lookout for bids that are coming up in the next six eight months okay then if i just clarify on that um when you see i don't know the trend here is obviously you're gaining share here but when you gain that and you see the share shift how unusual is it sometimes you actually will give back share if it's because of the pricing or whatever deal or once you get it is it pretty sticky and easier to keep it so far we've been able to be sticking and kept the the shift that that we've had on the bids that we've done in the last two plus years that I've done on, very rarely would we lose a vendor line on those bids. So we're very sticky with the vendors that we have and that's because we bring that additional value add. So we're not just shifting the business. Yes, we're shifting the business over and gaining that, but we're helping our partners drive net new business. We're bringing our co-op funds and our funding from our vendors to their business to go out there and drive DRs, new logos, go to market strategy with them. and we're building the mind share higher with our vendors than they were getting from other disties. So that's keeping them loyal to us as we move forward.

So Gerard, you had mentioned the value add that Climb brought to you as a small acquisition. Dale, you're talking about a couple of really large acquisitions out there.

What's the value add that Climb would bring to a $500 million acquisition so the tar the one of the targets i'm looking at um we would bring them right now they are very concentrated with four or five vendors and that's all they do so we would bring them a bigger line card um and and remember they're they're not u.s uh based so they're looking even though they have some tier one vendors that are out there they're looking at more vendors to do that and they don't have a vendor recruit team typically the ones that do and i'll give exclusive networks credit. You know, they're very big in Europe. They brought more of a vendor recruit team that lived in the U.S. just to be in the U.S., do some transactions, and just get to know the lay of the land and take those vendors to Europe. I mean, back to my Australian comment, there was a really great target there. Got to know the family very well. They were going to move on, but they had to spend, you know, two, three months a year just in the U.S. to get the relationships to say, hey, I want, you know, to sign you in Australia. We're finding that with our vendors. If we have in-region, our vendors are very quick to at least have the discussion to bring them on in that specific territory. But here's one thing that's kind of mentioned here. I mean, Matt mentioned Marketplace, and we talk about platformizing and all the other things. That is the wave or a big percentage of our business that everybody's talking about. You know, the hyperscale is that we thought we're going to crush all of our businesses. That never happened because, you know, they want to sell compute and storage. workloads that's what they want to do they don't want to sell software they make no percentage on that but the goal for us is to continue to platform eyes for msc msps to and a lot of them don't have the resources to actually do that in-house so they're really going to pass by by a competitor or have a lot of more margin or competition from a bigger player we didn't talk about some of the distributors like also infinegate there's some big ones out there that are starting to chew up and take on acquiring companies in Europe and just back to that point on the vendor concentration too so you know using that one the four or five hundred million dollar one that has you know four or

five vendor concentrations think back to our largest acquisition as well which was Douglas Stewart they had a heavy vendor concentration but that also drove the lowest multiple that we've played paid to date so that will also drive the pricing on the ultimate transaction too all right so that that's helpful and And then relative to, just using that example, four or 500 million, four or five vendors, you have 100 vendors.

Let's say the crossover is five, so you have 95 remaining. Is that relevant to those acquisitions that we could then see significant organic growth from the 95 vendors that you bring them in the ensuing time periods? Is this concept relevant?

It is. It's something that goes through, because we didn't put the growth factors in the acquire targets because of the timing when we would acquire the targets and then putting it and pushing it out to 2030. But if you look at the targets we're looking to acquire, they're already in the double digits, and sometimes high double digits gross profit margin. So if we bring products over there, we are assuming that they're going to get a higher margin because there's just less margin pressure, right? The Greeks do not have that much margin pressure in region it's a small you know why is a company going to go into a smaller region but for us it's very significant number one it bolsters our microsoft number number two it bolsters our vision our value at microsoft that we're handling an underserved region that they're trying to actually invest in um but yeah that's the that is the play and some of the thought processes they go into when we're looking at targets and and if they're hardware i'm sorry but if they're if they're mostly hardware it's not a target for us right well it's just not like there's a distributor called Tim they do a lot of hardware it's not a fit for us we want software you know we're 90% there even though we have some components with Fortinet and so forth that are hardware components we're still software reoccurring revenue as Matt Witten said we're moving much more into a monthly and you'll see more and more vendors when they have the technical capability inside their company move to a monthly subscription and we want to make sure we can do that and it's going to have to be a platform and a technology ploy thanks for taking my question all your questions at lunch so given that you're targeting a higher exposure and Europe looking at the long-term guide

here the gross margin numbers you've kept it basically flat what are the potential offsets from the acquisition strategy well european margins seem to be higher and if that becomes a higher percentage of mix so our grant organic growth we've kind of just left flat that the geographic mix would remain the same between north america and amia is that what you were looking for anything else go ahead you talked about what you're looking for but I mean is it competitive

or are there other things that you bump into when you go into region and particularly as you go increasingly into Europe and beyond I mean what are you finding in terms of you know the challenges is with France and employment regulations and other factors?

So that's a concern, right? And we've had to deal with that in our because Amsterdam is a tough one. We have a small office there and we've had to deal with the employee concerns because there's different contracts. We have to be on top of it. When the contract is up, are you giving a year contract? I think we give 90-day contracts. Don't we start in the UK that way? The Greeks are the first non primary English speaking company we acquired right so we've gone through that and it went pretty smooth because they decided in the transaction go through UK law pretty easy of course if it's French or German it probably won't be that way but that we take all those into consideration right and how they go to market you know what is their turnover rate you know what have they done in the last four years with employees if they lose them what's the cost factor we're still extremely small in the small of the targets we're looking at, so the impact will be minimal at that, but it is a consideration for sure.

Do you see competitors with their business bidding? Are you talking to them whether they sell or not?

I can't verify it 100%. I know we weren't the top bidder of the Greeks, but we acquired them because of relationships and because where their team wanted to go. Stamatis is with us today. He was not a majority ownership in the company, but he had a lot of say to the owners that he was with and said, hey, this is much better fit for me and my team you know they're going to take a little discount to allow us to quorum but we were quite we were competing with PE firms at least one of the distributor we know we're right now in competition with another distributor for a target so yeah it's a combination of those two and sometimes there's just some roll-ups that are happening underneath the the radar on the size so we have to there's a lot of factors right especially you know how much is going to cost us you know what is you know German law firm versus one in the U.K., and now we have a couple of choices. Venables are a law firm. They've been great hooking us up with targets that they've worked with in the past. We do some vetting there. Go ahead.

You touched on return on invested capital, and there's a chart there floating around mid-teens, 20%. How does that look like for organic growth versus inorganic growth? And also, is there an internal hurdle? like, I don't know, it used to be 12.5, 13% a long time back, but still that's the case. What does it look like on both sides of the business, and is there an internal hurdle for both sides?

No, no internal hurdle on both sides. So that chart was the consolidated return on invested capital of the company. That ebbs and flows as we have, you know, we've talked about it in the past. We have large, vast transactions in a given quarter or some other one-time drivers in a given quarter. So it can ebb and flow based on those results. So we more track it from the income statement standpoint because we integrate those business lines right away into our operations. So it's difficult to track that balance sheet and income statement specifically to the acquired entity. So if it's a vendor line or whatever internal metric that we can peg it to, that's how we're monitoring the success of the acquisition.

Yeah, when we acquire, we try to platform into our systems as quickly as possible. But if there's earn-out, we have to keep separate numbers all the way through to make sure that the targets are realistic and that we both agree, both the target and the acquirer, that we can track for the earn-out. We've paid earn-outs through half of our acquisitions and like that.

And the multiples, did you say 4 to 8x? I think it used to be higher, like 8 to 10x just a few years ago.

For us being acquired?

Yeah, for acquisitions.

The highest we acquired was the Greeks, right?

Yeah, that was about 8.5x.

That's the highest acquisition that we made. And DSS was about 4.5. And our multiple, as you've seen, between 7 and 12, depending on your math and taking cash out.

Vishal, there was a fair amount of conversation about the efficiencies that you all are bringing and that today there's approximately five quotes for one order. Is there anything about the technology advancements that's going to decrease the number of quotes per order or in any other way be revenue-enhancing?

Absolutely. I think Matt Witten touched in his presentation about marketplace. We right now do classic code to cash, because our resellers doesn't have a platform where they can find out what they want to buy and how much it costs. So that's why they have to go through the coding process. Now everything will not move, because there's still big amount of stuff will still go through the conventional coding process, but anything like MSP, monthly billing, those kind of stuff, they don't have to go to code. If I have a platform, our resellers can log in, they can see what they've ordered, what are the price, what are the different terms and conditions, they can just call out from there. So it will reduce some coding processes. The other piece on the same line is, you know, you talked about revenue generation. From MSP perspective, we believe we might be leaving opportunities right now on the table because we don't have a good platform where MSP can come and access those vendors.

Putting that platform will allow more MSP vendors to get onboarded so the resellers, the MSP providers will have more options to purchase. so I think in a lot of instances we do provide one quote the customer knows exactly what they want and when you have a self-servicing customer whether it's marketplace or whether it's anything else they can absolutely go to you get there one quote the issue that we run into is at the vendor level and as long as there's vendor reps they don't know the reseller as much they don't know the end customer as much so they'll throw out a bunch of different things on the wall to see what's gonna stick, right? I'm gonna offer my product for a year. I'm gonna offer my product with EDR for a year and then I'm gonna offer you for three years. I might offer it to you for five years and then once you decide that you might be interested in one of those, then we'll start to get to a negotiation factor or phase and we'll start negotiating and then it'll be a new quote with special pricing, right? And that's generally kind of where we see the edifications of quotes and how we get lost in, you know, 8, 10 or 12 quotes.

There are a lot of quotes that is just one quote those won't change if we can teach our resellers to be better stewards of our time it would work i'm not sure that that'll ever happen yeah the team members in the back that have been in that process of quoting you know that you know you they get their inbox right and it's coming through email most of the time we have and it is first in first out instead of maybe an order that's or a deal that you know is going to be an order that's 15 buried so this is one of the things for efficiency we're not necessarily saying we're going to cut down the quote how many times we do a quote but the speed if we can produce that quote if we can do scraping off of emails that are coming in to produce a quote for the for the rep already and then then verify it look at the pricing and let's move on we're going to do that if we can dynamically look and say hey um what's the propensity of this deal to go versus another deal and we put some logic behind it then the teams would see those first right in their inboxes and it'll automatically shift so this is some probably giving away the store but this is uh you know some of the things we're thinking about to make this much more efficient we have some really good systems in with our vendors that have been legacy vendors with us that when the quotes are done to get loaded into our system automatically and this is one of the things that we talk about a lot and that is you know we're 80 to 90 percent as a recurring revenue right so it's uh reoccurring if i say it right um that we're going to get a chance at every year as long as that vendor's still performing and unless the customer is still happy with that so really a lot of that is hey how can we do 30% growth on top of that to get into our you know 110% year over year so once we have them and I think more of the vendors are coming to these incumbency programs so if you're the incumbent it's tough to switch you to another distributor another reseller so once we have them we have them for a long time as long as that vendor performs.

I would love to get your insight or what you're seeing in terms of this, you know, death of software with AI talk that's going on, that's been going on. I would love to hear about what you're seeing, any impact maybe, you know, with your folks. Yeah.

My snide remark is it's such Q1. That's such Q1 back then. Yeah, we're still there.

I do think, I might have said it earlier, that the enterprise will pace the AI revolution, if you like. And I'm not sure enterprise customers, all the CEOs have a remit for AI strategy at the moment. No different to 12, 15 years ago when they had a remit for cloud strategy. They didn't really know what they were trying to achieve. So it's going to take some time for, I think, enterprise customers to really adopt a full AI strategy. And they're learning along the way. They're trying to figure out what they're trying to achieve with their data. because ultimately that's what it is. They want to use their data to achieve a more efficient, more effective business. That's effectively what they're trying to achieve. It's going to take time. We haven't really seen a mass difference. Even two or three of our products, we sell a couple of hundred million dollars. They are an AI company. The reality is they're selling storage. So if you look at the use cases when you're going out to these big hedge funds, as an example, they're actually selling storage, and it's not true AI. A lot of it is masked around automation as well. Is it automation? Is it AI? What is it? So it's certainly not affecting the EMEA business. I mean, Charles, I don't know if you want to talk about it.

I was just going to touch on, we're seeing AI is helping our vendors release more product more quickly, right? So that is helping them add more value in what's going out there. AI is also an opportunity for us. So how enterprises are going to control that spend, how they're going to make sure it's secure, but we're not seeing it replace security products, business productivity tools, those things that are embedded into organizations. And I think enterprises are going to spend a whole load of money on AI. I don't see it replacing those core tools that are already there in place at the moment, certainly in the short term. and when we're looking at, are you going to build your own CRM or are you just going to buy one from Salesforce or something? It's already there. It's been tested. It works. You get user adoption, all of these different things as we move forward. So I see it as a huge opportunity for climate as we go forward. But certainly in the short term, there's no immediate impact on our renewals or our businesses it's going through.

We were at the Avanti Live here last week, and they said it. They talked about that specific question, and one of the things they talked about was that, and I agree with that, looking at a lot of vendors, I treat vendors with a ton of suspicion that think they're going to have a revolution with AI-driven products. Most of what I see in product offerings are there's something like a 10% to 15% change in their products ROI, not an 85% change in their products ROI. And so I think those guys, you know, when I see companies that offer a modification with AI-driven offerings versus a revolution with AI-driven offerings, that's what I see most often in the products that I evaluate in our marketplace. So from a brand standpoint, I see more modifications to existing products than I see some kind of revolution in the marketplace with AI products.

Yeah, I'll just add a little bit to that as well. So we're actually seeing some opportunity creation as well with the proliferation of AI. particularly in our cyber security portfolios. So with the proliferation of AI, you need to secure AI now within the enterprise. So whether that's from a data point of view or an identity point of view, so our vendors that serve those elements of the market are seeing significant pipeline generation. So I actually see the explosion of AI as a significant demand gen opportunity for our channel.

Yeah, and Brian, you may have just hit on this, But with AI also benefiting the bad actors, the question now is, does that accelerate the adoption of the security software simply because of the bad actors now can move more quickly and more aggressively?

So my view is it 100% accelerates it. I think the need for the enterprise to stay ahead of the bad actors means the refresh cycles have been dramatically pulled forward. Now, whereas we might have been looking at a three-year or five-year refresh cycle for some technologies, that could now be down to six months or 12 months, and who knows how fast it's going to have to be. So I totally agree with you. I would see the bad actors driving a lot more demand through our channel because we need to accelerate, pull forward that spend.

There is some interesting development just from the technology perspective. As AI adoption is increasing, companies are now buying more and more defect simulation solutions. Earlier it was a little bit an optional thing for a lot of companies, but now they know because of the AI, they can get attacked, so they are now buying more software. Same with the SASE solution. That's another area on the cybersecurity where like small or medium businesses, they generally do not buy a SaaS solution. Now most of those guys started buying those solutions because they know that if they don't have, some AI player will come back and attack them and, you know, get the data from them. So those are, I mean, AI adoption is generating way more demand on the cybersecurity side right now and potentially more newer companies are going to come.

Anything else? Any more questions? Well, thank you. Thank you for showing up today. I know it's right in the middle of the day, but I appreciate you guys. Reach out to our hire firm, Sean Ansari and Aaron Sousa. If anything you guys need, please reach out. You have a good call. Appreciate it.