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What changed in Climb Global Solutions, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Climb Global Solutions, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+202 added−133 removedSource: 10-K (2026-02-27) vs 10-K (2025-03-11)

Top changes in Climb Global Solutions, Inc.'s 2025 10-K

202 paragraphs added · 133 removed · 122 edited across 4 sections

Item 1. Business

Business — how the company describes what it does

67 edited+29 added−5 removed151 unchanged
Biggest changeAlthou gh we did not have any material cybersecurity breaches in 2024, any failure on the part of us or our vendors to maintain the security of data we are required to protect, including via the penetration of our network security and the misappropriation of confidential and personal information, could result in business disruption, damage to our reputation, financial obligations to third parties, fines, penalties, regulatory proceedings and private litigation with potentially large costs, and also result in deterioration in our employees’, partners’ and clients’ confidence in us and other competitive disadvantages, and thus could have a material adverse impact on our business, financial condition and results of operations.
Biggest changeAny failure by us or our vendors to prevent or mitigate such incidents, including a compromise of network security or misappropriation of confidential or personal information, could result in business interruption, loss of data, reputational harm, contractual or other financial obligations, fines, penalties, regulatory investigations or proceedings and private litigation, as well as a loss of confidence by our employees, partners and clients, any of which could have a material adverse effect on our business, financial condition and results of operations. 9 Table of Contents We rely heavily on our internal information systems, which, if not properly functioning, could materially adversely affect our business.
The Company evaluates, on a regular basis, whether events or circumstances have occurred that indicate all, or a portion, of the carrying amount of goodwill or identifiable intangible assets may no longer be recoverable, in which case an impairment charge to earnings would become necessary. ​ A decline in general economic conditions, a substantial increase in market interest rates, and increase in income tax rates, or the company’s inability to meet long-term working capital or operating income projections could impact future valuations of the Company’s reporting units, and the company could be required to record an impairment charge in the future, which could impact the company’s consolidated balance sheets, as well as the Company’s consolidated statements of operations. ​ The inability to obtain financing on favorable terms may adversely impact our business, financial position and results of operations.
The Company evaluates, on a regular basis, whether events or circumstances have occurred that indicate all, or a portion, of the carrying amount of goodwill or identifiable intangible assets may no longer be recoverable, in which case an impairment charge to earnings would become necessary. ​ A decline in general economic conditions, a substantial increase in market interest rates, an increase in income tax rates, or the Company’s inability to meet long-term working capital or operating income projections could impact future valuations of the Company’s reporting units, and the Company could be required to record an impairment charge in the future, which could impact the Company’s consolidated balance sheets, as well as the Company’s consolidated statements of operations. ​ The inability to obtain financing on favorable terms may adversely impact our business, financial position and results of operations.
Item 1. Business ​ General ​ The Company is a value added information technology (“IT”) distribution and solutions company. The Company primarily operates through its “Distribution” segment, which distributes emerging technologies to corporate resellers, value added resellers (“VARs”), consultants and systems integrators worldwide under the name “Climb Channel Solutions”.
Item 1. Business ​ General ​ The Company is a value added information technology (“IT”) distribution and solutions company. The Company primarily operates through its “Distribution” segment, which distributes emerging and disruptive technologies to corporate resellers, value added resellers (“VARs”), consultants and systems integrators worldwide under the name “Climb Channel Solutions”.
Our ability to provide such services is dependent largely on the accuracy, quality and utilization of the information generated by our IT systems, which affect our ability to manage our sales, client service, distribution, inventories and accounting systems and the reliability of our data networks. ​ Failure to adequately maintain the security of our electronic and other confidential information could materially adversely affect our financial condition and results of operations.
Our ability to provide such services is dependent largely on the accuracy, quality and utilization of the information generated by our IT systems, which affect our ability to manage our sales, client service, distribution, inventories and accounting systems and the reliability of our data networks. ​ Failure to adequately maintain the security of our electronic systems and confidential information could materially adversely affect our business, financial condition and results of operations.
Acquisitions involve numerous risks, including the following: ​ ● effectively combining the acquired operations, technologies, or products; ● unanticipated costs or assumed liabilities, including those associated with regulatory actions or investigations; 9 Table of Contents ● not realizing the anticipated financial benefit from the acquired companies; ● diversion of management’s attention; ● negative effects on existing customer and vendor partner relationships; and ● potential loss of key employees of the acquired companies. ​ Further, the Company has made, and may continue to make acquisitions of, or investments in new services, businesses or technologies to expand its current service offerings and product lines.
Acquisitions involve numerous risks, including the following: ​ ● effectively combining the acquired operations, technologies, or products; ● unanticipated costs or assumed liabilities, including those associated with regulatory actions or investigations; ● not realizing the anticipated financial benefit from the acquired companies; ● diversion of management’s attention; ● negative effects on existing customer and vendor partner relationships; and ● potential loss of key employees of the acquired companies. ​ Further, the Company has made, and may continue to make acquisitions of, or investments in new services, businesses or technologies to expand its current service offerings and product lines.
We are susceptible to unanticipated changes in legislation, especially relating to income and other taxes, import/export laws, hazardous materials and other laws related to trade, accounting and business activities. Such changes in legislation may have an adverse effect on our business. ​ 14 Table of Contents We may be subject to litigation.
We are susceptible to unanticipated changes in legislation, especially relating to income and other taxes, import/export laws, hazardous materials and other laws related to trade, accounting and business activities. Such changes in legislation may have an adverse effect on our business. ​ 15 Table of Contents We may be subject to litigation.
For geographic financial information, please refer to Note 13 in the Notes to our Consolidated Financial Statements. ​ Customer Support ​ We believe that providing a high level of customer service is necessary to compete effectively and is essential to continued sales and revenue growth.
For geographic financial information, please refer to Note 12 in the Notes to our Consolidated Financial Statements. ​ Customer Support ​ We believe that providing a high level of customer service is necessary to compete effectively and is essential to continued sales and revenue growth.
As a public company, we also are subject to increasingly complex public disclosure, corporate governance and accounting requirements that increase compliance costs and require significant management focus. ​ The Company may be subject to intellectual property rights claims, which are costly to defend, could require payment of damages or licensing fees and could limit the Company's ability to use certain technologies in the future.
As a public company, we also are subject to increasingly complex public disclosure, corporate governance and accounting requirements that increase compliance costs and require significant management focus. 12 Table of Contents ​ The Company may be subject to intellectual property rights claims, which are costly to defend, could require payment of damages or licensing fees and could limit the Company's ability to use certain technologies in the future.
For the year ended December 31, 2023, there were two customers that accounted for 20%, and 15%, respectively, of consolidated net sales and as of December 31, 2023, 15% and 6%, respectively, of total net accounts receivable. Our top five customers accounted for 54% and 51% of consolidated net sales in 2024 and 2023, respectively.
For the year ended December 31, 2023, there were two customers that accounted for 20%, and 15%, respectively, of consolidated net sales and as of December 31, 2023, 15% and 6%, respectively, of total net accounts receivable. Our top five customers accounted for 55%, 54% and 51% of consolidated net sales in 2025, 2024 and 2023, respectively.
Additionally, current market conditions, the global economy, and overall credit conditions could limit our availability of capital, which could cause increases in interest margin spreads over underlying indices, effectively increasing the cost of our borrowing. ​ Legal and Regulatory Risks ​ We may be liable for misuse of our customers ’ or employees ’ information.
Additionally, current market conditions, the global economy, and overall credit conditions could limit our availability of capital, which could cause increases in interest margin spreads over underlying indices, effectively increasing the cost of our borrowing. 11 Table of Contents Legal and Regulatory Risks ​ We may be liable for misuse of our customers ’ or employees ’ information.
If any of the vendor partners that have historically provided these benefits to us decides to reduce such benefits, our expenses would increase, adversely affecting our results of operations. ​ The IT products and services industry is intensely competitive and actions of competitors, including manufacturers of products we sell, can negatively affect our business.
If any of the vendor partners that have historically provided these benefits to us decides to reduce such benefits, our expenses would increase, adversely affecting our results of operations. 7 Table of Contents The IT products and services industry is intensely competitive and actions of competitors, including manufacturers of products we sell, can negatively affect our business.
As a result, an increasing proportion of our sales in 2024 were from VARs, driven by a continued focus on increasing sales to larger VARs with more than $1 million in annual sales.
As a result, an increasing proportion of our sales in 2025 were from VARs, driven by a continued focus on increasing sales to larger VARs with more than $1 million in annual sales.
As an IT channel solutions provider, a critical element of our strategic growth plan is to maintain our ability to offer an efficient route to market for emerging technology vendors.
As an IT channel solutions provider, a critical element of our strategic growth plan is to maintain our ability to offer an efficient route to market for emerging and disruptive technology vendors.
The large majority of the products we sell are either digital products such as license authorizations, third party maintenance contracts, or hardware that is dropped shipped to the end customer directly by the vendor. We utilize electronic digital interchange (“EDI”) and other automation to fulfill these orders on a cost-efficient basis.
The large majority of the products we sell are either digital products such as license authorizations, third party maintenance contracts, or hardware that is drop-shipped to the end customer directly by the vendor. We utilize electronic data interchange (“EDI”) and other automation tools to fulfill these orders on a cost-efficient basis.
Technologies used in or integrated into our operations, such as cloud-based services, artificial intelligence, and automation, may cause an adverse shift in the way our existing business operations are conducted. ​ We depend on certain key personnel.
Technologies used in or integrated into our operations, such as cloud-based services, AI, and automation, may cause an adverse shift in the way our existing business operations are conducted. ​ We depend on certain key personnel.
We believe we offer a compelling solution for emerging technology vendors seeking to establish the IT channel as a route to market, by offering broad distribution capabilities with more flexibility than some of our larger competitors. ​ In our Solutions segment, we compete against a large variety of IT solutions providers including e-commerce sites, service organizations, value added resellers, cloud solution providers and technology providers offering direct solutions.
We believe we offer a compelling solution for emerging and disruptive technology vendors seeking to establish the IT channel as a route to market, by offering broad distribution capabilities with more flexibility than some of our larger competitors. ​ In our Solutions segment, we compete against a large variety of IT solutions providers including e-commerce sites, service organizations, VARs, cloud solution providers and technology providers offering direct solutions.
Our common stock, par value $0.01 per share (“Common Stock”), is listed on The NASDAQ Global Market under the symbol “CLMB”. ​ Distribution Segment ​ In our Distribution segment, which accounted for approximatel y 95 % of our consolidated net sales and 86% of our consolidated gross profit during the year ended December 31, 2024, we distribute technology products from software developers, software vendors or original equipment manufacturers (“OEMs”) to resellers, and system integrators worldwide.
Our common stock, par value $0.01 per share (“Common Stock”), is listed on The NASDAQ Global Market under the symbol “CLMB”. ​ Distribution Segment ​ In our Distribution segment, which accounted for approximatel y 96% of our consolidated net sales and 87% of our consolidated gross profit during the year ended December 31, 2025, we distribute technology products from software developers, software vendors or original equipment manufacturers (“OEMs”) to resellers, and system integrators worldwide.
Our results of operations are influenced by a variety of factors, including the condition of the IT industry, general economic conditions, shifts in demand for, or availability of, computer products and software and IT services and industry introductions of new products, upgrades or methods of distribution.
Our results of operations are influenced by a variety of factors, including the condition of the IT industry, general economic conditions, seasonal buying by end-users, shifts in demand for, or availability of, computer products and software and IT services and industry introductions of new products, upgrades or methods of distribution.
The Company is not a party to any collective bargaining agreements with its employees, has experienced no work stoppages and considers its relationships with its employees to be satisfactory. ​ The following table shows the Company’s approximate headcount by region: ​ Americas EMEA Headcount 224 170 Workforce Health and Safety ​ We take workplace safety very seriously and our robust safety program means that we are constantly evaluating our safety protocols in an effort to keep our facilities safe for our employees. ​ Compensation and Benefits ​ As part of our compensation philosophy, we believe that we must offer and maintain market competitive compensation and benefit programs for our employees in order to attract and retain superior talent.
The Company is not a party to any collective bargaining agreements with its employees, has experienced no work stoppages and considers its relationships with its employees to be satisfactory. ​ The following table shows the Company’s approximate headcount by region: North America Europe Headcount 250 162 Workforce Health and Safety ​ We take workplace safety very seriously and our robust safety program means that we are constantly evaluating our safety protocols in an effort to keep our facilities safe for our employees. ​ Compensation and Benefits ​ As part of our compensation philosophy, we believe that we must offer and maintain market competitive compensation and benefit programs for our employees in order to attract and retain superior talent.
We also have foreign currency exposure to the extent net sales and purchases are not denominated in a subsidiary’s functional currency, which could have an adverse effect on our business, results of operations, or cash flows. ​ The Company ’ s non-U.S. sales represent an increasing portion of its revenues, and consequently, the company is exposed to risks associated with operating internationally.
We also have foreign currency exposure to the extent net sales and purchases are not denominated in a subsidiary’s functional currency, which could have an adverse effect on our business, results of operations, or cash flows. 10 Table of Contents ​ The Company ’ s non-U.S. sales represent a significant portion of our revenues, and consequently, the Company is exposed to risks associated with operating internationally.
As of December 31, 2024, we had approximately $0.8 million outstanding under our term loan with First American Commercial Bancorp and there were no amounts outstanding under our revolving credit agreement with JPMorgan Chase Bank, N.A.
As of December 31, 2025, we had approximately $0.2 million outstanding under our term loan with First American Commercial Bancorp and there were no amounts outstanding under our revolving credit agreement with JPMorgan Chase Bank, N.A.
We have experienced the loss and changes in the business habits of key customer and vendor relationships in the past and expect to do so again in the future. Sales of products purchased from our largest two vendors accounted for 16% of our 2024 purchases and sales from our largest five vendors generated approximately 28% of 2024 purchases.
We have experienced the loss and changes in the business habits of key customer and vendor relationships in the past and expect to do so again in the future. Sales of products purchased from our largest two vendors accounted for 14% of our 2025 purchases and sales from our largest five vendors generated approximately 29% of 2025 purchases.
Factors that may affect the Company's ability to attract and retain qualified employees include employee morale, its reputation, competition from other employers, and availability of qualified individuals. ​ As of December 31, 2024, the Company had 394 total employees, including 367 full-time employees.
Factors that may affect the Company's ability to attract and retain qualified employees include employee morale, its reputation, competition from other employers, and availability of qualified individuals. ​ As of December 31, 2025, the Company had 412 total employees, including 392 full-time employees.
Through our Distribution segme nt, we sell a wide variety of technology products from a broad range of software vendors and manufacturers, such as Bluebeam Software, Microsoft, Delinea, Micro Focus, SmartBear Software, SolarWinds, Sophos, TechSmith, Trend Micro, Unitrends, Tintri and Extrahop .
Through our Distribution segme nt, we sell a wide variety of technology products from a broad range of software vendors and manufacturers, such as Adobe, Bluebeam Software, Dark Trace, Delinea, ExtraHop, Fortinet, Micro Focus, Microsoft, SmartBear Software, SolarWinds, Sophos, TechSmith and Trend Micro.
We continually review the marketplace to identify new and emerging vendors and products to potentially add to our vendor partners. ​ The Company operates distribution facilities in Millersville, Maryland and Dublin, Ireland. ​ Solutions Segment ​ We also provide comprehensive IT solutions directly to end users through our Solutions segment, which accounted for approximately 5 % of our consolidated net sales and 14% of our consolidated gross profit during the year ended December 31, 2024.
We continually review the marketplace to identify new, emerging and disruptive vendors and products to potentially add to our vendor partners. ​ The Company operates distribution facilities in Millersville, Maryland and Dublin, Ireland. ​ Solutions Segment ​ We also provide comprehensive IT solutions directly to end users through our Solutions segment, which accounted for approximatel y 4% of our consolidated net sales and 13% of our consolidated gross profit during the year ended December 31, 2025.
The Company promotes the use of EDI with its vendor partners and customers, which helps reduce overhead and the use of paper in the ordering process. ​ 3 Table of Contents Competition ​ The Company operates in a highly competitive environment, both in the United States and internationally.
The Company promotes the use of EDI with its vendor partners and customers, which helps reduce overhead and the use of paper in the ordering process. ​ 3 Table of Contents Competition ​ The Company operates in a highly competitive environment, both in North America and Europe.
In 2024 and 2023, approximately 27% and 26% of the Company’s net sales came from its operations outside the United States, respectively.
In 2025, 2024 and 2023, approximate ly 23%, 27% and 26% of the Company’s net sales came from its operations outside the United States, respectively.
If we are unable to maintain and enhance our digital platforms, cloud platforms, and artificial intelligence related tools to keep pace with competitors and align with evolving customer and supplier expectations and demands, it could adversely impact our sales revenues and ability to retain existing, and attract new, customers.
If we are unable to maintain and enhance our digital platforms, cloud platforms, and AI-related tools to keep pace with competitors and align with evolving customer and supplier expectations and demands, it could adversely impact our sales revenues and ability to retain existing, and attract new, customers. We currently incorporate AI technology in certain offerings and in our business operations.
Sales of hardware and peripherals consistently represente d 6% of o ur gross billings in 2024 and 2023. ​ Cloud ​ Our vendor and reseller partners are increasingly incorporating cloud and hybrid cloud products into their portfolios.
Sales of hardware and peripherals consistently represen ted 8% in 2025 and 6% of o ur gross billings, an operational metric, in 2024 and 2023. ​ Cloud ​ Our vendor and reseller partners are increasingly incorporating cloud and hybrid cloud products into their portfolios.
Some of our current competitors have substantially greater capital resources and sales and distribution capabilities than we do. In response to competitive pressures from any of our current or future competitors, we may be required to lower selling prices in order to maintain or increase market share, and such measures could adversely affect our operating results.
In response to competitive pressures from any of our current or future competitors, we may be required to lower selling prices in order to maintain or increase market share, and such measures could adversely affect our operating results.
Changes in our credit rating or other market factors may increase our interest expense or other costs of capital, or capital may not be available to us on competitive terms to fund our working capital needs. ​ We may not be able to continue to pay dividends on our Common Stock in the future, which could impair the value of our Common Stock.
Changes in our credit rating or other market factors may increase our interest expense or other costs of capital, or capital may not be available to us on competitive terms to fund our working capital needs. ​ We have suspended quarterly dividends and may not resume paying dividends on our Common Stock, which could adversely affect the value of our Common Stock.
For the year ended December 31, 2023, this same vendor accounted for 14% o f our consolidated purchases. The loss of a key vendor or group of vendors could disrupt our product availability and otherwise have an adverse effect on the Company. The Company predominantly sells third party software, software subscriptions, and maintenance.
For the year ended December 31, 2025, our largest five vendors generated approxim ately 29% of our consolidated purchases. The loss of a key vendor or group of vendors could disrupt our product availability and otherwise have an adverse effect on the Company. The Company predominantly sells third party software, software subscriptions, and maintenance.
The way software products are distributed and sold is changing, and new methods of distribution and sale may emerge or expand. Software vendors have sold, and may intensify their efforts to sell, their products directly to end-users. There can be no assurances that software developers and vendors will continue using distributors and resellers to the same extent they currently do.
Software vendors have sold, and may intensify their efforts to sell, their products directly to end-users. There can be no assurances that software developers and vendors will continue using distributors and resellers to the same extent they currently do.
We offer credit to our customers and, therefore, are subject to significant credit risk. We sell our products to a large and diverse customer base. We finance a significant portion of such sales through trade credit, typically by providing 30 to 60-day payment terms.
We sell our products to a large and diverse customer base. We finance a significant portion of such sales through trade credit, typically by providing 30 to 60-day payment terms. In addition, we offer extended payment terms to certain customers for terms of up to two years.
We rely heavily on our internal information systems, which, if not properly functioning, could materially adversely affect our business. We rely on our information systems to support daily operations and generate timely, accurate, and reliable financial and operational data. We are undergoing projects to streamline and optimize our multiple technology platforms to a consistent technology platform globally.
We rely on our information systems to support daily operations and generate timely, accurate, and reliable financial and operational data. We are undergoing projects to streamline and optimize our multiple technology platforms to a consistent technology platform globally.
The loss of a key customer or a group of customers could have an adverse effect on the Company. ​ Net sales in Europe and the United Kingdom represented 21 % and 19% of our consolidated net sales in 2024 and 2023, respectively.
The loss of a key customer or a group of customers could have an adverse effect on the Company. ​ Net sales to customers in the United Kingdom repr esented 13%, 14% and 15% of our consolidated net sales in 2025 , 2024 and 2023, respectively.
In addition, we offer extended payment terms to certain customers for terms of up to two years. As a result, our business could be adversely affected in the event of a deterioration of the financial condition of our customers, resulting in the customers’ inability to repay us.
As a result, our business could be adversely affected in the event of a deterioration of the financial condition of our customers, resulting in the customers’ inability to repay us.
For the year ended December 31, 2024, the Company had three c ustomers, all of which are considered DMRs, that accounted for 18%, 14% and 11%, respectively, of consolidated net sales and as of December 31, 2024, 12%, 6% and 19%, respectively, of total net accounts receivable.
For the year ended December 31, 2024, the Company had three customers that accounted for 18%, 1 4%, and 11%, respectively, of consolidated net sales and as of December 31, 2024, 12%, 6% and 19%, r espectively, of total net accounts receivable.
Net sales to customers in Canada represented 6% and 7% of our consolidated net sales in 2024 and 2023, respectively.
Net sales to customers in Europe, excluding the United Kingdom, represented 5%, 7%, and 4% of our consolidated net sales in 2025, 2024 and 2023, respectively. Net sales to customers in Canada represented 5%, 6% and 7% of our consolidated net sales in 2025, 2024 and 2023, respectively.
This risk may increase if there is a general economic downturn affecting a large number of our customers and in the event our customers do not adequately manage their business or properly disclose their financial condition.
This risk may increase if there is a general economic downturn affecting a large number of our customers and in the event our customers do not adequately manage their business or properly disclose their financial condition. Also, certain of our larger customers require greater than 30-day payment terms which could increase our credit risk and decrease our operating cash flow.
Accordingly, we are at a continual risk of loss of their business on account of a number of factors and forces, many of which are largely beyond our control. 8 Table of Contents In 2024, ou r two la rgest customers accounted f or 32% of our net sales and our largest five customers accounted for 54% of our net sales.
Accordingly, we are at a continual risk of loss of their business on account of a number of factors and forces, many of which are largely beyond our control. In 2025, o ur two largest customers accounted for 37% of our net sales and our largest five customers accounted for 55% of o ur net sales.
The terms of one or more of the agreements under which this indebtedness was incurred may limit or restrict, among other things, our (or our subsidiaries', as applicable) ability to incur additional indebtedness or liens, or enter into certain transactions. ​ 10 Table of Contents We are also required to maintain specified financial ratios and satisfy certain financial condition tests under certain of our debt facilities.
The terms of one or more of the agreements under which this indebtedness was incurred may limit or restrict, among other things, our (or our subsidiaries', as applicable) ability to incur additional indebtedness or liens, or enter into certain transactions.
If we do not qualify for listing on The NASDAQ Capital Market, and if we are not able to list our Common Stock on another exchange, our Common Stock could be quoted on the OTC Bulletin Board or on the “pink sheets”.
If our Common Stock were delisted and we were unable to qualify for listing on The Nasdaq Capital Market, or another national securities exchange, our Common Stock could be quoted on an over-the-counter market, including the OTC Bulletin Board or “pink sheets”.
In addition, we do not have guaranteed purchasing volume commitments from our customers and, therefore, our sales volume may be volatile. ​ Our business is substantially dependent on a limited number of customers and vendors, and the loss or any change in the business habits of such key customers or vendors may have a material adverse effect on our financial position and results of operations.
Our business is substantially dependent on a limited number of customers and vendors, and the loss or any change in the business habits of such key customers or vendors may have a material adverse effect on our financial position and results of operations. Our business experiences customer and vendor concentration from time to time.
Our strategic growth plan is to expand our cloud offerings by leveraging these support services to other markets and products. ​ For the year ended December 31, 2024, we had one vendor that accounted for 10% of our consolidated purchases and our largest five vendors generated approxim ately 29 % of our consolidated purchases.
Our strategic growth plan is to expand our cloud offerings by leveraging these support services to other markets and products. ​ For the year ended December 31, 2025, the Company had no major vendors that accounted for greater than 10% of our consolidated purchases during the year, compared to one vendor that accounted for 10% and 1 4% of our consolidated purchases, respectively, for the years ended December 31, 2024 and 2023.
Additionally, a key part of our strategic growth plan is to provide a high level of support to select emerging technology vendors through our Climb Elevate program to develop future relationships throughout the growth cycle of a vendor partner. ​ In our Solutions business, an essential part of our strategic growth plan is to pursue opportunities with higher growth prospects and gross margin characteristics through the sale of specialty products, services and cloud offerings.
Additionally, a key part of our strategic growth plan is to provide a high level of support to select emerging and disruptive technology vendors through our Climb Elevate program to develop future relationships throughout the growth cycle of a vendor partner.
Many competitors compete based principally on price and may have lower costs or accept lower selling prices than we do and, therefore, our gross margins may not be maintainable. Our gross margins have declined historically and may continue to decline in the future. Our competitors may offer better or different products and services than we offer.
Many competitors compete based principally on price and may have lower costs or accept lower selling prices than we do and, therefore, our gross margins may not be maintainable. As a result of significant price competition in the IT industry, our gross margins are low, and we expect them to continue to be low in the future.
Without a larger float, our Common Stock will be less liquid than the stock of companies with broader public ownership, and, as a result, the trading prices for our Common Stock may be more volatile.
As a result of a potentially limited trading market and public float, the market price of our Common Stock may be more volatile than the overall stock market and the stock prices of other companies with larger public floats.
Furthermore, these laws and regulations are evolving and may be inconsistent from jurisdiction to jurisdiction, further increasing the cost of compliance and doing business, and the risk of noncompliance. ​ 11 Table of Contents We have implemented policies and procedures designed to help ensure compliance with applicable laws and regulations, but there can be no guarantee against coworkers, contractors or agents violating such laws and regulations or our policies and procedures.
We have implemented policies and procedures designed to help ensure compliance with applicable laws and regulations, but there can be no guarantee against coworkers, contractors or agents violating such laws and regulations or our policies and procedures.
As a result, we could face significant adverse consequences including, among others, a limited availability of market quotations for our securities and a decreased ability to issue additional securities or obtain additional financing in the future. ​ General Risk Factors Global and regional economic and political conditions may have an adverse impact on our business.
In that event, we could experience significant adverse consequences, including reduced liquidity, fewer market quotations for our securities, increased price volatility and a diminished ability to issue additional securities or obtain financing on acceptable terms, or at all. ​ General Risk Factors Global and regional economic and political conditions may have an adverse impact on our business.
Price reductions by our competitors that we either cannot or choose not to match, could result in an erosion of our market share and/or reduced sales or, to the extent we match, such reductions, could result in reduced operating margins, any of which could have a material adverse effect on our business, results of operations and financial condition. 7 Table of Contents If we fail to adequately invest successfully in and introduce digital, artificial intelligence ( “ AI ” ), and other technological developments, or our suppliers are not able to continue to offer competitive components and electronic computing solutions, it could materially adversely impact results.
Price reductions by our competitors that we either cannot or choose not to match, could result in an erosion of our market share and/or reduced sales or, to the extent we match, such reductions, could result in reduced operating margins, any of which could have a material adverse effect on our business, results of operations and financial condition.
In addition to those risks to which our business and the acquired businesses are generally subject, the acquisition of these businesses gives rise to transactional and transitional risks, and the risk that the anticipated benefits will not be realized. ​ When the Company makes acquisitions, it may take on additional liabilities or not be able to successfully integrate such acquisitions .
As a result, we regularly evaluate potential acquisition opportunities, which may be material in size and scope. In addition to those risks to which our business and the acquired businesses are generally subject, the acquisition of these businesses gives rise to transactional and transitional risks, and the risk that the anticipated benefits will not be realized.
Among other things, trading of a relatively small volume of our Common Stock may have a greater impact on the trading price of our stock than would be the case if our public float were larger. ​ 13 Table of Contents Our Common Stock is listed on The NASDAQ Global Market tier of the Nasdaq Stock Market, and we therefore are subject to continued listing requirements, including requirements with respect to the market value and number of publicly-held shares, number of stockholders, minimum bid price, number of market makers and either (i) stockholders’ equity or (ii) total market value of stock, total assets and total revenues.
In addition, trading in relatively small volumes of our Common Stock may have a disproportionate effect on its trading price compared to companies with broader public ownership. ​ 14 Table of Contents Our Common Stock is listed on The Nasdaq Global Market and we are subject to Nasdaq's continued listing requirements, including requirements relating to, among other things, minimum bid price, market value of publicly held shares, public float, number of stockholders, number of market makers and certain financial thresholds.
If we are unable to accurately estimate the cost of these services or the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. Changes to United States tariff and import/export regulations may have a negative effect on our Company and, in turn, harm us.
If we are unable to accurately estimate the cost of these services or the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. Changes to U.S. Tariffs, import and export controls and other trade regulations could adversely affect our business, financial condition and results of operations.
Any of these competitive programs, if successful, could have a material adverse effect on the Company’s business, results of operations and financial condition. The Company’s business and results of operations may be adversely affected if the terms and conditions of the Company’s authorizations with its vendors were to be significantly modified or if certain products become unavailable to the Company.
Any of these competitive programs, if successful, could have a material adverse effect on the Company’s business, results of operations and financial condition.
Such tax developments could further increase uncertainty and have a material adverse impact on our, effective tax rate, and financial results. We may explore additional growth through acquisitions. During the year ended December 31, 2024, we completed one acquisition to expand our sales presence in the United States distribution operations and bring key vendor partner relationships to our portfolio.
Such tax developments could further increase uncertainty and have a material adverse impact on our, effective tax rate, and financial results. We may explore additional growth through acquisitions.
Any of these factors could depress economic activity and restrict our access to suppliers or customers and have a material adverse effect on their business, financial condition and results of operations, which in turn would negatively impact us. ​ 12 Table of Contents Financial Risks and Market Risks ​ Our quarterly financial results may fluctuate, which could lead to volatility in our stock price.
Any of these factors could disrupt our operations or relationships with vendors and customers and materially adversely affect our business, financial condition and results of operations. 13 Table of Contents Financial Risks and Market Risks ​ Our quarterly financial results may fluctuate, which could lead to volatility in our stock price.
If we fail to satisfy one or more of the requirements, we may be delisted from The NASDAQ Global Market.
If we fail to satisfy one or more of these requirements, Nasdaq may take steps to delist our Common Stock.
As part of our strategic growth plan, we may pursue the acquisition of companies that either complement or expand our existing business. As a result, we regularly evaluate potential acquisition opportunities, which may be material in size and scope.
We have in the past, pursued, and in the future expect to pursue, acquisitions of businesses and assets in new markets, either within the IT industry, that complement or expand our existing business. As part of our strategic growth plan, we may pursue the acquisition of companies that either complement or expand our existing business.
We are dependent upon automated information technology processes. Privacy, security, and compliance concerns have continued to increase as technology has evolved to facilitate commerce and as cross-border commerce increases.
We are dependent on automated information technology systems to conduct our operations, and privacy, data security and regulatory compliance risks have increased as technology has evolved and as our business and cross-border activities have expanded.
Our sales are also partially dependent on continued innovations in solutions by our suppliers, the competitiveness of our suppliers’ offerings, and our ability to partner with new and emerging technology providers. We may have difficulty offering customers solutions that anticipate and respond to rapid and continuing changes in technology and which meet their evolving demands.
We may have difficulty offering customers solutions that anticipate and respond to rapid and continuing changes in technology and which meet their evolving demands. The way software products are distributed and sold is changing, and new methods of distribution and sale may emerge or expand.
Also, certain of our larger customers require greater than 30-day payment terms which could increase our credit risk and decrease our operating cash flow. ​ We face substantial competition from other companies. We compete in all areas of our business against local, regional, national, and international firms.
We face substantial competition from other companies. We compete in all areas of our business against local, regional, national, and international firms. Some of our current competitors have substantially greater capital resources and sales and distribution capabilities than we do.
The information technology products industry is characterized by abrupt changes in technology, rapid changes in customer preferences, short product life cycles and evolving industry standards.
We typically sell to our customers on a purchase order basis, rather than pursuant to long-term contracts or contracts with minimum purchase requirements. Consequently, our sales are subject to demand variability by our customers. The information technology products industry is characterized by abrupt changes in technology, rapid changes in customer preferences, short product life cycles and evolving industry standards.
In the course of normal and customary business practice, we may share some of this information with vendors who assist us with certain aspects of our business. Moreover, the success of our operations depends upon the secure transmission of confidential and personal data over public networks, including the use of cashless payments.
We also routinely share certain of this information with third-party vendors and service providers that support our operations. The secure transmission and storage of confidential and personal information over public and private networks, including in connection with electronic and cashless payment systems, is critical to our business.
As part of our normal business activities, we collect and store certain confidential information, including personal information of employees and information about partners and clients which may be entitled to protection under several regulatory regimes.
In the ordinary course of our business, we collect, process and store confidential information, including personal information relating to our employees and information relating to our partners and clients, much of which is subject to protection under applicable data protection, privacy and cybersecurity laws and regulations.
We have paid a quarterly dividend on our Common Stock since the first quarter of 2003. Any future declaration of dividends remains subject to further determination from time to time by our Board of Directors. Our ability to pay dividends in the future will depend on our financial results, liquidity and financial condition.
Any future declaration and payment of dividends will be determined from time to time by our Board of Directors and will depend on, among other things, our results of operations, cash flows, liquidity, financial condition, capital requirements and other factors the Board of Directors deems relevant. There can be no assurance that we will resume paying dividends in the future.
There continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties and tariffs.
Ongoing geopolitical developments and changes in trade policies, treaties and tariffs have created and may continue to create, significant uncertainty regarding the scope, timing and impact of such measures, including with respect to trade between the United States and other countries.
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The United States has recently enacted and proposed to enact significant new tariffs. Additionally, President Trump has directed various federal agencies to further evaluate key aspects of U.S. trade policy and there has been ongoing discussion and commentary regarding potential significant changes to U.S. trade policies, treaties and tariffs.
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The Climb Elevate program allows resellers and vendors to connect through the Company for products typically outside of the main line-card. ​ In our Solutions business, an essential part of our strategic growth plan is to pursue opportunities with higher growth prospects and gross margin characteristics through the sale of specialty products, services and cloud offerings.
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These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the U.S.
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For the year ended December 31, 2025, the Company had two c ustomers, all of which are considered DMRs, that accounted for 24% and 13%, respectively, of consolidated net sales and as of December 31, 2025, 15% and 8%, re spectively, of total net accounts receivable.
Removed
There is no assurance that we will be able to pay dividends in the future, or if we are able to, that our Board of Directors will continue to declare dividends in the future, at current rates or at all.
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Worldwide economic conditions remain uncertain due to the persistence of inflation, elevated interest rates, market volatility and adverse effects on product demand connected to geopolitical developments including tariff uncertainty, and other disruptions to global and regional economies and markets.
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If we discontinue or reduce the amount or frequency of dividends, the value of our Common Stock may be impaired. ​ Risks related to our Common Stock . The issuance of shares by us may dilute your ownership of our Common Stock.
Added
If we fail to adequately invest successfully in and introduce digital, artificial intelligence ( “ AI ” ), and other technological developments, or our suppliers are not able to continue to offer competitive components and electronic computing solutions, it could materially adversely impact results.
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Trading volume in our Common Stock varies significantly based on a number of factors, which may be exacerbated by our repurchases of our Common Stock. As a result of the potentially low volume trading market for our stock, its market price may fluctuate significantly more than the stock market as a whole or of the stock prices of similar companies.
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AI systems are complex, rapidly changing, and may not operate as intended.
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Use of AI could lead to unintended consequences, including exposing us to additional risks related to cybersecurity, privacy and data security, such as the risk of increased vulnerability to cybersecurity threats and exposure, impacts to the stability of our operations, the inadvertent disclosure, misuse, or corruption of intellectual property, confidential, personal, or competitively sensitive information that could affect our reputation.
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Our efforts to expand AI capabilities within our products and internal functions involve risks, costs and operational challenges. Although we aim to design, develop, and deploy AI responsibly and to identify and mitigate associated ethical, legal and technical risks, we may not detect or resolve issues before they occur.
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AI technologies are complex and rapidly evolving, we face significant competition in the market and from other companies regarding such technologies. Further, the legal and regulatory landscape for AI is rapidly evolving and uncertain, and requirements may differ across jurisdictions.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings ​ We are involved from time to time in routine legal matters and other claims incidental to our business. We review outstanding claims and proceedings internally and with external counsel as necessary to assess probability and amount of potential loss.
Biggest changeItem 3. Legal Proceedings ​ We are involved from time to time in routine legal matters and other claims incidental to our business.
There are no material legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is the subject. ​ Item 4. Mine Safety Disclosures ​ Not applicable. ​ PART II ​
There are no material pending legal proceedings to which the Company or any of its subsidiaries is a party or to which any of their property is subject, and there are no material proceedings known to be contemplated by government authorities. ​ Item 4. Mine Safety Disclosures ​ Not applicable. ​ PART II ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis figure does not include an estimate of the number of beneficial holders whose shares are held of record by banks, broker or other nominees. ​ 16 Table of Contents Purchases of Equity Securities ​ The table below sets forth the share repurchase activity of Common Stock by the Company and its affiliates during the fourth quarter of 2024: ​ ​ ​ ​ ​ ​ Maximum ​ ​ ​ ​ ​ Number of ​ ​ ​ Total Number ​ Shares That ​ ​ ​ of Shares ​ May Yet Be ​ Total ​ Purchased as ​ Purchased ​ Number ​ ​Part of Publicly ​ Under the ​ of Shares Average ​Announced Average Plans or ​ Purchased Price Paid ​Plans or Price Paid Programs Period (1) Per Share ​Programs Per Share (2) ​ ​ ​ ​ ​ ​ October 1, 2024 - October 31, 2024 — $ — — $ — 545,786 November 1, 2024 - November 30, 2024 — $ — — $ — 545,786 December 1, 2024 - December 31, 2024 — $ — — $ — 545,786 Total — $ — — $ — 545,786 (1) For the year ended December 31, 2024, we did not repurchase any shares of our Common Stock under our share repurchase plans referred to in footnote (2) below. ​ (2) On December 3, 2014, the Board of Directors of the Company approved an increase of 500,000 shares of Common Stock to the number of shares of Common Stock available for repurchase under its repurchase plans.
Biggest changeRecent Sales of Unregistered Securities None. ​ 17 Table of Contents Purchases of Equity Securities ​ The table below sets forth the share repurchase activity of Common Stock by the Company and its affiliates during the fourth quarter of 2025: ​ Maximum Number of Total Number Shares That of Shares May Yet Be Total Purchased as Purchased Number Part of Publicly Under the of Shares Average Announced Average Plans or Purchased Price Paid Plans or Price Paid Programs Period (1) Per Share Programs Per Share (2) October 1, 2025 - October 31, 2025 — $ — — $ — 545,786 November 1, 2025 - November 30, 2025 — $ — — $ — 545,786 December 1, 2025 - December 31, 2025 — $ — — $ — 545,786 Total — $ — — $ — 545,786 (1) For the year ended December 31, 2025, we did not repurchase any shares of our Common Stock under our share repurchase plans referred to in footnote (2) below. ​ (2) On December 3, 2014, the Board of Directors of the Company approved an increase of 500,000 shares of Common Stock to the number of shares of Common Stock available for repurchase under its repurchase plans.
Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information ​ Shares of our Common Stock, par value $0.01, trade on The Nasdaq Global Market tier of The Nasdaq Stock Market under the symbol “CLMB”. ​ Dividends ​ In each of 2024 and 2023, we declared dividends totaling $0.68 p er share on our Common Stock.
Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information ​ Shares of our Common Stock trade on The Nasdaq Global Market tier of The Nasdaq Stock Market under the symbol “CLMB”. ​ Dividends ​ In each of 2025, 2024 and 2023, we declared dividends totaling $0.68 p er share on our Common Stock.
The payment of future dividends is at the discretion of our Board of Directors and will depend upon future earnings, results of operations, capital requirements, our financial condition, contractual restrictions, including the terms of the agreements governing our debt and any future indebtedness we may incur and other relevant factors and other factors the Board of Directors may find relevant.
The declaration and payment of any future dividends will be at the discretion of our Board of Directors and will depend on, among other things, our future earnings, results of operations, capital requirements, financial condition, contractual restrictions, including the terms of the agreements governing our existing indebtedness and any future indebtedness we may incur, and other factors the Board of Directors may deem relevant.
There can be no assurance that we will continue to pay comparable cash dividends in the future. ​ Shareholder Information ​ As o f February 6, 2025, there were approximately 16 re cord holders of our Common Stock.
There can be no assurance that we will resume paying cash dividends in the future. ​ Shareholder Information ​ As o f February 9, 2026, there were approximately 22 re cord holders of our Common Stock.
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The Common Stock repurchase program does not have an expiration date. ​ Item 6. [Reserved] ​
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Following the end of fiscal year 2025, our Board of Directors determined to suspend quarterly cash dividends on our Common Stock beginning with the first quarter of 2026 in order to preserve financial flexibility and prioritize capital allocation objectives.
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This figure does not include an estimate of the number of beneficial holders whose shares are held of record by banks, broker or other nominees.
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The Common Stock repurchase program does not have an expiration date. ​ Performance Graph The following graph shows a five-year comparison of cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of the S&P MidCap 400 Index and the S&P 500 Computer and Electronics Retail Index for the period commencing December 31, 2020 and ending December 31, 2025, assuming $100 was invested on December 31, 2020 and the reinvestment of dividends.
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The past performance of our common stock is no indication of future performance.
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Fiscal Years Ended December 31, 2020 2021 2022 2023 2024 2025 Climb Global Solutions, Inc. 100.00 188.44 172.81 291.98 693.32 565.69 S&P MidCap 400 Index 100.00 124.73 108.37 126.72 144.80 155.64 S&P 500 Computer & Electronics Retail Index 100.00 104.47 86.19 88.15 102.11 83.94 Item 6. [Reserved] ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe operating results of DSS are included in our operating results from the date of acquisition. ​ Net cash and cash equivalents used in financing activities during the year ended December 31, 2024 was $13.0 mil lion, comprised of net repayments of borrowings under credit facilities of $4.2 million, payments of contingent considerations of $3.6 m illion, dividend payments on our Common Stock o f $3.0 m illion, purchases of treasury stock of $1.6 m illion and repayments of borrowing under term loan of $0.5 m illion. ​ On December 3, 2014, the Board of Directors of the Company approved an increase of 500,000 shares of Common Stock to the number of shares of Common Stock available for repurchase under its repurchase plans.
Biggest changeNet cash and cash equivalents used in financing activities during the year ended December 31, 2025 w as $9.1 million, comprised of payments of contingent considerations of $3.4 million, dividend payments on our Common Stock of $3.1 million, purchases of treasury stock of $2.1 million and repayments of borrowing under term loan of $0.5 million.
Gross billings increased at a greater rate than net sales due to differences in the product mix between the two periods as an increasing number of products that we sold are recognized on a net basis as there were increased sales of security, maintenance and cloud-based products. ​ Net sales in our Solutions segment for the year ended December 31, 2024 decreased 12 %, or $3.1 million, to $23.7 milli on compared to $26.8 million for the prior year.
Gross billings increased at a greater rate than net sales due to differences in the product mix between the two periods as an increasing number of products that we sold are recognized on a net basis as there were increased sales of security, maintenance and cloud-based products. ​ Net sales in our Solutions segment for the year ended December 31, 2024 decreased 12%, or $3.1 million, to $23.7 million compared to $26.8 million for the prior year.
In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. ​ 21 Table of Contents Foreign Exchange ​ The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product.
In the event the Company were to determine that it would not be able to realize all or part of its net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to income in the period such determination was made. ​ 22 Table of Contents Foreign Exchange ​ The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product.
We also use judgment in the allocation of sales proceeds among performance obligations, utilizing observable data such as stand-alone selling prices, or market pricing for similar products and services. ​ 19 Table of Contents Allowances for Expected Credit Losses ​ The Company maintains allowances for expected credit losses for estimated losses resulting from the inability of its customers to make required payments.
We also use judgment in the allocation of sales proceeds among performance obligations, utilizing observable data such as stand-alone selling prices, or market pricing for similar products and services. ​ 20 Table of Contents Allowances for Expected Credit Losses ​ The Company maintains allowances for expected credit losses for estimated losses resulting from the inability of its customers to make required payments.
Furthermore, fluctuations in the Company’s operating results, announcements regarding litigation, the loss of a significant vendor partner or customer, increased competition, reduced vendor incentives and trade credit, higher operating expenses, and other developments, could have a significant impact on the market price of our Common Stock. ​ 18 Table of Contents Inflation.
Furthermore, fluctuations in the Company’s operating results, announcements regarding litigation, the loss of a significant vendor partner or customer, increased competition, reduced vendor incentives and trade credit, higher operating expenses, and other developments, could have a significant impact on the market price of our Common Stock. ​ 19 Table of Contents Inflation.
The year-to-year comparison of financial results is not necessarily indicative of future results: ​ Year ended ​ December 31, ​ 2024 2023 Net sales 100.0 % 100.0 % Cost of sales 80.4 81.7 Gross profit 19.6 18.3 Selling, general and administrative expenses 12.1 12.6 Acquisition related costs 0.5 0.2 Depreciation and amortization expense 0.9 0.8 Income from operations 6.0 4.7 Other (expense) income (0.6 ) 0.1 Income before income taxes 5.4 4.8 Income tax provision 1.4 1.3 Net income 4.0 % 3.5 % Key Business Metrics GAAP and Non-GAAP Financial Measures ​ Our management monitors several financial and non-financial measures and ratios on a regular basis in order to track the progress of our business.
The year-to-year comparison of financial results is not necessarily indicative of future results: Year ended December 31, 2025 2024 2023 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 83.9 80.4 81.7 Gross profit 16.1 19.6 18.3 Selling, general and administrative expenses 10.4 12.1 12.6 Acquisition related costs 0.1 0.5 0.2 Depreciation and amortization expense 1.2 0.9 0.8 Income from operations 4.5 6.0 4.7 Other (expense) income (0.2 ) (0.6 ) 0.1 Income before income taxes 4.3 5.4 4.8 Income tax provision 1.0 1.4 1.3 Net income 3.3 % 4.0 % 3.5 % Key Business Metrics GAAP and Non-GAAP Financial Measures ​ Our management monitors several financial and non-financial measures and ratios on a regular basis in order to track the progress of our business.
If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. ​ 20 Table of Contents If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test.
If, after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative goodwill impairment test is unnecessary. ​ 21 Table of Contents If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform the quantitative goodwill impairment test.
We market these products through creative marketing communications, including our web sites, local seminars, webinars, social media, direct e-mail, and printed materials. ​ We have subsidiaries in the United States, Canada, Netherlands, United Kingdom, and Ireland, through which sales are made. ​ 17 Table of Contents Factors Influencing Our Financial Results ​ We derive most of our net sales though the sale of third-party software licenses, maintenance and service agreements.
We market these products through creative marketing communications, including our web sites, local seminars, webinars, social media, direct e-mail, and printed materials. ​ We have subsidiaries in the United States, Canada, Netherlands, United Kingdom, Ireland, and Germany through which sales are made. ​ 18 Table of Contents Factors Influencing Our Financial Results ​ We derive most of our net sales through the sale of third-party software licenses, maintenance and service agreements.
Gross billings for the Solutions segment for the year ended December 31, 2024 increased 8%, or $6.3 million, to $89.8 milli on compared to $83.5 million for the same period in 2023.
Gross billings for the Solutions segment for the year ended December 31, 2024 increased 8%, or $6.3 million, to $89.8 million compared to $83.5 million for the same period in 2023.
During the year ended December 31, 2024, gross profit increased 42%, or $26.9 million, to $91.1 mi llion compared to $64.2 million for the same period in 2023 while effective margi n increased 520 basis points to 43.5% compared to 38.3% for the same period in 2023. ​ 24 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 ​ Acquisitions On July 31, 2024, we completed the acquisition of DSS for an aggregate purchase price of approximately $20.3 million (subject to certain adjustments) plus a potential post-closing earnout payment.
During the year ended December 31, 2024 , gross profit increased 42%, or $26.9 million, to $91.1 million compared to $64.2 million for the same period in 2023 while effective margin increased 520 basis points to 43.5% compared to 38.3% for the same period in 2023. ​ 25 Table of Contents Acquisitions On July 31, 2024, we completed the acquisition of DSS for an aggregate purchase price of approximately $20.3 million (subject to certain adjustments) plus a potential post-closing earnout payment.
Gross billings for the Distribution segment for the year ended December 31, 2024 increased 44 %, or $518.6 million, t o $1,695.5 millio n compared to $1,176.9 million for the same period in 2023.
Gross billings for the Distribution segment for the year ended December 31, 2024 increased 44%, or $518.6 million, to $1,695.5 million compared to $1,176.9 million for the same period in 2023.
Amortization and depreciation expense increas ed $1.5 million to $4.3 million for the year ended December 31, 2024 compared to $2.8 million for the same period in the prior year. Net incom e increased 51%, or $6.3 million, to $18.6 million for the year ended December 31, 2024 compared to $12.3 million for the same period in 2023.
Amortization and depreciation expense increased $1.5 million to $4.3 million for the year ended December 31, 2024 compared to $2.8 million for the same period in the prior year. Net income increased 51%, or $6.3 million, to $18.6 million for the year ended December 31, 2024 compared to $12.3 million for the same period in 2023.
Our use of non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results reported under GAAP, as these measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures. 23 Table of Contents ​ Year ended ​ December 31, December 31, Net income reconciled to adjusted EBITDA (Non-GAAP): 2024 2023 ​ ​ ​ Net income $ 18,610 $ 12,323 Provision for income taxes 6,408 4,458 Depreciation and amortization 4,269 2,798 Interest expense 335 264 EBITDA 29,622 19,843 Share-based compensation 4,070 4,148 Acquisition related costs 2,311 629 Change in fair value of acquisition contingent consideration 3,618 — Adjusted EBITDA $ 39,621 $ 24,620 We define adjusted EBITDA, as net income, plus provision for income taxes, depreciation, amortization, share-based compensation, interest, acquisition related costs and changes in the fair value of contingent considerations.
Our use of non-GAAP information as analytical tools has limitations, and you should not consider them in isolation or as substitutes for analysis of our financial results reported under US GAAP, as these measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures. 24 Table of Contents Year ended December 31, December 31, December 31, Net income reconciled to adjusted EBITDA (Non-GAAP): 2025 2024 2023 Net income $ 21,330 $ 18,610 $ 12,323 Provision for income taxes 6,588 6,408 4,458 Depreciation and amortization 7,728 4,269 2,798 Interest expense 293 335 264 EBITDA 35,939 29,622 19,843 Share-based compensation 4,775 4,070 4,148 Acquisition related costs 807 2,311 629 Change in fair value of acquisition contingent consideration 1,374 3,618 — Adjusted EBITDA $ 42,895 $ 39,621 $ 24,620 We define adjusted EBITDA, as net income, plus provision for income taxes, depreciation, amortization, share-based compensation, interest, acquisition related costs and changes in the fair value of contingent considerations.
We are subject to fluctuations primarily in the Canadian Dollar, Euro Dollar and British Pound-to-U.S. Dollar exchange rate. ​ Off-Balance Sheet Arrangements ​ As of December 31, 2024, we did not have any off-balance sheet arrangements. ​
We are subject to fluctuations primarily in the Canadian Dollar, Euro and British Pound-to-U.S. Dollar exchange rate. ​ Off-Balance Sheet Arrangements ​ As of December 31, 2025, we did not have any off-balance sheet arrangements. 28 Table of Contents ​
These expenses in the current year relate to costs incurred in conjunction with our continued acquisition initiatives including the acquisition of DSS, while these expenses in the same period the prior year related to the acquisition of Data Solutions. ​ Foreign Currency Transaction Loss ​ Foreign currency transaction loss for the year ended December 31, 2024 was $0.3 million compared to a foreign currency transaction loss of $0.6 million for the same period in the prior year.
These expenses in the current year relate to costs incurred in conjunction with our continued acquisition initiatives, while these expenses in the same period the prior year related to the acquisition of DSS. ​ Foreign Currency Transaction Loss ​ Foreign currency transaction loss for the year ended December 31, 2025 was $0.7 million compared to a foreign currency transaction loss of $0.3 million for the same period in the prior year.
We use gross billings and gross profit as a percentage of gross billings, or gross billings margin, as operational metrics to assess the volume of transactions or market share for our business as well as to understand changes in our accounts receivable and accounts payable.
We use gross billings and gross profit as a percentage of gross billings, or gross billings margin, as operational metrics to assess the volume of transactions or market share for our business as well as to understand changes in our accounts receivable and accounts payable. We believe gross billings and gross billings margin will aid investors in the same manner.
The increase was primarily driven by higher payroll and related costs consistent with higher gross profit, as well as the impact of the DSS and Data Solutions acquisitions.
The increase was primarily driven by higher payroll and related costs consistent with higher gross profit, as well as the impact of the DSS acquisition.
On October 6, 2023, we completed the acquisition of Data Solutions for an aggregate purchase of approximately €15.0 million (equivalent to $15.9 million USD), subject to certain working capital and other adjustments, paid at closing plus a potential post-closing earn-out.
The operating results of DSS are included in our operating results from the date of the acquisition. On October 6, 2023, we completed the acquisition of Data Solutions for an aggregate purchase of approximately €15.0 million (equivalent to $15.9 million USD), subject to certain working capital and other adjustments, paid at closing plus a potential post-closing earn-out.
We anticipate that our working capital needs will increase as we invest in the growth of our business. We believe that the funds held in cash and cash equivalents and our unused borrowings under our Credit Agreement will be sufficient to fund our working capital and cash requirements for at least the next 12 months.
We believe that the funds held in cash and cash equivalents and our unused borrowings under our Credit Agreement will be sufficient to fund our working capital and cash requirements for at least the next 12 months.
Selling, general and administrative (“SG&A”) expenses increased 27%, or $12.2 million, to $56.5 m illion for the year ended December 31, 2024, compared to $44.3 million for the same period in 2023. Acquisition related costs for the years ended December 31, 2024 and 2023 were $2.3 million and $0.6 million, respectively.
SG&A expenses increased 27%, or $12.2 million, to $56.5 million for the year ended December 31, 2024, compared to $44.3 million for the same period in 2023. Acquisition related costs for the years ended December 31, 2024 and 2023 were $2.3 million and $0.6 million, respectively.
We believe that most price increases could be passed on to our customers, as prices charged by us are not set by long-term contracts; however, as a result of competitive pressure, there can be no assurance that the full effect of any such price increases could be passed on to our customers or cause a reduction in our customers spending. ​ Financial Overview ​ Net sales increased 3 2%, or $113.6 million, to $465.6 m illion for the year ended December 31, 2024, compared to $352.0 million for the same period in 2023.
We believe that most price increases could be passed on to our customers, as prices charged by us are not set by long-term contracts; however, as a result of competitive pressure, there can be no assurance that the full effect of any such price increases could be passed on to our customers or cause a reduction in our customers spending. ​ Financial Overview ​ Net sale s increased 40%, or $186.9 million, to $652.5 million for the year ended December 31, 2025, compared to $465.6 million for the same period in 2024.
This increase was the result of the aforementioned increase in gross billings. ​ Customer rebates and discounts for the year ended December 31, 2024 were $19.7 million compared to $12.8 million for the same period in the prior year.
This increase was the result of the aforementioned increase in gross billings. ​ Custome r rebates and discounts for the year ended December 31, 2025 were $22.7 million compared to $19.7 million for the same period in the prior year.
We plan to continue to expand our investment in information technology to support the growth of our business. ​ Acquisition Related Costs ​ Acquisition related costs for the years ended December 31, 2024 and 2023 were $2.3 m illion and $0.6 million, respectively.
We plan to continue to expand our investment in information technology to support the growth of our business. ​ Acquisition Related Costs ​ Acquisition related costs for the years ended December 31, 2025 and 2024 were $0.8 million and $2.3 million, res pectively.
On February 2, 2017, the Board of Directors approved an increase of 500,000 shares of Common Stock to the number of shares of Common Stock available for repurchase under its repurchase plans. The Company is authorized to purchase 545,786 shares of Common Stock as of December 31, 2024.
On February 2, 2017, the Board of Directors approved an increase of 500,000 shares of Common Stock to the number of shares of Common Stock available for repurchase under its repurchase plans. The Company is authorized to purchase 545,786 s hares of Common Stock as of December 31, 2025. The Common Stock repurchase program does not have an expiration date.
Total dividends paid and the dollar value of shares repurchased wer e $3.0 million and $1.6 m illion for the year ended December 31, 2024, respectively, and $3.0 million and $1.7 million for the year ended December 31, 2023, respectively.
Total dividends paid and the dollar value of shares repurchased wer e $3.0 million and $2.0 mill ion for the year ended December 31, 2025, respectively, $3.0 million and $1.6 million fo r the year ended December 31, 2024, and $3.0 million and $1.7 million for the year ended December 31, 2023, respectively.
The major customers accounted for 18 %, 14% and 11%, of our total net sales during the year ended December 31, 2024.
During the year ended December 31, 2024, we relied on three key customers for a total of 43% of our total net sales. The major customers accounted for 18%, 14% and 11%, of our total net sales during the year ended December 31, 2024.
Numerous conditions which impact these sectors or the stock market in general or the Company in particular, whether or not such events relate to or reflect upon the Company’s operating performance, could adversely affect the market price of the Company’s Common Stock.
The technology, distribution and services sectors of the United States stock markets is subject to substantial volatility. Numerous conditions which impact these sectors or the stock market in general or the Company in particular, whether or not such events relate to or reflect upon the Company’s operating performance, could adversely affect the market price of the Company’s Common Stock.
We believe gross billings and gross billings margin will aid investors in the same manner. ​ Year ended ​ December 31, December 31, ​ 2024 2023 ​ ​ ​ Net sales $ 465,607 $ 352,013 ​ ​ ​ Gross profit $ 91,080 $ 64,247 Gross profit - Distribution $ 78,292 $ 53,363 Gross profit - Solutions $ 12,788 $ 10,884 Non-GAAP Financial Measures: ​ ​ Adjusted EBITDA (Non-GAAP) $ 39,621 $ 24,620 Effective margin % - Adjusted EBITDA (Non-GAAP) 43.5 % 38.3 % ​ ​ ​ Operational metrics: Gross billings $ 1,785,302 $ 1,260,382 Gross billings - Distribution $ 1,695,538 $ 1,176,866 Gross billings - Solutions $ 89,764 $ 83,516 Gross billings margin % - Gross billings 5.1 % 5.1 % We consider gross profit growth and effective margin to be key metrics in evaluating our business.
Year ended December 31, December 31, December 31, 2025 2024 2023 Net sales $ 652,517 $ 465,607 $ 352,013 Gross profit $ 105,270 $ 91,080 $ 64,247 Gross profit - Distribution $ 91,891 $ 78,292 $ 53,363 Gross profit - Solutions $ 13,379 $ 12,788 $ 10,884 Non-GAAP Financial Measures: Adjusted EBITDA (Non-GAAP) $ 42,895 $ 39,621 $ 24,620 Effective margin % - Adjusted EBITDA (Non-GAAP) 40.7 % 43.5 % 38.3 % Operational metrics: Gross billings $ 2,105,168 $ 1,785,302 $ 1,260,382 Gross billings - Distribution $ 2,014,847 $ 1,695,538 $ 1,176,866 Gross billings - Solutions $ 90,321 $ 89,764 $ 83,516 Gross billings margin % - Gross billings 5.0 % 5.1 % 5.1 % We consider gross profit growth and effective margin to be key metrics in evaluating our business.
These same customers accounted for 12 %, 6% and 19%, respectively , of total net accounts receivable as of December 31, 2024. ​ Gross Profit ​ Gross profit for the year ended December 31, 2024 increased 4 2%, or $26.9 million, to $91.1 million compared to $64.2 million for the same period in 2023. ​ 25 Table of Contents Distribution segment gross profit for the year ended December 31, 2024 increased 47%, or $24.9 million, to $78.3 m illion compared to $53.4 million for the same period in 2023.
These same customers accounted for 12%, 6% and 19%, respectively, of total net accounts receivable as of December 31, 2024. Gross Profit Gross profit for the year ended December 31, 2024 increased 42%, or $26.9 million, to $91.1 million compared to $64.2 million for the same period in 2023.
SG&A expenses were 3.2% of gross billings, an operational metric, for the year ended December 31, 2024, compared to 3.7% for the same period in the prior year. ​ The Company expects that its SG&A expenses, as a percentage of gross billings, an operational metric, may vary depending on changes in sales volume, as well as the levels of continuing investments in key growth initiatives.
SG&A expen ses wer e 3.2% o f gross billings, an operational metric, for the year ended December 31, 2025 and 2024, respectively. ​ The Company expects that its SG&A expenses, as a percentage of gross billings, an operational metric, may vary depending on changes in sales volume, as well as the levels of continuing investments in key growth initiatives.
G ross billings increased at a greater rate than net sales due to differences in the product mix between the two periods as an increasing number of products that we sold are recognized on a net basis as there were increased sales of security, maintenance and cloud-based products. ​ During the year ended December 31, 2024, we relied on three key customers for a total of 43% of our total net sales.
Gross billings increased at a greater rate than net sales due to differences in the product mix between the two periods as an increasing number of products that we sold are recognized on a net basis as there were increased sales of security, maintenance and cloud-based products.
The increase in Distribution segment gross profit resulted primarily from the organic growth at our existing vendor lines and the impact of DSS and Data Solutions since the dates of the respective acquisitions, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of gross billings. ​ Solutions segment gross profit for the year ended December 31, 2024, increased 18%, or $1.9 million, to $12.8 million compared to $10.9 million for the same period in 2023.
The increase in Distribution segment gross profit resulted primarily from the organic growth at our existing vendor lines and the impact of DSS and Data Solutions since the dates of the respective acquisitions, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of gross billings.
In December 2023, the FASB issued ASU No. 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures ” . Upon adoption of this ASU, the company will disclose specific new categories in its income tax rate reconciliation and provide additional information for reconciling items above a quantitative threshold.
Upon adoption of this ASU, the Company will disclose specific new categories in its income tax rate reconciliation and provide additional information for reconciling items above a quantitative threshold.
Gross profit increased 4 2%, or $26.9 million, to $91.1 m illion for the year ended December 31, 2024, compared to $64.2 million for the same period in 2023.
Net sales increased 32%, or $113.6 million, to $465.6 million for the year ended December 31, 2024, compared to $352.0 million for the same period in 2023. Gross profit increased 42%, or $26.9 million, to $91.1 million for the year ended December 31, 2024, compared to $64.2 million for the same period in 2023.
The discount rate under the IDF was equal to 2.5% above AIB’s applicable lending rates that varied based on the currency of the accounts receivable. At December 31, 2024, the outstanding balance under the IDF at was zero, as the Company terminated the IDF during the period.
Borrowings under the IDF were based on accounts receivable up to 80% of the outstanding accounts receivable balance. The discount rate under the IDF was equal to 2.5% above AIB’s applicable lending rates that varied based on the currency of the accounts receivable.
The effective tax rate for the year ended December 31, 2024 as well as the same period in the prior year are impacted by limitations on the deductibility of certain executive compensation amounts during both periods, as well as the Company’s effective tax rate for both periods were impacted changes in the mix of jurisdictions in which taxable income was earned. ​ 26 Table of Contents Liquidity and Capital Resources ​ Our cash and cash equivalents decreased by $6.5 million to $29.8 m illion at December 31, 2024 compared to $36.3 million at December 31, 2023.
The effective tax rate for the year ended December 31, 2025 as well as the same period in the prior year are impacted by limitations on the deductibility of certain executive compensation amounts during both periods, as well as the Company’s effective tax rate for both periods were impacted changes in the mix of jurisdictions in which taxable income was earned. ​ 27 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Net Sales Net sales for the year ended December 31, 2024 increased 32%, or $113.6 million, to $465.6 million compared to $352.0 million for the same period in 2023.
In our Solutions segment sales are generally driven by sales force effectiveness and success in providing superior customer service and cloud solutions support, competitive pricing, and flexible payment solutions to our customers.
In our Solutions segment sales are generally driven by sales force effectiveness and success in providing superior customer service and cloud solutions support, competitive pricing, and flexible payment solutions to our customers. Our sales are also impacted by external factors such as levels of IT spending and customer demand for products we distribute.
Net cash and cash equivalents used in investing activities during the year ended December 31, 2024 was $26.4 million, comprised of $5.5 million of purchases of fixed assets supporting our ERP project a nd $20.9 million payment for the DSS and Data Solutions acquisitions, net of cash acquired.
Net cash and cash equivalents used in investing activities during the year ended December 31, 2025 was $2.0 million of purchases of fixed assets supporting our ERP project.
Data Solutions had previously entered into the IDF with AIB Commercial Finance Limited (“AIB”) pursuant to a Debt Purchase Agreement. The proceeds from the IDF were used for working capital needs of Data Solutions. Borrowings under the IDF were based on accounts receivable up to 80% of the outstanding accounts receivable balance.
In connection with the acquisition of Data Solutions, the Company acquired an invoice discounting facility (“IDF”) that was with recourse to the Company. Data Solutions had previously entered into the IDF with AIB Commercial Finance Limited (“AIB”) pursuant to a Debt Purchase Agreement. The proceeds from the IDF were used for working capital needs of Data Solutions.
The Company recognized an unrealized gain of less than $0.1 million on contracts outstanding as of December 31, 2024, which is included in foreign currency transaction loss in the Consolidated Statement of Earnings. ​ Recently Issued Accounting Pronouncements ​ In November 2024, the FASB issued ASU No. 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ” .
The Company recognized an unrealized loss of less than $0.1 million o n contracts outstanding as of December 31, 2025, which is included in foreign currency transaction loss in the Consolidated Statement of Earnings. ​ Recently Issued Accounting Pronouncements ​ In September 2025, the FASB issued ASU No. 2025-06, “ Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software ”.
The proceeds from the Term Loan will be used to fund certain capital expenditures. The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026.
The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026. The Company had $0.2 million and $0.8 million o utstanding under the Term Loan as of December 31, 2025 and 2024, respectively.
The Common Stock repurchase program does not have an expiration date. ​ As of December 31, 2024, we held 683,198 shares of our Common Stock in treasury at an average cost of $19.52 per share. As of December 31, 2023, we held 711,052 shares of our Common Stock in treasury at an average cost of $17.75 per share.
As of December 31, 2025, we held 673,882 shar es of our Common Stock in treasury at an average cost of $22.13 per share. As of December 31, 2024, we held 683,198 shares of our Common Stock in treasury at an average cost of $19.52 p er share.
Our sales are also impacted by external factors such as levels of IT spending and customer demand for products we distribute. ​ We sell in a competitive environment where gross product margins have historically declined due to competition and changes in product mix towards products where no delivery of a physical product is required.
Technology trends are likely to evolve as customers prioritize spend that will produce the most important outcomes for their business. ​ We sell in a competitive environment where gross product margins have historically declined due to competition and changes in product mix towards products where no delivery of a physical product is required.
The payment of future dividends and any share repurchases are at the discretion of our Board of Directors and dependent on results of operations, projected capital requirements and other factors the Board of Directors may find relevant. ​ Stock Volatility. The technology, distribution and services sectors of the United States stock markets is subject to substantial volatility.
The payment of future dividends and any share repurchases will be at the discretion of our Board of Directors and will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors the Board of Directors deems relevant. ​ Stock Volatility.
The operating results of Data Solutions are included in our operating results from the date of acquisition. ​ Operating results of Douglas Stewart Software & Services and Data Solutions are included in our Distribution segment. ​ Net Sales ​ Net sales for the year ended December 31, 2024 increased 32 %, or $113.6 million, to $465.6 million compared to $352.0 million for the same period in 2023. ​ Gross billings, an operational metric, for the year ended December 31, 2024 increased 42%, or $524.9 million, to $1,785.3 m illion compared to $1,260.4 million for the same period in 2023. ​ Net sales in our Distribution segment for the year ended December 31, 2024 increased 36%, or $116.6 million, to $441.9 million compared to $325.3 million for the same period in the prior year.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 ​ Net Sales ​ Net sales for the year ended December 31, 2025 increased 40%, or $186.9 million, to $652.5 millio n compared to $465.6 million for the same period in 2024. ​ Gross billings, an operational metric, for the year ended December 31, 2025 increased 18%, or $319.9 million, to $2,105.2 mil lion compared to $1,785.3 million for the same period in 2024. ​ Net sales in our Distribution segment for the year ended December 31, 2025 increased 42%, or $185.5 million, to $627.4 m illion compared to $441.9 million for the same period in the prior year.
In connection with entering into the Credit Agreement, the Company voluntarily terminated that certain existing revolving credit agreement, dated November 15, 2017, by and among the Company, certain subsidiaries of the Company and Citibank, N.A. ​ On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc. pursuant to a Master Loan and Security Agreement.
There were no amounts outstanding under the Credit Agreement as of December 31, 2025 and 2024. On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc. pursuant to a Master Loan and Security Agreement. The proceeds from the Term Loan will be used to fund certain capital expenditures.
The decrease in cash and cash equivalents was primarily the result of $33.7 million of cash and cash equivalents provided by operating activities, offset by $20.9 million payment for the DSS and Data Solutions acquisitions, $5.5 million of cash used in other investing activities, $13.0 million of cash used in financing activities and $0.9 million negative impact of foreign exchange rates on cash and cash equivalents. ​ Net cash provided by operating activities for the year ended December 31, 2024 was $33.7 million, comprised of net income adjusted for non-cash items of $30.6 million offset by changes in operating assets and liabilities of $3.1 mill ion.
The increase in cash and cash equivalents was primarily the result of $16.6 million of cash and cash equivalents provided by operating activities, offset by $2.0 million of cash used in other investing activities, $9.1 million of cash used in financing activities and $1.2 million positive impact of foreign exchange rates on cash and cash equivalents.
T he Company adopted this ASU in the first quarter of 2024 and upon adoption, the Company has disclosed significant segment expenses, the title and position of the CODM, and an explanation of how the reported measure of segment profit or loss is used by the CODM to assess segment performance and make resource allocation decisions. 22 Table of Contents Results of Operations ​ The following table sets forth for the years indicated the percentage of net sales represented by selected items reflected in the Company’s Consolidated Statements of Earnings.
The Company adopted ASU No. 2023-09 on a prospective basis for the fiscal year ending December 31, 2025. 23 Table of Contents Results of Operations ​ The following table sets forth for the years indicated the percentage of net sales represented by selected items reflected in the Company’s Consolidated Statements of Earnings.
The operating results of DSS are included in our operating results from the date of the acquisition. The Company recorded net revenue for DSS of approximately $11.8 million and net income of approximately $0.8 mill ion during the year ended December 31, 2024.
The operating results of Data Solutions are included in our operating results from the date of acquisition. Operating results of DSS and Data Solutions are included in our Distribution segment.
Removed
The Company expects these amendments will first be applied in the company’s annual report on Form 10-K for the fiscal year ending December 31, 2025, on a prospective basis. ​ In November 2023, the FASB issued Accounting Standards Update 2023-07 “ Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ” .
Added
Our customers evaluate the complex technology landscape in order to balance priorities and focus on products that lead to business optimization, cost management and security risk management, resulting in a more measured approach to their IT spending. We provide security, software and hybrid and cloud offerings to help customers achieve their objectives.
Removed
The amendments in this ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.
Added
Technology trends drive customer purchasing behaviors in the market. Current technology trends are focused on delivering greater flexibility and efficiency, as well as designing and managing IT securely. These trends are driving customer adoption of cloud, AI, software defined architectures and hybrid on-premise and off-premise combinations.
Removed
On July 31, 2024, we completed the acquisition of DSS for an aggregate purchase price of approximately $20.3 million, subject to certain working capital and other adjustments, paid at closing plus a potential post-closing earn-out.
Added
Following the end of fiscal year 2025, our Board of Directors determined to suspend quarterly cash dividends on our Common Stock beginning with the first quarter of 2026 in order to preserve financial flexibility and prioritize capital allocation objectives.
Removed
There were no amounts outstanding under the Credit Agreement as of December 31, 2024 and 2023.
Added
Gross profit increased 16%, or $14.2 million, to $105.3 m illion for the year ended December 31, 2025, compared to $91.1 million for the same period in 2024. Selling, general and administrative (“SG&A”) expenses increased 20%, or $11.1 million, to $67.6 m illion for the year ended December 31, 2025, compared to $56.5 million for the same period in 2024.
Removed
The Company had $0.8 million and $1.3 million outstanding under the Term Loan as of December 31, 2024 and 2023, respectively. ​ 27 Table of Contents In connection with the acquisition of Data Solutions, the Company acquired an invoice discounting facility (“IDF”) that was with recourse to the Company.
Added
Acquisition related costs for the years ended December 31, 2025 and 2024 were $0.8 million and $2.3 million, respectively. Amortization and depreciation expen se increased $3.4 million to $7.7 million for the year ended December 31, 2025 compared to $4.3 million for the same period in the prior year.
Added
Net incom e increased 15%, or $2.7 million, to $21.3 million for the year ended December 31, 2025 compared to $18.6 million f or the same period in 2024. Income per diluted shar e increased 14%, or $0.58, to $4.64 for the year ended December 31, 2025 compared to $4.06 for the same period in 2024.
Added
This ASU amends the guidance under ASC 350-40 for internal-use software. The amendments remove referenced to development-stages, clarify when capitalization may begin, and require entities to apply to property, plant and equipment disclosure requirements under ASC 350-10 to capitalize internal-use software costs.
Added
The ASU is effective for annual periods beginning after December 15, 2027, and for interim periods within those annual periods. Early adoption of ASU No. 2025-06 is permitted.
Added
The Company has performed an initial assessment and currently does not expect the adoption of ASU No. 2025-06 to have a material effect on its financial position, results of operations or cash flows.
Added
In July 2025, the FASB issued ASU No. 2025-05, “ Financial Instruments - Credit Losses (Topic 326): Measurements of Credit Losses for Accounts Receivable and Contract Assets ” .
Added
The update amends the guidance in ASC 326-20 to introduce a practical expedient when estimating credit losses that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The amendments apply to current accounts receivable and current contract assets arising from transactions under ASC 606 (Revenue from Contracts with Customers).
Added
The amendments are applied prospectively and are effective for annual reporting periods beginning after December 15, 2025, and interim periods within those years. Early adoption of ASU No. 2025-05 is permitted. The Company has evaluated the impact of ASU No. 2025-05 on its accounting policies and internal controls related to its credit-customer receivables.
Added
The Company has determined that, given (i) the nature of its receivables (primarily receivables from customers on credit terms), (ii) its historical credit-loss experience and collection patterns, and (iii) its allowance methodology, adoption of ASU No. 2025-05 is not expected to have a material effect on the Company's consolidated financial position.
Added
In November 2024, the FASB issued ASU No. 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ” .
Added
The Company is currently evaluating the impact the new accounting standard will have on its expense disclosures in the notes to the consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures ” .
Added
During the year ended December 31, 2025, gross profit increased 16%, or $14.2 million, to $105.3 mi llion compared to $91.1 million for the same period in 2024 while effective margi n decreased 280 basis points to 40.7% compared to 43.5% f or the same period in 2024.
Added
Gross billings for the Distribution segment for the yea r ended December 31, 2025 increased 19%, or $319.3 million, to $2,014.8 million c ompared to $1,695.5 million for the same period in 2024.
Added
Net sales and gross billings increased due to organic growth at our existing vendor lines and the full year impact of the DSS acquisition that closed in the third quarter of 2024.
Added
Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods, which positively impacted our net sales by approximately $102.3 million, or 16%. ​ Net sales in our Solutions segment for the year ended December 31, 2025 increased 6%, or $1.4 million, to $25.1 million c ompared to $23.7 million for the prior year.
Added
Gross billings for the Solutions segment for the year ended December 31, 2025 increased 1%, or $0.5 million, to $90.3 milli on compared to $89.8 million f or the same period in 2024 .
Added
Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods, which positively impacted our net sales by approximately $1.3 million, or 5%. ​ During the year ended December 31, 2025, we relied o n two key customers for a total of 37% of our total net sales.
Added
The major customers accounted for 24% and 13%, respectively, of our total net sales during the year ended December 31, 2025.
Added
These same customers accounted f or 15% and 8%, respectively , of total net accounts receivable as of December 31, 2025. ​ Gross Profit ​ Gross profit for the year ended December 31, 2025 increased 16%, or $14.2 million, to $105.3 million co mpared to $91.1 million for the same period in 2024. ​ 26 Table of Contents Distribution segment gross profit for the year ended December 31, 2025 increased 17%, or $13.6 million, to $91.9 million compared to $78.3 millio n for the same period in 2024 .
Added
The increase in Distribution segment gross profit resulted primarily from the organic growth at our existing vendor lines and the impact of DSS acquisition, partially offset by higher early pay discounts and other rebates and discounts offered to our customers. ​ Solutions segment gross profit for the year ended December 31, 2025 , increased 5%, or $0.6 million, to $13.4 m illion compared to $12.8 million for the same peri od in 2024 .
Added
Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers. ​ Vendor rebates and discounts for the year ended December 31, 2025 , were $17.4 million compared to $6.1 million for the same period in the prior year.
Added
We anticipate that price competition in our market will continue in both of our business segments. ​ Selling, General and Administrative Expenses ​ SG& A expenses for the year ended December 31, 2025 , increased 20%, or $11.1 million, to $67.6 million, compared to $56.5 million for the same period in the prior year.

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