# Climb Global Solutions, Inc.: Form 10-Q for the period ended Sep 30, 2026

- Company: [Climb Global Solutions, Inc.](/companies/clmb.md) (CIK 945983)
- Form: 10-Q
- Filed: 2026-10-29
- Accepted by EDGAR: Oct 29, 2026, 16:06 ET
- Period: 2026-09-30
- Accession: 0001437749-26-033931
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/945983/000143774926033931/clmb20260930_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/945983/000143774926033931/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2026-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2026-07-01 to 2026-09-30 | $220.3m | us-gaap:Revenues |
| Revenue | 9 months, 2026-01-01 to 2026-09-30 | $576.9m | us-gaap:Revenues |
| Gross profit | 3 months, 2026-07-01 to 2026-09-30 | $33.0m | us-gaap:GrossProfit |
| Gross profit | 9 months, 2026-01-01 to 2026-09-30 | $89.7m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2026-07-01 to 2026-09-30 | $20.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Selling, general and administrative | 9 months, 2026-01-01 to 2026-09-30 | $61.9m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2026-07-01 to 2026-09-30 | $10.0m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2026-01-01 to 2026-09-30 | $21.2m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2026-07-01 to 2026-09-30 | $2.9m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2026-01-01 to 2026-09-30 | $5.8m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2026-07-01 to 2026-09-30 | $7.9m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2026-01-01 to 2026-09-30 | $16.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2026-07-01 to 2026-09-30 | $0.43 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2026-01-01 to 2026-09-30 | $0.90 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2026-07-01 to 2026-09-30 | $0.43 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2026-01-01 to 2026-09-30 | $0.90 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2026-07-01 to 2026-09-30 | 18,323,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2026-01-01 to 2026-09-30 | 18,279,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2026-01-01 to 2026-09-30 | $44.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 9 months, 2026-01-01 to 2026-09-30 | $1.8m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 9 months, 2026-01-01 to 2026-09-30 | $0 | us-gaap:PaymentsOfDividends |
| Share repurchases | 9 months, 2026-01-01 to 2026-09-30 | $1.8m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2026-09-30 | $66.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2026-09-30 | $426.8m | us-gaap:AssetsCurrent |
| Total assets | at 2026-09-30 | $518.4m | us-gaap:Assets |
| Current liabilities | at 2026-09-30 | $375.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2026-09-30 | $384.3m | us-gaap:Liabilities |
| Current portion of debt | at 2026-09-30 | $0 | us-gaap:DebtCurrent |
| Shareholders' equity | at 2026-09-30 | $134.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 51,147 characters.

*The following information should be read in conjunction with the consolidated financial statements and the notes included in Item 1 of Part I of this Quarterly Report and the audited consolidated financial statements and notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2026 for the fiscal year ended December 31, 2025. In addition to historical information, the following discussion contains certain forward-looking information. See “Cautionary Note Regarding Forward-Looking Statements” above for certain information concerning forward-looking statements.*

### Overview

Our Company is a value-added IT distribution and solutions company, primarily selling software and other third-party IT products and services through two reportable operating segments. Through our “Distribution” segment we sell products and services to corporate resellers, VARs, consultants and systems integrators worldwide, who in turn sell these products to end users. Through our “Solutions” segment we act as a cloud solutions provider and value-added reseller, selling computer software and hardware developed by others and providing technical services directly to end user customers worldwide. We offer an extensive line of products from leading software vendors and tools for virtualization/cloud computing, security, networking, storage and infrastructure management, application lifecycle management and other technically sophisticated domains as well as computer hardware. 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, Germany, Greece, and South Africa through which sales are made.

### Factors Influencing Our Financial Results

We derive most of our net sales through the sale of third-party software licenses, maintenance and service agreements. In our Distribution segment, sales are impacted by the number of product lines we distribute, and sales penetration of those products into the reseller channel, product lifecycle competition, and demand characteristics of the products which we are authorized to distribute. 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.

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. In addition, we grant discounts, allowances, and rebates to certain customers, which may vary from period to period, based on volume, payment terms and other criteria. To date, we have been able to implement cost efficiencies such as the use of drop shipments, electronic digital interchange and other capabilities to be able to operate our business profitably as gross margins have declined. We evaluate the profitability of our business based on return on equity and effective margin (see discussions below).

Gross profit is calculated as net sales less cost of sales. We record customer rebates, discounts and returns as a component of net sales and record vendor rebates, discounts and returns as a component of cost of sales.

Selling, general and administrative expenses are comprised mainly of employee salaries, commissions and other employee related expenses, facility costs, costs to maintain our IT infrastructure, public company compliance costs and professional fees. We monitor our level of accounts payable, inventory turnover and accounts receivable turnover which are measures of how efficiently we utilize capital in our business.

The Company’s sales, gross profit and results of operations have fluctuated and are expected to continue to fluctuate on a quarterly basis as a result of a number of factors, including but not limited to: the condition of the software industry in general, shifts in demand for software products, pricing, industry shipments of new software products or upgrades, fluctuations in merchandise returns, adverse weather conditions that affect response, distribution or shipping, import and export tariffs, shifts in the timing of holidays and changes in the Company’s product offerings. The Company’s operating expenditures are based on sales forecasts. If sales do not meet expectations in any given quarter, operating results may be materially adversely affected.

*Dividend Policy and Share Repurchase Program.* Historically we have sought to return value to investors through the payment of quarterly dividends and share repurchases. Total dividends paid and the dollar value of the shares repurchased were zero and $0.2 million for the three months ended September 30, 2026, respectively, and $0.8 million and $0.3 million for the three months ended September 30, 2025, respectively. 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. 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 technology, distribution and services sectors of the United States stock markets are 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. 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.

*Inflation*. We have historically not been adversely affected by inflation, as abrupt changes in technology, rapid changes in customer preferences, short product life cycles and evolving industry standards within the IT industry have generally caused the prices of the products we sell to decline. This requires us to sell new products and have growth in unit sales of existing products in order to increase our net sales. 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 without causing a reduction in our customers’ spending.

### Financial Overview

Net sales increased 37%, or $59.0 million, to $220.3 million for the three months ended September 30, 2026 compared to $161.3 million for the same period in the prior year. Gross profit increased 28%, or $7.3 million, to $33.0 million for the three months ended September 30, 2026, compared to $25.7 million for the same period in the prior year. Selling, general and administrative (“SG&A”) expenses increased 29%, or $4.7 million, to $20.9 million for the three months ended September 30, 2026 compared to $16.2 million for the same period in the prior year. Depreciation and amortization expense increased 5%, or $0.1 million, to $2.1 million for the three months ended September 30, 2026 compared to $2.0 million for the same period in the prior year. Net income increased 69%, or $3.2 million, to $7.9 million for the three months ended September 30, 2026 compared to $4.7 million for the same period in the prior year. Diluted income per share increased 72%, or $0.18, to $0.43 for the three months ended September 30, 2026 compared to $0.25 for the same period in the prior year.

### Critical Accounting Policies and Estimates

Management’s discussion and analysis of the Company’s financial condition and results of operations are based upon the Company’s consolidated financial statements that have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.

On an ongoing basis, the Company evaluates its estimates, including those related to product returns, bad debts, inventories, intangible assets, income taxes, stock-based compensation, contingencies and litigation.

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The Company believes the following critical accounting policies used in the preparation of its consolidated financial statements affect its more significant judgments and estimates.

#### Revenue

The Company utilizes judgment regarding performance obligations inherent in the products for services it sells, including whether ongoing maintenance obligations performed by third party vendors are distinct from the related software licenses, and allocation of sales prices among distinct performance obligations. These estimates require significant judgment to determine whether the software’s functionality is dependent on ongoing maintenance or if substantially all functionality is available in the original software download. 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.

#### 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. Management determines the estimate of the allowance for expected credit losses by considering a number of factors, including historical experience, aging of the accounts receivable, as well as current market conditions and future forecasts of our customers’ ability to make payments for goods and services.

#### Business Combinations

We apply the provisions of ASC 805, Business Combinations (“ASC 805”), in accounting for our acquisitions. ASC 805 requires that we evaluate whether a transaction pertains to an acquisition of assets, or to an acquisition of a business. A business is defined as an integrated set of assets and activities that is capable of being conducted and managed for the purpose of providing a return to investors. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets and liabilities assumed on a relative fair value basis; whereas the acquisition of a business requires us to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values. Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed.

Our valuation of acquired assets and assumed liabilities requires estimates, especially with respect to intangible assets, which are derived using valuation techniques and models such as the income approach. Such models require use of estimates including discount rates, and future expected revenue. The approach to estimating an initial contingent consideration associated with the purchase price also uses similar unobservable factors such as projected cash flows over the term of the contingent earn-out period, discounted for the period over which the initial contingent consideration is measured and expected volatility. Based upon these assumptions, the initial contingent consideration is then valued using a Monte Carlo simulation.

We have used third-party qualified specialists to assist management in determining the fair value of assets acquired and liabilities assumed. This includes assistance with the determination of economic useful lives and valuation of identifiable intangibles.

We estimate the fair value based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from our estimates. Estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed. As a result, during the measurement period, which may be up to one year from the business acquisition date, we record certain adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill.

All acquisition-related costs are accounted for as expenses in the period in which they are incurred. Contingent consideration is remeasured each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized in change in fair value of acquisition contingent consideration in the consolidated statement of earnings.

#### Goodwill

We test goodwill for impairment on an annual basis and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company performs an evaluation of goodwill, utilizing either a qualitative or quantitative impairment test. The annual test for impairment is conducted as of October 1. The Company’s reporting units included in the assessment of potential goodwill impairment are the same as its operating segments. Goodwill is not amortized but is subject to periodic testing for impairment at the reporting unit level.

In a qualitative assessment, we assess qualitative factors to determine whether it is more likely than not (that is, a likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. 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.

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 may also elect the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test.

In the quantitative impairment test, we compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired. Conversely, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including net sales growth rates, gross profit margins, operating margins, discount rates and future market conditions, among others. Any changes in the judgments, estimates or assumptions used could produce significantly different results.

#### Intangible Assets

Intangible assets with determinable lives are amortized on a straight-line basis over their respective estimated useful lives, which are determined based on their expected period of benefit or are amortized weighted toward their expected periods of benefit. Intangible assets are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. If the carrying amount of an asset exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset’s carrying amount over its fair value. In addition, each quarter, the Company evaluates whether events and circumstances warrant a revision to the remaining estimated useful life of each of these intangible assets. If the Company were to determine that a change to the remaining estimated useful life of an intangible asset was necessary, then the remaining carrying amount of the intangible asset would be amortized prospectively over that revised remaining useful life.

#### Income Taxes

The Company has considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for the valuation allowance related to deferred tax assets. 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.

#### 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 cases where the Company is not able to create a natural hedge by maintaining offsetting asset and liability amounts in the same currency, it may enter into foreign exchange contracts, typically in the form of forward purchase agreements, to facilitate the hedging of foreign currency exposures to mitigate the impact of changes in foreign currency exchange rates. These contracts generally have terms of no more than two months. The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings. The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions.

### Recently Issued Accounting Pronouncements

In December 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-11, "Interim Reporting (Topic 270): Narrow-Scope Improvements." This ASU clarifies the guidance in Accounting Standards Codification (“ASC”) Topic 270 - *Interim Reporting*, adding a comprehensive list of required interim disclosures and a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This ASU is effective for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating these new disclosure requirements.

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”*. This ASU amends the guidance under ASC 350-40 for internal-use software. The amendments remove references to development stages, clarify when capitalization may begin, and require entities to apply property, plant and equipment disclosure requirements under ASC 360-10 to capitalized internal-use software costs. 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. 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.

In July 2025, the FASB issued ASU No. 2025-05, “*Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”.* 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). 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 adopted this ASU for the three months ended March 31, 2026. The Company has evaluated the impact of ASU No. 2025-05 on its accounting policies and internal controls related to its credit-customer receivables. 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 did not have a material effect on the Company's consolidated financial position.

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”*. This ASU requires entities to disaggregate expense items in the notes to the financial statements and requires disclosure of specified information related to purchases of inventory, employee compensation, depreciation, and intangible asset amortization. The amendments in this ASU are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Companies have the option to apply the guidance either on a retrospective or prospective basis, and early adoption is permitted. The Company is currently evaluating the impact of the ASU on its condensed consolidated financial statements and related disclosures. In January 2025, the FASB issued ASU No. 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. This ASU amends the effective date of ASU No. 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of ASU No. 2024-03 is permitted.

### Results of Operations

The following table sets forth for the periods indicated certain financial information derived from the Company’s unaudited condensed consolidated statements of earnings expressed as a percentage of net sales. This comparison of financial results is not necessarily indicative of future results:

|  | Nine months ended September 30, 2026 | 2025 | Three months ended September 30, 2026 | 2025 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | 100.0% | 100.0% | 100.0% | 100.0% |
| Cost of sales | 84.5 | 83.6 | 85.0 | 84.1 |
| Gross profit | 15.5 | 16.4 | 15.0 | 15.9 |
| Selling, general and administrative expenses | 10.7 | 10.8 | 9.5 | 10.1 |
| Acquisition related costs | 0.1 | 0.2 | 0.1 | 0.4 |
| Depreciation and amortization expense | 1.1 | 1.2 | 0.9 | 1.2 |
| Income from operations | 3.7 | 4.3 | 4.5 | 4.3 |
| Other income | 0.2 | (0.0) | 0.4 | 0.1 |
| Income before income taxes | 3.9 | 4.0 | 4.9 | 3.9 |
| Income tax provision | 1.0 | 0.9 | 1.3 | 1.0 |
| Net income | 2.9% | 3.1% | 3.6% | 2.9% |

26

### 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. We believe that the most important of these measures and ratios include net sales, gross profit and net income, in each case based on information prepared in accordance with U.S. GAAP, as well as certain non-GAAP financial measures and ratios which include adjusted EBITDA and adjusted EBITDA as a percentage of gross profit, or effective margin. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance or financial position that either excludes or includes amounts that are correspondingly not normally excluded or included in the most directly comparable measure calculated and presented in accordance with U.S. GAAP. 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 U.S. 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.

| Net income reconciled to adjusted EBITDA (Non-GAAP): | Nine months ended September 30, 2026 | September 30, 2025 | Three months ended September 30, 2026 | September 30, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Net income | $16,790 | $14,346 | $7,937 | $4,696 |
| Provision for income taxes | 5,790 | 3,945 | 2,929 | 1,607 |
| Depreciation and amortization | 6,131 | 5,696 | 2,068 | 1,976 |
| Interest expense | 253 | 226 | 68 | 67 |
| EBITDA | 28,964 | 24,213 | 13,002 | 8,346 |
| Share-based compensation | 4,538 | 3,574 | 1,609 | 1,078 |
| Acquisition related costs | 437 | 733 | 118 | 594 |
| Change in fair value of acquisition contingent consideration | — | 1,374 | — | 860 |
| Adjusted EBITDA | $33,939 | $29,894 | $14,729 | $10,878 |
| Gross profit | $89,666 | $75,437 | $33,010 | $25,733 |
| Net income % | 18.7% | 19.0% | 24.0% | 18.2% |
| Effective margin % - Adjusted EBITDA | 37.9% | 39.6% | 44.6% | 42.3% |

We define adjusted EBITDA as net income, plus provision for income taxes, depreciation, amortization, share-based compensation, interest expense, acquisition related costs and changes in the fair value of contingent considerations. We define effective margin as adjusted EBITDA as a percentage of gross profit. We provide a reconciliation of adjusted EBITDA to net income, which is the most directly comparable U.S. GAAP measure. We use adjusted EBITDA as a supplemental measure of our performance to gain insight into our business's profitability, operating performance and performance trends, and to provide management and investors a useful measure for period-to-period comparisons by excluding items that management believes are not reflective of our underlying operating performance. Accordingly, we believe that adjusted EBITDA and effective margin provide useful information to investors and others in understanding and evaluating our operating results. Adjusted EBITDA is also a component of our financial covenants in our credit facility. Our use of adjusted EBITDA has limitations, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under U.S. GAAP. In addition, other companies, including companies in our industry, might calculate adjusted EBITDA, or similarly titled measures differently, which may reduce their usefulness as comparative measures.

#### Key Operational Metrics

We also use a variety of operating and other information to evaluate the operating performance of our business, develop financial forecasts, make strategic decisions, and prepare and approve annual budgets. Gross billings are the total dollar value of customer purchases of goods and services during the period, net of customer returns and credit memos, sales, or other taxes. Gross billings include the transaction values for certain sales transactions that are recognized on a net basis, and, therefore, include amounts that will not be recognized as revenue. 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.

|  | Nine months ended September 30, 2026 | September 30, 2025 | Three months ended September 30, 2026 | September 30, 2025 |
| --- | ---: | ---: | ---: | ---: |
| Net sales | $576,890 | $458,671 | $220,306 | $161,343 |
| Gross profit | $89,666 | $75,437 | $33,010 | $25,733 |
| Gross profit - Distribution | $78,837 | $65,847 | $29,477 | $22,400 |
| Gross profit - Solutions | $10,829 | $9,590 | $3,533 | $3,333 |
| Non-GAAP Financial Measures: |  |  |  |  |
| Adjusted EBITDA (Non-GAAP) | $33,939 | $29,894 | $14,729 | $10,878 |
| Effective margin % - Adjusted EBITDA (Non-GAAP) | 37.9% | 39.6% | 44.6% | 42.3% |
| Operational Metrics: |  |  |  |  |
| Gross billings | $1,836,462 | $1,479,750 | $706,374 | $504,600 |
| Gross billings - Distribution | $1,764,295 | $1,412,503 | $680,498 | $481,884 |
| Gross billings - Solutions | $72,167 | $67,247 | $25,876 | $22,716 |
| Gross billings margin % - Gross billings | 4.9% | 5.1% | 4.7% | 5.1% |

We consider gross profit growth and effective margin to be key metrics in evaluating our business. During the three months ended September 30, 2026, gross profit increased 28%, or $7.3 million, to $33.0 million compared to $25.7 million for the same period in the prior year, while effective margin increased to 44.6% compared to 42.3% for the same period in the prior year. During the nine months ended September 30, 2026, gross profit increased 19%, or $14.3 million, to $89.7 million compared to $75.4 million for the same period in the prior year, while effective margin decreased to 37.9% compared to 39.6% for the same period in the prior year.

​**Acquisitions**

On February 24, 2026, we completed the acquisition of Interworks for an aggregate purchase price of approximately €8.0 million (equivalent to $9.4 million USD), adjusted upwards for $3.6 million in net working capital adjustment resulting in a final purchase consideration of $13.0 million. The operating results of Interworks are included in our operating results from the date of acquisition within our Distribution segment.

### Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025

### Net Sales and Gross Billings

Net sales for the three months ended September 30, 2026 increased 37%, or $59.0 million, to $220.3 million compared to $161.3 million for the same period in the prior year. Gross billings, an operational metric, for the three months ended September 30, 2026 increased 40%, or $201.8 million, to $706.4 million compared to $504.6 million for the same period in the prior year. Net sales and gross billings both increased, reflecting strong double-digit organic growth from new and existing vendors and the Interworks acquisition. Interworks contributed approximately $1.6 million of net sales during the quarter; excluding Interworks, net sales increased by approximately $57.4 million. Interworks contributed approximately $6.7 million of gross billings during the quarter. Excluding Interworks, gross billings increased by approximately $195.1 million. Gross billings increased at a higher rate than net sales due to differences in the product mix between the two periods. During the three months ended September 30, 2026, gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales, while during the three months ended September 30, 2025, gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis.

Distribution segment net sales for the three months ended September 30, 2026 increased 37%, or $57.3 million, to $211.7 million compared to $154.4 million for the same period in the prior year. Gross billings for the Distribution segment for the three months ended September 30, 2026 increased 41%, or $198.6 million, to $680.5 million compared to $481.9 million for the same period in the prior year. Net sales increased organically at a lesser rate than gross billings increased due to the impact of security, maintenance, and cloud products sales recognized during the current period, which are recorded on a net basis.

Solutions segment net sales for the three months ended September 30, 2026, increased 25%, or $1.8 million, to $8.7 million compared to $6.9 million for the same period in the prior year. Gross billings for the Solutions segment for the three months ended September 30, 2026 increased 14%, or $3.2 million, to $25.9 million compared to $22.7 million for the same period in the prior year. Net sales increased organically at a greater rate than gross billings due to differences in the product mix between the two periods in our Solutions segment.

The Company had three major customers that accounted for 20%, 13%, and 13%, respectively, of its net sales during the three months ended September 30, 2026, and 22%, 14%, and 2%, respectively, of its net sales during the three months ended September 30, 2025. The Company had no major vendors during the three months ended September 30, 2026, and one major vendor that accounted for 13% of total purchases during the three months ended September 30, 2025.

### Gross Profit

Gross profit for the three months ended September 30, 2026 increased 28%, or $7.3 million, to $33.0 million compared to $25.7 million for the same period in the prior year. Gross profit increased due to organic growth from our new and existing vendor partnerships.

Distribution segment gross profit for the three months ended September 30, 2026 increased 32%, or $7.1 million, to $29.5 million compared to $22.4 million for the same period in the prior year. The increase reflects the previously noted strong double-digit organic growth from new and existing vendors and a $1.0 million contribution from the Interworks acquisition.

Solutions segment gross profit for the three months ended September 30, 2026 increased 6%, or $0.2 million, to $3.5 million compared to $3.3 million for the same period in the prior year. The increase reflects the previously noted gross billings growth.

Customer rebates and discounts for the three months ended September 30, 2026 were $7.9 million compared to $5.6 million for the same period in the prior year. 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 three months ended September 30, 2026 were $6.4 million compared to $3.9 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

### Selling, General and Administrative Expenses

SG&A expenses for the three months ended September 30, 2026 increased 29%, or $4.7 million, to $20.9 million compared to $16.2 million for the same period in the prior year. This increase was primarily due to an increase in salaries, commissions and other employee related expenses in support of the increased gross profit, targeted investments to drive organic growth from new vendors, and in the Company's infrastructure to support long-term growth initiatives. SG&A expenses were 3.0% of gross billings for the three months ended September 30, 2026, compared to 3.2% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

### Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended September 30, 2026, increased 5%, or $0.1 million, to $2.1 million compared to $2.0 million for the same period in the prior year, primarily due to increased amortization for the vendor relationship intangible acquired through the Interworks acquisition.

### Acquisition Related Costs

Acquisition related costs for the three months ended September 30, 2026 and 2025 were $0.1 million and $0.6 million, respectively. These expenses in both the current period and the same period in the prior year relate to exploratory acquisition-related initiatives.

### Income Taxes

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items. As a result, our estimated tax rate is adjusted each quarter. For the three months ended September 30, 2026 and 2025, the Company recorded a provision for income taxes of $2.9 million and $1.6 million, respectively. The effective tax rate for the three months ended September 30, 2026 and 2025 was 27.0% and 25.5%, respectively. The effective tax rate for the three months ended September 30, 2026 compared to the same period in the prior year was primarily impacted by changes in the mix of jurisdictions in which taxable income was earned, as well as a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods. The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of less than $0.1 million, which reduced our effective tax rate by 0.6% during the three months ended September 30, 2026. The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.1 million, which reduced our effective tax rate by 1.9% during the three months ended September 30, 2025.

### Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025

### Net Sales and Gross Billings

Net sales for the nine months ended September 30, 2026 increased 26%, or $118.3 million, to $576.9 million compared to $458.6 million for the same period in the prior year. Gross billings, an operational metric, for the nine months ended September 30, 2026 increased 24%, or $356.7 million, to $1.8 billion, compared to $1.5 billion for the same period in the prior year. Net sales and gross billings both increased, reflecting strong double-digit organic growth from new and existing vendors and the Interworks acquisition. Interworks contributed approximately $3.6 million of net sales for the period from acquisition through September 30, 2026; excluding Interworks, net sales increased by approximately $114.7 million. Interworks contributed approximately $18.8 million of gross billings for the period from acquisition through September 30, 2026. Excluding Interworks, gross billings increased by approximately $337.9 million. Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods. During the nine months ended September 30, 2026, gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the nine months ended September 30, 2025, gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Distribution segment net sales for the nine months ended September 30, 2026 increased 27%, or $116.9 million, to $556.5 million compared to $439.6 million for the same period in the prior year. Gross billings for the Distribution segment for the nine months ended September 30, 2026 increased 25%, or $351.8 million, to $1.8 billion, compared to $1.4 billion for the same period in the prior year. Net sales increased organically at a greater rate than gross billings increased due to the impact of hardware and software sales recognized during the current period, which are recorded on a gross basis.

Solutions segment net sales for the nine months ended September 30, 2026, increased 7%, or $1.3 million, to $20.4 million compared to $19.1 million for the same period in the prior year. Gross billings for the Solutions segment for the nine months ended September 30, 2026 increased 7%, or $5.0 million, to $72.2 million compared to $67.2 million for the same period in the prior year. Net sales and gross billings increased at the same rate due to similarities in product mix between the two periods in our Solutions segment.

The Company had three major customers that accounted for 19%, 13%, and 17%, respectively, of its net sales during the nine months ended September 30, 2026, and 24%, 13%, and 9%, respectively, of its net sales during the nine months ended September 30, 2025. The Company had no major vendors during the nine months ended September 30, 2026 and September 30, 2025.

### Gross Profit

Gross profit for the nine months ended September 30, 2026 increased 19%, or $14.3 million, to $89.7 million compared to $75.4 million for the same period in the prior year. Gross profit increased due to organic growth from our new and existing vendor partnerships and a $2.3 million contribution from the Interworks acquisition.

Distribution segment gross profit for the nine months ended September 30, 2026 increased 20%, or $13.0 million, to $78.8 million compared to $65.8 million for the same period in the prior year. The increase reflects the previously noted strong double-digit organic growth from new and existing vendor partnerships and a $2.3 million contribution from the Interworks acquisition, partially offset by higher other rebates and discounts offered to our customers as a percentage of gross billings.

Solutions segment gross profit for the nine months ended September 30, 2026 increased 13%, or $1.2 million, to $10.8 million compared to $9.6 million for the same period in the prior year. This increase was driven by higher gross profit margins generated in both North America and Europe.

Customer rebates and discounts for the nine months ended September 30, 2026 were $21.1 million compared to $16.5 million for the same period in the prior year. 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 nine months ended September 30, 2026 were $13.9 million compared to $14.1 million for the same period in the prior year. Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors. The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

### Selling, General and Administrative Expenses

SG&A expenses for the nine months ended September 30, 2026 increased 25%, or $12.6 million, to $61.9 million compared to $49.3 million for the same period in the prior year. This increase was primarily due to an increase in salaries, commissions and other employee related expenses in support of the increased gross profit, one-time investments to drive organic growth from new vendors and in the Company's infrastructure to support long-term growth initiatives, and a $1.6 million contribution from the Interworks acquisition. SG&A expenses were 3.4% of gross billings for the nine months ended September 30, 2026, compared to 3.3% for the same period in the prior year. The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

### Depreciation and Amortization Expense

Depreciation and amortization expense for the nine months ended September 30, 2026, increased 8%, or $0.4 million, to $6.1 million compared to $5.7 million for the same period in the prior year, primarily due to increased amortization for the vendor relationship intangible acquired through the Interworks acquisition.

### Acquisition Related Costs

Acquisition related costs for the nine months ended September 30, 2026 and 2025 were $0.4 million and $0.7 million, respectively. These expenses in the current period relate to costs incurred with the acquisition of Interworks, as well as costs incurred for potential acquisitions, while these expenses in the same period in the prior year relate to exploratory acquisition related initiatives.

### Income Taxes

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items. As a result, our estimated tax rate is adjusted each quarter. For the nine months ended September 30, 2026 and 2025, the Company recorded a provision for income taxes of $5.8 million and $3.9 million, respectively. The effective tax rate for the nine months ended September 30, 2026 and 2025 was 25.6% and 21.6%, respectively. The effective tax rate for the nine months ended September 30, 2026 compared to the same period in the prior year was primarily impacted by changes in the mix of jurisdictions in which taxable income was earned, as well as a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods. The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.5 million, which reduced our effective tax rate by 2.4% during the nine months ended September 30, 2026. The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.8 million, which reduced our effective tax rate by 4.6% during the nine months ended September 30, 2025.

### Liquidity and Capital Resources

Our cash and cash equivalents as of September 30, 2026 increased 83%, or $30.3 million, to $66.9 million compared to $36.6 million as of December 31, 2025.

Net cash and cash equivalents provided by operating activities for the nine months ended September 30, 2026 was $44.1 million, comprised primarily of net income adjusted for non-cash items of $27.3 million and changes in operating assets and liabilities of $16.8 million.

Net cash and cash equivalents used in investing activities during the nine months ended September 30, 2026 was $10.0 million, comprised primarily of the payment for the Interworks acquisition.

Net cash and cash equivalents used in financing activities during the nine months ended September 30, 2026 was $3.0 million, comprised of repayments under credit facilities of $10.1 million and purchases of treasury stock of $1.8 million, partially offset by borrowings under credit facilities of $9.0 million. The Company had a short-term operating need during the nine months ended September 30, 2026, that resulted in $9.0 million of borrowings under credit facilities, which was subsequently repaid in full during the nine months ended September 30, 2026.

On May 18, 2023, the Company entered into a revolving credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPM”), providing for a revolving credit facility of up to $50.0 million, including the issuance of letters of credit and swingline loans not to exceed $2.5 million and $5.0 million, respectively, at any time outstanding. In addition, subject to certain conditions enumerated in the Credit Agreement, the Company has the right to increase the revolving credit facility by a total amount not to exceed $20.0 million. The proceeds of the revolving loans, letters of credit and swingline loans under the Credit Agreement may be used for working capital needs, general corporate purposes and for acquisitions permitted by the terms of the Credit Agreement. All outstanding loans issued pursuant to the Credit Agreement become due and payable on May 18, 2028. There were no amounts outstanding under the Credit Agreement as of September 30, 2026.

On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc. (“First American”) pursuant to a Master Loan and Security Agreement. The proceeds from the Term Loan were used to fund certain capital expenditures. The borrowing under the Term Loan bore interest at a rate of 3.73% per annum and was repaid over forty-eight monthly installments of principal and interest through March 2026. As of September 30, 2026, the Company had no amounts outstanding under the Term Loan.

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. Our uses of cash beyond the next 12 months will depend on many factors, including the general economic environment in which we operate and our ability to generate cash flow from operations. These uses are uncertain but include funding our operations and additional capital expenditures. We continuously evaluate our liquidity and capital resources, including access to external capital, to ensure we can finance our longer-term capital requirements.

### Foreign Exchange

The Company’s foreign subsidiaries are subject to changes in demand or pricing resulting from fluctuations in currency exchange rates or other factors. We are subject to fluctuations primarily in the Canadian Dollar, Euro, and British Pound-to-U.S. Dollar exchange rates.

​**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

There have been no material changes in the Company’s market-risk exposures from those disclosed under “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

## Controls and procedures

As filed, 3,290 characters.

*Evaluation of Disclosure Controls and Procedures.* We maintain “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that material information relating to us is made known to the officers who certify as to our financial reports and to other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

As required by Rule 13a-15(b) under the Exchange Act, our management carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report. This evaluation was carried out under the supervision and with the participation of various members of our management, including our Company’s Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial and accounting officer). Based upon that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective, as of the end of the period covered by this Quarterly Report, to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As described above, on February 24, 2026, we completed the acquisition of Interworks. SEC guidance permits management to omit an assessment of an acquired business’ internal control over financial reporting from management’s assessment of internal control over financial reporting for a period not to exceed one year from date of acquisition. We are in the process of integrating Interworks operations within our internal control structure. In executing this integration, we are analyzing, evaluating, and where necessary, making changes in controls and procedures related to the Interworks business. Accordingly, management's evaluation of disclosure controls and procedures as of September 30, 2026 excluded those disclosure controls and procedures of Interworks that are subsumed by internal control over financial reporting. Interworks represented approximately 1.6% of total assets as of September 30, 2026 and 0.6% of net sales for the period from acquisition through September 30, 2026.

*Changes in Internal Control Over Financial Reporting.* There has been no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) under the Exchange Act, that occurred during the three months ended September 30, 2026, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 458 characters.

You should carefully consider the risks described in "Item 1A. Risk Factors" in Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as our business, financial condition and results of operations could be adversely affected by any of the risks and uncertainties described therein. There have been no material changes to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Filed Oct 29, 2026.
Source: SEC EDGAR, the filing index for accession 0001437749-26-033931. Last ingested by Listed: Oct 29, 2026, 17:09 ET. No prices; not investment advice.