Climb Global Solutions, Inc. (CLMB) Earnings Call Transcript & Summary

Good morning, everyone. Thank you for joining us today. Investors. Thanks for the Climb team to join us this morning with the opening bell as we rang it in the NASDAQ. So thanks for everybody coming up. Just for everybody, there's some nervous people in the back. Our bus didn't show up in New Jersey. So everybody had to figure their own way to get here, so everybody was able to make it. So thank you again. I'd like to thank the marketing team for everything they do. And our teams inside Climb know this very well. For events that they perform, anything that we do, touching our customers, our vendors, they get involved and then events like this. So I appreciate that. NASDAQ was great to us, allowing us to do the opening bell and then setting us up for Investor Day where we could get you in. Investors, thank you, our bankers, thank you. And I know we have some PE firms in the room as well to just hear our story. A lot of you know the story, but you know the story from myself and Matt Sullivan, right? And now you get to get a bigger, broader part of the story from the rest of the exec team. So you're going to hear them for the first hour. So on the first hour, I'll get through the safe harbor stuff. The first hour is going to be the team, and then we'll do lunch. The second hour is going to be about where we're going to take the company. I always like to say that if you want to know what's going to happen, take a look at the last 3 years. We're going to be a little bit more aggressive than we were 3 years ago on our acquisition play and also with our technology play as you'll meet Vishal, our CIO as far as what we're going to do as far as efficiencies go. So with that, I'm going to kick off a couple of slides. And this is -- I started 8 years ago here. I took over 6 years ago. This is what we did as a company, and some pretty simple things, focus on being a sales-first company. That's the first thing. And part of the sales first company is compensation plans, change the compensation plan very quickly to the sales. So it actually aligned with our customer base and went line in our go-to-market. Vendor recruiting is a priority. It is the lifeblood of a distributor. So you're going to hear about -- a lot about distribution and how we go to market. So that is the lifeblood. So we went for vendors. We get questions a lot from investors as far as why did you only pick 2 when you interviewed 30 companies. And Charles will give you the details on that, but that is the lifeblood. I talked about changing compensation plans, broad a field sales force. And this is something that our competitors have, but they typically have it in an overlay fashion where they have different layers for different technology segments inside their business. And Climb, you'll see that -- and you can meet some of the sellers that are here, it's one throat to choke when you're at a VAR, at a reseller, at a DMR, they know who to go to at climb to get anything done. Use of our balance sheet, we have done 6 acquisitions in 6 years. We plan to accelerate that. You'll see some targets on some of the presentations. And we've done them all with cash. We have no debt in the company. We're pretty attractive that way from a balance sheet. I think the argument back to us would be we're not good stewards of our capital. We probably should be putting some debt on the company to acquire faster if there's good targets. Headquartered in Eatontown, New Jersey and offices throughout the world and our latest one is South Africa, and you'll hear from Gerard in his background. So here's what we say. Here's what we say to our vendors, our customers and our climb team. And that is we sell speed. How fast and how many eyeballs can we get on technology -- your technology products into the market and how fast can we transact it and how fast we collect. If you look into the numbers, our net working capital, we have a very strong negative net working capital because we are paying slower than we're collecting. Some of it has to do with our biggest customers that give us options to collect faster. So very important as we use our cash flow as far as we grow the company that way. With that, this is our exec team that you'll get to see in person today, and I'm going to start off with Charles Bass, and he'll talk about vendors. Charles.

Lifeblood that was complementary. Thank you, Dale. So again, Charles Bass, I'm responsible for vendor alliances. And what I hope to do in the next 10 minutes is talk about 3 things. Dale asked me to talk to you about what we're looking for in vendor partners and how I do that. And then I'll spend some time talking about how we actually do that. And then we'll talk about how we onboard before I pass it over to Vishal. But if you'll indulge me, what I wanted to do first is maybe take 2 minutes and give you the strategy behind it. I actually got some really interesting questions before we started. And I want to try to answer why we're -- I kind of give you some context maybe for how we do that. And I need to kind of tell you about where we live and how we kind of came about to the strategy we're on. So it's going to be important to know kind of where we live, especially from a North American standpoint. When we -- when this management team came in 8 years ago, we were a sub-$400 million distributor undergrowing the market with no discernible strategy, right? And there were 3 players in North America that had consolidated and bought most of the players in the market. That was Ingram Micro, TD SYNNEX and Arrow Electronics. And what those guys all had in common was some pretty impressive things. Number one, they were all over $30 billion in sales because they had consolidated and gobbled up a lot of the competition. Number two, and quite impressively, they were all transacting more than 30,000 VARs and MSPs. Number three, they're all transacting more than 1,000 brands, in some cases, more than 4,500 brands. But here's the hook. They have a very similar strategy. And all those guys were having the vast majority of their gross margin, the vast majority of their revenue come from a very small minority of their brands. They are all focused on these giant leaders like Cisco, Microsoft, HP, Dell. And look, it was a common theme for us to say to each other, we're not going to out Ingram Ingram today. We, as a management team, had to look at ourselves and say, okay, what's the play that we're going to have to go be more successful than this company had been. And look, Ingram was selling more toner and printer cartridges than we were selling product, right? And so we decided we were going to go look at the market and figure out where Ingram was failing and go run a classic red ocean, blue ocean strategy where we're going to go where they aren't, and we're going to go try to get to the market that was the most underserved. And so in North America, the way to do that was to go to the challenger or the emerging part of the market. Now very different than Europe. There's probably between 50 and 70 distributors in Europe that run a limited line card service-enabled play. But in North American-centric, which we are fairly much today, that was the play that was left to us. So let me kind of describe what our strategy was using a 30-year-old slide from Gartner, probably the most used slide in the world. If you're not familiar, Gartner would use this slide to describe markets. The X-axis for completeness of vision was usually a euphemism for do you solve a problem or problems and how well you do that. The Y-axis was typically the ability to execute was usually meant are you selling a lot or a little. And early on in our cycle, we were focused on selling niche players in some visionaries and some smaller guys because that's what was left for us. But as our brand began to grow, as we began to have more success, we climbed up the food chain, and we began to focus squarely on challengers. So while all of our competitors are focused on Gartner Upper right on the leadership quadrant, we're focused on the Gartner Upper left. Everything we do all day every day is finding challengers who are taking bites out of leaders, and that's the play we're on. So when I look for a brand, I'm looking for a guy taking a bite out of Cisco, not Cisco I'm looking for a guy taking a bite out of NetApp, not NetApp. That's what our play looks like. So when you look at what our model looks like, again, it's a similar model. There's a common model. This is a fairly normal play. We're the only guy in North America running this play, not an uncommon play in EMEA. We went down -- I should give you a little bit of history. We started with about a little bit under 500 brands in 2018. We've squeezed our line card down from about 465 brands to about 100 brands. 70 of our brands make up 95% of our sales. And each year, I add between 12 and 18 brands to the line card. And each year, I remove between 18 and 36 brands from the line card. So while we're refreshing our line card every year, we're also removing brands from the line card, adding them to our sister company called Climb Elevate and trying to find the next challenger successful brand like Ivanti or Darktrace or another successful brand. The success metrics that have been really tried and true for us, this will come as a surprise to some of you. I don't actually look for the next -- the best mousetrap. We don't actually make decisions based on how cool technology is. We're looking for brands that are successful in distribution. So what we found through success and failure is what really wins for us is companies that first are distribution first routes to market, channel mechanics and execution are the things that make the most sense for us in terms of picking a brand. So I look for companies that are more than 50% distribution. Our success rate with companies that are less than 50% distribution is close to 0%. The second thing is I look for companies with really successful channel mechanics. And when I say channel mechanics, I typically mean a price model built for the channel, a margin model built for the channel and basic partner programs built for the channel, like how they treat their partners and how they interact with their partners. And then third and probably most important is how they plan to execute with their partners in terms of cross-selling and upselling with other brands on our line card. That's -- those are the metrics that have proven to us to be the most successful with our brands. And then as we went down from 500 brands to 100 brands, we picked 6 different brand categories. We could have picked 60, we could have picked 16. We picked a total of 6. Security has emerged as the most important. And they really haven't changed a great deal. A lot of people say, "Hey, when are you going to add AI as a brand or when are you going to change that? Candidly, AI has emerged as a piece of each one of these 6 categories. And so we probably aren't going to look to change our cross-sell brand categories over time. When I look at the sources, our sources have candidly changed quite a bit over the last several years. Early on, we had to aggressively go find brands to consider for climb. And we had to cold call, we had to use the market to go find places. Today, far more brands come to us than we can even evaluate. I evaluate about 600 brands per year. Maybe 400 brands are net new evaluations each year. About 200 brands are reevaluations or companies we've evaluated in the past that come back through the cycle again because they've changed their routes to market or their management team or something like that. And of those 600, again, we'll pick about 12 to 18 that we onboard for climb. We also use existing relationships. A lot of times, our joke is we'll bet on the jockeies, not the horses. If we're successful with the management team and they move to another company, we'll obviously look at those guys on the next time they come around, pretty common for us. We've developed a pretty tried and true methodology. We look at financials. We look at corporate questions, we look at marketing questions, we look at operational questions. But what we found is that our questions that go through, again, channel mechanics, routes to market and execution questions are far more correlated to success and failure than anything else than product. I would be happy to talk about some of those in details, but we ask the exact same 92 questions each and every time we evaluate a company. It's proven to be pretty successful for us. Final thing I'll talk about was the last thing Dale asked me to talk through is also a process-driven play that what we do when we onboard a net new brand. The goal for us is to use the exact same onboarding process once a month. It doesn't work like that. We think that we're going to be able to do that each and every time and that we'll onboard one guy a month. But sometimes we try to digest a gigantic player like a Fortinet or a $1 billion player like an Ivanti, and we'll have to basically skip a month to get our sales guys time to actually digest or understand a particular brand. But the concept is the same each and every time. A lot of folks think that the -- so there's 4 points to what we do when we onboard. We do an operational onboarding. We do an educational onboarding called enablement onboarding. We do a marketing onboarding, and then we do field engagement. The operational stuff can be done in hours, not days. It's everything that is required to be able to transact. It's loading SKUs. It's understanding the linkages between AP, AR, getting our system ready and being able to quote and ship product. It's pretty simple. And Vishal will talk about that when he's up next, but we do that in, again, hours, not days. It's fairly simple. It's one of the easiest things we do. It usually surprises people. From an enablement standpoint, we've actually got this down to a pretty -- we actually run the enablement play by our job descriptions. The most important folks for us, what every single vendor wants from me is access to our VARs and our MSPs. The guys that own the VARs and MSPs are our field sellers that you'll meet today. So we do one training for our field guys that's focused on value proposition and how they go access our VARs and MSPs. We do a separate training for our inside guy that's focused on the quote-to-ship process, how to get resources. That usually takes days, not weeks to go do that part. The third piece is the marketing onboarding. Look, we have some brands that spend literally $100,000 a month with us and do quite a bit of things in marketing. There's a 4-part marketing onboarding. We have some brands that spend no dollars in marketing that are very successful with us. So it depends on what companies want from us. We have an excellent marketing organization that has a bunch of different offerings, but I won't spend time on that, but I will say it's a huge advantage for us. All of our competitors use marketing as a profit center. And many brands come to us because they feel like Ingram, Tech Data SYNNEX and Arrow are picking their pockets and force them to buy some terrible marketing as part of their distribution experience. They love coming to us with options on marketing, where we'll admittedly make some money on marketing, but it's not a forced play for them. And then finally, the last thing we do is field engagement. Candidly, operations, marketing and enablement are all candidly table stakes for field engagements. We win or lose when we onboard a new brand by engaging with the brand that we're onboarding in front of a VAR. What everybody wants for me is to access -- Michael Taliercio is our guy in Colorado. They want Mike Taliercio to walk with their rep into Sandy Solutions and tell their value proposition to Sandy Solution, reach into Sandy Solutions end user population and find net new opportunities. That's the value they want from us. That's what they can't do from Ingram Micro because Ingram Micro has 4,500 brands, and we have 100, right? That's the value they see from us as climb. And that's what we're going to basically try to do 12x to 18 times a year. So that's what our play looks like. I know I went through that fairly quickly, but I'm going to go ahead and introduce Vishal. Hopefully, if some of you have questions on some of the plays that we run, how that looks, we'll get time during lunch to go through some of the details on that. So Vishal, let me have you come up.

Thanks, Charles. Good morning, everyone. I'm Vishal Pushpa, CIO. I joined Climb just 1 year back. I mean, last year in June. So we didn't spend a lot of time, but enough to understand what we are doing, what challenges we are facing, where Dale wants to take the company and then what we can do from a technology perspective to help enable him, his leadership team, his sales team to get there. From a technology standpoint, our strategy is very simple. It's three-pronged: focus on efficiency, drive experience, secure the environment. We spent almost 3 years, I think, probably 2022 to 2025 or late 2024, doing a large transformation with ERP. We had a lot of disjointed system, unclean data. Going through that exercise, what we did that we consolidated all the system of records together and ensure that we have one source of truth of everything. And that allowed us to look at the data differently. And that's what led into our next level of transformation is, okay, now we have data, how can we bring AI and other automation framework to drive more efficiency. So I'm going to talk a little bit more about what we are doing. But the intent there is overall from lead to cash perspective, how can we move faster? Charles said that our quoting is easy. Our goal is how to make it further or easier than what it is right now. The second part of the focus area is driving experience. We do a lot of things. We have a lot of -- we are very focused with our vendor. But one complaint or one challenge with our resellers and customers are, they do not have access of information when they want. Our end-to-end operations runs on e-mail phone calls, which is great. I mean we are a relationship-driven company. But then when they need something, if they want information, they want opportunity, we want to give them on their end. So we'll talk a little bit more about what we are trying to do. And the last one is, of course, securing the environment. Everyone is nervous right now with AI and what's happening. Then we are trying to onboard larger vendors and larger customers. They are concerned, hey, what is your footprint? How you are going to ensure that our data is secure, you are not doing uncompliant stuff. So some of the focus there. When you talk about AI or what I call like AI-enabled process efficiency, first, like I explained, we put system of record. We did ERP transformation great. Now the question was, what I can do with that system and the data what we have from all the way lead to cash and how can we ensure that we can do probably double the business what we are doing now with the same level of staff, and that's what our focus is. When it comes to the back-end operation, fulfillment and cash, we are being very intentional in figuring out where we have mundane task, putting agents, allowing people to use AI tools within the boundary of compliance, definitely discouraging any kind of intellectual tourism, doing that. But on the front end, and that's where our focus area is right now. On the front-end side, we are now transforming our overall CRM and marketing footprint. Charles just said that marketing is our profit center. Our vendors looks for that. We're trying to bring better systems, better infrastructure for our entire marketing team so that they can do their job efficiently. But more importantly, they can connect their data from go-to-market from the lead to the opportunity all the way to the quoting. The other piece is coding. That is our biggest time consumption. Even it is easy, that's where in the operation, we spend the most amount of time. Just to give you a perspective, last year, we have produced probably almost 1.1 million quotes and 95% of them was created manually through an e-mail manually entering the data into the system. A lot of time consumed. The human elements still have to be there. That's what we do. We build relationship. But we can save all those time where we are spending like entering the data into the system, figuring out errors and everything. We are right now in process of building our own in-house AI-powered quoting system, which will be going live somewhere in the month of October or November, which will allow our entire insight team to get more efficient, potentially by 30% to 40%. That's our prediction right now. So we are putting a lot of effort there. The overall goal is reduce the manual touch point and ultimately increase the deal velocity. The second piece is, which I want to touch is the experience sector, right? We -- as we speak, we started working on that. We are in the process of building our own customer experience platform, which should be up and running somewhere probably by Q1 next year. The intent is twofold. One, as we transact end-to-end, we want to give our customer every access of data they can have. Majority of our business is software. And if you look at that, we transact licenses. But we cannot tell our customer what are your licenses. It's actually not even in a format they can read right now. Renewal is another part of the business where we struggle right now. When it's a struggle, like we do better than all of our competitors. But internally, when we look at our own efficiency, it's a long process from our customer figuring out what has to get renewed, then our internal team figuring out how it has to get done. Our intent here is that provide -- I want to say this, probably Amazon-like experience where our reseller can log in and see everything and then put a request of the quote, put a call out for an existing order, call a renewal and everything. But on top of that, also act as a marketplace for our MSP providers and everyone else. So our focus right now, and like I said, we already started working on this and potentially by Q1 of 2027, this should be up and running for at least some targeted vendor. Last one, safeguarding the ecosystem. I think Dale said, right, we were $400 million or so in 2020. Now we are transacting around $2 billion or so. We are onboarding larger resellers. We are onboarding larger vendors, and they all are asking the same question, how should we trust you? How do we know that our data is safe, right? Now we can always tell, hey, we have great security protocols. We have all kind of firewalls and everything, that alone is not enough. So what we are trying to do is that we are trying to get into some of the difficult certification or industry standard certification. We are in process of getting certified on SOC 2. We are also going after NIST 800-171, which will also allow us to sell or distribute to federal market, state, local education and all. We are focusing on ISO 27001. We are already certified in EMEA. We are now trying to get into North America as well as we are getting to CMMC because a lot of our resellers already serve federal and government, and we want to ensure that they are not in trouble because as a distributor, we are not certified. So we are going after all these things to ensure that our risk is reduced, but also open up the market access, right, from resellers' perspective as well as vendor perspective. So just to conclude, our focus, again, focus on efficiency, ensure our margin footprint looks better, focus on experience to open up new market space, new channels, new customer base and also provide our MSPs and vendors a level of confidence that once we go to climb, our business is going to grow and then gain the trust for the industry. So thank you, everyone.

Gerard and Carlos.

Good morning, everybody. Great to be here. My name is Gerard Brophy. I'm actually based in London. And my responsibilities are really to go after the international business really from a regional growth, vendor growth, different brands, portfolios in different regions. And really just the strategy throughout EMEA also assist Dale with targeting the right type of acquisition targets really in the different regions across EMEA.

Excellent. And good afternoon, everybody. Carl Rodrigues, President here for North America. I've been with Climb now just almost 6 years from their first acquisition of a North American distributor called Interwork Technologies, where I managed our North American go-to-market, came over to Climb to really help build out our sales team here in North America, both on the Canadian side as well as the U.S. side and get deeper with our vendor partners.

I just wanted to start really on the model of distribution, how it's been evolving over the last 3 years and where we think and we feel and certainly investing our focus into where the future of distribution is going to. I'm pleased to say it's all very positive in all the trends that we're doing. If you look on the left-hand side, that was more the traditional model on go-to-market just the usual vendor distributor channel and all the way through down to the end customer. But on the right-hand side, this is really how we believe the future is starting to look. And it's really powered by the likes of data services, digital platforms in the market. And it's really putting us as a distributor right at the epicenter, if you like, of the ecosystem. And that's been accelerated by things like hyperscalers, different marketplaces, consultants, AI agents, these types of things coming in. We're investing our time and energy into building out the MSPs, larger resellers, et cetera. One thing that's really interesting is the end customer. If you look at it on the right-hand side, the end customer is always driven by the resellers. I think one of the biggest frustrations a lot of the vendors have at the moment or they can't get the access to the end customers as quickly as they can. And I think one of the reasons is the channel partners. There's a lot of selling existing to existing customers, so existing technology to existing customers. So for us, it really gives us an opportunity of helping the vendors. A lot of the vendors are actually investing a lot of MDF money into distribution to try and drive end-user demand. And one of the reasons they're doing that is really from a solution sell. So we can put a number of our vendors together into a solution and really fix end users' problems. So rather than trying to sell point product at this stage, selling solutions is a much easier and beneficial way of getting into the resellers and selling that. So just the next slide here. The good news is it's putting us in a fantastic place. These numbers here up on stage really are -- I mean, up on the board is the Q1 revenue for the top 6 publicly quoted distributors. What you can see is 22% year-on-year growth from revenue, 60% up on profit. And most importantly, from a share price perspective, it's gone up 20%, not too dissimilar to our numbers and how we're growing through the year. So this is a very exciting figure for us, number and a future growth. This slide actually comes from Omdia. So I haven't just pulled it off the internet. It actually comes from Omdia. But there's a number of specific trends that are actually driving this behavior. These trends are the likes of digital and platform acceleration. We heard from Charles earlier around consolidation of vendors, rationalization of vendors. Our competition are looking at -- we mentioned 4,000. There's often in EMEA, they're probably coming out at 12,000, 13,000, 14,000 vendors on the books. Why does a vendor want to be part of that? We rationalize down to 7 or consolidate down to 70 different brands, making up 95% of our revenues. Very exciting. One thing to actually do take note of, I think a lot of these numbers may be slightly skewed because of the shortage of hardware. So when you look at the bigger competitors with us, it doesn't really affect us as much because we're pretty much a software distributor. But if you look at the big guys shifting the likes of laptops, a lot of infrastructure piece, that hardware shortage, there's a lot of -- not prebuying, but forward buying, I guess, of this hardware, so the customers aren't stuck at the end of the year with a shortage of hardware. That may well be skewing these numbers, I think. But from our perspective, it's very exciting because we primarily are a software driver of distribution -- of the vendors. Covered that one [indiscernible].

Perfect. So I'll just jump into this next one, and this is really about what the Climb advantage is, right? And there's one thing I think everybody here needs to understand that we win when our partners win, both our resellers and our vendor partners in the channel. And we've built our team specifically to help our partners win faster. Dale talked about speed and what does that mean? So one, at the forefront, we have our partner-first mindset, really focused in driving partner success. And what that means is that we align both with our resellers' go-to-market as well as our vendors' go-to-market and make sure that we're going to market together as one unit, where a lot of times, different distributors and so forth will work with our vendor partners in different models instead of together jointly, and that's what we bring as well as building long-term relationships. The second one is around the high-growth vendors. Charles mentioned this earlier. We strategically looked at our main line card, narrowed it down to 100 with 70 focused vendors. And that's so that we can get deeper with those vendors with our teams, have the expertise to be able to support our resellers the first time when we're engaged with them, when we're out in the market with them, when we're in the field. And as they're looking for new solutions, they can count on our teams to really be that trusted source for them so that they can come to distribution versus having to go directly to vendors individually. The third one is really around our engaged sales team. And Charles mentioned this as well earlier. Our field teams have one of the best relationships out there in the regions with our reseller partners and our vendor -- and the reason for that is they're out in the field. They're on site at our resellers weekly. They're partnered with them. They're aligned with their go-to-market planning. And we find that's what's really helping us drive and grow business in these long-term relationships. The fourth one is really around new business initiatives. You heard this a little bit earlier, really using business intelligence to help grow our business. And what we've done and what we continue to do is look at our database, understand who our end customer base is, understand our vendors and their target vertical markets, understand our reseller strength, use that data to really align our vendors and resellers in the market to grow the business and move faster out there. The fifth one here is really about fast and reliable support. This is the day-to-day. This is the quote to order. This is how we support our partners. And what we pride ourselves is industry-leading SLAs and supports. We support our partners within 4-hour SLAs from a response time, education time, really getting back to them so that they know where they stand and where their business is. And that's how we continue to win is bringing that speed to our partners. And then lastly, the technology enablement. You heard Vishal talk about that earlier. Everything right now is talking about platforms. Our top partners are looking for integrations, APIs, EDI, renewal integration, quote automation, all of that integration is what we're building, and we're going to market fast with our partners. Now the next step, when you take a look at our field team and how we've built our field team and our sales team in general, it's purpose-built. It's really around relationships. We know relationships is what wins the business and builds the business. And frankly, I think relationships is the new competitive edge out there with technology going out there. So when you take a look at how we built our relationships in North America, we have 19 field sellers, and that's across 13 regions. We have 2 regional VPs that we just promoted last week to help drive and grow and mentor our territory teams. Now what's special about these teams is, as I mentioned earlier, they're out in the field. They're engaged with the resellers. They're having real conversations. They're part of their go-to-markets. They're involved with our vendor teams. They're out in the field. They're bringing our vendor teams into our reseller partners talking about go-to-market. And I'll tell you, what we hear so much is, hey, we haven't had a disti rep in our account to visit us in forever, right? Even with our vendor partners, our latest relationship, when you take a look at Fortinet and our partnership with them, we've now gone to all their local offices where other distributors aren't present, and they are now hosting their QBRs, their business planning in our offices over the next 3 weeks. We have 5 of them. So we're getting deeper and closer with teams aligning to their go-to-markets and really being strong. And that's the value that our field team brings in. The next step when you take a look at it, our vendor managers. So our vendor managers are essentially our funded vendor heads at our company. They are funded by our top vendors. If you take a look, we have 26 of our strategic vendors that fund that team. That team is roughly 90% funded. These guys are the specialists. They know the vendor solutions inside and out. Again, it's making Climb as a distributor, the first point of contact for our resellers versus our partners having to go directly to the vendors. And that's an important part of earning their trust and building their business. The second part about this team, and it's so large is that we're completely aligned with our vendors. Our vendors are investing in us. They want us to be successful. They want to grow their business with us. We're aligned on their go-to-market. We take a look at our top reseller partners and gain the mind share of our vendors to focus on our partners, go-to-market, MDF, co-op, dollar funds, really figuring out how to drive new business through our group versus our competitors.

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

Yes. That's a great point. And then when you take a look at our 2 teams and how the teams work together, it's really how do we bring our field sellers, our vendor managers into one cohesive team to accelerate the business in the channel. So there's 4 key areas that we look at. One is around demand creation, right? We look at our field sellers. They're really on site, working with our reseller partners, working with their sales team, identifying end-user opportunities, doing account mapping and really driving that pipeline at that level. Then we back that up with our vendor team. They really bring in, they activate the vendor funding. They collaborate with our vendor sales reps, bring them into opportunities into our accounts, drive campaigns and launch a number of initiatives to keep the mind share with our partners and really just accelerate and build pipeline faster our company, right? The second one is around account growth, right? And we really work with our field reps, and they work with our resellers. They do account planning, figure out where the gaps are in their portfolio, where they want to go to market, how they're going to market, different verticals that may be ideal for them to go after that they're strong in or that they lack in that we can help bring together. They team them up with our vendor managers and align our reseller strategies with our vendor strategies that are going after the same markets and really building the business in the same areas as our partners, and we go to market together with our reseller and our vendors. And that really just brings a stronger performance from our resellers. We're seeing double-digit growth when we truly align both go-to-markets. The third one is really around deal execution. This is where our field teams are actively engaged with our resellers. They're driving deals forward. They understand where we are. They're negotiating credit terms, the deal size, moving forward, making sure that everything is aligned. They team up with our vendor managers that then track that pipeline, but track it alongside of our vendor sales reps as well. So it's in their forecast. It's at their end of quarter, end of month targeting. We're making sure we're an integral part, and that makes sure that no deals slip to a competitor of ours and that we know exactly what's coming in and closing, and that gives us higher win rates across the board when we do that with our vendor partners. And then lastly, enablement. This is where our field reps are in the offices, working with our resellers, understanding their vendor portfolio, understanding their gaps, understanding the opportunity out there industry on our vendor portfolio, our emerging partners, our strong top partners that will really fill that gap for the resellers. They will then bring in our vendor managers that will come in, enable, do demos, do presale support, post-sale support, be that line item for that reseller to engage with and move their business further along, and that really helps us expand accounts further. Now the next part is really around regional expansion. And if we take a look at where our focus is in North America, we've doubled down in a couple of areas. One, bringing in our regional VPs, right? We now have Mike Taliercio for the West, and then we have Jessica Lindlof for the East. They're really going to be managing our field teams, getting closer, getting into our top reseller building those relationships, identifying the opportunities and really driving forward with that. We've expanded into MSP division. We had our MSP teams managing over 1,500 of our MSPs throughout our territories in different regions. We've now built a dedicated team to go after the MSP business and continue to drive that growth and also bring a different level of service tied to with our platform as we start launching our marketplace and moving forward. We also invested in our territories. I think one thing we consistently do is evaluate our territories that are out there, look for the highest opportunity for growth and where we can expand in different regions that have a high potential of opportunity for our teams. We've split out California into NorCAL into SoCal to really increase the business there, and we're starting to see an uptake in double-digit growth there with our partners, allowing us to get deeper with stronger reseller partners in those regions. And then lastly, this is where we're seeing a ton of success come from. It is really doubling down on those enterprise partners in the North American region. Really, when you take a look at it, WWT, also CDW, they're the top 10 solution providers that are here in North America. They have the highest opportunity within customers. With WWT, we've built a strategic team around that. We brought in Kip Thompson, which is now managing that line, working with our inside teams. We're starting to see our sales double, triple as we move forward and tremendous growth. And the fact that we put that dedicated body around those lines allows us and allows our vendors to focus more around with us because our competition doesn't have that. CDW, this is our largest partner, one largest service providers in North America, led by probably one of the strongest field reps I've seen, Nathan Wysocki. He's been on that account for more than 10-plus years, really knows how to build and build relationships. We've now built out that team to a team of 4 to really go after and build out the different regions, the different verticals and really get deeper within those accounts. And as Charles mentioned earlier, our vendors are coming to us wanting to get into these large national accounts, CDW, SHI, Insight, and our relationships are getting them in the door to move faster.

Yes. I'll just move it across to EMEA. And I think it's important to take a step back -- sorry. I think it's important to take a step back and have a look at the strategy of the business. So when Dale did come in, the strategy was, yes, we talked about consolidation of vendors. But from an M&A perspective, North America, primarily quite consolidated. A lot of the big distis have been hoovered up. So EMEA was the market to really go after. So originally, the Lifeboat business really had a business in Amsterdam, small internal, 3 or 4 people, and they just used to really procure some software products, the likes of Intel, et cetera to a number of different countries. Since the strategy changed and the acquisition was key to growing the business, we've acquired 3 businesses in the U.K. and Ireland, you can see. So we've got 3 offices in the U.K. and Ireland. We -- this is a bit of a combination of a slide of acquisitions as well as organic growth. So a number of the regions we've actually invested ahead of the curve with an idea we're going to scale out the business from an organic perspective, while still keeping an eye on the targets for those regions. We still got the Amsterdam business. We've actually grown that out quite significantly, and it now trades with all of Benelux and Nordics. We have a team in Paris. We've got an office in Paris as well. That market is one of the biggest opportunities. I think, for a lot of American vendors as well as Israeli vendors, they tend to try and stay away from that market because the French are quite persnickety in the way they work. So you need to have French people. You also got to hire teams and teams of people in France. It's very difficult to get rid them with their own people. But we've also -- we opened up in Germany. We've got an office in Munich. That's very exciting for us. And obviously, the latest acquisition in Athens. Exciting for me, you can probably hear I've got a bit of South African accent. For me, it's exciting. We've actually -- we've organically grown. We set up a business 2 months ago in South Africa. We've got a team of 8 people out there. One of our key vendors in Sophos, our largest vendor from a revenue perspective, they've decided to really work with us in the region. And it's not just South Africa, all of sub-Sahara South Africa is key to it. We've hired some really strategic people in that region who've already worked distribution there. So we're looking for big things coming out of that market, very exciting market. I'm sure you're all aware, but the amount of cash that's being invested into East and West Africa, certainly from a data center perspective is through the roof. A lot of the governments are funding a lot of the IT start-ups and data centers. So for us being in there and giving our vendors the opportunity to scale is very exciting indeed. We continue to look for the next target. Dale is obviously talking to a number of targets at the moment, and that's an exciting part of our growth. But from a regional perspective, key regions, obviously, the things like the Middle East for us. We definitely need to focus in on the Middle East, but there's a number of exciting conversations going on right across the board.

Excellent. And so when you take a look at everything we've been talking about, is really around building relationships, getting deeper with our resellers, aligning with our vendors. And is that really driving the growth that we want to see here in North America? And when we take a look at our first half of the year, what does that mean for us? What have we accomplished? So really, you take a look at where did we win on RFPs, relationships, vendor partnerships. Alone in the first half, we did $350 million in large-scale RFP wins and also about vendor transitions and engagements in the channels. Those were primarily RFP wins and new relationships with CDW, SHI, WWT and Optiv. And I think one of our larger wins there was really around the Optiv account and taking that account to the next level. And we're talking about bringing account from a $20 million account to $120-plus million with us over this next year. And those are the large enterprise wins that we're really getting underneath and bringing our relationships to develop. We have another 10, 15 accounts that we're building those same relationships and going to market and bidding on those RFPs and so forth. The second part is around the strategic vendor momentum. These are our staple vendors and the growth. And if I take a look at these 5 vendors alone in the first half of the year, we grew almost $72 million with these vendors year-over-year. And that, again, comes from alignment, our vendor management team collaborating with it, our field team being out there in the field, bringing their vendor reps into new accounts, new resellers and moving forward. And that's the momentum that we're building here and taking forward into the second half.

Yes. And just from an EMEA perspective, I'll just put up 3 accounts there from a success perspective. The first one, Softcat. Softcat is the largest reseller in the United Kingdom. We have, over the last 3 to 4 years, have been successful in doing well over $100 million with them on an annual basis based around one of our vendors in Vast. That's obviously grown significantly through other vendors, that relationship. So things are going well there. I think we spoke a little earlier around end-user demand. This is a great example where distribution can get involved and open up some doors. So one of the large account there was actually opened up by us, by climb, which enables us to maintain higher margins on the larger deals and stay in the fight, if you like. So again, pushing that end user demand is pushing up our margin. SCC, that's a French win for us. That's -- SCC is a massive account in France. There's a public platform, I guess, you could say, that it's called UGAP and all public spend goes through UGAP in France. So that's a $3 billion opportunity that all runs through SEC. We've managed to sign up with them and get the contract finalized, and we're starting to trade quite a lot of our vendors to that. So that's very exciting. First Distribution, I had to put that up because that's the biggest reseller. First Distribution is the name of the company, but they have a reseller called First Technology. They're the largest reseller in South Africa, and they've again signed up to give us -- effectively, it will be 1/3 of our income over the next 12 to 18 months, which is very exciting.

Perfect. Excellent. And then one more slide.

Yes. Myself and Carlos often go at 7 minutes, so bear with us. I think I always put the word relevance to what we do. I believe us as an organization trust stay ahead of everybody else and remain relevant for our resellers. AI, 18 months ago, we sat down, we recognized there was a massive opportunity for us within AI. We looked at building out our own solutions. We realized we're not an AI company. You've obviously heard from Vishal earlier about what we're doing from an AI perspective on tooling. But what we looked at ourselves and said, what are we? What do we actually do? We're an enabler. We're a trainer of resellers effectively. So what we put together was we put together -- we named it the Skywood project. And what it is, it's effectively 6 steps to AI readiness for all our resellers. Because the reality is even though AI is talked about everywhere, from an enterprise level, a lot of people don't know what they want to do with their data. So ultimately, it's achieving that outcome. People are on different levels and different steps. So we created our first step, which is effectively our AI academy. And that's training people from entry level to people who are geniuses in AI and sitting down with these enterprise and SMB companies and saying like what are you trying to achieve? It's a journey. We're actually on a journey. We need to get somewhere. It's not a quick fix product that you're going to stick in and it's going to work. So we want to take them on that journey. So that's number one. We actually go in vendor neutral when we talk about the Skywood project. And ironically, what happens there, we get a lot of end user interest as well. So end users and resellers come to a lot of our events and webinars. Once we have them in there, then we open up the technology because we only really make money when we sell technology. So this is not a money earner. It's been relevant and given access to wherever we want. So really, secondly, we open up and we give them a true ISO certification that enables them to go to their resellers and discuss what their outcomes and bring them in. We also then, from a third perspective, we all know every use -- every AI opportunity is a new use case. We partner with a third party called Unframe. They have a number of different use cases, hundreds and hundreds of different use cases, which are relevant to every individual case that we see. So we take them on that journey. Also got user group. We set up a user group. Remember, cloud came to market and the things like HCL and these types of things, we actually set up user groups for people to kind of push ideas against each other, put -- we're not selling anything. We're just having these conversations with peers at a certain level. We start to generate that interest. Risk and compliance, we spoke about it again, Vishal. Certainly in Europe at the moment, governance compliance is key to everything. You've got Cyber Resilience Act coming out on the 1st of September. All our vendors, our American vendors and Israeli members have to be compliant. If they're not, even us as a distributor could face fine. So it's up to us to educate and make sure they compliant. It's a key part of that. And then obviously, sixth, our marketing team, I think we have one of the best marketing teams around, and we can help our resellers go to market from an AI perspective. So again, slightly over our 7 minutes. Sorry, I apologize for that. I don't know. We actually cut out 5 slides. I'm going to introduce Brian and Tim. Thanks.

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

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

Excellent. So Brian and I are here to talk to you guys about inside sales and operations. And as you can see from behind me, there are a lot of different groups of inside sales, right? So we have our national accounts that Carlos just spoke about in CDW, SHI, Insight and Worldwide Technologies. Everybody else kind of falls into this little VAR segment, and there's about 7,000 VARs that we do work with in territory. We have our MSP team that we also mentioned. The 2 that I really want to point out are our Elevate team and our Basecamp. And we mentioned that we have about 100 brands on our mainline card. When we moved our line card from 400 plus or less than 500 vendors down to 100, we didn't just fire those vendors. They were revenue-generating vendors. So what we did is we had carved off Elevate, which is run by Michael Bernstein here. And we transact in a fulfillment fashion. So these fulfillment vendors do not get access to our field sellers. They don't get the ability to participate in our marketing and events, and we don't maintain their price books, right? They are truly a one-off vendor that we provide fulfillment for. Many of these companies and especially the larger guys, they call it long-tail management. They also want to only focus on the lines that bring them money. But if they're participating in an RFP for one of their big end users, whether it be Exxon or Cisco or somebody else, Bank of America, they have to procure everything. They just can't procure some things. So they look to climb to procure all of those products, and that's what our Elevate group is for. The other group is base camp, and that is mostly our order entry group. We utilize EDI as a technology, and we have over 20 reseller partners that are on EDI. All of those orders are coming in based on quotes that the inside sales teams have created, and our base camp group are the ones that process those orders and send them off to our vendors. We put a few notes down here. Fast response equals faster results. We are by far the quickest company in this industry to provide a quote back to any customer. You'll see on a future slide that we have a 4-hour SLA. However, we get most of our things done within 2 hours. As Vishal automates our system, that's probably going to become a shorter time frame. Our reps have been here for a long period of time. I've been here for almost 23 years, and I think I might be the fourth longest or have the fourth longest longevity in our company -- in this room, right? So we have people that have developed relationships with our partners, and those people have stayed at those resellers where we have really furthered the relationship because we've just known each other for that long, right? We say that quoting is not hard, but it can be. We have 100 different vendors, and they all have different rules of engagement. They have standard pricing. They have deal registration pricing. They have special pricing. Some people require information periods of perform. There is a lot of data that goes into a quote. All that data will be shrunk and make us faster as we automate through Vishal. All of our inside sales reps are sales certified, and they're experienced within the groups that they exist. So Carlos mentioned, we have 19 field sellers. Each of those field sellers are backed by 4 to 5 and in some cases, 6 or 7 inside sales reps that support that speed. But our inside sales org is where the speed comes from, and that's part of the other reason why we win outside of relationships.

Thanks, Tim. So what we're looking at here is our EMEA inside sales footprint across 7 locally based teams in 7 markets. We have a team in the U.K., a team in Dublin, Ireland, a Benelux team covering the Netherlands, Belgium and Luxembourg. A France-based team, a DACH team covering Germany, Switzerland, Austria, but also into Poland and up into the Baltics, a Greece team covering that Southern Mediterranean region; and our most recent office, our South Africa team in Johannesburg, covering, as Gerard mentioned, all of Sub-Saharan Africa. What's important to note is these teams are local to their customers. They're local to our vendor teams that are in those regions. And they understand the local buying cultures, which are very different across each country in this region. And by being local, we're able to drive speed. What a customer in this region wants is they want the distributor to come back quickly, accurately and knowledgeably with the information they need to win business from their customer. And Kim are the best distributor to deliver this. And that's why consistently, we're winning over reseller partners across the region. Like we've all heard that adage that people buy from people. Let me tell you, French people really do only buy from French people. But it's actually more than that. Our value to the market is we understand how to sell to the German mid-market. We understand if a vendor wants to access the public sector in France and how to get them into that market. If one of our vendors wants to go sell to the NHS in the United Kingdom, we know which partners hold the right accreditations and are on the right framework agreements to give them access to those accounts. So using our teams and the knowledge within our teams accelerates our vendor partners' route to market locally. While our teams are local, our operations sits in a shared services engine centralized within our U.K. and Irish business. That encompasses our sales operations, our procurement and our vendor operations. That provides a consistency of experience to all of our vendors as we sell across the region. It also provides consistency for any partners we're working with in our North American business that want to access or service customers in the EMEA region. It's the same experience across EMEA as they get in our North American business. When we moved into South Africa, we didn't scale out a new sales support team. We didn't scale out a new finance team, a new procurement team in the region. We just extended the capability what we already had. The cost for us or the marginal cost for us to enter a new region in EMEA is a fraction of the cost of what it costs us to enter our first region in EMEA. And that operating efficiency, the revenues generated from that flow straight to the bottom line. Within our shared services engine, we also have a lot of experienced people within the business, as Tim mentioned, tenure. Everybody has a very long tenure in the business. So they understand not only the buying culture, as I mentioned earlier, but the challenges with actually doing business in specific regions. That is exacerbated not too long ago by Brexit in the U.K., where all of a sudden became a lot more difficult for some of our vendor partners to manage the shipment of hardware into the U.K. or into the EMEA region. By having logistics facilities in both Dublin within the EU and in the U.K., we can facilitate both markets seamlessly without any disruption to our vendors or our customers.

Yes. I mean I'll just say it's easier to buy than it is to build, especially internationally. And our speed to market has been minimalized so greatly being on a unified global system. Okay. So these are just some stats. I really want to talk about the scalable commercial engine. But as you can see, we've processed almost 271,000 orders across the past trailing 12 months. And as Vishal noted, there's about 5 quotes for every order that we place, right? There's a lot of options that these customers are considering. We worked with more than -- or almost 800 different vendors, which means Michael Bernstein's Elevate Group is transacting with almost 700 of those. But the commercial engine and the scalability, it's easy to add a new vendor and then plug them into a machine that's already running. We can sell things that are more than just software if we really wanted to, but we'll probably just stick to our specialization. We can plug them into a partner ecosystem that we've already shown and that we've already proved works. And as long as Charles is working through his vendor profile and signing those guys that have more than 50% of a distribution viewpoint, those guys are going to plug right in and be equally as successful, right? Our inside sales growth engine is simple. We add people as we do more business, right? And there's always a revenue threshold that tells us, hey, there's x amount of quotes, there's x amount of orders, there's x amount of revenue coming in, and this is the time that we go and we add. Take the bottom 2.

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

Okay. So inside sales and operations is really blocking and tackling, right? It's the necessity behind how we go and we sell. So our entire thing is speed and accuracy. And even for as fast as we are, people would like us to be faster, right? The amount of e-mail that we have incoming is insane. The partner portal, the reseller portal that Vishal talked about, it's a self-service portal. It's going to help minimize the amount of things that we have coming in. We also like to utilize our own self-service portals when vendors offer them. We can go and we can grab quotations quicker. We can get that out to our reseller partners quicker, right, which leads to a quicker sale. Our automation, and I'll tell you down here, we utilize XML, EDI, API and soon marketplace to get to our customers, right? This receiving a quote from a vendor in a PDF, copying it and paste it into your own quote tool is long. It takes a long period of time. If you have a 60 or 70 line item quote, it's going to take you an hour to do a quote, right? With XML, we can take that file, we can drag it and drop it into our quote tool and every line item automatically appears for us to do, right? Then our inside sales reps job changes from creating the quote to reviewing the quote for accuracy and sending it out. It allows us to upsell and cross-sell other products that we can now add to the quote. And that's really a key for us. Our bid wins. Carlos had mentioned that we had already won $350 million worth of business across the CDW, Optiv and a couple of other bids. We're probably the sixth biggest distributor in North America. There's a reason why people choose to work with us, right? It's the relationships that we own. It's the speed in which we work on the inside, the accuracy of the quotes that we provide and how quickly we can help them close the sale. We win because of our relationships and because of our speed. We don't have the biggest rebates. We're not the biggest distributor out there, right? They probably have other technologies. They just don't do it better. For exclusivity?

Yes. I thought I'd give you a couple of examples of what's been happening in our region with vendor exclusivity. So one of our largest partners, Sophos in our North American business, made a decision this year in our Irish market to terminate the relationship that they had with 2 existing distributors in that region and replace them with Climb as a sole exclusive distributor in that region. And that was because, first of all, they've had an amazing experience working with Climb in our North American business. Secondly, we have the same systems and platform globally. So we -- they trusted and knew that they would get the same operational experience with us. And thirdly, our go-to-market strategy in the EMEA region delivered what they needed from a growth point of view in new customer acquisition and new partner acquisition in that territory, which had kind of slowed with their existing model. This is something that we're seeing recurring over and over again now. And we're part of multiple conversations every month with vendors who are looking to talk to us, either they're dissatisfied with their current incumbent distributor in the region or one of the countries within the region or they're looking to enter a market and enter a market for the first time. And given the experience they've had with us in other markets, they choose us from the beginning to have an exclusive relationship. That allows us to continue to invest in -- or to expand our investment initially in those technologies. So we have more people from the get-go on the ground to support that vendor in region.

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

So real quick. Yes, Carlos and Gerard went too long. That's why we're moving around. And they always do that. I want anybody else to understand what persnickety means. I don't know what that means on that side. So yes, we'll forget that busting on the French. So what we're going to do is we're going to go to lunch now. We'll come back. Matt Whitton will kick off, and then we'll get into the numbers. The second hour is going to be really where Climb's going to be going, which I know that is a lot of the reason you guys are here, understanding us where we are, but where we're going to go in the next 3 to 4 years. So let's go all good to lunch. One thing that was mentioned as far as a lot of the sales teams here. And the last thing is Sandy DeVico got to be upset that she wasn't on that one slide, Carlos, I have no idea. I know I could feel the heat coming there. So please intermingle with our teams. We have vendor manager directors here, our field sellers, our operations, our credit, everybody, please get to know everybody and pick their brains on what we're doing internally in climb, but thank you. We'll be back in an hour. [Break]

Awesome. Thank you very much. I hope you all had a nice lunch, and we've saved the best bit until now because -- yes, we thought that would. I'm going to talk a little bit about parts of the business that maybe some of you aren't quite as familiar with. So I'm Matt Whitton. I'm the COO in EMEA. And as part of that, I also run our Gray Matter brand globally. I joined the business about 5.5 years ago as part of the CDF acquisition over in the U.K. that happened. But I've been with the company now 26 years. So a long time, as Tim was talking about earlier on. So what is our Solutions business? It is Gray Matter, which sells mainly to ISVs, so to developers that are building IP to sell on. We sell both to them and through them. And then there's Climb Global Services as well that I'll go into a bit more detail with now. So starting with the numbers. Our Solutions business, although in 2025, the AGB was about $90 million, so not a massive part of our business. From a revenue standpoint, from profitability, it punches above its weight. So yes, from 4.6% of our AGB drives about 13.5% of our gross profit. We're able to do that because of the way that we work. It's where you add more value, right, you can retain more margin. So Gray Matter, as I said, sells to ISVs, but what does it sell? So majority, about 86% of what Gray Matter does is Microsoft. But there's some niche areas of that where we work there. So where you've seen the vendors that the other guys have talked about earlier on. In Europe, we are a Microsoft distributor. I'll go into some more details about that a bit later on. But Gray Matter essentially help developers to build an application, provide them the tools to do that. These are people that are adopting AI as fast as you can take it, right? They are people that are quick to adapt and adopt new technologies to see how they can build their business, but then they need somewhere for that to run. They need some people to help them secure that because when they're working -- software is their business. They really understand what they're talking about. And our salespeople, our marketing people working much the same way as the Climb team, the operations that you've seen earlier on, but they're working with these companies that are using the technology to help build their business and go forward. Climb Global Services serves both Gray Matter and the Climb Channel Solutions part of our business, and it serves that with presale support. It serves that with post-sale support. So first and second line, whatever the vendor is needing, Climb Global Services can provide that into our major vendors. They also help drive license sales. That's what we're all here really to do. So they do migrations, optimization, in some circumstances, managed services, so helping MSPs adopt those technologies early stages before they build up that themselves. So we're training MSPs and resellers to scale that as they look to grow. And they also give us the technical certifications that we need that many vendors require. Certainly, yes, that's for Microsoft, but for many other vendors as well to either be a distributor to be a partner in some way or other and have increased margins. So that gives us our credentials. One area with Microsoft that they now have a frontier distribution program, and we are very well placed to become a frontier distributor because of our services business that we have there. And what that will mean is that we're, again, able to retain more margin, get leads to build that business as we go forward. And then the third piece I'm going to talk about as well is the client marketplace. So again, you've seen some bits of that. In Europe, we already have a well-established marketplace that is in operation. This is again centered around our Microsoft business, but also with other vendors that we have there. And this is really helping us serve a market that otherwise would not be profitable for us to do so. So when we're working with MSPs where there's a low average sale value where the margins wouldn't otherwise support us putting headcount against that, having these partners self-serve, much like a Pax8 sort of model, if you want to look at it in that way. But then we have the support personnel around that. So we still have that personal touch, but we have those marketplaces there, too. So delving a little bit more into Gray Matter and how we go to market. So we're working with ISVs, independent software vendors, vendors, we'd call them in Climb-land, right? So we're helping them to build their application, provide them the tools to do that, as we already said. And they're mainly go-to-market on the Microsoft Cloud. So they're building, they're deploying to Azure. We help them sell, then we grow from that consumption revenue that's going to come back from that. Also -- so the 2 things that come up in any conversation that we have, AI, AI, AI. I've already touched on the fact that developers are among the first people to adopt AI, and it turns out that everybody needs more code. They want to generate more software that they can take to market. But then, okay, how are they going to scale that? Does it commercially make sense? And we can help them with that by going to market through the Azure marketplace. We then need to also help support them to manage their cloud spend. So what's their FinOps strategy? How can we support them to have a sustainable business going forward? Are they secure? So we have a 7-layer security assessment that we run these ISVs through as well, and that really looks at all areas of the security stack and bringing in different client vendors. It's a great cross-sell opportunity that we have there to open that up and help take our vendors into these ISVs as customers. A couple of stats on the bottom there. So Gray Matter' business, 65% of it is true recurring. So this is not just subscription renewals that you've got out there. This is 65% of the business as we come in is going to come through every year and 40% of that is monthly billing. So we're seeing a real shift to a recurring model that is -- it's moved to annual over the years, and now it's moving to monthly, and we're seeing that really drive growth. And then I'd like to just touch on a couple of niches as well that we work in. So we are a mapping distributor. So that's Microsoft Bing Maps, that's HERE Technologies, that's TomTom. So some areas that you probably haven't heard of or touched on for some time, but this is where developers use APIs to bring location intelligence into their applications. They need a distributor to really serve that market. We fill that gap, and we're able to retain great margins because of the presales service that we offer around that, which really pushes up our GP. And then in other licensing areas as well. So a couple of examples on there is SPLA, which is a Microsoft licensing scheme for hosters and ISV Royalty, which is for -- if you're embedding SQL Server or some other Microsoft tool into an on-premise application, then we are distributors for that as well. It's not that exciting to other providers. So it's an area we've really been able to grow that across Europe and use that to bring more MSPs and more ISVs into our stack. So stepping away from the Gray Matter part of our business and really focusing on Microsoft as a vendor that we work with, clearly not a challenger when we look at the -- where they stand in that Gartner matrix. However, the opportunity in Europe is huge, both for us all up, but especially with our Microsoft business there. So we are -- I'll say it again, we are Microsoft distributors in Europe, both originally, Climb already were and then through the Interworks.cloud acquisition that we've made, that's really bolstered our numbers there. Now where Microsoft use distribution under their CSP licensing scheme that they term it, it's really to serve the SME market. And so that is growing year-on-year, and it's looking like out to 2035, that's going to grow 20% every year. Now that's exciting for us. And obviously, we are not a huge part of that market as it stands. There is -- our growth opportunity there is huge. Microsoft are looking to distis to serve more of that market as well. So they're already -- they've driven some consolidation by making resellers, which is this direct build threshold piece here. They've got to be transacting at least $1 million a year to be a direct partner with Microsoft. We know that's going to increase as time goes on as they move more and more of these smaller partners through distribution. So that's a great opportunity for us to pick up on this business. And what we're really offering to those partners is, yes, the marketplace, but then we're also -- as you look at the areas where Microsoft want to grow the business, which is where they put their largest rebates, that is very much around AI. It's around their copilot, it's around security. And that is where our Climb Global Services business really comes into place. That's how that's driving that extra margin back into our business. And there are other areas as well where this partnership can help us take our existing vendors out to market. So the 2 more acronyms, unfortunately, to you, so ROO and MPO, so reseller-enabled offers and multiparty private offers are ways that Microsoft are offering traditional client vendors and obviously, many others as well, routes to sell to end users by Azure spend essentially. So they're getting enterprise customers to sign up for a Mac. So they get them sign up to -- they can have a certain amount of Azure spend. They can retire that using us and using client vendors to do that. So through this partnership and this understanding, not only is it in itself a good business opportunity for us, but it is for our vendors, too. And again, in Europe, Microsoft really underpins our MSP messaging. So as we're going out to market, our MSP business, Microsoft is the cornerstone of that, and then we're able to add on margin add-on value but through the other more niche or more emerging technologies that we're able to cross-sell into those MSPs. Once we get them onto our platform, then doing that attach is a lot easier. And year-on-year, we've grown over the last 6 months against the previous 6 months, we've grown our AGB on Microsoft in Europe by 45%. That's excluding the Interworks acquisition. Interworks also growing at an accelerated rate since they've become part of our business. So it's an exciting place to be. It is different to the rest of our business, but it's going to grow, and I can see this being really a part of our acquisition strategy in Europe as we go forward and across the Middle East and Africa as well because as we have these tools, we have these platforms, we have these expertises in place. It's very easy for us to scale that. So a quick bit on interworks.cloud. They only sell via the marketplace. I feel like I'm saying marketplace far too often, but there you go. So we already use the same technology to do that. So from an integration point of view, this is very easy for us. We're already integrating the teams. They're working together to add value there. So they don't quote. They think it's crazy that we do 5 quotes for every sale that we do. They're like, why do you do that? Why don't you just sell for a marketplace? So we're also educating them on the wider client business. So across Southern Europe, there is a good cross-sell opportunity for us there, taking the existing client vendors through their sales team and through their marketplace as well. All of their business is recurring, and they retain about 5% EBITDA. So it's a good profitable distribution business that they have there. The fact that they're in Greece, they're in Malta, they're in Cyprus, they're in Bulgaria. These are not areas that have high penetration for the more broad line distributors. So again, we're able to retain more of the margin that we make there. And yes, 74% of their business is Microsoft. The next biggest is Acronis that's in there, which ties in nicely to our North American business. They're a certified Acronis training center and very well thought of by them. So they're going to help us take the Acronis brand right across the rest of Europe, help us build that out. I've covered marketplace enough, as I've already said, but I think the piece that I would like to pick out on that, it's a must. Every Disney needs a great marketplace, and we're already there. As Vishal covered earlier on, it's only going to get better, and we're going to add more value here to what our resellers and our MSPs really need. I think an important part when you're working in countries where language is different, where tax rules are different, where there are more complications around that, having a consistent marketplace infrastructure that you can then localize, it's really going to help us go to market a lot quicker as we add new regions or expand across existing ones. And it lowers the cost of entry for us because we just need a few salespeople, and we use the existing client and the Interworks go-to-market that we have there, a great MSP lead generation and conversion system, the stats there, which I won't quite quote now as part of this, but we're looking to make sure that, that's driven by the Greek team because they're already doing a fantastic job of that, and we think we can drive great growth as we move through the rest of 2026 and beyond. And now it's time for lunch, right? Let's go. I'd like to bring Dale up. Thank you.

Matt's coming up here. We're getting into the finance side of things, but I want to recap from this morning just some things that I think you could see that were a strain through a lot of the presentations, and that is the distribution is becoming way back -- much more in vogue. As we were going through different cycles, it's coming back where we are seeing private equity companies, we're seeing investment companies pushing their teams to get more efficient. The channel already exists out there, both the distribution channel and the VAR channel, why would you go direct to the end user and spend all those dollars? They look at it from every nickel and dime, and it's good for us because we are seeing so many more targets. Charles, could probably use a team or 2 or 3, just to look at the incoming vendors and then us trying to vet through them as fast as possible. So that's the strain that is exciting to us as we continue to grow in these next 6 -- 4 or 5 years that we're going to talk about. And I'll let Matt kick off.

Good afternoon, everyone. So the next few slides, we'll talk about 2026 and beyond going out as far as 2030. Just to level set for those who follow along are very well aware of the key metrics that we track to, but those are gross billings, gross profit and adjusted EBITDA. And then further down from that, we track gross profit percentage, which is the gross profit dollars as a percentage of gross billings and effective margin, which is the adjusted EBITDA dollars as a percentage of gross profit dollars. From a perspective, we filed this presentation with an 8-K earlier today. So included in there is the appendices that reconcile the gross billings, which we call a key operational metric to net sales. and also reconciles adjusted EBITDA to net income, similar to how we do in our earnings releases and in our quarterly filings. So just starting with 2025, we did $2.1 billion in gross billings, $105.3 million in gross profit and $42.9 million in adjusted EBITDA. Breaking down those gross billings and gross profit numbers a little further, $1.75 billion of those gross billings were generated in North America, while $350 million were generated in EMEA, which breaks down to 83% in North America and 17% in EMEA. As far as gross profit goes, about $77 million of that was generated in North America, while $28 million was generated in EMEA. So 73% for North America and 27% for EMEA. The difference is the higher margin profile, which is a key point to keep in mind as Dale gets to some of our future goals in the next couple of slides. But in 2025, we generated 4.5% gross profit margin in North America, where in EMEA, it was 8.1%. So a much higher profile as you're competing against regional distributors in EMEA as opposed to here some of the larger broad lines for the most part. So the first step we kind of did as we're modeling this out is model out to 2026. And from an organic perspective, we've looked at the top and bottom line, all 3 numbers here, gross billings, gross profit and adjusted EBITDA growing at about 10% -- and then on top of that, we've layered in, which we'll get into a bit more again in future slides on the acquisition strategy, we've layered in an aspirational target on top of what we've already completed this year. And then the target profile that we used for that is similar to the Interworks acquisition that we completed earlier in 2026. So they have a much higher gross profit percentage than we do here in North America and even in our existing EMEA business. And to get through to there, we ended up with $2.3 billion as our gross billings target for 2026, $119 million for gross profit and adjusted EBITDA of $48.5 million. And to sense check all of that to date -- year-to-date results with our top 15 vendors, are tracking at a higher growth percentage than that 10% that we used here in this model. And then looking ahead, we carry this out all the way through 2030. Again, we use that same top line growth rate of 10% on gross billings and gross profit. And we used a higher growth rate on adjusted EBITDA as we -- which the theme of today is we continue to get more efficient, gain operating leverages, our operations become more efficient, more of those gross profit dollars will flow through to adjusted EBITDA. And then highlighted here, we'll talk about acquisitions in a later slide. But how we get to those gross billing growth metrics in '27 through 2030 is we continue to -- a number of things. We continue to deepen our relationships with existing vendors. So today, we have 45 vendors globally that we do more than $10 million in gross billings with. If we look back to 2022, that was about 22 vendors. So significant growth there. As of today, about 80 vendors represent 90% of our total consolidated gross billings. And looking back to 2022, that was about 50 vendors. So there's deepening the relationships with the existing vendors that we have. Also, we continue to sign disruptive vendors like we have over the past few quarters. Some notable ones there, Darktrace in early 2025, they now represent one of our top 20 vendors globally. The Fortinet vendor relationship that we signed at the end of 2025 that we've talked a bit about on recent earnings calls. That relationship continues to ramp up today. And then lastly, the Ivanti relationship that we just announced a couple of weeks back. We're very bullish on what that can provide to us in 2026 and beyond. On top of that, we continue to maintain a very diligent focus on credit. Eva Pinto leads our global credit team. We've -- to date, we have $3.65 billion of credit extended to customers globally, whereas our bad debt expense is $100,000 to $200,000 annually. So we continue to keep a very diligent focus on that while we are growing with these existing vendors. And then lastly, on top of all this, we have the acquisition activity that we plan to execute upon, which I'll pass it over to Dale here.

Thanks, Matt. So acquisitions, right? We've talked about them. We've done 6 in 6 years. We're going to get much more aggressive with this. We had a lot of things going on in the last couple of years with our ERP. We needed to have a platform globally that we could actually add acquired companies to and be able to platformize them in North America and Europe as our 2 bases and then grow from there because what we want to see is marketing and sales in regions like we talked about in regions in the U.S., we want them there, but we want our operations and all our back office in North America and Europe in those 2 spots. So I can tell you with acquisitions, the M&A team is standing right here. It's Matt and I, right? We use our teams. We use our vendors, for picking targets, for looking at what's out there. Our teams run into different distributors or compete against them. We'll take a look at those, but we have a pretty robust target list. But what it takes the most of is the energy to actually do it, right? I mean once you get involved in it, it takes a lot of energy. We have consultants that we use from the legal side, from the financial side, tax side to make all this happen. We want to just get this more into a repeatable exercise on some of these smaller distributors that we want to acquire. And we have a strategic plan for acquiring. And I'll take you through that. And if you -- just please remember Matt's first slide when he talked about how is it possible that 17% of the gross profit or 17% of the adjusted gross billings is overseas, but 27% of the profit is coming from overseas and we want to continue to double down on that. The acquisitions in the United States have already happened. There's very few targets left. The roll-up happened to 40 distributors over the last 20 years. If you look at Europe and beyond, there's probably hundreds that we could actually look at and target that fit us perfectly as far as software, security in our little ecosystem. So we do have the energy to do that. So why? We're an opportunistic company. The team knows, even though we have a budget set, if we see something like a Fortinet that's not in our budget, and we're going to have to spend dollars to get that or to spend dollars to take it to market, we will do that. If we look at and say, "Hey, we want to split territories" because we got to a certain amount, we know the cost is going to come to climb first, and then we'll start seeing the results. So we'll split territories, and we're just a very opportunistic team. Vendors, they want faster expansion. And part of the acquisition play is that technology starts in North America and moves to the rest of the world is just how it is. If you talk to our vendors, the majority of them are 60% in North America all the time, and the rest is in, of course, the rest of the world. But what happens, and it's our life as many in this room were at Ingram, it took Ingram 18 months to 2 years to launch vendors in other areas, right? They were just launching in the U.S. and then eventually go to their other teams. We think we can launch and we sign global agreements. Charles signs an agreement globally. We think we can launch. And if the team wants them in those regions, we can launch them within weeks of launching in the U.S. So much faster to market, much faster ahead of our competition. Reduced multiples. The reason I put this in there is because we want to buy companies at a reduced multiple that we're trading at. And we've been very successful at that. Our multiple, of course, has gone up and down, as you've seen. But our acquisitions are typically between 4 and 8 on a multiple scale. Margin expansion, I already talked about that. Distributors in region. So here's what happens with the big 3. The big 3 are in regions around the world. But what they did is they set up shop some place and they sell in country, and they just do an okay job with it if you're selling Cisco or HP, but not when you get down the line card into vendors that we compete with them against. So we think we can do a good job with that. Solutions and services, Matt Whitton talked about that. We do our shared services between our Gray Matter technical team and the climb teams. So Matt heads up both of those. But that's on our radar. Should we look at a services company to get us stickier with our vendors, sticky with our customers? I just don't want to compete with my customers if they're doing the services already. Where are we going to go? We're going to go into Europe as we already have. Matt showed a target on there that we're going after now. The DACH region, we have a team there. And if you remember, Gerard mentioned that sometimes we'll just invest in that territory, get to know the landscape, and then we'll look for an acquisition target there. The Nordics, France. And I'll just mention the groups, we acquired them. It was opportunistic for us to make sure we maintain our Microsoft relationship at a $30 million rate. We know that, that number is going up. What Matt didn't mention is that our trailing 12 months between our combined groups now is in the $40 million range. We'll continue to grow because we know that Microsoft is going to put another bar and everybody consolidate underneath probably $60 million. So anyway, we've already been prospecting in the Middle East. We have some targets in LatAm. We're nervous about the market. We'll be very careful there. And then APAC, we've looked at this years ago. And now that John McCarthy, our Chairman is not in the room, I can say it out loud. I was shun from going there because I'd have to get on a plane to fix thing and I fix things. And I said, okay, I would have to fix something in Europe maybe and get on a plane. So that's back on the table. We'll look at those distributors there. And I'll go back to some things Charles tells our teams all the time. There could be 2 or 3 climbs that $2 billion to $4 billion each, and we still weren't running into each other or we'd still have that much more opportunity. There's that much to go after. There's that many vendors looking for a route to market that we provide, and we see it as just opportunistic that way. The first thing that almost every target that we've acquired or have talked to when they're not in the States, their #1 thing is it's so hard to sign vendors, right? The vendors are not coming to them in their regions. The vendors, they have to go find them. They have to spend time in the states. We're finding it easier and easier to sign in the states and move to a global contract. So that's another reason for our optimism. I'll let you kick off the next one.

So then over here, we have our return on invested capital. So when you look back at the company historically before we started on our acquisition journey back in 2020, the return on invested capital was in the 8% to 10% range. As we've layered in here kind of where all the different acquisitions took place over time, and there's ebbs and flows depending on earnings in a given quarter, but every single one of these acquisitions have been accretive to the company's business for the 6 that we've completed to date.

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

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

Okay. And then if you look at the logos underneath the ROIC slide, those are vendors that we have acquired through acquisitions. And then the ones on the bottom are vendors that we've moved through territories, right? The goal is like we started with our acquisition plan is that we want to sign vendors in the U.S. and move them to the rest of our regions. We've had some come back to us. We've had some that Charles pushed over and then they came back. I think it was canonical, right, that you pushed over to the Europeans and they came back. So we want to see more of this cross-pollination between the different regions and eventually, of course, be one region. So highly competitive. I talked about the big 3 distis. If you don't know them, Ingram Micro, SYNNEX data, they're both $60 billion plus, and then Arrow is in that $40 billion range. Margin is competitive, and that's why we're seeing the margin compression in North America has always been there. We have to compete with them and you're saying, wait a second, you're selling emerging tech. Sometimes they have it, sometimes they don't. But it's a mindset of the resellers in North America that -- or I'm sorry, the mindset of the vendors that are like, hey, we know the distribution should cost me between 3% and 5%. And it's just the pressure that we have just signing a new vendor line right off the bat that that's the expectations that are out there because they're factoring in what is it going to cost me to the reseller market and beyond. So that's why we have it here more than we have it anywhere else. And that's -- I think if you looked at that one time, the big 3, the majority of their sales is also in North America. So this is a little messy slide, but I want to talk about it and go back to what Matt was saying before. As far as North America gross billings, 1.9 to 87%, gross profit is 76% of it. This is what the organic growth play is for us, the 2030 that Matt made up. So what do we want to do? We want to have an equivalent number of sales outside of America that we do in America. So if you think about it, right, I think you said 4.3%, right, is our gross margin in North America, 8.1%. Almost all of our targets are over 10% in margin that they have. So if I can play that game, I can almost 1.5x my margin as an overall company. Because if you think about it, if I can acquire companies and build outside of the U.S. at $1.9 billion, I'm going to move my margin profile up into the 7s and 8s, which is a definitely game changer for us as a company and the drop-through. One thing I will caveat is that and Vishal is a very -- he just runs the same kind of mindset that I run as far as how can we do this more efficiently. We've got to stay as efficient as we are in North America as we expand to other regions. If not, we're just going to be basically on the hamster wheel. So here's what we're doing. So when Matt put the slide before, our forecast plan is we're going to acquire up to $100 million in companies from here on out, right, to 2030. There are some big targets out there that are way over $100 million a year. There are some that are smaller, and we're going to be opportunistic in territories. But if we look at it, they're going to be all outside of the U.S. There is still a couple of sleepers in the U.S. So I won't say that we can or can't get that done, but they would be strategic companies that we look to acquire. We think this is doable to do $100 million in acquisitions a year. It might take 2 or 3 acquisitions to do that to get to $100 million or we'll have 1 year on some targets that could be $400 million, $500 million. We talked about it before, and that is we have no debt in the company. We've done all acquisitions with cash. Should we take on debt, I would argue we probably should on certain acquisitions if it makes sense. Should we use equity, we're going to shy away from that. I mean we feel like we're underpriced right now. We wouldn't use that, but we would get a lot of input from Sean, team and a lot of you before we do things like that. But that is where we're going to go, and that's how we're going to forecast the numbers out. So Matt showed you all the organic side. Now we're going to show you bolting on acquisitions and some efficiencies with that. So here's the back to the slide, the $2.3 billion in organic growth, 10% a year flatlined out, target 1 that we're working on right now. And this is what it looks like for 2030, right? So this is organic 10% growth and then putting on $100 million for the next 4 years. So we think that we can basically double our EBITDA by 2030. And I can tell you that we've made this pretty conservative for what our internal forecasts are, but we think this is something that you should see where we're going to go, kind of a mindset that our exec team has going forward and where we're going to take Climb. And we don't -- of course, there'll be headwinds along the way. We always deal with those, but this is our plan for the next 4 years.

With that, we are going to go right to Q&A. So with that, can I have the exec guys come up so that you guys can answer questions that Matt and I might miss out on? So go ahead. We're ready for them. Sir?

So it makes sense with where your stock is not to issue equity and debt and other options. But at the same time, the stock isn't that liquid. And to what extent are sellers interested in potentially rolling over their stake into your company in return for equity? And -- so have you considered those options?

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

Let's get a mic for the webcast.

Oh, I'm sorry. If the webcast picked up anything on John McCarthy, I apologize.

Yes, Dale, you're talking about doing significantly larger acquisitions. And there's a lot of rationale to that, your scale business, et cetera. You've had success in your past acquisitions. But the risk will go up, right, if you're doing bigger deals. So maybe you could tell us what are some of the lessons learned from previous deals that should give us comfort?

So my -- you know what, I can ask some of these guys who have been acquired, right? I mean, we can talk about that. I think some of some of it, we need to get to know that team and backfill how we do vetting. It's pretty easy for us to do it because we can talk to our vendors and ask them about a distributor in a region. We can learn more about them than you can imagine through a distributor. Then we go to our sales teams and find a reseller that buys from them and see what the experience is there. But then it really depends on what that exec team looks like. Is the -- like for -- in Brian's instance, we knew that the owner was going to move on. How good are his next lieutenants down? Are they good? Do they have the same philosophy we do, go-to-market? What's their vendor relationships? You can vet that out pretty quickly in the marketplace. So are we going to make a mistake? We're going to do our damndest not to make that mistake on acquiring somebody. But you're right, there's 2 targets that are plus-$500 million that are on our list that would be more transformative to us. We'll take more time with that.

Okay.

I don't know if you guys want to talk about being acquired and how bad it was?

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

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

I can jump in. I met Dale in 2021. Charles and Dale came across to meet me in London. I was then a shareholder of Spinnakar, and I wasn't looking to sell the business at all because we've only been trading for 3.5 years. We did have a brand that was very attractive to Climb. And after meeting the guys, it felt like a really good fit, genuinely felt like a really good fit. For me, obviously, being a smaller business, derisking future growth is really relevant. I think some of the -- well, one of the vendors that came with the Spinnakar business is now a global brand for us. It was just a U.K. brand at that stage. It's now a global brand, and it's a significant driver in the revenue. But the scale and the size of it, my business, which was Spinnakar, would have probably lost that brand because we didn't have the scale and the size or investment to go along with it. So the attraction for Climb going into smaller distis is there just to derisk the growth, derisk the -- losing out on some of the key vendors. And I'm still here, 3, 3.5 years in, just because I'm allowed to speak more than 7 minutes on the stage. But I think when we're doing acquisitions, all of us who've been involved with it can genuinely go and speak to the owners of the business and talk about the culture. And it's a bit of a cliche from a culture perspective on many businesses, but genuinely within this business, that is very much the case.

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

And a quick one for Matt. Are you assuming better geographic cross-selling in your organic outlook today?

We're assuming consistent cross-pollination across the geographies that we have today.

Thank you for the target. I'm trying to gauge whether this 2030 target is a 2-foot hurdle, 4-foot hurdle or a 6-foot hurdle for you guys. Are you trying to clear -- is it something that is kind of relatively easy, you're pretty confident that it's -- or is it a pretty -- is it challenging? Is it pushing you? Could you do better?

Yes. I think it would be -- so as we mentioned earlier before, internally, we think it's a bit on the conservative side. We think we can achieve this strategy. It's our first jump of putting guidance out there, which we haven't done in the past. So we'll continue to fine-tune that as we move along. But internally, we do think it's a very achievable goal for 2030.

Because we talk about low double digits as far as organic growth. So that's why we flatlined at 10%, right? And then on the acquisition play, we just know the targets we're already talking to and the ones that are out there. And then we're getting so much income from -- like Gerard said, some of these smaller distributors that are going through some tougher growth stages that need more vendors, and they see that the combination with client that we can do that and not selling out. If I look at it -- if you're Ingram, you're $60 billion, what is a $30 million distributor going to do for you? It's going to do nothing unless it's strategic. But somebody like a $30 million to $60 million distributor makes a lot of sense for us. So we see the targets, and we still see the growth of the product mix of our vendor portfolio. And emerging vendors should be growing at that rate. But then if you look at some of our bigger vendors, they're not growing -- they're not going to grow. The bigger you are, the harder it is to double. But then I look at Fortinet, and Fortinet as a company is growing about 14% to 16% on that side. So we have a long way to go with them in that relationship. The other thing is that we don't talk about -- and vendors don't like to hear this because they never want to say it, but it's share shift, right? Once we get to a more efficient model -- and we think we're halfway there -- we get more efficient than our competitors. We'll get more share shift of existing business. And it's the easiest, less expensive route to market to pick up business is just being better than everybody else, not going out to net new.

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

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

Let's go to Keith.

Appreciate the detail here. Matt, just one question for you, then I have a follow-up. You were talking about the top 15 vendors. I just want to make sure I understand that. You said top 15 vendors are growing above the 10% you were saying there, and that's gross billings right now, correct?