What changed in this filing

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Item 1. Financial Statements

2026-04-30 compared with 2025-10-30 · 184 added, 408 removed, 623 unchanged (49% of the section changed)

4 unchanged sentences

(Amounts in thousands, except share and per share amounts)

September 30,

Current assets:

1 unchanged sentence

$ 41,775 $ 36,563

Accounts receivable, net of allowance for doubtful accounts of $ 666 and $ 588 , respectively

Accounts receivable, net of allowance for expected credit losses of $ 614 and $ 669 , respectively

306,403 324,345

1 unchanged sentence

Prepaid expenses and other current assets

10,494 10,825

Total current assets

11 unchanged sentences

Current liabilities:

Accounts payable and accrued expenses

Accounts payable

$ 298,360 $ 309,670

Accrued expenses and other current liabilities

31,020 26,835

Lease liability, current portion

4 unchanged sentences

Deferred income tax liabilities

Term loan, net of current portion

Other non-current liabilities

13 unchanged sentences

90,373 87,039

Accumulated other comprehensive income (loss)

1,832 ( 2,892 )

Accumulated other comprehensive income

Total stockholders’ equity

7 unchanged sentences

(Amounts in thousands, except per share data)

Nine months ended

Three months ended

September 30,

Cost of sales

5 unchanged sentences

Interest, net

Foreign currency transaction (loss) gain

Foreign currency transaction gain (loss)

Change in fair value of acquisition contingent consideration

10 unchanged sentences

(Amounts in thousands)

Nine months ended

Three months ended

September 30,

Other comprehensive income (loss):

Other comprehensive (loss) income:

Foreign currency translation adjustments

Other comprehensive income (loss)

Other comprehensive (loss) income

Comprehensive income

11 unchanged sentences

— — — — — — ( 1,349 ) ( 1,349 )

Dividends paid (per common share $ 0.17 )

— — — — — ( 766 ) — ( 766 )

Share-based compensation expense

6 unchanged sentences

21,138,000 $ 53 $ 43,326 2,669,932 $ ( 16,031 ) $ 90,373 $ 709 $ 118,430

— — — — — 5,968 — 5,968

Translation adjustment

— — — — — — 3,782 3,782

Dividends paid (per common share $ 0.17 )

— — — — — ( 769 ) — ( 769 )

Share-based compensation expense

— — 1,181 — — — — 1,181

Restricted stock unit grants (net of forfeitures)

— — ( 670 ) ( 38,402 ) 670 — — —

Treasury shares repurchased

— — — 5,251 ( 539 ) — — ( 539 )

Balance at June 30, 2025

5,284,500 $ 53 $ 40,043 667,294 $ ( 14,266 ) $ 76,904 $ 2,443 $ 105,177

— — — — — 4,696 — 4,696

Translation adjustment

— — — — — — ( 611 ) ( 611 )

Dividends paid (per common share $ 0.17 )

— — — — — ( 771 ) — ( 771 )

Share-based compensation expense

— — 1,077 — — — — 1,077

Restricted stock grants (net of forfeitures)

— — 16 905 ( 16 ) — — —

Treasury shares repurchased

— — — 2,855 ( 306 ) — — ( 306 )

Balance at September 30, 2025

5,284,500 $ 53 $ 41,136 671,054 $ ( 14,588 ) $ 80,829 $ 1,832 $ 109,262

Comprehensive

15 unchanged sentences

21,138,000 $ 53 $ 39,532 2,801,780 $ ( 14,397 ) $ 71,705 $ ( 1,339 ) $ 95,554

— — — — — 3,430 — 3,430

Translation adjustment

— — — — — — ( 121 ) ( 121 )

Dividends paid (per common share $ 0.17 )

— — — — — ( 758 ) — ( 758 )

Share-based compensation expense

— — 1,113 — — — — 1,113

Restricted stock unit grants (net of forfeitures)

— — ( 545 ) ( 31,213 ) 545 — — —

Treasury shares repurchased

— — — 4,817 ( 283 ) — — ( 283 )

Balance at June 30, 2024

5,284,500 $ 53 $ 35,738 672,973 $ ( 12,462 ) $ 57,862 $ ( 1,361 ) $ 79,830

— — — — — 5,459 — 5,459

Translation adjustment

— — — — — — 2,517 2,517

Dividends paid (per common share $ 0.17 )

— — — — — ( 761 ) — ( 761 )

Share-based compensation expense

— — 938 — — — — 938

Restricted stock grants (net of forfeitures)

— — — — — — — —

Treasury shares repurchased

— — — 4,737 ( 315 ) — — ( 315 )

Balance at September 30, 2024

5,284,500 $ 53 $ 36,676 677,710 $ ( 12,777 ) $ 62,560 $ 1,156 $ 87,668

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

(Amounts in thousands)

Nine months ended

September 30,

Three months ended

Cash flows from operating activities

$ 3,334 $ 3,684

Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities:

2 unchanged sentences

Deferred income tax benefit

( 134 ) ( 130 )

Share-based compensation expense

1 unchanged sentence

Amortization of discount on accounts receivable

( 19 ) ( 12 )

Amortization of right-of-use assets

2 unchanged sentences

Accounts receivable

20,788 103,235

( 2,425 ) 171

Prepaid expenses and other current assets

Accounts payable and accrued expenses

( 12,768 ) ( 102,524 )

Lease liability, net

( 206 ) ( 195 )

Other assets and liabilities

1 unchanged sentence

Cash flows from investing activities

Purchase of equipment and leasehold improvements and capitalization of internal-use software

Payment for acquisition

Purchases of property and equipment

( 478 ) ( 729 )

Payment for acquisition, net of cash acquired

Net cash and cash equivalents used in investing activities

( 8,706 ) ( 729 )

Cash flows from financing activities

Purchase of treasury stock

( 1,493 ) ( 883 )

Borrowings under credit facilities

Repayments of borrowings under credit facilities

Repayments of borrowings under term loan

( 145 ) ( 138 )

Dividends paid

1 unchanged sentence

Net cash and cash equivalents used in financing activities

( 2,717 ) ( 5,346 )

Effect of foreign exchange rate on cash and cash equivalents

1 unchanged sentence

Cash and cash equivalents at beginning of period

36,563 29,778

Cash and cash equivalents at end of period

$ 41,775 $ 32,461

Supplementary disclosure of cash flow information:

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements

September 30, 2025

March 31, 2026

(Amounts in tables in thousands, except share and per share amounts)

8 unchanged sentences

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

In the opinion of the Company’s management, all adjustments that are of a normal recurring nature, considered necessary for fair presentation of the results for the periods presented, have been included in the accompanying condensed consolidated financial statements.

In the opinion of the Company’s management, all adjustments that are of a normal recurring nature, considered necessary for fair statement of the results for the periods presented, have been included in the accompanying condensed consolidated financial statements.

The Company’s actual results may differ from these estimates under different assumptions or conditions.

4 unchanged sentences

All intercompany transactions and balances have been eliminated.

On March 20, 2026, the Company completed a four -for- one forward stock split of the Company's issued common stock (the “Stock Split”).

Each shareholder as of the record date of March 16, 2026 received three additional shares of common stock for every share held.

References made to share or per share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Stock Split.

Reclassifications

Certain reclassifications have been made to the prior period financial statements to conform to the current-year presentation.

Recently Issued Accounting Standards:

38 unchanged sentences

2024 - 03 is permitted.

In December 2023, the FASB issued ASU No.

2023 - 09, “ Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures ” .

Upon adoption of this ASU, the Company will disclose specific new categories in its income tax rate reconciliation and provide additional information for reconciling items above a quantitative threshold.

The Company will also disclose the amount of income taxes paid disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions in which income taxes paid were above a threshold.

The Company expects these amendments will first be applied in the Company’s annual report on Form 10 -K for the fiscal year ending December 31, 2025, on a prospective basis.

The Company is currently evaluating the impact the new accounting standard will have on its expense disclosures in the notes to the consolidated financial statements.

Foreign Currency Translation:

2 unchanged sentences

Foreign currency transaction gains and losses are recorded as income or expenses as amounts are settled.

The net sales from our foreign operations for the three months ended September 30, 2025 and 2024 were $ 33.3 million and $ 37.5 million, respectively.

The net sales from our foreign operations for the nine months ended September 30, 2025 and 2024 were $ 107.0 million a nd $ 88.6 million, respectively.

The net sales from our foreign operations for the three months ended March 31, 2026 and 2025 were $ 33.0 million and $ 31.0 million, respectively.

The Company’s foreign currency exposure relates primarily to international transactions where the currency collected from customers can be different from the currency used to purchase the product.

In cases where the Company is not able to create a natural hedge by maintaining offsetting asset and liability amounts in the same currency, it may enter into foreign exchange contracts, typically in the form of forward purchase agreements, to facilitate the hedging of foreign currency exposures to mitigate the impact of changes in foreign currency exchange rates.

These contracts generally have terms of no more than three months.

These contracts generally have terms of no more than two months.

The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings.

The Company does not enter into foreign exchange contracts for trading purposes and the risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the Company minimizes by limiting its counterparties to major financial institutions.

The Company recognized an unrealized gain of less than $ 0.1 million on contracts outstanding as of September 30, 2025 , which is included in foreign currency transaction loss in the Consolidated Statements of Earnings.

The Company recognized an unrealized gain of less than $ 0.1 million on contracts outstanding during the three months ended March 31, 2026 and 2025, respectively, which is included in foreign currency transaction gain (loss) in the Consolidated Statements of Earnings.

Comprehensive Income:

Cumulative translation adjustments have been classified within accumulated other comprehensive loss, which is a separate component of stockholders’ equity in accordance with FASB ASC Topic 220, “Comprehensive Income.”

Cumulative translation adjustments have been classified within accumulated other comprehensive income (loss), which is a separate component of stockholders’ equity in accordance with FASB ASC Topic 220, “Comprehensive Income.”

Revenue Recognition:

30 unchanged sentences

For monthly subscription-based arrangements, the Company is acting as an agent in the transaction and recognizes revenue as it invoices the customer for its monthly usage on a net basis.

For software licenses where the accompanying third -party delivered software assurance is not critical or essential to the core functionality, the software assurance is recognized as a separate performance obligation, with the associated revenue recognized on a net basis at the point the related software license is delivered to the customer.

For software licenses where the accompanying third -party delivered software assurance is not critical or essential to the core functionality, the software assurance is recognized as a separate performance obligation, with the associated revenue recognized on a gross basis at the point the related software license is delivered to the customer

The Company also sells some of its products and services as part of bundled contract arrangements containing multiple deliverables, which may include a combination of products and services.

2 unchanged sentences

If the standalone selling price is not observable through established standard prices, we use judgement and estimate the standalone selling price considering available information such as market pricing and pricing related to similar products.

As of December 31, 2025, there was no balance of deferred revenue.

During the three months ended March 31, 2026, no revenue was recognized that was included in the balance of deferred revenue as of December 31, 2025.

As of March 31, 2026, the balance of deferred revenue was $ 12.3 million.

The deferred revenue balance of $ 12.3 million as of March 31, 2026, is comprised of $ 9.1 million in accrued expenses and other current liabilities and $ 3.2 million in other non-current liabilities.

During the three months ended March 31, 2025, no revenue was recognized that was included in the balance of deferred revenue as of December 31, 2024.

The Company pays commissions and related payroll taxes to sales personnel when customers are invoiced.

These costs are recorded as selling, general and administrative expenses in the period earned as all our performance obligations are complete within a short window of processing the order.

On July 31, 2024, Climb Global Solutions DSS, LLC, a wholly-owned subsidiary of the Company, entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”) and purchased the entire share capital of Douglas Stewart Software & Services, LLC (“DSS”), a Florida limited liability company, for an aggregate purchase price of approximately $ 20.3 million (subject to certain adjustments) plus a potential post-closing earnout payment.

DSS distributes software to value added resellers (“VARs”) and campus stores across North America in both the K- 12 and higher education markets, furthering the Company's reach into these markets.

On February 24, 2026, the Company entered into a Share Purchase Agreement (the “Purchase Agreement”) by and among the Company, Infiterra Holding Limited, a company incorporated in Cyprus (the "Seller"), and purchased the entire share capital of Interworks Single Member SA (“Interworks”), a Greek société anonyme, for an aggregate purchase price of approximately €8.0 million (equivalent to $ 9.4 million USD), adjusted upwards for $ 3.5 million in net working capital adjustment resulting in a final purchase consideration $ 13 million.

Interworks is a Greece-based cloud distributor serving reseller markets across Southeastern Europe, including Greece, Malta, Cyprus, Bulgaria, and other regional markets, furthering the Company’s reach into these geographies.

The Purchase Agreement contains customary representations, warranties, covenants and indemnities.

The acquisition was funded utilizing cash from the Company’s balance sheet.

The purchase consideration included approximately $ 1.7 million fair value for potential earn-out consideration if certain targets were achieved by September 30, 2025, payable in cash.

As of September 30, 2025 , the Company reassessed the earn-out liability and increased the fair value of the earn out liability to approximately $ 3.2 million, with $ 0.9 million and $ 1.4 million adjustment recognized within change in fair value of acquisition contingent consideration during the three and nine months ended September 30, 2025 , respectively.

The fair value earn-out measurement was primarily based on inputs that are not observable, which are categorized as a Level 3 measurement in the fair value hierarchy (See Note 18 – Fair Value Measurements), reflecting its assessment of the assumptions market participants would use to value these liabilities.

The undiscounted payment of the earn-out can range from zero up to approximately $ 4.2 million and achievement is based on the post-acquisition results of DSS.

The financial position and operating results of Interworks is included in the Company's consolidated financial statements from the date of the acquisition.

The Company recorded net revenue for Interworks of approximately $ 0.6 million and net income of approximately $ 0.1 million during the three months ended March 31, 2026.

The impact of the acquisition’s preliminary purchase price allocations on the Company’s consolidated balance sheet and the acquisition date fair value of the total consideration transferred is depicted in the table below.

Due to the timing of the closing of the transaction in the first quarter of 2026, the Company has not yet completed its evaluation and determination of certain assets acquired and liabilities assumed, primarily the final valuation of goodwill and intangible assets;

therefore, the final fair value of the assets acquired and liabilities assumed, which will be completed within the measurement period of up to one year from the acquisition date, may vary from the Company’s preliminary estimates:

(in thousands)

Accounts receivable

Prepaid expenses and other current assets

Equipment and leasehold improvements, net

Accounts payable and accrued expenses

Other current liabilities

Non-current liabilities

Deferred tax liability

Intangibles - vendor relationships

(in thousands)

Supplementary information:

Cash paid to sellers

Cash acquired in acquisition

Total purchase consideration

Intangible assets are comprised of approximately $ 5.9 million of vendor relationships with a weighted average amortization period of 11 years, representing the expected period of benefits.

Goodwill, which was allocated to the Distribution segment, is the excess of the consideration transferred over the net assets recognized and represents the expected revenue and cost synergies of the combined company and assembled workforce.

Goodwill recognized as a result of the acquisition is not deductible for income tax purposes.

The Company used the income approach to value the intangible assets, representing acquired vendor relationships.

Inputs used to value these intangible assets include the discount rate, projection of all future cash flows, long-term growth rates, vendor attrition rates and applicable income tax rates.

Non-current liabilities are comprised of approximately $ 1.1 million of loans and credit facilities that were subsequently repaid in full following the acquisition closing and there were no outstanding balances as of March 31, 2026.

Pro Forma Results (unaudited)

The following unaudited pro forma financial information summarizes the results of operations for the three months ended March 31, 2026 and 2025 as if the acquisition of Interworks had been completed as of the beginning of the three months ended March 31, 2026 and 2025, respectively.

The pro forma results are based upon certain assumptions and estimates, and they give effect to actual operating results prior to the acquisitions and adjustments to reflect income taxes at a rate consistent with the tax rates of the local jurisdictions.

As a result, these pro forma results do not necessarily represent results that would have occurred if the acquisitions had taken place on the basis assumed above, nor are they indicative of the results of future combined periods.

Three months ended

$ 183,137 $ 138,826

$ 3,407 $ 3,642

Goodwill and Other Intangible Assets:

The following table summarizes the changes in the carrying amount of goodwill for the nine months ended September 30, 2025 :

The following table summarizes the changes in the carrying amount of goodwill for the three months ended March 31, 2026 :

Balance December 31, 2025

$ 26,530 $ 8,394 $ 34,924

Goodwill acquired

Translation adjustments

1,247 606 1,853

Balance September 30, 2025

$ 27,777 $ 9,000 $ 36,777

Balance March 31, 2026

Information related to the Company’s other intangibles, net is as follows:

As of September 30, 2025

As of March 31, 2026

Customer and vendor relationships

$ 46,022 $ 12,604 $ 33,418

$ 46,538 $ 12,773 $ 33,765

As of December 31, 2025

Customer and vendor relationships

$ 43,805 $ 7,603 $ 36,202

$ 44,286 $ 7,736 $ 36,550

Customer relationships are amortized o ver thirteen years.

Vendor relationships are amortized between four and fifteen years.

Vendor relationships are amortized between eight and fifteen years.

Trade name is amortized over fifteen ye ars.

During the three months ended September 30, 2025 and 2024 , the Company recognized total amortization expense for other intangibles, net of $ 1.6 million and $ 1.1 million, respectively.

During the nine months ended September 30, 2025 and 2024 , the Company recognized total amortization expense for other intangibles, net of $ 4.4 million and $ 2.5 million, respectively.

Estimated future amortization expense of the Company’s other intangibles, net as of September 30, 2025 is as follows:

2025 (excluding the nine months ended September 30, 2025)

During the three months ended March 31, 2026 and 2025 , the Company recognized total amortization expense for other intangibles, net of $ 1.5 million and $ 1.3 million, respectively.

Estimated future amortization expense of the Company’s other intangibles, net as of March 31, 2026 is as follows:

2026 (excluding the three months ended March 31, 2026)

Right-of-use Asset and Lease Liability:

The Company has entered into operating leases for office and warehouse facilities, which have terms at lease commencement that range from 2 years to 12 years.

The Company has entered into operating leases for office and warehouse facilities, which have terms at lease commencement that range from 1 year to 11 years.

The Company determines if an arrangement is a lease at inception.

5 unchanged sentences

Operating lease expense is recognized on a straight-line basis over the lease term and included in selling, general and administrative expenses.

Information related to the Company’s ROU assets and related lease liabilities were as follows:

Nine months ended

September 30,

Information related to the Company’s ROU assets and related lease liabilities are as follows:

Three months ended

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for new operating lease obligations

$ 1,061 $ 360

Weighted-average remaining lease term (years)

Weighted-average discount rate

Maturities of lease liabilities as of September 30, 2025 were as follows:

2025 (excluding the nine months ended September 30, 2025)

Maturities of lease liabilities as of March 31, 2026 were as follows:

2026 (excluding the three months ended March 31, 2026)

imputed interest

3 unchanged sentences

Total lease liabilities

The carrying amounts of financial instruments, including cash and cash equivalents, short-term accounts receivable, accounts payable and term loan approximated fair value at September 30, 2025 and December 31, 2024 because of the relative short maturity of these instruments.

The carrying amounts of financial instruments, including cash and cash equivalents, short-term accounts receivable, accounts payable and term loan approximated fair value at March 31, 2026 and December 31, 2025 because of the relative short maturity of these instruments.

The Company’s accounts receivable long-term are discounted to their present value at prevailing market rates at the time of sale.

1 unchanged sentence

Equipment and leasehold improvements consist of the following:

September 30,

$ 3,143 $ 2,951

Capitalized software

13,167 11,821

Leasehold improvements

19,522 17,866

Less accumulated depreciation and amortization

( 6,037 ) ( 5,013 )

$ 13,485 $ 12,853

During the three months ended September 30, 2025 and 2024 , the Company recorded depreciation and amortization expense of $ 0.4 million and $ 0.1 million, respectively.

During the nine months ended September 30, 2025 and 2024 , the Company recorded depreciation and amortization expense of $ 1.2 milli on and $ 0.4 million, respectively.

During the three months ended March 31, 2026 and 2025 , the Company recorded depreciation and amortization expense of $ 0.5 million and $ 0.4 million, respectively.

In limited circumstances, the Company offers extended payment terms to customers for periods of 12 to 36 months.

3 unchanged sentences

Accounts receivable long term, net consists of the following:

September 30,

Total amount due from customer

$ 1,806 $ 2,459

unamortized discount

( 78 ) ( 102 )

current portion included in accounts receivable

( 850 ) ( 1,183 )

$ 878 $ 1,174

The undiscounted cash flows to be received by the Company relating to these accounts receivable long-term is expected to be $ 0.4 million, $ 0.5 million and $ 0.9 million, respectively, du ring each of the 12 -month periods ending September 30, 2025, 2026 and 2027.

Accounts payable and accrued expenses consist of the following:

September 30,

Trade accounts payable

$ 233,714 $ 331,654

Accrued expenses

13,622 17,179

Other accounts payable and accrued expenses

11,654 21,564

$ 258,990 $ 370,397

The undiscounted cash flows to be received by the Company relating to these accounts receivable long-term is expected to be $ 1.3 million, $ 0.9 million and $ 0.4 million, respectively, during each of the 12 -month periods ending March 31, 2026, 2027 and 2028.

Credit Facility:

4 unchanged sentences

All outstanding loans issued pursuant to the Credit Agreement become due and payable, on May 18, 2028.

There were no amounts outstanding under the Credit Agreement as of September 30, 2025 and December 31, 2024 .

During the three months ended March 31, 2026, borrowing under the Credit Agreement bore interest at a rate of 7.25 % per annum.

There were no amounts outstanding under the Credit Agreement as of March 31, 2026 and December 31, 2025 .

Outstanding Loans comprising (i) ABR Borrowings bear interest at the ABR plus the Applicable Rate, (ii) Term Benchmark Borrowings bear interest at the Adjusted Term SOFR Rate or the Adjusted EURIBOR Rate, as applicable, plus the Applicable Rate and (iii) RFR Loans bear interest at a rate per annum equal to the applicable Adjusted Daily Simple RFR plus the Applicable Rate.

7 unchanged sentences

The proceeds from the Term Loan were used to fund certain capital expenditures.

The borrowing under the Term Loan bears interest at a rate of 3.73 % per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026.

At September 30, 2025 and December 31, 2024 , the Company had $ 0.3 million an d $ 0.8 million outstanding under the Term Loan, respectively.

At September 30, 2025 , future principal payments under the Term Loan are as follows:

2025 (excluding the nine months ended September 30, 2025)

In connection with the acquisition of Data Solutions, which was completed October 6, 2023, the Company acquired an invoice discounting facility ("IDF") that was with recourse to the Company.

Data Solutions had previously entered into the IDF with AIB Commercial Finance Limited ("AIB") pursuant to a Debt Purchase Agreement.

The Company subsequently terminated the IDF during the year ended December 31, 2024 .

The proceeds from the IDF were used for working capital needs of Data Solutions.

Borrowings under the IDF were based on accounts receivable up to 80 % of the outstanding accounts receivable balance.

The discount rate under the IDF was equal to 2.5 % above AIB's applicable lending rates that varied based on the currency of the accounts receivable.

The borrowing under the Term Loan bears interest at a rate of 3.73 % per annum and is being repaid over forty-eight monthly installments of principal and interest through March 2026.

At March 31, 2026 , there were no amounts outstanding under the Term Loan and there are no future principal payments.

At December 31, 2025 , the Company had $ 0.2 million outstanding under the Term Loan.

Earnings Per Share:

4 unchanged sentences

Diluted and basic earnings per share are the same because the restricted shares are the only potentially dilutive security.

A reconciliation of the numerators and denominators of the basic and diluted per share computations follows:

Nine months ended

A reconciliation of the numerators and denominators of the basic and diluted per share, as adjusted for the Stock Split, computations follows:

Three months ended

September 30,

$ 14,346 $ 11,620 $ 4,696 $ 5,459

Less distributed and undistributed income allocated to participating securities

214 288 69 139

Net income attributable to common shareholders

14,132 11,332 4,627 5,320

Weighted average common shares (Basic)

4,518 4,458 4,536 4,476

Weighted average common shares including assumed conversions (Diluted)

4,518 4,458 4,536 4,476

Basic net income per share

$ 3.13 $ 2.54 $ 1.02 $ 1.19

Diluted net income per share

$ 3.13 $ 2.54 $ 1.02 $ 1.19

Major Customers and Vendors:

The Company had one major vendor that accounted for 13 % of total purchases during the three months ended September 30, 2025 , compared to no major vendors during the three months ended September 30, 2024 .

During the nine months ended September 30, 2025 , the Company ha d no m ajor vendors, compared to one major vendor that account ed for 11 % of total purchases during the nine months ended September 30, 2024 .

The Company had two major customers that accounted for 22 % and 14 %, respectively, of its net sales during the three months ended September 30, 2025 , and 16 % and 13 %, respectively, of its net sales during the three months ended September 30, 2024 .

The Company had two major customers that accounted for 24 % and 13 % of net sales during the nine months ended September 30, 2025 , and 18 % and 15 %, of net sales during the nine months ended September 30, 2024 .

These same customers accounted for 16 % and 7 % of total net accounts receivable as of September 30, 2025, and 12 % and 6 % of total net accounts receivable as of December 31, 2024 .

The Company had no major vendors during the three months ended March 31, 2026 , compared to one major vendor that accounted for 13 % of total purchases during the three months ended March 31, 2025 .

The Company had two major customers that accounted for 26 % and 17 %, respectively, of its net sales during the three months ended March 31, 2026 , and 26 % and 13 %, respectively, of its net sales during the three months ended March 31, 2025 .

These same customers, respectively, accounted for 13 % and 15 % of total net accounts receivable as of March 31, 2026, and 1 % and 15 % of total net accounts receivable as of December 31, 2025 .

Income Taxes:

2 unchanged sentences

The Company believes that it has appropriate support for the income tax positions it takes and expects to take on its tax returns, and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax law applied to the facts of each matter.

During the three months ended September 30, 2025 and 2024 , the Company recorded a provision for income taxes of $ 1.6 million and $ 1.7 million, respectively.

The effective tax rate for the three months ended September 30, 2025 and 2024 was 25.5 % and 23.3 %, respectively.

During the nine months ended September 30, 2025 and 2024 , the Company recorded a provision for income taxes of $ 3.9 million and $ 3.6 million, respectively.

The effective tax rate for the nine months ended September 30, 2025 and 2024 was 21.6 % and 23.5 %, respectively.

The change in effective tax rate for the three and nine months ended September 30, 2025 , compared to the same period in the prior year was primarily impacted by a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, changes in the mix of jurisdictions in which taxable income was earned, as well as limitations on the deductibility of certain executive compensation amounts during both periods.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.1 million and $ 0.8 million, respectively, which reduced our effective tax rate by 1.9 % and 4.6 % during the three and nine months ended September 30, 2025 .

The One Big Beautiful Bill Act was enacted on July 4, 2025.

The Company is evaluating the impacts of the newly enacted legislation and does not expect it to have a material impact on its effective tax rate or cash flows in the current year.

During the three months ended March 31, 2026 and 2025 , the Company recorded a provision for income taxes of $ 0.8 million and $ 0.6 million, respectively.

The effective tax rate for the three months ended March 31, 2026 and 2025 was 20.1 % and 13.3 %, respectively.

The change in effective tax rate for the three months ended March 31, 2026 , compared to the same period in the prior year was primarily impacted by changes in the mix of jurisdictions in which taxable income was earned, as well as a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods.

During the three months ended March 31, 2026 , the recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.4 million, which reduced our effective tax rate by 10.5 %.

During the three months ended March 31, 2025 , the recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $ 0.5 million, which reduced our effective tax rate by 10.7 %.

Stockholders ’ Equity and Stock Based Compensation:

1 unchanged sentence

The 2021 Plan was approved by the Company’s stockholders at the 2021 Annual Meeting in June 2021.

The tota l number of shares of the Company’s common stock, par value $ 0.01 per share (“Common Stock”) initially available for award under the 2021 Plan was 500,000 shares.

As of September 30, 2025 , the number of shares of Common Stock available for future award grants to employees, officers and directors under the 2021 Plan is 163,895 .

During the nine months ended September 30, 2025 , the Company granted a total of 43,736 Restricted Stock Units to directors, officers and employees.

These Restricted Stock Units vest immediately, over time in three equal installments or over time in sixteen equal quarterly installment s.

During the nine months ended September 30, 2025 , a total of 16,376 Restricted Stock Units were forfeited.

During the nine months ended September 30, 2024 , the Company granted a total of 51,812 Restricted Stock Units to directors, officers and employees.

These Restricted Stock Units vest immediately, over time in three equal installments or over time in sixteen equal quarterly installments.

During the nine months ended September 30, 2024 , a total of 1,661 Restricted Stock Units were forfeited.

A summary of nonvested Restricted Stock Unit awards outstanding under the 2021 Plan as of September 30, 2025 , and changes during the three months then ended is as follows:

The tota l number of shares of the Company’s common stock, par value $ 0.01 per share (“Common Stock”) initially available for award under the 2021 Plan was 2,000,000 shares, as adjusted for the Stock Split.

As of March 31, 2026 , the number of shares of Common Stock available for future award grants to employees, officers and directors under the 2021 Plan is 356,540 , as adjusted for the Stock Split.

During the three months ended March 31, 2026 , the Company granted a total of 88,748 Restricted Stock Units to officers.

During the three months ended March 31, 2026 , a total of 3,776 Restricted Stock Units were forfeited.

During the three months ended March 31, 2025 , the Company granted a total of 7,624 Restricted Stock Units to an officer.

During the three months ended March 31, 2025 , a total of 48,172 Restricted Stock Units were forfeited.

A summary of nonvested Restricted Stock Unit awards, as adjusted for the Stock Split, outstanding under the 2021 Plan as of March 31, 2026 , and changes during the three months then ended is as follows:

Average Grant

Nonvested shares at January 1, 2026

114,710 $ 47.41

Granted in 2026

Vested in 2026

( 65,621 ) 49.78

Forfeited in 2026

( 16,376 ) 50.27

Nonvested shares at September 30, 2025

76,449 $ 71.14

As of September 30, 2025 , there is approximate ly $ 4.8 million of total unrecognized compensation costs related to nonvested share-based compensation arrangements.

Nonvested shares at March 31, 2026

As of March 31, 2026 , there is approximate ly $ 3.3 million of total unrecognized compensation costs related to nonvested share-based compensation arrangements.

The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.7 y ears.

During the t hree months ended September 30, 2025 and 2024 , the Company recognized share-based compensation expense of $ 1.1 million and $ 0.9 million, respectively.

During the nine months ended September 30, 2025 and 2024 , the Company recognized share-based compensation expense o f $ 3.6 m illion and $ 2.8 million, respectively.

During the three months ended March 31, 2026 and 2025 , the Company recognized share-based compensation expense of $ 1.4 million and $ 1.3 million, respectively.

Commitments and Contingencies

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In the event the Covered Termination in connection with a change of control, the Severance Plan provides for increased severance benefits, including payment of 18 - 24 months of base salary, payment of such executive’s target bonus for the year in which the Covered Termination occurred, double trigger vesting acceleration of equity awards, and a COBRA subsidy during the severance period.

As of September 30, 2025 , the Company has no standby letters of credit, has no standby repurchase obligations or other commercial commitments.

As of March 31, 2026 , the Company has no standby letters of credit, has no standby repurchase obligations or other commercial commitments.

The Company has a line of credit see Note 11 (Credit Facility).

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The following segment reporting information of the Company is provided:

Nine months ended

Three months ended

September 30,

$ 439,584 $ 286,523 $ 154,413 $ 111,861

19,087 17,324 6,930 7,488

458,671 303,847 161,343 119,349

Cost of Sales:

$ 373,737 $ 235,069 $ 132,013 $ 90,304

9,497 8,945 3,597 4,788

383,234 244,014 135,610 95,092

Direct Costs:

$ 29,944 $ 23,342 $ 9,826 $ 8,430

4,708 4,013 1,605 1,330

34,652 27,355 11,431 9,760

Segment Income:

$ 35,903 $ 28,112 $ 12,574 $ 13,127

4,882 4,366 1,728 1,370

Segment Income

40,785 32,478 14,302 14,497

General and administrative

$ 14,687 $ 12,078 $ 4,795 $ 4,177

Acquisition related costs

733 1,201 594 609

Depreciation and amortization expense

5,696 2,933 1,976 1,197

Interest, net

562 755 224 198

Foreign currency transaction (loss) gain

( 566 ) ( 688 ) 2 ( 442 )

Foreign currency transaction gain (loss)

Change in fair value of acquisition contingent consideration

( 1,374 ) ( 1,152 ) ( 860 ) ( 1,152 )

Income before taxes

$ 18,291 $ 15,181 $ 6,303 $ 7,118

Excludes general corporate expenses including acquisition related costs, amortization and depreciation expense, interest, foreign currency transaction (loss) gain, and change in fair value of acquisition contingent consideration.

September 30,

Selected Assets by Segment:

$ 276,632 $ 394,809

22,447 21,882

Segment Select Assets

299,079 416,691

Corporate Assets

77,012 52,488

$ 376,091 $ 469,179

Geographic areas and net sales mix related to operations for the three and nine months ended September 30, 2025 and 2024 were as follows.

Geographic areas and net sales mix related to operations for the three months ended March 31, 2026 and 2025 were as follows.

Revenue is allocated to a geographic area based on the location of the sale, which is generally the customer’s country of domicile.

Nine months ended

Three months ended

September 30, 2025

$ 345,023 $ 6,622 $ 351,645 $ 125,573 $ 2,442 $ 128,015

Europe and United Kingdom

70,222 11,964 82,186 19,816 4,368 24,184

24,339 501 24,840 9,024 120 9,144

March 31, 2026

United Kingdom

Total net sales

$ 439,584 $ 19,087 $ 458,671 $ 154,413 $ 6,930 $ 161,343

Timing of Revenue Recognition

Transferred at a point in time where the Company is principal (1)

$ 402,385 $ 13,942 $ 416,327 $ 143,222 $ 5,177 $ 148,399

Transferred at a point in time where the Company is agent (2)

37,199 5,145 42,344 11,191 1,753 12,944

Total net sales

$ 439,584 $ 19,087 $ 458,671 $ 154,413 $ 6,930 $ 161,343

Nine months ended

Three months ended

September 30, 2024

$ 208,462 $ 6,808 $ 215,270 $ 78,012 $ 3,818 $ 81,830

Europe and United Kingdom

62,135 9,702 71,837 29,494 3,418 32,912

15,926 814 16,740 4,355 252 4,607

March 31, 2025

United Kingdom

Total net sales

$ 286,523 $ 17,324 $ 303,847 $ 111,861 $ 7,488 $ 119,349

Timing of Revenue Recognition

Transferred at a point in time where the Company is principal (1)

$ 253,027 $ 10,969 $ 263,996 $ 101,561 $ 5,074 $ 106,635

Transferred at a point in time where the Company is agent (2)

33,496 6,355 39,851 10,300 2,414 12,714

Total net sales

$ 286,523 $ 17,324 $ 303,847 $ 111,861 $ 7,488 $ 119,349

Includes net sales from third -party hardware and software products.

Includes net sales from third -party maintenance, software support and services.

Geographic identifiable assets related to operations as of September 30, 2025 and December 31, 2024 were as follows.

September 30,

Geographic identifiable assets related to operations as of March 31, 2026 and December 31, 2025 were as follows.

Identifiable Assets by Geographic Areas

$ 225,882 $ 278,957

30,479 34,352

Europe and United Kingdom

119,730 155,870

$ 376,091 $ 469,179

Fair Value Measurements

Fair value is defined under U.S.

GAAP as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

A fair value hierarchy has been established for valuation inputs to prioritize the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

Each fair value measurement is reported in one of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety.

These levels are:

Level 1 – observable inputs such as quoted prices for identical instruments traded in active markets.

Level 2 – inputs are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models and similar techniques.

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of September 30, 2025 and December 31, 2024 , respectively, are as follows:

As of September 30, 2025

Contingent earn-out

$ — $ — $ 3,240 $ 3,240

Total liabilities

$ — $ — $ 3,240 $ 3,240

As of December 31, 2024

Contingent earn-out

$ — $ — $ 5,896 $ 5,896

Total liabilities

$ — $ — $ 5,896 $ 5,896

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions based on the best information available.

The approach to estimating the contingent earn-out associated with the Company’s business combinations uses unobservable factors such as projected cash flows over the term of the contingent earn-out periods.

The Company’s contingent earn-out liability is measured at fair value on a recurring basis and is classified as level 3 within the fair value hierarchy.

During the fourth quarter of each year, the Company evaluates goodwill for impairment at the reporting unit level.

The Company uses qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform a goodwill impairment test.

This measurement is classified based on level 3 input.

The following table presents the changes in the Company’s level 3 financial instruments measured at fair value on a recurring basis:

Balance December 31, 2024

Contingent earnout paid

Change in fair value of acquisition contingent consideration

Discount on escrow reserve

Translation adjustments

Balance September 30, 2025

During the nine months ended September 30, 2025 , the Company made a contingent consideration payment of $ 4.0 million in cash related to the acquisition of Spinnakar Limited, which was completed on August 18, 2022.

The payment was made based on Spinnakar's achievement of targets outlined in the acquisition agreement.

United Kingdom

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations.

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We market these products through creative marketing communications, including our web sites, local seminars, webinars, social media, direct e-mail, and printed materials.

We have subsidiaries in the United States, Canada, Netherlands, United Kingdom and Ireland, through which sales are made.

We have subsidiaries in the United States, Canada, Netherlands, United Kingdom, Ireland, Germany, and Greece through which sales are made.

Factors Influencing Our Financial Results

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Historically we have sought to return value to investors through the payment of quarterly dividends and share repurchases.

Total dividends paid and the dollar value of the shares repurchased were $0.8 million and $ 0.3 million, for the three months ended September 30, 2025 and 2024.

The payment of future dividends and share repurchases is at the discretion of our Board of Directors and dependent on results of operations, projected capital requirements, and other factors the Board of Directors may find relevant.

Total dividends paid and the dollar value of the shares repurchased were $0.0 million and $1 .5 million, for the three months ended March 31, 2026 and 2025, respectively, and $0.8 million and $0.9 million, for the three months ended March 31, 2025, respectively.

Following the end of fiscal year 2025, our Board of Directors determined to suspend quarterly cash dividends on our Common Stock beginning with the first quarter of 2026 in order to preserve financial flexibility and prioritize capital allocation objectives.

The payment of future dividends and any share repurchases will be at the discretion of our Board of Directors and will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors the Board of Directors deems relevant.

Stock Volatility.

7 unchanged sentences

Financial Overview

Net sales increased 35%, or $42.0 million, to $161.3 million f or the three months ended September 30, 2025 compared to $119.3 million for the same period in the prior year.

Gross profit increased 6%, or $1.4 million, to $25.7 milli on for the three months ended September 30, 2025, compared to $24.3 million for the same period in the prior year.

Selling, general and administrative (“SG&A”) expens es increased 16%, or $2.3 million, to $16.2 mill ion for the three months ended September 30, 2025 compared to $13.9 million for the same period in the prior year.

Depreciation and amortizatio n expense increased 65%, or $0.8 million, to $2.0 mil lion for the three months ended September 30, 2025 compared to $1.2 million for the same period in the prior year.

Net inco me decreased 14%, or $0.8 million, to $4.7 mi llion for the three months ended September 30, 2025 compared to $5.5 million for the same period in the prior year.

Diluted income per share decreased 14%, or $0.17 to $1.02 for the three months ended September 30, 2025 compared to $1.19 for the same period in the prior year.

Net sales increased 32%, or $44.4 million, to $182.4 million f or the three months ended March 31, 2026 compared to $138.0 million for the same period in the prior year.

Gross profit increased 13%, or $3.1 million, to $26.5 milli on for the three months ended March 31, 2026, compared to $23.4 million for the same period in the prior year.

Selling, general and administrative (“SG&A”) expens es increased 21%, or $3.5 million, to $20.3 mill ion for the three months ended March 31, 2026 compared to $16.8 million for the same period in the prior year.

Depreciation and amortizatio n expense increased 18%, or $0.3 million, to $2.0 mil lion for the three months ended March 31, 2026 compared to $1.7 million for the same period in the prior year.

Net inco me decreased 10%, or $0.4 million, to $3.3 mi llion for the three months ended March 31, 2026 compared to $3.7 million for the same period in the prior year.

Diluted income per share decreased 10%, or $0.02 to $0.18 for the three months ended March 31, 2026 compared to $0.20 for the same period in the prior year.

Critical Accounting Policies and Estimates

55 unchanged sentences

These contracts generally have terms of no more than three months.

These contracts generally have terms of no more than two months.

The Company does not apply hedge accounting to these contracts and therefore the changes in fair value are recorded in earnings.

The Company recognized an unrealized gain of less than $0.1 million o n contracts outstanding as of September 30, 2025, which is included in foreign currency transaction loss in the Consolidated Statement of Earnings.

The Company recognized an unrealized gain of less than $0.1 million on contracts outstanding during the three months ended March 31, 2026 and 2025, respectively, which is included in foreign currency transaction loss in the Consolidated Statements of Earnings.

Recently Issued Accounting Pronouncements

35 unchanged sentences

2024-03 is permitted.

In December 2023, the FASB issued ASU No.

2023-09, “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures ” .

The Company expects these amendments will first be applied in the Company’s annual report on Form 10-K for the fiscal year ending December 31, 2025, on a prospective basis.

Results of Operations

1 unchanged sentence

This comparison of financial results is not necessarily indicative of future results:

Nine months ended

Three months ended

September 30,

Cost of sales

13 unchanged sentences

GAAP, as these measures used by management may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

Nine months ended

Three months ended

September 30,

Net income reconciled to adjusted EBITDA (Non-GAAP):

6 unchanged sentences

Adjusted EBITDA

We define adjusted EBITDA, as net income, plus provision for income taxes, depreciation, amortization, share-based compensation, interest, acquisition related costs and changes in the fair value of contingent considerations.

We define adjusted EBITDA, as net income, plus provision for income taxes, depreciation, amortization, share-based compensation, interest expense, acquisition related costs and changes in the fair value of contingent considerations.

We define effective margin as adjusted EBITDA as a percentage of gross profit.

12 unchanged sentences

We believe gross billings and gross billings margin will aid investors in the same manner.

Nine months ended

Three months ended

September 30,

Gross profit - Distribution

9 unchanged sentences

We consider gross profit growth and effective margin to be key metrics in evaluating our business.

During the three months ended September 30, 2025 , gross profit increased 6%, or $1.4 million, to $25.7 million compared to $24.3 million for the same period in the prior year while effective margin decreased to 42.3% compared to 45.7% for the same period in the prior year.

During the nine months ended September 30, 2025, gross prof it increased 26%, or $15.6 million, to $75.4 million compar ed to $59.8 million for the same period in the prior year while effective margin increased to 39.6% compared to 39.3% f or the same period in the prior year.

On July 31, 2024, we completed the acquisition of DSS for an aggregate purchase price of approximately $20.3 million (subject to certain adjustments) plus a potential post-closing earnout payment.

The operating results of DSS are included in our operating results from the date of acquisition within our Distribution segment.

Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024

During the three months ended March 31, 2026, gross profit increased 13%, or $3.1 million, to $26.5 million compared to $23.4 million for the same period in the prior year, while effective margin decreased to 29.9% compared to 32.7% for the same period in the prior year.

On February 24, 2026, we completed the acquisition of Interworks for an aggregate purchase price of approximately €8.0 million (equivalent to $9.4 million USD), adjusted upwards for $3.5 million in net working capital adjustment resulting in a final purchase consideration $13 million.

The operating results of Interworks are included in our operating results from the date of acquisition within our Distribution segment.

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

Net Sales and Gross Billings

Net sales for the three months ended September 30, 2025 increased 35%, or $42.0 million, to $161.3 million compared to $119.3 million for the same period in the prior year.

Gross billings, an operational metric, for the thre e months ended September 30, 2025 increased 8%, or $39.4 million, to $504.6 million compared to $465.2 million for the same period in the prior year.

Net sales and gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of DSS.

Net sales for the three months ended March 31, 2026 increased 32%, or $44.4 million, to $182.4 million compared to $138.0 million for the same period in the prior year.

Gross billings, an operational metric, for the thre e months ended March 31, 2026 increased 14%, or $68.2 million, to $542.8 million compared to $474.6 million for the same period in the prior year.

Net sales and gross billings both increased due to organic growth from our existing vendor partnersh ips.

Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods.

During the three months ended September 30, 2025 , gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the three months ended September 30, 2024 , gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Distribution segment net sales for the three months ended September 30, 2025 increased 38%, or $42.5 million, to $154.4 million compared to $111.9 million for the same period in the prior year.

Gross billings for the Distribution segment for the three months ended September 30, 2025 increased 9%, or $40.5 million, to $481.9 million compared to $441.4 million for the same period in the prior year.

Net sales increased organically at a greater rate than gross billings increased due to the impact of hardware and software sales recognized during the current period, which are recorded on a gross basis, as well as the impact of the acquisition of DSS.

Solutions segment net sales for the three months ended September 30, 2025 , decreased 7%, or $0.6 million, to $6.9 million compared to $7.5 million for the same period in the prior year.

Gross billings for the Solutions segment for the three months ended September 30, 2025 decreased 5%, or $1.1 million, to $22.7 m il lion compared to $23.8 million for the same period in the prior year.

Net sales decreased at a greater rate than the decrease in gross billings due to differences in the product mix between the two periods in our Solution segment.

The Company had two major customers that accounted for 22% and 14%, respectively, of its total net sales during the three months ended September 30, 2025 and 16% and 13%, resp ectively, of its total net sales during the three months ended September 30, 2024.

The Company had one major vendor that accounted for 13% of total purchases during the three months ended September 30, 2025 , compared to no major vendors during the three months ended September 30, 2024.

Gross profit for the three months ended September 30, 2025 increased 6%, or $1.4 million, to $25.7 million compared to $24.3 million for the same period in the prior year.

Gross profit increased due to both organic growth from our existing vendor partnerships as well as the impact of the DSS acquisition.

Distribution segment gross profit for the three months ended September 30, 2025 increased 4%, or $0.8 million, to $22.4 million compared to $21.6 million for the same period in the prior year.

The increase reflects the previously noted organic growth from existing vendor partnerships as well as the contribution from the DSS acquisition, partially offset by an increase in early pay discounts and other customer incentives as a percentage of gross billings.

Solutions segment gross profit for the three months ended September 30, 2025 increased 23%, or $0.6 million, to $3.3 million compared to $2.7 million for the same period in the prior year.

During the three months ended March 31, 2026 , gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the three months ended March 31, 2025 , gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Distribution segment net sales for the three months ended March 31, 2026 increased 34%, or $44.9 million, to $177.1 million compared to $132.2 million for the same period in the prior year.

Gross billings for the Distribution segment for the three months ended March 31, 2026 increased 15%, or $67.3 million, to $520.9 million compared to $453.6 million for the same period in the prior year.

Solutions segment net sales for the three months ended March 31, 2026, decreased 10%, or $0.6 million, to $5.3 million compared to $5.9 million for the same period in the prior year.

Gross billings for the Solutions segment for the three months ended March 31, 2026 increased 4%, or $0.9 million, to $21.9 million compared to $21.0 million for the same period in the prior year.

Net sales decreased despite the increase in gross billings due to differences in the product mix between the two periods in our Solution segment.

The Company had two major customers that accounted for 26% and 17%, respectively, of its total net sales during the three months ended March 31, 2026 and 26% and 13%, resp ectively, of its total net sales during the three months ended March 31, 2025.

The Company had no major vendors during the three months ended March 31, 2026 , compared to one major vendor that accounted for 13% of total purchases during the three months ended March 31, 2025.

Gross profit f or the three months ended March 31, 2026 increased 13%, or $3.1 million, to $26.5 million compared to $23.4 million for the same period in the prior year.

Gross profit increased due to organic growth from our existing vendor partnerships.

Distribution segment gross profit for the three months ended March 31, 2026 increased 15%, or $3.0 million, to $23.4 million compared to $20.4 million for the same period in the prior year.

The increase reflects the previously noted organic growth from existing vendor partnerships, partially offset by higher other rebates and discounts offered to our customers as a percentage of gross billings.

Solutions segment gross profit for the three months ended March 31, 2026 increased 5%, or $0.1 million, to $3.1 million compared to $3.0 million for the same period in the prior year.

This increase was driven by higher gross profit margins generated in both North American and Europe.

Customer rebates and discounts for the three months ended September 30, 2025 were $5.6 million compared to $3.9 million for the same period in the prior year.

Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Vendor rebates and discounts for the three months ended September 30, 2025 were $3.9 million compared to $0.8 million for the same period in the prior year.

Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors.

The Company monitors vendor rebate levels, competitive pricing, and gross profit margins carefully.

Selling, General and Administrative Expenses

SG&A expenses for the three months ended September 30, 2025 increased 16%, or $2.3 million, to $16.2 million compared to $13.9 million for the same period in the prior year.

This increase was primarily due to the impact of the acquisition of DSS as well as an increase in salaries, commissions and other employees related expenses in support of the increased gross profit.

SG&A expenses were 3.2% of gross billings for the three months ended September 30, 2025 , compared to 3.0% for the same period in the prior year.

The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Depreciation and Amortization Expense

Depreciation and amortization expense for the three months ended September 30, 2025 , increased 65%, or $0.8 million, to $2.0 million compared to $1.2 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS acquisition as well as amortization of previously capitalized ERP costs, which amortization commenced in the fourth quarter of 2024 and increased amortization for a vendor relationship acquired through a prior year acquisition.

The Company received notice of termination of its distribution agreement from this vendor during the first quarter of 2025 and therefore changed the amortization life of the intangible asset to a shorter period to reflect the expected period of benefits.

Acquisition Related Costs

Acquisition related costs for the three months ended September 30, 2025 and 2024 remained consistent at $0.6 million, respectively.

We compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items and discrete items.

As a result, our estimated tax rate is adjusted each quarter.

For the three months ended September 30, 2025 and 2024, the C ompany recorded a provision for income taxes of $1.6 million and $1.7 million, respectively.

The effective tax rate for the three months ended September 30, 2025 and 2024 was 25.5% and 23.3%, respectively.

The effective tax rate for the three months ended September 30, 2025 compared to the same period in the prior year was impacted by changes in the mix of jurisdictions in which taxable income was earned and limitations on the deductibility of certain executive compensation amounts during both periods, as well as a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense during the three months ended September 30, 2025 .

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.1 million, which reduced our effective tax rate by 1.9% during the three months ended September 30, 2025.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Net Sales and Gross Billings

Net sales for the nine months ended September 30, 2025 increased 51%, or $154.8 million, to $458.6 million compared to $303.8 million for the same period in the prior year.

Gross billings, an operational metric, for the nine months ended September 30, 2025 increased 25%, or $299.5 million, to $1,479.8 million compared to $1,180.3 million for the same period in the prior year.

Net sales and gross billings increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of DSS.

Gross billings increased at a lesser rate than net sales due to differences in the product mix between the two periods.

During the nine months ended September 30, 2025 , gross billings included a greater percentage of hardware and software products, which are recorded on a gross basis, while during the nine months ended September 30, 2024 , gross billings included a greater percentage of security, maintenance and cloud products, which are recorded net of related cost of sales.

Distribution segment net sales for the nine months ended September 30, 2025 increased 53%, or $153.1 million, to $439.6 million compared to $286.5 million for the same period in the prior year.

Gross billings for the Distribution segment for the nine months ended September 30, 2025 increased 27%, or $298.9 million, to $1,412.5 million compared to $1,113.6 million for the same period in the prior year.

Solutions segment net sales for the nine months ended September 30, 2025 , increased 10% or $1.8 million, to $19.1 million compared to $17.3 million for the same period in the prior year.

Gross billings for the Solutions segment for the nine months ended September 30, 2025 increased 1%, or $0.5 million, to $67.2 million compared to $66.7 million for the same period in the prior year.

Net sales increased organically at a greater rate than gross billings due to differences in the product mix between the two periods.

The Company ha d two major customers that accounted for 24% and 13%, respectively, of its total net sales during the nine months ended September 30, 2025 and 17% and 15%, respectively, of its total net sales during the nine months ended September 30, 2024 .

During the nine months ended September 30, 2025 the Company had no major vendors, compared to one major vendor that accounted for 11% of total purchases during the nine months ended September 30, 2024 .

Gross profit for the nine months ended September 30, 2025 increased 26%, or $15.6 million, to $75.4 million compared to $59.8 million for the same period in the prior year.

Gross profit increased due to both organic growth from our existing vendor partnerships as well as the impact of the acquisition of DSS.

Distribution segment gross profit for the nine months ended September 30, 2025 increased 28%, or $14.3 million, to $65.8 million compared to $51.5 million for the same period in the prior year.

The increase in Distribution segment gross profit was due to the aforementioned organic growth from our existing vendor partnerships as well as the contribution from the acquisition of DSS, partially offset by higher early pay discounts and other rebates and discounts offered to our customers as a percentage of gross billings.

Solutions segment gross profit for the nine months ended September 30, 2025 increased 14%, or $1.2 million, to $9.6 million compared to $8.4 million for the same period in the prior year.

This increase was organically driven by the aforementioned increase in gross billings compared to the same period in the prior year, as well as higher gross profit margins generated in both North America and Europe.

Customer rebates and discounts for the nine months ended September 30, 2025 were $16.5 million compared to $10.4 million for the same period in the prior year.

Customer rebates and discounts for the three months ended March 31, 2026 were $6.8 million compared to $4.6 million for the same period in the prior year.

Customer rebates and discounts vary based on terms of rebate and early pay discount programs offered to customers and timing of payments ultimately received from our customers.

Vendor rebates and discounts for the nine months ended September 30, 2025 were $14.1 million compared to $4.4 million for the same period in the prior year.

Vendor rebates and discounts for the three months ended March 31, 2026 were $2.3 million compared to $4.7 million for the same period in the prior year.

Vendor rebates are dependent on programs offered by our vendors and in some cases reaching certain volume targets set by our vendors or meeting certain early payment programs offered by our vendors.

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Selling, General and Administrative Expenses

SG&A expenses for the nine months ended September 30, 2025 increased 25%, or $9.9 million, to $49.3 million compared to $39.4 million for the same period in the prior year.

This increase was primarily due to the impact of the acquisition of DSS as well as an increase in salaries, commissions and other employee related expenses in support of the increased gross profit.

SG&A expenses were 3.3% of gross billings for the nine months ended September 30, 2025 and 2024 .

SG&A expenses for the three months ended March 31, 2026 increased 21%, or $3.5 million, to $20.3 million compared to $16.8 million for the same period in the prior year.

This increase was primarily due to an increase in salaries, commissions and other employee related expenses in support of the increased gross profit, as well as one-time investments to drive organic growth from new vendors and in the Company's infrastructure to support long-term growth initiatives.

SG&A expenses were 3.7% of gross billings for the three months ended March 31, 2026, compared to 3.5% for the same period in the prior year.

The Company expects that its SG&A expenses, as a percentage of gross billings, may vary depending on changes in sales volume, as well as the levels of continuing investments to drive future growth.

Depreciation and Amortization Expense

Depreciation and amortization expense for the nine months ended September 30, 2025 , increased 94%, or $2.7 million, to $5.7 million compared to $3.0 million for the same period in the prior year, primarily due to the amortization of intangible assets acquired in the DSS acquisition as well as amortization of previously capitalized ERP costs, which amortization commenced in the fourth quarter of 2024 and increased amortization for a vendor relationship acquired through a prior year acquisition.

Depreciation and amortization expense for the three months ended March 31, 2026, increased 18%, or $0.3 million, to $2.0 million compared to $1.7 million for the same period in the prior year, primarily due to increased amortization for a vendor relationship acquired through a prior year acquisition.

Acquisition Related Costs

Acquisition related costs for the nine months ended September 30, 2025 and 2024 wer e $0.7 million and $1.2 million, respectively.

Acquisition related costs for the three months ended March 31, 2026 and 2025 were $0.3 million and $0.1 million, respectively.

These expenses in the current period relate to costs incurred with the acquisition of Interworks, while these expenses in the same period in the prior year relate to a previously completed acquisition.

As a result, our estimated tax rate is adjusted each quarter.

For the nine months ended September 30, 2025 and 2024, the Com pany recorded a provision for income taxes of $3.9 million and $3.6 million, respectively.

The effective tax rate for the nine months ended September 30, 2025 and 2024 was 21.6% and 23.5%, respectively.

The change in effective tax rate for the nine months ended September 30, 2025 compared to the same period in the prior year was impacted by a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, changes in the mix of jurisdictions in which taxable income was earned, as well as limitations on the deductibility of certain executive compensation amounts during both periods.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.8 million, which reduced our effective tax rate by 4.6% during the nine months ended September 30, 2025.

For the three months ended March 31, 2026 and 2025, the Company recorded a provision for income taxes of $0.8 million and $0.6 million, respectively.

The effective tax rate for the three months ended March 31, 2026 and 2025 was 20.1% and 13.3%, respectively.

The effective tax rate for the three months ended March 31, 2026 compared to the same period in the prior year was primarily impacted by changes in the mix of jurisdictions in which taxable income was earned, as well as a discrete item for the recognition of excess tax benefits related to share-based compensation in income tax expense, and limitations on the deductibility of certain executive compensation amounts during both periods.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.4 million, which reduced our effective tax rate by 10.5% during the three months ended March 31, 2026.

The recognition of excess tax benefit related to share-based compensation in income tax expense resulted in a net tax benefit of $0.5 million, which reduced our effective tax rate by 10.7% during the three months ended March 31, 2025.

Liquidity and Capital Resources

Our cash and cash equivalents as of September 30, 2025 increased 67%, or $20.0 million, to $49.8 million c ompared to $29.8 million as of December 31, 2024.

Net cash and cash equivalents provided by operating activities for the nine months ended September 30, 2025 was $28.5 million, comprised primarily of net income adjusted for non-cash items of $24.3 million, partially offset by changes in operating assets and liabilities of $4.2 million.

Net cash and cash equivalents used in investing activities during the nine months ended September 30, 2025 wa s $1.7 million, comprised primarily of purchases of fixed assets supporting our recently completed ERP project and new leasehold improvements.

Net cash and cash equiv alents used in financing activities during the nine months ended September 30, 2025 was $8.0 million, comprised of payments of contingent considerations of $3.6 million, purchases of treasury stock of $1.7 million, dividend payments on our Common Stock of $2.3 million and repayments of borrowings under term loan of $0.4 million.

Our cash and cash equivalents as of March 31, 2026 increased 14%, or $5.2 million, to $41.8 million compared to $36.6 million as of December 31, 2025.

Net cash and cash equivalents provided by operating activities for the three months ended March 31, 2026 was $16.9 million, comprised primarily of net income adjusted for non-cash items of $6.7 million, partially offset by changes in operating assets and liabilities of $10.2 million.

Net cash and cash equivalents used in investing activities during the three months ended March 31, 2026 was $8.7 million, comprised primarily of the payment for the Interworks acquisition.

Net cash and cash equivalents used in financing activities during the three months ended March 31, 2026 was $2.8 million, comprised of repayments under credit facilities of $10.1 million, purchases of treasury stock of $1.5 million, and repayments of borrowings under term loan of $0.2 million, partially offset by borrowings under credit facilities of $9.0 million.

The Company had a short-term operating need during the three months ended March 31, 2026, that resulted in $9.0 million of borrowings under credit facilities, which was subsequently repaid in full during the three months ended March 31, 2026.

On May 18, 2023, the Company entered into a revolving credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

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All outstanding loans issued pursuant to the Credit Agreement become due and payable, on May 18, 2028.

There were no amounts outstanding under the Credit Agreement as of September 30, 2025.

There were no amounts outstanding under the Credit Agreement as of March 31, 2026.

On April 8, 2022, the Company entered into a $2.1 million term loan (the “Term Loan”) with First American Commercial Bancorp, Inc.

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The proceeds from the Term Loan was used to fund certain capital expenditures.

The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through April 2026.

As of September 30, 2025, the Company had $0.3 millio n outstanding under the Term Loan.

In connection with the acquisition of Data Solutions, which was completed October 6, 2023, the Company acquired an IDF that was with recourse to the Company.

Data Solutions had previously entered into the IDF with AIB pursuant to a Debt Purchase Agreement.

The Company subsequently terminated the IDF during the year ended December 31, 2024.

The proceeds from the IDF were used for working capital needs of Data Solutions.

Borrowings under the IDF were based on accounts receivable up to 80% of the outstanding accounts receivable balance.

The discount rate under the IDF was equal to 2.5% above AIB's applicable lending rates that varied based on the currency of the accounts receivable.

The borrowing under the Term Loan bears interest at a rate of 3.73% per annum and is being repaid over forty-eight monthly installments of principal and interest through March 2026.

As of March 31, 2026, the Company had no amounts outstanding under the Term Loan.

We anticipate that our working capital needs will increase as we invest in the growth of our business.

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Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934, as amended.

As of March 31, 2026, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act of 1934, as amended.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements