Climb Global Solutions distributes technical software applications to corporations, systems integrators and value-added resellers in North America, Europe and the United Kingdom. The Company also provides cloud solutions and resells computer software and hardware under the Grey Matter brand. UST and Accenture (ACN: NYSE) are among its principal competitors. While challengers are numerous, Climb has been successful in distinguishing its brand with customized solutions and high quality service.
In the twelve months ending March 2024, Climb Global reported $359.4 million in total sales, providing $15.76 million in operating profits. During this period the Company generated $12.56 million in operating cash flows, representing a sales-to-cash conversion rate of 3.59%. The Company’s consistent cash generation has helped support the use of leverage to accelerate growth. Climb’s debt-to-equity ratio is 25.86.
Taking on debt has been rewarding for Climb. The Company’s return on invested capital was 16.09% in the twelve months ending March 2024, well above its cost of capital at an estimated 9.77%. With excess returns in excess of 6.0%, we believe CLMB can deliver compelling value to shareholders. This compares favorably to excess returns near 8.5% for one of its largest competitors, Accenture. Accenture’s return on invested capital over the last year was near 18.00% compared to its estimated cost of capital near 9.5%.
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