Climb Global Solutions Inc (CLMB) 2023 Q3 法說會逐字稿

Good morning, everyone, and thank you for participating in today's conference call to discuss Climb Global Solutions financial results for the third quarter ended September 30, 2023. Joining us today are Climb's CEO, Mr. Dale Foster; the company's CFO, Mr. Drew Clark; and the company's Investor Relations adviser, Mr. Sean Mansouri, with Elevate IR.

大家早安，感謝大家參加今天的電話會議，討論 Climb Global Solutions 截至 2023 年 9 月 30 日的第三季度財務業績。今天加入我們的是 Climb 首席執行官 Dale Foster 先生；公司財務長德魯克拉克先生；以及該公司投資者關係顧問 Sean Mansouri 先生（Elevate IR）。

By now, everyone should have access to the third quarter 2023 earnings press release, which was issued yesterday afternoon at approximately 4:05 p.m. Eastern Time. The release is available in the Investor Relations section of Climb Global Solutions website at www.climbgobalsolutions.com. This call will also be available for webcast replay on the company's website. Following management remarks, we'll open up the call for your questions.

到目前為止，每個人都應該可以查看昨天下午 4 點左右發布的 2023 年第三季財報新聞稿。東部時間。新聞稿可在 Climb Global Solutions 網站 www.climbgobalsolutions.com 的投資者關係部分取得。此次電話會議也將在公司網站上進行網路直播重播。在管理層發表講話後，我們將開始電話詢問您的問題。

I'd now like to turn the call over to Mr. Mansouri for introductory comments.

我現在想將電話轉給曼蘇裡先生，請其介紹性評論。

Thank you. Before I introduce Dale, I'd like to remind listeners that certain comments made on this conference call and webcast are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements, which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to revise or publicly release the results of any revision to any forward-looking statements.

謝謝。在介紹Dale 之前，我想提醒聽眾，根據1995 年《私人證券訴訟改革法案》，本次電話會議和網路廣播中的某些評論被視為前瞻性陳述。這些前瞻性陳述受到某些已知和未知的因素的影響。風險和不確定性以及可能導致實際結果與這些前瞻性陳述中反映的結果有重大差異的假設。這些前瞻性陳述也受到該公司向 SEC 提交的文件中不時描述的其他風險和不確定性的影響。請勿過度依賴任何前瞻性陳述，這些陳述僅截至本次電話會議之日作出。除法律要求外，本公司不承擔修改或公開發布任何前瞻性陳述的任何修改結果的義務。

Our presentation also includes certain non-GAAP financial measures, including adjusted gross billings, adjusted EBITDA, adjusted net income and EPS as well as effective margin as supplemental measures of performance of our business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC rules. You'll find reconciliation charts and other important information in the earnings press release, and Form 8-K we furnished to the SEC yesterday.

我們的簡報還包括某些非公認會計準則財務指標，包括調整後的總帳單、調整後的 EBITDA、調整後的淨利潤和每股盈餘以及有效利潤率，作為我們業務績效的補充指標。根據 SEC 規則，所有非 GAAP 衡量標準均已與最直接可比較的 GAAP 衡量標準進行了調整。您可以在收益新聞稿以及我們昨天向 SEC 提供的 8-K 表格中找到調節表和其他重要資訊。

I'll now turn the call over to Climb's CEO, Dale Foster.

現在我將電話轉給 Climb 的執行長 Dale Foster。

Thank you, Sean. And good morning, everyone. We made steady progress on our core initiatives during the quarter as reflected by another period of organic growth and profitability, alongside our recent acquisition of DataSolutions. At a high level, this acquisition enables us to deepen our line card and efficiently grow market share in Europe. I'd like to publicly welcome the DataSolutions team to the Climb family and look forward to working with the new team in the months ahead.

謝謝你，肖恩。大家早安。本季我們的核心計畫取得了穩步進展，這體現在另一個有機成長和獲利時期，以及我們最近收購的 DataSolutions。從高水準來看，這次收購使我們能夠深化我們的產品線並有效地擴大在歐洲的市場份額。我謹公開歡迎 DataSolutions 團隊加入 Climb 大家庭，並期待在未來幾個月與新團隊合作。

As we previously mentioned, our commitment is to have a focused vendor line card by selecting the most innovative technology companies in the market. Out of our 29 brands that we have evaluated in the third quarter, we signed agreements with only three of them. I'd like to quickly highlight a couple of these wins. First, we partnered with GigaIO, a pioneer in artificial intelligence and high-performance data center solutions. This collaboration represents another step forward in our data center product line and will enable us to deliver additional cutting-edge solutions to the channel to optimize data center operations.

正如我們之前提到的，我們的承諾是透過選擇市場上最具創新性的科技公司來擁有專注的供應商產品線。在我們第三季評估的 29 個品牌中，我們只與其中的三個簽署了協議。我想快速強調其中的一些勝利。首先，我們與人工智慧和高效能資料中心解決方案的先驅 GigaIO 合作。此次合作代表我們的資料中心產品線又向前邁出了一步，將使我們能夠向通路提供更多尖端解決方案，以優化資料中心營運。

Next, we kicked off a relationship with Security Compass, a leading provider of security -- cybersecurity solutions that integrates directly with existing DevSecOps tools and workflows, allowing organizations to release secure and compliance software to the market quickly and cost effectively. We are excited to collaborate with each of these vendors and bring our products to market, building a mutually-beneficial relationship along the way.

接下來，我們與Security Compass 建立了合作關係，Security Compass 是一家領先的安全網路安全解決方案提供商，直接與現有的DevSecOps 工具和工作流程集成，使組織能夠快速且經濟高效地向市場發布安全且合規的軟​​體。我們很高興與這些供應商合作，將我們的產品推向市場，並在此過程中建立互惠互利的關係。

In early October, we closed the acquisition of DataSolutions headquartered in Dublin, Ireland, a leading security distributor -- specialty distributor of cloud and security solutions with sales in both Ireland and the U.K. DataSolutions brings a deep network of relationships to Climb, including 14 focused vendor partnerships such as Check Point, Citrix, NuStar to name a few. In addition to their strong vendor relationships, DataSolutions carries a robust recurring revenue base with more than 90% of the fiscal 2023 revenue coming from existing partners. We expect this acquisition to be immediately accretive to earnings and adjusted EBITDA. We've already identified cross-selling opportunities and look forward to unlocking additional potential as we integrate data solutions into the Climb operating systems in the months ahead.

10 月初，我們完成了對總部位於愛爾蘭都柏林的DataSolutions 的收購，DataSolutions 是一家領先的安全分銷商，是雲端和安全解決方案的專業分銷商，在愛爾蘭和英國均有銷售。DataSolutions 為Climb 帶來了深厚的關係網絡，包括14 個重點合作夥伴供應商合作夥伴包括 Check Point、Citrix、NuStar 等。除了強大的供應商關係之外，DataSolutions 還擁有強大的經常性收入基礎，2023 財年 90% 以上的收入來自現有合作夥伴。我們預計此次收購將立即增加收益和調整後的 EBITDA。我們已經確定了交叉銷售機會，並期待在未來幾個月將資料解決方案整合到 Climb 作業系統中時釋放更多潛力。

Shortly after the acquisition of DataSolutions, we announced our Technical Services division known as Cloud Know-How completed a rebrand to Climb Global Services. This rebranding signifies our commitment to unifying our operating divisions under one uniform brand to build a truly global platform. Currently, our service team delivers migration, modernization, management and services for MSP's resellers and their respective end users: clients on platforms such as Microsoft Azure, Managed Engine and Acronis. We're excited about the continued expanding of our professional services arm to provide a more comprehensive solutions for our growing customer base across the globe.

收購 DataSolutions 後不久，我們宣布我們的技術服務部門 Cloud Know-How 完成了品牌重塑，並更名為 Climb Global Services。此次品牌重塑標誌著我們致力於將我們的營運部門統一在一個統一的品牌下，以建立一個真正的全球平台。目前，我們的服務團隊為 MSP 的經銷商及其各自的最終用戶（Microsoft Azure、託管引擎和 Acronis 等平台上的用戶端）提供遷移、現代化、管理和服務。我們很高興我們的專業服務部門不斷擴大，為全球不斷成長的客戶群提供更全面的解決方案。

Quickly touching on the macro environment. Despite broader challenges and global uncertainty, our vendor and acquisition pipelines remain strong and customer sentiment for the next year continues to be positive. We continue to monitor our evolving economic landscape and a potential softening in the markets we serve, particularly where large competitors have experienced softness in the hardware sector. However, we believe we are still well positioned to drive value and growth to our customers and vendors in the future as we scale our global footprint. As I've mentioned before, our team is always focused on the long game.

快速觸及宏觀環境。儘管面臨更廣泛的挑戰和全球不確定性，我們的供應商和收購管道仍然強勁，客戶對明年的情緒仍然積極。我們將繼續監控不斷變化的經濟狀況以及我們所服務的市場的潛在疲軟情況，特別是在大型競爭對手經歷了硬體產業疲軟的情況下。然而，我們相信，隨著我們擴大全球足跡，我們仍然有能力在未來為客戶和供應商帶來價值和成長。正如我之前提到的，我們的團隊始終專注於長期比賽。

Looking ahead, we will remain diligent in our M&A strategy as we evaluate opportunities that can bolster our line card and our [immediate needs] to our financial profile, both in North America and overseas. With a strong balance sheet and a robust pipeline of targets, we can be selective as we pursue acquisitions that will further add scale in the business we align with our culture and strategic goals.

展望未來，我們將繼續努力實施我們的併購策略，同時評估能夠增強我們的產品線以及我們在北美和海外​​的財務狀況的[直接需求]的機會。憑藉強大的資產負債表和強大的目標管道，我們在進行收購時可以選擇性地進行收購，這將進一步擴大我們與我們的文化和策略目標一致的業務規模。

With that, I will turn the call over to our CFO, Drew Clark, to take you through the financial results. Thank you. Drew?

接下來，我將電話轉給我們的財務長德魯克拉克 (Drew Clark)，他將向您介紹財務表現。謝謝。德魯？

Thank you, David. Good morning, everyone. As we review our third quarter financial results, I would like to remind everyone that all comparisons and variance commentary refer to the prior year quarter unless otherwise specified. So let's jump right in.

謝謝你，大衛。大家，早安。在我們回顧第三季財務表現時，我想提醒大家，除非另有說明，否則所有比較和差異評論均指去年同期。那麼就讓我們直接開始吧。

As reported in our earnings press release, adjusted gross billings on AGB, which is a non-GAAP measure increased 7% to [$1.9 million] compared to (inaudible) in the year ago quarter. In addition, net sales in the third quarter of 2023 increased approximately (inaudible) compared to (inaudible), which primarily reflect the organic growth from our new and existing vendors. As we communicated before, we focus on AGB as the true metric of our top line growth as the calculation of net sales is influenced by product mix and the respective adjustments for AGB to net sales for financial reporting purposes under GAAP.

正如我們的收益新聞稿中所報導的，與去年同期（聽不清楚）相比，AGB（一項非公認會計原則衡量標準）調整後的總帳單增長了 7%，達到 [190 萬美元]。此外，與（聽不清楚）相比，2023 年第三季的淨銷售額大約成長了（聽不清楚），這主要反映了我們的新供應商和現有供應商的有機成長。正如我們之前所傳達的，我們將 AGB 作為我們營收成長的真正指標，因為淨銷售額的計算受到產品組合以及根據 GAAP 進行財務報告時 AGB 對淨銷售額的相應調整的影響。

In the third quarter, we had an increase in sales of security and maintenance, which is recorded net of related cost of sales, and therefore, leads to order adjustment from (inaudible). Gross profit in the third (inaudible) [6%] to $14.3 million compared to [$17.5 million]. Again, the increase was primarily driven by organic growth from new vendors in our existing top 20 vendors in North America and Europe. This growth was partly offset by several large customers taking advantage of early pay discounts or EP compared to the year ago period. For example, in the month of September, we had approximately $500,000 more in EP taken as compared to the prior year.

第三季度，我們的安全和維護銷售額有所增加，這是扣除相關銷售成本後記錄的，因此導致訂單調整（聽不清楚）。第三季的毛利（聽不清楚）[6%] 為 1,430 萬美元，而 [1,750 萬美元]。同樣，這一成長主要是由北美和歐洲現有 20 強供應商中新供應商的有機成長所推動的。與去年同期相比，一些大客戶利用提前薪資折扣或 EP，部分抵消了這一成長。例如，在 9 月份，我們的 EP 比去年增加了約 50 萬美元。

(technical difficulty)

（技術難度）

Turning to our balance sheet. Cash and cash equivalents were $49.8 million on September 30, 2023, compared to $20.2 million on December 31, 2022, while working capital increased by $5.2 million during this period. The increase in cash was primarily attributed to the timing of receivable collections and vendor payments. The benefit of increased EP is the timely collection of our receivables, which has maintained our DSO metric in the U.S. below 32 days. As of September 30, 2023, we had $1.4 million of outstanding debt with no borrowings outstanding under our $50 million revolving credit facility with JPMorgan Chase.

轉向我們的資產負債表。截至2023年9月30日，現金及現金等價物為4,980萬美元，而2022年12月31日為2,020萬美元，而在此期間營運資金增加了520萬美元。現金增加主要歸因於應收帳款催收和供應商付款的時間表。增加 EP 的好處是及時收回我們的應收帳款，這使我們在美國的 DSO 指標保持在 32 天以下。截至 2023 年 9 月 30 日，我們與摩根大通的 5,000 萬美元循環信貸安排下有 140 萬美元的未償債務，沒有未償還的借款。

Subsequent to quarter end and consistent with prior quarters, our Board of Directors declared on October 31, 2023, a quarterly dividend of $0.17 per share of our common stock payable on November 17, 2023, to shareholders of record as of November 13, 2023.

季度末後，與前幾季一致，我們的董事會於2023 年10 月31 日宣布，將於2023 年11 月17 日向截至2023 年11 月13 日登記在冊的股東派發普通股每股0.17 美元的季度股息。

Looking ahead, we will continue to leverage our strong liquidity position to explore acquisition opportunities in both domestic and international markets. This will enable us to expand our service and solution offerings, reach new customers and accelerate our expansion into new markets. We look forward to closing out the fourth quarter on a strong note and continuing to execute our game plan in 2024 and beyond.

展望未來，我們將繼續利用強大的流動性狀況，探索國內和國際市場的收購機會。這將使我們能夠擴展我們的服務和解決方案，接觸新客戶並加速我們向新市場的擴張。我們期待以強勁的勢頭結束第四季度，並在 2024 年及以後繼續執行我們的遊戲計劃。

This now concludes our prepared remarks. We will now open it up for questions from those participating in the call. Operator, back to you.

我們準備好的演講到此結束。我們現在將開放電話會議，供參與電話會議的人員提問。接線員，回到您身邊。

(Operator Instructions) Our first question comes from Vince Calico with Barrington Research.

（操作員說明）我們的第一個問題來自 Barrington Research 的 Vince Calico。

Yes. I just want to call out that I couldn't hear Drew's comments very well until he started talking about the balance sheet. Having said that, Dale, curious if any vendor categories slowed in the quarter versus your expectations and how the overall business is trending in October.

是的。我只是想指出，在德魯開始談論資產負債表之前，我無法很好地聽到他的評論。話雖如此，Dale 很好奇本季是否有任何供應商類別的成長速度低於您的預期，以及 10 月的整體業務趨勢如何。

Yes. Just for looking at the Q, I mean, we had -- we looked at -- we had some pockets. Typically, the government's fiscal year-end September 30, and we had a tough comparable from the year before. But we just have a couple of pockets that were soft, but they were by territories and not really by power product categories.

是的。就看 Q，我的意思是，我們有——我們看過——我們有一些口袋。通常情況下，政府的財政年度截止日期為 9 月 30 日，我們與前一年進行了嚴格的比較。但我們只有幾個軟領域，但它們是按地區劃分的，而不是按電力產品類別劃分的。

So two things we kind of measure, Vince, and that is what does our quote volume look like because we can track over the years what the quote to order turn into. We had some of it pushed into Q4. I can just tell you, Q4 looks good. Some of the vendors that we've signed and the ones we're going besides the DataSolutions that we're integrating those teams, both mostly on a sales and marketing standpoint.

因此，文斯，我們要衡量兩件事，那就是我們的報價量，因為我們可以多年來追蹤訂單報價的變化。我們將其中一些推到了第四季。我只能告訴你，Q4看起來不錯。除了 DataSolutions 之外，我們已經簽約的一些供應商以及我們正在整合這些團隊的供應商，主要是從銷售和行銷的角度來看。

But we haven't noticed then. We are looking at the amount of pipeline, like I think it's one of our biggest quarters of evaluating new vendors that are coming at us. At 29, it's a big number and signing three of them. We still have three in the pipe that we're not able to launch yet just due to timing of that many vendors coming at us.

但當時我們還沒有註意到。我們正在關注管道的數量，我認為這是我們評估新供應商的最大季度之一。 29歲，這是一個很大的數字，而且還簽下了其中的三名球員。我們還有三個正在籌備中，但由於許多供應商來找我們的時機，我們還無法推出。

And I think the last thing I'll mention is we talked about signing some of these vendors and trying to keep a limited line card. But we don't really talk about publicly is that we push vendors that are nonperforming or performing at a more of a flat level. They go to our division called Climb Elevate. And they get transacted, but they don't get access to our sales and marketing teams, like a vendor in our core portfolio. So we still transact when they're ready to really put money into the market or hire team members that are going to cover territories, then we can bring them back into the fold. But other than that, they stay into our Climb Elevate team.

我想我要提到的最後一件事是我們討論了與其中一些供應商簽約並試圖保留有限的線路卡。但我們並沒有真正公開談論的是，我們推動表現不佳或表現平平的供應商。他們去了我們名為「攀爬電梯」的部門。他們進行了交易，但他們無法像我們核心產品組合中的供應商一樣接觸我們的銷售和行銷團隊。因此，當他們準備好真正將資金投入市場或僱用將涵蓋地區的團隊成員時，我們仍然會進行交易，然後我們可以將他們帶回。但除此之外，他們仍留在我們的 Climb Elevate 團隊中。

And did your top 20 vendors perform in line with the rest of the business?

您的前 20 名供應商的表現是否與其他企業一致？

They did across the board. Those are the ones that are driving that, and same with our customers. We had some of our larger customers, a little flat in the quarter as well. And we had some stuff on our Spinnakar side we can talk about that got pushed into Q4 that we already have those orders in and just didn't give them in the last week of September.

他們全面做到了。這些是推動這一趨勢的因素，我們的客戶也是如此。我們有一些較大的客戶，本季也有些持平。我們在 Spinnakar 方面有一些東西，我們可以談論這些東西被推到了第四季度，我們已經收到了這些訂單，只是在 9 月的最後一周沒有給它們。

And then on DataSolutions, any help on what type of revenue contribution you expect in Q4 and maybe '24?

然後在 DataSolutions 上，您對第四季度（也許是 24 年）預計的收入貢獻類型有何幫助？

Yes, at this point, we're not going to share that information, Vince, but we'll try and provide some info as we get into the Q4 earnings call.

是的，文斯，目前我們不會分享這些信息，但我們會在進入第四季度財報電話會議時嘗試提供一些信息。

Okay. And then so the organic growth for the quarter, I assume very little came from your Spinnakar acquisition. Is that correct?

好的。然後，本季度的有機成長，我認為很少來自於對 Spinnakar 的收購。那是對的嗎？

Correct, yes. The Spinnakar contributed very little in the prior year quarter. We acquired them in August and did not have a big -- had a very minor contribution in this quarter.

正確，是的。 Spinnakar 在上一季的貢獻微乎其微。我們在八月收購了它們，並沒有做出很大的貢獻——在本季度做出了很小的貢獻。

Our next question comes from Howard Root, an Individual Investor.

我們的下一個問題來自個人投資者霍華德·魯特。

Congratulations on another solid quarter. Can you hear me okay?

恭喜又一個穩定的季度。你聽得到我說話嗎？

Sure can. Thanks, Howard.

當然可以。謝謝，霍華德。

Sure. If I could ask just a couple of questions on the DataSolutions acquisition just to get a little bit more kind of detail on the numbers. So as I see it, you paid around a little over $16 million for it, and then there's a post-honezing earn-out. And without giving the amount, is that like a 10% potential? Or is that more substantial of a potential earn-out amount for that acquisition?

當然。如果我可以問幾個有關 DataSolutions 收購的問題，只是為了獲得更多有關數字的詳細資訊。所以在我看來，你為此支付了大約 1600 萬美元多一點，然後還有磨練後的收益。如果不給出具體金額，那是不是就有 10% 的潛力？或者該收購的潛在獲利金額是否更為可觀？

Yes, the earn-out has a range, Howard. That would be 85% to 115% of the EBITDA number. So it's going to be probably -- in terms of the consideration that we've disclosed in the filings, it's going to be about 15% to 20%.

是的，收入是有一個範圍的，霍華德。這將是 EBITDA 數字的 85% 到 115%。因此，就我們在文件中揭露的考慮而言，可能會是 15% 到 20% 左右。

Okay. So -- and with EBITDA of $3.3 million in the fiscal year March 31 for that, you're paying around 5x EBITDA. Is that kind of the way you look at acquisitions going forward? Is that a kind of normal pricing for you?

好的。因此，鑑於 3 月 31 日財年的 EBITDA 為 330 萬美元，您需要支付約 5 倍的 EBITDA。您也是這樣看待未來的收購嗎？這對您來說是正常定價嗎？

We were fortunate to get a little bit of a discount on the EBITDA multiple. But as we said before, over in Europe, the transactions will probably have premium due to the fact that the

我們很幸運能夠在 EBITDA 倍數上獲得一點折扣。但正如我們之前所說，在歐洲，交易可能會產生溢價，因為

(technical difficulty)

（技術難度）

So we would expect that multiple to be slightly higher than that. We're going to go through [more] space in Western Europe, but we think that was a fair transaction (inaudible)

因此，我們預計該倍數會略高於該數字。我們將穿越西歐的[更多]空間，但我們認為這是一次公平的交易（聽不清楚）

And Howard, just a little more detail. So we look at our positions we're trading at in North America, and (inaudible) a bit more. We also look at the concentration if there's a discount because of the attrition of vendors and customers. And then also, we look at the margin profile. There's a lot of things that go into it. This one came out from a company that was running the book on, and they were basically pushed out to multiple distributors that were looking at them as they're being attractive, not only for the Irish market, but for some of their vendors. And the one that jumps out of the page, it should jump as almost a Tier 1 vendor was Citrix. And Citrix and Microsoft go very well, and that's one of the ones we have as a distributor in the U.K. that we want to bolster to go to the (inaudible) customer base. And when there are two companies combined, we can do that in an effective way and be as efficient to deliver in those product categories.

霍華德，請提供更多細節。所以我們看看我們在北美的交易頭寸，以及（聽不清楚）更多。我們也會關注是否因供應商和客戶的流失而出現折扣的集中度。然後，我們也查看了利潤率情況。其中涉及很多事情。這本書來自一家正在運行這本書的公司，它們基本上被推給了多個分銷商，這些分銷商正在關注它們，因為它們不僅對愛爾蘭市場有吸引力，而且對他們的一些供應商也很有吸引力。跳出頁面的那個應該是 Citrix，因為它幾乎是一級供應商。 Citrix 和 Microsoft 合作得非常好，這是我們作為英國經銷商所擁有的合作夥伴之一，我們希望加強這項合作來吸引（聽不清楚）客戶群。當兩家公司合併時，我們可以以有效的方式做到這一點，並同樣有效地交付這些產品類別。

Okay. And then just kind of a final one on that. So can you give us kind of a perspective on their Q3, not looking forward, but for DataSolutions Q3 as what the amount -- the adjusted gross billings or net revenue? I realized you didn't have any of that in for your number. But if they've been added in, is that a $10 million increase in Q3? Is that a $5 million increase in Q3? And adjusted gross billings, if you had them in your fold for that quarter?

好的。然後就是最後一個。那麼，您能給我們介紹一下他們第三季的情況嗎？不是展望未來，而是 DataSolutions 第三季的金額是多少——調整後的總帳單或淨收入？我發現你的號碼裡沒有這些內容。但如果將它們添加進來，第三季是否會增加 1000 萬美元？第三季增加了 500 萬美元嗎？調整後的總帳單（如果您在該季度已將其納入您的範圍內）？

Yes. So there's a little bit of cyclicality to their business. And if you look at -- again, as we've said in Q4, Howard, they will be accretive. Obviously, at the top line, they'll be accretive in terms of EBITDA and they'll be accretive for us in terms of an EPS calculation. I don't have the exact numbers in front of me, talk about those at the moment, but it's going to be a very, very good transaction for us ultimately.

是的。所以他們的業務有一點週期性。如果你再看一遍，正如我們在第四季度所說的那樣，霍華德，他們將會增值。顯然，在利潤方面，它們將在 EBITDA 方面帶來增值，並且在 EPS 計算方面也將為我們帶來增值。我面前沒有確切的數字，現在就談論這些，但這最終對我們來說將是一筆非常非常好的交易。

And I think it's a fair number, Howard, them being over $130 million in adjusted gross billings, not on net sales because we'll have to go through out the netting process. But bringing around $10 million a month, but then they have some cyclicality. But they also have some -- the core business with some of their top vendors. And we talked about it in some of the early releases that they start in the Irish market, very strong there. When we were presenting this to the Board for approval, you look at the vendors that they have and the percentage of market share and wallet that they have for the Irish side, it's is in the 90 percentile. But -- and then they moved in the last 3.5 years to the U.K., and they are quickly gaining market share there. So where they go? They tend to be one of the leaders in that space of their product -- product mix.

我認為這是一個公平的數字，霍華德，調整後的總帳單超過 1.3 億美元，而不是淨銷售額，因為我們必須完成淨額結算過程。但每月帶來1000萬美元左右，但他們有一定的周期性。但他們也有一些——與一些頂級供應商的核心業務。我們在他們在愛爾蘭市場推出的一些早期版本中討論了這一點，那裡非常強大。當我們將其提交給董事會批准時，你會看到他們擁有的供應商以及他們為愛爾蘭方面所擁有的市場份額和錢包的百分比，它處於 90% 的水平。但是 - 然後他們在過去 3.5 年裡搬到了英國，並迅速獲得了那裡的市場份額。那麼他們就去哪了呢？他們往往是其產品（產品組合）領域的領導者之一。

And do you see that having legs outside of the U.K.? Or is that kind of where it stops for...

您是否認為這種做法在英國以外也有影響力？或是這樣的地方停下來......

Of course, we take a look at their top 5 brands, and we take a look at their contracts and say, okay, can we expand this contract into the rest of Western Europe, selling -- and we found some really unique things in the company. And that is they already -- since they're an EU country, it's easy to ship into the other 28 EU states. So I think it's easy for us after the Brexit happened. So that's a potential in some of their contracts. But we've already looked and added them to some of our existing contracts for our vendors that we had in common, like I think it was Cato and Orca. But yes, we'll do that. If we were able to expand, and this is one of our first conversations, Citrix to other places, I think that would be a big one for us on top of just the team we acquired.

當然，我們會看看他們的前5 個品牌，我們會看看他們的合同，然後說，好吧，我們能否將這份合同擴展到西歐其他地區，進行銷售——我們發現了一些非常獨特的東西公司。這就是它們——因為它們是歐盟國家，所以很容易運送到其他 28 個歐盟國家。所以我認為英國脫歐後這對我們來說很容易。所以這是他們的一些合約中的潛力。但我們已經研究過並將它們添加到我們共同的供應商的一些現有合約中，就像我認為是 Cato 和 Orca 一樣。但是，是的，我們會這麼做。如果我們能夠將 Citrix 擴展到其他地方（這是我們的第一次對話之一），我認為除了我們收購的團隊之外，這對我們來說將是一件大事。

Yes. They're, I say, a huge win for you. So my second question generally is I'm looking at the Q4, which last year, you just knocked the cover off the ball with your adjusted gross billings about $320 million, which is a big step up, obviously, from Q3, and it's obviously seasonally your strongest quarter. But you had words in the press release about broader challenges in the macro environment. And there's other issues, global uncertainty, that kind of thing. But in terms of posting a number above that kind of with the DataSolutions maybe adding $30 million or so in adjusted gross billings, are you confident in exceeding last year's exceptionally strong number in Q4 to gross billings?

是的。我說，它們對你來說是一個巨大的勝利。所以我的第二個問題通常是我正在關注第四季度，去年，您剛剛以調整後的總賬單約為 3.2 億美元，這顯然比第三季度邁出了一大步，而且顯然季節性最強的季度。但您在新聞稿中談到了宏觀環境中更廣泛的挑戰。還有其他問題，全球不確定性等等。但是，就透過 DataSolutions 公佈的數字而言，調整後的總帳單可能會增加 3000 萬美元左右，您有信心在第四季度超過去年異常強勁的總帳單嗎？

You're talking to a sales marketing guy. So yes, I'm very confident, Howard, and what the team is performing. We already have October numbers, as Drew and his team put out a flash report. So we're on track. That's our goal to do that. I don't see -- yes, there could be some obstacles as far as getting stuff in the last couple of days because a lot of -- everybody waits and we just -- the vendors wait to push these things in. Like I said, we track our quote volumes so we can know if there's going to be a dip coming in because we know how many quotes it takes to get one order depending on certain manufacturers. We track that data. But we -- I'm comfortable that we'll be on target for Q4.

您正在與銷售行銷人員交談。所以，是的，霍華德，我對球隊的表現非常有信心。正如德魯和他的團隊發布的快速報告一樣，我們已經有了 10 月的數據。所以我們步入正軌。這就是我們的目標。我不認為 - 是的，在過去幾天裡獲得東西可能會遇到一些障礙，因為很多 - 每個人都在等待，而我們只是 - 供應商等待將這些東西推入。就像我說的，我們追蹤我們的報價量，這樣我們就可以知道是否會出現下降，因為我們知道根據某些製造商的不同，獲得訂單需要多少報價。我們追蹤這些數據。但我們——我很高興我們將實現第四季的目標。

Great. Great. Well, congrats again on another solid quarter. I love the continued focus on performance and execution.

偉大的。偉大的。好吧，再次恭喜又一個穩定的季度。我喜歡持續關注性能和執行力。

Operator, can you hear us okay?

接線員，你聽得到我們說話嗎？

Yes. You're coming clear on my side. I know a few people are working on the back end for some of our listeners. Our next question comes from [Bill Dezellem] with Tieton Capital Management.

是的。你明顯站在我這邊了。我知道有一些人正在為我們的一些聽眾做後端工作。我們的下一個問題來自 Tieton Capital Management 的 [Bill Dezellem]。

I'll just say, Drew, in relation to your last question, as you were answering the prior questioner's question, there was a lot of garble that came through and was not only difficult to decipher, but like indecipherable on the site.

我只想說，德魯，關於你的最後一個問題，當你回答前一個提問者的問題時，出現了很多亂碼，不僅難以破譯，而且在網站上也難以破譯。

Relative to my question, the early pay discounts, I am surprised with higher interest rates that your customers are doing additional early pay discounts or more early pay discounts this year than they did last year. So have you raised your incentive for the early pay discounts? Or what's the dynamic behind the scenes there, please?

相對於我的問題，即提前付款折扣，我對您的客戶今年比去年提供更多提前付款折扣或更多提前付款折扣的利率更高感到驚訝。那麼您是否提高了提前薪資折扣的激勵措施？或是請問幕後的動態是什麼？

Sure. Bill, can you hear me?

當然。比爾，你聽得到我說話嗎？

Yes.

是的。

Okay. So the dynamic is we have one of our large DMRs that historically was very inconsistent. They're not publicly traded or private, and they brought on a new CFO about 1.5 years ago, who's reorganizing his team. They're focused on a number of different initiatives. And for whatever motivation, they are now adhering to the time frame in early pay discount. Don't have a real understanding as to why, but we just know that that's been a mandate from him to his team to not forgo the early pay discount. So I don't know, again, what their balance sheet or financing terms look like, but they're taking full advantage of it now. They were probably taking early pay maybe 30% to 40% of the time. It was very inconsistent. We didn't have any rhyme or reason, but they're now taking it.

好的。因此，動態是我們的大型 DMR 之一在歷史上非常不一致。他們不是上市公司或私人公司，大約 1.5 年前他們任命了一位新的財務官，他正在重組他的團隊。他們專注於許多不同的舉措。無論出於何種動機，他們現在都遵守提前工資折扣的時間表。我們並不真正理解為什麼，但我們只知道這是他向他的團隊發出的一項命令，要求他們不要放棄早期的薪資折扣。所以我再次不知道他們的資產負債表或融資條款是什麼樣的，但他們現在正在充分利用它。他們可能有 30% 到 40% 的時間提前領取薪水。這是非常不一致的。我們沒有任何押韻或理由，但他們現在接受了。

So in terms of assuming that, that behavior continues over the course of next 12 months, then we've we won't have the same increase, at least from them in early pay discounts, and the comparables will be a bit more even. Is that kind of how you are looking at it?

因此，假設這種行為在未來 12 個月內持續下去，那麼我們不會有同樣的增長，至少在早期工資折扣方面不會有同樣的增長，而且可比較的情況會更加均勻。您是這樣看待它的嗎？

Correct. And as we've stated, we were very positive on the fact that we were able to maintain gross profit as a percentage of adjusted gross billings at a consistent level despite the increased level of early pay taken by a couple of our key DMRs.

正確的。正如我們所說，我們對以下事實非常樂觀：儘管我們的幾個關鍵 DMR 的提前付款水平有所提高，但我們能夠將毛利佔調整後總帳單的百分比保持在一致水平。

Great. Congratulations getting money in the door early.

偉大的。恭喜你早日拿到錢了。

(Operator Instructions) Our next question is from Bob Sales with LMK Capital Management.

（操作員說明）我們的下一個問題來自 LMK Capital Management 的 Bob Sales。

Two questions. And you really -- for my connection, you really broke up as you were walking through the dynamics of the quarter with respect to the end of the quarter in macro. So my question is, can you just talk a little bit about the organic growth one more time and, just for those of us that didn't hear, what you saw and the dynamic has it played out and the result in 7% growth in adjusted gross billings?

兩個問題。就我的聯繫而言，當您在宏觀上回顧本季末的動態時，您真的分手了。所以我的問題是，您能否再談談有機增長，對於我們這些沒有聽到的人來說，您所看到的以及它的動態已經發揮出來，結果是 7% 的增長調整後的總賬單？

So the dynamic, Bob, if you didn't hear it before, we had a nice mid-single-digit growth in adjusted gross billings despite "headwinds" that many of our larger distributors experienced over the past several quarters, predominantly due to hardware. Our outlook remains, as Dale mentioned earlier. Fairly confident in the fact that we'll kind of meet and be at the previous quarter -- fourth quarter results from 2022, at least at the top line. Obviously, gross profit is going to be impacted by what we expect the continued early pay discount taken by several DMRs. And again, we're confident that we can continue to execute and deliver on the long term, while we have some economic headwinds, maybe get into the data center, security space and trickle down from hardware. We're not seeing a lot of that, but we're starting to see a little bit, right, slowly, but surely. Some opportunities are getting pushed to the next quarter, but we're still pretty bullish on the fact that we'll continue to execute the game plan that we've had over the past 10 quarters.

因此，鮑勃，如果您之前沒有聽說過的話，儘管我們的許多大型分銷商在過去幾個季度中經歷了“逆風”（主要是由於硬體），但我們的調整後總賬單仍實現了中等個位數的成長。正如戴爾之前提到的，我們的前景依然不變。我們相當有信心，我們將在上一季（2022 年第四季）的業績中見面，至少在營收方面是如此。顯然，毛利將受到我們預期的幾個 DMR 持續的提前工資折扣的影響。再說一遍，我們有信心能夠繼續長期執行和交付，儘管我們面臨一些經濟逆風，也許會進入資料中心、安全領域並從硬體中滲透出來。我們沒有看到很多這樣的情況，但我們開始看到一點，對，緩慢但肯定的。一些機會被推遲到下個季度，但我們仍然非常看好我們將繼續執行過去 10 個季度的遊戲計劃。

And Bob, we track -- we have quite a few customers that we sell to that are public, and they've already put their earnings releases out, like CDW. They have a bigger hardware component. And some of the times, when we went through the last couple of years, the hardware piece of the data center and everybody moving to a remote play. So there's a lot of sales on the hardware side of things. What we say is we're still 90% software. So we see a different product mix quarter-by-quarter depending on the ebb and flow. One thing that we always count on is that we're having so many different vendors coming at us from a security standpoint, and we already have a lot of vendors on our security portfolio. So that continues to be strong. And everybody is doing security in a little different way.

鮑勃，我們追蹤——我們有相當多的公開客戶，他們已經發布了他們的收益報告，例如 CDW。他們有更大的硬體組件。有時，當我們經歷過去幾年時，資料中心的硬體部分和每個人都轉向遠端遊戲。因此，硬體方面的銷售量很大。我們所說的是我們 90% 仍然是軟體。因此，根據潮起潮落，我們每季都會看到不同的產品組合。我們始終依賴的一件事是，從安全角度來看，我們有很多不同的供應商來找我們，而且我們的安全產品組合中已經有很多供應商。所以這仍然很強勁。每個人都以不同的方式來確保安全。

With the acquisition of DataSolutions, it comes with them a strong CTO that's going to help us really kick off a division that's going to really focus on AI products. Most of our vendors are talking about already or already have some kind of machine learning built into their products, but then now they're starting in the marketing side to push that element or that potential in their products. So just a lot of good things in the software IT security data center space, and that's our two top categories.

收購 DataSolutions 後，他們將迎來一位強大的技術官，這將幫助我們真正啟動一個真正專注於人工智慧產品的部門。我們的大多數供應商都在談論已經或已經將某種機器學習內建到他們的產品中，但現在他們開始在行銷方面推動該元素或潛力在他們的產品中。軟體 IT 安全資料中心領域有很多好東西，這是我們的兩個首要類別。

Great. And then my second question is on the DataSolutions acquisition, it looks looks like a home run in terms of accretion. I wanted to understand the tax situation given that it's a -- I assume as a Irish domicile company and whether that presents any of the advantages there because of the Irish entity.

偉大的。我的第二個問題是關於 DataSolutions 的收購，就成長而言，它看起來像是一次本壘打。我想了解稅務情況，因為我假設它是一家愛爾蘭註冊公司，以及這是否會因為愛爾蘭實體而帶來任何優勢。

Yes. We look -- we're looking at that right now, and we'll -- we did have an entity when we acquired CDF that had because they were getting ready for a potential Brexit 3 years ago. So we'll look at that. We'll look at where we can deal with the tax savings. The Irish tax on business is at 12.5%, I believe. So yes, we're -- we'll continue to look at that, where orders actually start from where they get transacted and where we can take advantage of that into the rest of the EU countries and then back to the U.K. team.

是的。我們現在正在考慮這個問題，我們在收購 CDF 時確實有一個實體，因為他們 3 年前就為潛在的英國脫歐做好了準備。所以我們會看看這個。我們將研究在哪裡可以節省稅收。我相信愛爾蘭的商業稅是 12.5%。所以，是的，我們將繼續關注這一點，訂單實際上是從交易的地方開始的，我們可以利用這一點進入其他歐盟國家，然後回到英國團隊。

Thank you. At this time, I'm showing no further questions. I would like to turn it back to Dale Foster for closing remarks.

謝謝。目前，我沒有再提出任何問題。我想請戴爾·福斯特（Dale Foster）發表結束語。

Thank you, operator. And thanks, everyone, for joining today. Again, I want to welcome our DataSolutions team. We've had the luxury of spending some time in Dublin over the last 6 months with the teams. Our teams are getting integrated. Some of our sales and marketing team were in the U.K. over the last couple of days, getting things kicked off, and we'll really start talking as a combined team going into 2024. Thank you for your support to the shareholders, and we look to have a strong 2023. Thank you.

謝謝你，接線生。感謝大家今天的加入。我再次歡迎我們的 DataSolutions 團隊。在過去的 6 個月裡，我們有幸與團隊一起在都柏林度過了一段時間。我們的團隊正在整合。過去幾天，我們的一些銷售和行銷團隊在英國，開始著手開展工作，進入 2024 年，我們將真正開始作為一個聯合團隊進行討論。感謝您對股東的支持，我們希望祝您2023 年一切順利。謝謝。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。