Dale Foster
Thank you, Aaron, and good morning, everyone. Our fourth quarter performance capped off an exceptional 2024, marking another year of record results across all key financial metrics. These achievements underscore our team's execution of our core initiatives. We continue to focus on organic growth by deepening relationships with existing vendors and customers while signing new emerging vendors to our line card and delivering on our acquisition goals. Throughout the year, we evaluated over 120 vendors and signed agreements with only 13 of them focusing on the most innovative technologies in our market segments. In in Q4, we evaluated 34 brands but only partnered with 2 of them. I'd like to quickly highlight a couple of these wins. First, we launched a partnership with Scality, a global leader in cyber resilient storage software for AI environments. This strategic collaboration aims to expand Scalady's reach across North America, enabling organizations to access sable, scalable, secure, and high performance storage solutions for their growing data needs.
Next, we signed an agreement with Smartsheet, a dynamic work management platform that empowers teams to collaborate, automate workflows, and drive innovation and scale with flexibility and security. We are excited to collaborate with each of these vendors and bring their products to market, building a mutually beneficial relationship along the way. We continue to make progress with the implementation of our new ERP system, a critical step in streamlining processes and enhancing real-time data accessibility across the global operations. While we still are in the early stages, we are already seeing improvements in transactional efficiency. As we continue optimizing our systems, we anticipate unlocking additional benefits, driving greater agility, visibility, and operational effective effectiveness across the organization.
In January, we announced several changes to our executive leadership team. To start, we appointed Matt Sullivan, our Chief Financial Officer, following the retirement of Drew Clark. I'd like to thank Drew for his invaluable contributions to Climb over the years and congratulate Matt on his well-earned promotion to CFO. Since joining us in 2019 as Vice President corporate Controller, Matt has risen internally to his most recent role as Chief Accounting Officer, overseeing our global accounting functions, including external internal reporting. Compliance and planning. He has also played a pivotal role in advancing Climb's growth strategy and helping drive our financial due diligence for five creative acquisitions since 2020.
Shortly after Matt's appointment, we announced the promotion of two leaders who have played a pivotal role in driving Climb's growth and success. First, Kim Stevens has been appointed to our Chief Marketing Officer. Climb's proven track record of success and commitment to excellence is a testament to our talent and dedication as we nurture within incline.
Next, Charles Bass was promoted to a newly created role of Chief Alliance Officer for Climb Global Solutions. Charles has taken on the global responsibility in identifying, vetting, and onboarding our most innovative technologies in the marketplace into our ecosystem, positioning Klein as a trusted partner for growth. I'm proud of the achievements of these two individuals, and I look forward to seeing the impact that they will continue to make in their new roles. At the end of January, we announced the appointment of John McCarthy as our new Chairman of the board. John has over 30 years of experience in the technology sector of leadership. He is also a board member, board director of Climb since 2019, and currently serves as the compensation committee chair. We're proud to have John leave our board, and Climb's executive team looks forward to working with him to drive our strategic vision forward.
We're excited about the year ahead and while we have some holes to fill due the public exit of Citrix leaving the channel, we view this as an opportunity to strengthen our mix and further diversify our offerings. Looking ahead, we will continue building on a foundation to generate strong organic growth while further improving operating leverage. We will continue to also evaluate M&A opportunities that will enhance ours and solutions offerings as well as expand our geographic footprint in the US and overseas. This these initiatives coupled with our demonstrative track record of execution and a robust balance sheet will enable us to deliver on our organic and inorganic initiatives in 2025. With that, I will turn the call over to our CFO, Matt Sullivan to take you through the financial results.
Matthew Sullivan
Thank you, Dale, and good morning, everyone. I'm pleased to address you for the first time as Climb's new CFO. A quick reminder as we review the financial results for our 4th quarter. All comparisons and various commentary refer to the prior year quarter unless otherwise specified. As reported in our earnings press release, gross billings increased 52% to $605 million compared to $397 million in the year ago quarter. Distribution segment gross billings increased 57% to $582 million and solution segment gross billings decreased 9% to $23 million. Net sales in the fourth quarter of 2024 increased 51% to $161.8 million compared to $106.8 million, which primarily reflects organic growth from new and existing vendors, as well as contribution from our acquisition of DSS in July of last year.
Gross profit in the fourth quarter increased 48% to $31.2 million compared to $21.1 million. Again, the increase was driven by organic growth from new and existing vendors in both North America and Europe, as well as the contributions from DSS. Gross profit as a percentage of gross billings was 5.2% compared to 5.3% in the year ago period. SG&A expenses in the fourth quarter were $17.1 million compared to $12.4 million for the same period in 2023. SGNA from DSS accounted for $2.2 million of the increase. SG&A as a percentage of gross billings decreased to 2.8% compared to 3.1% in the year ago period.
Net income in the fourth quarter of 2024 increased 33% to $7 million or $1.52 per diluted share compared to $5.2 million or $1.15 per diluted share for the comparable period in 2023. As referenced in our press release, net income was impacted by a $2.5 million dollar charge related to a change in fair value of acquisition contingent consideration associated with Spinnaker Limited. Adjusted net income increased 87% to $10.3 million or $2.26 per diluted share compared to $5.5 million or $1.21 per diluted share for the year ago period.
Adjusted EBITDA in the fourth quarter increased 75% to $16.1 million compared to $9.2 million in the prior year quarter. The increase was driven by the aforementioned organic growth from both new and existing vendors, as well as contribution from DSS. Adjusted EBITDA as a percentage of gross profit or effective margin increased 780 basis points to 51.5% compared to 43.7% in the year ago period.
Turning to our balance sheet, cash and cash equivalents were $29.8 million as of December 31, 2024, compared to $36.3 million on December 31, 2023, while working capital decreased by about $9.3 million during this period. The decrease in cash was primarily attributed to the cash paid at closing for acquisition of DSS of $20.4 million, as well as the timing of receivable collections and vendor payments. As of December 31, 2024, we had [$800,000] of outstanding debt with no borrowings outstanding under our $50 million-dollar revolving credit facility with JPMorgan Chase.
On February 28, 2025, our board of directors declared a quarterly dividend of $0.17 per share of our common stock to shareholders of record as of March 17, 2025, and payable on March 21, 2025. Looking ahead, our strong liquidity position continues to provide us with the flexibility to pursue both organic and inorganic growth opportunities while expanding our relationships with vendors and customers worldwide. We will continue to be active on the M&A front as we evaluate accretive targets in both North America and overseas. With a disciplined approach to expansion and a focus on execution, we believe we are well positioned to deliver another year of growth and enhanced profitability in 2025. This concludes our prepared remarks. We will now open it up for questions from those participating in the call. Operator, back to you.
Operator
Thank you. [operator instruction]
And we will take our first question from Vincent Calico with Barrington Research. Please go ahead.
Vincent Colicchio
Yes, good morning, Dale, nice job in the quarter. Did you have any large, unexpected deals in the quarter because it was, quite a result.
Dale Foster
Yes, so and we've said this, I think it's coming up on a couple of years, it goes back quite a ways, but we acquired Spinnaker, we acquired the vast vendor relationship with that, and you know it's been, if you listen to our strategic plans, as far as technology starting here and taking it to, really Western Europe, that's our plan. This is a vendor. Came back to the US, so we started with a relationship there and then to the US, so we have some good things for 2025, but yes, we have some lumpy quarters. We had a large vast deal that came in the end of Q4 that helped the numbers, but we also just looking outside of that just had a great growth across, all of our divisions in Q4. And Q4s typically are a larger one. So, you know if you're selling, software applications and SATs and you keep hammering in that same quarter that's big, you should get that recurring revenue the next year, so we're taking advantage of that as well.
Vincent Colicchio
Did security continue to lead growth amongst your segments?
Dale Foster
It did, it is still making up, between 55% and 65% of our portfolio, a lot of vendors, put the word security, and now we're seeing, new money flow into our vendors from their investors, to build out AI components just to make their products better. So we'll see that really in 2020, 2025, we'll talk about that as the announcements come out.
Vincent Colicchio
And how did DSS perform well versus your expectations?
Dale Foster
They do good. I mean, Q4 is not, their biggest quarter, because they're heavy in the education market. So it's really, the end of Q2 and Q3, and then, but they were, up year over year, but nothing, it isn't one of the bigger quarters. They kick off if you're going into the buying seasons of, the state and local governments.
Vincent Colicchio
Of the number of vendors, I'm forgetting the number offhand, that you added for the year, were all of them productive? How would you characterize that?
Dale Foster
Yes, so it's like I say, it's kissing a lot of frogs and vetting as much as you can up front before you sign a vendor because When you think a lot of the hard work is building that relationship, getting the vendors say, hey, we, this is a good fit for us, as soon as we say yes, that's when all the energy, gets consumed inside the climb because we have to onboard them, it goes from ops to finance, before it even goes back to the sales team to start selling. So, if I look at the, those 13 that we signed, they're all up, but then again, we're still pushing the ones that, we signed, could be quarters ago or years ago, and we're pushing them to our climb elevate team because they didn't perform. We'll still transact with them, but you know we just highlighted a couple on 4 that we've already, some of the share. Shift that starts off as they're moving from a direct to an indirect model, and I know you know just on scaliest alone we've picked up, probably $2million to $3 million as we've launched that brand. So, I'd have to go into individual ones, but you know we don't, we TRY to get to a fast now and we also TRY to get to a quick move if they don't launch or run at the rate that we believe that they were when we signed them.
Vincent Colicchio
Okay, I'll go back in the queue. Thanks.
Dale Foster
Thanks then.
Operator
Thank you. [operator instruction]
And it appears that we have no further questions at this time. I will now turn the program back to Dale for any additional or closing remarks.
Dale Foster
Thank you, operator, and again, thank you to our shareholders supporting us in 2024. Just a great year for climb. Also, I'd never want to miss thanking our teams we have our sales kick-offs at the beginning of the year. We did one in North America, which we usually do. We did our first ever one in Europe for our MEA teams to finally get them together from all the different countries. We pulled into Bristol, UK, and had a great couple of days of planning and celebrating, but I want to thank our team members. Tremendous job in 2024. We have our work cut out for us in 2025, but just we're in a good market space as we've always talked about. So, thank you again. Thank you, operator.
Operator
Thank you. This does conclude today's presentation. Thank you for your participation. You may disconnect at any time.
