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GigaCloud Technology Inc (GCT)·Q3 2025 Earnings Summary

Executive Summary

  • Record quarter: revenue $332.6M (+9.7% YoY) and GAAP diluted EPS $0.99; adjusted EPS – diluted $1.16; marketplace KPIs strong and Europe revenue hit a record $100M .
  • Significant beats vs consensus: revenue beat by ~$31.7M and adjusted/Primary EPS beat by ~$0.44; Q3 also outperformed prior Q2 revenue and EPS .
  • Mix and margin: product margin expanded 70bps sequential to 29.9%; gross margin 23.2% (-70bps QoQ) as service margin fell to 9.1% amid higher last‑mile costs; net income $37.2M (11.2% margin) .
  • Guidance: Q4 2025 revenue guidance $328–$344M; management highlighted tariff mitigation via targeted price increases and momentum in Europe; announced binding term sheet to acquire New Classic for $18M cash (closing expected early Q1 2026) .
  • Capital returns: ~$16M repurchases in Q3; cumulative since IPO ~$87M; liquidity $366.6M; debt‑free — supporting opportunistic buybacks and M&A .

What Went Well and What Went Wrong

What Went Well

  • Record revenue $333M and record quarterly EPS $0.99; CEO: “setting new records of $333 million in quarterly revenue and $0.99 in quarterly EPS” .
  • Europe strength: revenue +70% YoY to a record ~$100M, driving growth and offsetting U.S. softness .
  • Product margin resilience: “sequential product margin expansion of 70bps to 29.9%…benefited from lowered ocean shipping costs,” despite >100% tariff headwind on Q2‑sourced goods .

What Went Wrong

  • Service margin compression: service margin 9.1%, down 230bps QoQ due to higher last‑mile delivery costs; management recalibrating pricing .
  • Gross margin drift: gross margin 23.2% vs 23.9% in Q2 and 25.5% in Q3 2024, reflecting service margin pressure and tariff timing .
  • U.S. product revenue down 5% YoY as management prioritized “margin integrity over pure volume” amid tariffs and macro softness .

Financial Results

Revenue and EPS vs prior periods and estimates

MetricQ3 2024Q2 2025Q3 2025Consensus (Q3 2025)
Revenue ($USD Millions)$303.3 $322.6 $332.6 $301.0*
GAAP Diluted EPS ($)$0.98 $0.91 $0.99 —
Adjusted EPS – diluted ($)$1.15 $1.14 $1.16 $0.72*

Note: Primary EPS consensus corresponds to adjusted EPS; GAAP diluted EPS presented separately.

  • Values retrieved from S&P Global.

Margins and Profitability

MetricQ3 2024Q2 2025Q3 2025
Gross Margin %25.5% 23.9% 23.2%
Net Income ($USD Millions)$40.7 $34.6 $37.2
Net Income Margin %13.4% 10.7% 11.2%
Product Margin %—29.2% 29.9%
Service Margin %—11.4% 9.1%

Segment breakdown

SegmentQ3 2024 ($M)Q2 2025 ($M)Q3 2025 ($M)YoY Change
Product Revenues$193.0 $225.7 $224.3 +16%
Service Revenues$110.3 $96.9 $108.4 -2%
Europe Revenues——~$100.0 +70%

KPIs (Marketplace)

KPIQ1 2025Q2 2025Q3 2025
Marketplace GMV (TTM, $USD Millions)$1,416.7 $1,438.5 $1,488.5
3P Seller GMV (TTM, $USD Millions)$734.3 $757.5 $790.4
Active 3P Sellers1,154 1,162 1,232
Active Buyers9,966 10,951 11,419
Spend per Active Buyer ($)$142,156 $131,359 $130,349

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenues ($USD Millions)Q4 2025—$328–$344 New
Total Revenues ($USD Millions)Q3 2025$295–$310 Actual: $332.6 Beat vs guidance
Gross Margin CommentaryQ3 2025~2.5% headwind expected from tariff timing Delivered 23.2% GM, -70bps QoQ Impact mitigated via pricing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2025)Trend
Tariffs/macroQ1: Preparing for uncertainty; SFR enables agility ; Q2: ~2.5% GM headwind expected; mitigation via targeted price increases Q3: >100% tariffs on Q2‑sourced goods; protected margins via strategic price increases Improving mitigation; pricing power intact
Supply chain & service costsQ2: Ocean spot rate declines and temporary shipping pauses; service margin 11.4% Q3: Higher U.S. last‑mile costs; service margin down to 9.1%; repricing underway Near‑term pressure; repricing actions
Europe/InternationalQ1: Europe +~80% GMV; footprint expansion ; Q2: Europe +59% revenue; 3P interest rising Q3: Europe +70% revenue to $100M record Strong, accelerating
Product portfolio (Noble House)Q1: Begin Phase 3 SKU refresh; 300+ new SKUs ; Q2: Margin improve; SKU rationalization ahead of schedule Q3: +2,300 new SKUs; -1,100 retired; portfolio back to profitability and growth Positive; healthier mix
M&A strategyQ1/Q2: Active pipeline; brick‑and‑mortar and Europe focus Q3: Binding term sheet to acquire New Classic; closing expected early Q1 2026 Accretive capabilities; channel diversification
Capital allocationQ2: ~$71M repurchases to date; debt‑free Q3: $111M program approved; ~$87M cumulative buybacks; liquidity $366.6M; debt‑free Ongoing returns + M&A

Management Commentary

  • CEO: “We delivered a robust 10% year‑over‑year growth, returning to two‑digit increase and setting new records of $333 million in quarterly revenue and $0.99 in quarterly EPS… Noble House is a powerful validation… We plan to acquire New Classic Home Furnishings, scheduled to close on January 1st, 2026.”
  • President: “Marketplace GMV rose ~21% to nearly $1.5B… Europe continues to be a powerful growth engine, with year‑over‑year revenues of 70% to a record $100 million.”
  • CFO: “Sequential product margin expansion of 70bps to 29.9%… service margin 9.1% on higher last‑mile costs; net income $37M (11.2% margin); operating cash flows $78M; total liquidity $367M; we remain debt‑free; Q4 revenue expected $328–$344M.”

Q&A Highlights

  • M&A cadence: Near‑term focus on closing New Classic; pipeline active but unlikely to add another deal in next few months .
  • Housing and rates: Management aims to deliver growth independent of macro tailwinds, diversifying revenue avenues to reduce reliance on housing cycles .
  • Noble House drivers: Outperformance in U.S. and Europe; portfolio now profitable and growing post SKU optimization .
  • Q4 setup: Guidance reflects continued strength across Europe, Noble House, and core marketplace; tone confident and execution‑focused .

Estimates Context

  • Revenue beat: Actual $332.6M vs consensus $301.0M* — strong outperformance driven by Europe and product margin expansion despite service margin headwinds .
  • EPS beat: Adjusted EPS – diluted $1.16 vs Primary EPS consensus $0.72*; GAAP diluted EPS $0.99; buybacks augmented per‑share metrics .
  • Prior quarter context: Q2 revenue $322.6M vs consensus $290.1M*; adjusted EPS $1.14 vs consensus $0.42* — estimate dispersion light (# of estimates: EPS 2; revenue 3)* .
  • Values retrieved from S&P Global.

Key Takeaways for Investors

  • Narrative shift to durability: Europe’s $100M record and 70% YoY growth provide a robust hedge against U.S. softness; expect continued international contribution .
  • Margin integrity strategy is working: sequential product margin expansion to 29.9% despite tariff shocks; expect ongoing pricing adjustments to normalize service margin .
  • Catalysts: Q4 revenue guide $328–$344M; pending New Classic acquisition to broaden brick‑and‑mortar distribution and channel mix in 4–6 quarters post close .
  • Cash returns + optionality: $366.6M liquidity, debt‑free; ~$87M cumulative buybacks since IPO create EPS leverage alongside M&A .
  • Watch list: last‑mile cost inflation and service margin recovery path; tariff policy volatility; U.S. demand trajectory vs Europe strength .
  • Non‑GAAP context: Adjusted EBITDA $43.4M (-11% YoY) and adjusted EPS $1.16 (+0.8% YoY) — GAAP/adjusted bridge consistent with prior methodology .
  • Actionable: Favor near‑term positioning for beat‑and‑raise potential on sustained Europe momentum and SKU mix; monitor Q4 execution vs guide and integration milestones for New Classic .

Search note: We found and read the Q3 2025 8‑K earnings press release and full call transcript; no separate additional press releases in Oct–Dec 2025; prior two quarters’ 8‑Ks and transcripts were read for trend analysis .