United States

- Ocean Transport

- Warehousing

- Last-mile Delivery

- Packaging

- Others

Japan

Germany

Hong Kong

Others

Total Revenue

1f86ddd06e7466ab58a571637ea60d9b2bfe6b39c37eed1e049bc3c6a8f0d213

2bdcbc110cf08e4d3308142536596cf8ba20514acbed7919fb3509911cc7a7d4

Total Revenue (USD, thousands)

Cost of Goods Sold (COGS) (USD, thousands)

SG&A (USD, thousands)

Research and Development (R&D) (USD, thousands)

Depreciation and Amortization (D&A) (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

Net Income (USD, thousands)

EPS - Basic (USD)

EPS - Diluted (USD)

b465596c8e6b62a6bb7575c0c4b26d7409a9f4ed76fb76da79982992be1433d5

Current Assets (USD, thousands)

Cash and Cash Equivalents (USD, thousands)

Accounts Receivable (USD, thousands)

Inventory (USD, thousands)

Non-Current Assets (USD, thousands)

Property, Plant, and Equipment (PP&E) (USD, thousands)

Goodwill (USD, thousands)

Intangible Assets (USD, thousands)

Current Liabilities (USD, thousands)

Accounts Payable (USD, thousands)

Short-term Debt (USD, thousands)

Accrued Expenses (USD, thousands)

Non-Current Liabilities (USD, thousands)

Long-term Debt (USD, thousands)

Lease Liabilities (USD, thousands)

Deferred Tax Liabilities (USD, thousands)

Shareholders' Equity (USD, thousands)

Retained Earnings (USD, thousands)

Common Stock (USD, thousands)

Additional Paid-in Capital (USD, thousands)

52f94a07f70aaec3923e44db1de977b593bd539f514d386ac09642f0b6319078

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

a800609b8bf7c80a1357fb635375494a07141533a7da701576a4d3d493fdaf61

GigaCloud Technology Inc (GCT) is a leading provider of global end-to-end B2B ecommerce solutions, specializing in large parcel merchandise. The company facilitates transactions on its GigaCloud Marketplace and sells its inventory both on and off the platform. GCT's operations are enhanced by its strategic acquisitions, which have expanded its product offerings and market reach.

1. **Product Revenues** - Generates revenue through the sale of GCT's inventory, including:
   - **GigaCloud 1P** - Sells inventory directly on the GigaCloud Marketplace.
   - **Off-platform Ecommerce** - Sells inventory through third-party ecommerce websites.
   - **Product Sales to B** - Direct sales to business customers.
   - **Product Sales to C** - Direct sales to consumer customers.
2. **Service Revenues** - Facilitates transactions between sellers and buyers on the GigaCloud Marketplace, offering:
   - **Last-mile Delivery Service** - Provides delivery services to ensure products reach their final destination.
   - **Warehousing Service** - Offers storage solutions for large parcel merchandise.
   - **Ocean Transportation Service** - Manages the shipping of goods across international waters.
   - **Platform Commission** - Earns commission from transactions on the marketplace.
   - **Packaging Service** - Provides packaging solutions for products.
   - **Others** - Includes additional services related to logistics and ecommerce support.

f332b272901e0042a790709304cf18fe6e5cd92255860f030dea9847b615ce4c

| Name                  | Position                          | Start Date          | Short Bio                                                                                                                                                                                                 |
|-----------------------|-----------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Larry Lei Wu          | Founder, Chairman, and CEO        | 2006                | Larry Lei Wu is the **founder, chairman, and chief executive officer** of GigaCloud Technology Inc. He has served in these roles since the company's inception in **2006**. He holds an MBA from Yale University.  **[0001857816-24-000101_gct-2024definitiveproxysta.htm:6]** **[0001857816-24-000081_gct-2024preliminaryproxyst.htm:6]** **[0001193125-23-112830_d353289d20f.htm:202]**                       |
| Xin Wan               | Director and Chief Technology Officer | 2014 (CTO), Nov 2020 (Director) | Xin Wan has served as the **Chief Technology Officer** since **2014** and as a **Director** since **November 2020**. He holds a master's degree in software engineering from Tsinghua University.  **[0001193125-23-112830_d353289d20f.htm:202]** **[0001857816-24-000101_gct-2024definitiveproxysta.htm:6]** **[0001857816-24-000081_gct-2024preliminaryproxyst.htm:6]** **[0001193125-22-207915_d160437df1a.htm:268]** **[0001193125-22-203362_d160437df1a.htm:268]** **[0001193125-22-200154_d160437df1a.htm:269]** **[0001193125-22-190279_d160437df1.htm:266]** **[0000950123-22-006843_filename1.htm:259]**                       |
| Kwok Hei David Lau    | Chief Financial Officer           | May 2022            | Kwok Hei David Lau has served as the Chief Financial Officer since **May 2022**. He has over 12 years of experience in investment banking and holds a master's degree in economics from The University of Hong Kong.  **[0001857816-24-000101_gct-2024definitiveproxysta.htm:6]** **[0001193125-23-112830_d353289d20f.htm:204]**                       |
| Iman Schrock          | President                         | July 2022           | Iman Schrock has served as the President since **July 2022**. He has over 17 years of experience in the home furnishings industry and holds a PhD in organizational psychology from the University of Phoenix.  **[0001857816-24-000101_gct-2024definitiveproxysta.htm:6]** **[0001857816-24-000081_gct-2024preliminaryproxyst.htm:6]** **[0001193125-23-112830_d353289d20f.htm:205]**                         |
| Xinyan Hao            | Chief Operating Officer           | October 2010        | Xinyan Hao has served as the Chief Operating Officer since **October 2010**. He holds a bachelor's degree in information management and information systems from Tsinghua University.  **[0001857816-24-000101_gct-2024definitiveproxysta.htm:6]** **[0001857816-24-000081_gct-2024preliminaryproxyst.htm:6]** **[0000950123-22-000703_filename1.htm:222]**                                                 |
| Marshall Bernes       | Executive Director                | November 11, 2024   | Marshall Bernes was appointed as an executive director on **November 11, 2024**. He has over 30 years of experience in the home furnishings market and founded Noble House Home Furnishings LLC.  **[0001857816-24-000216_gct-20241113.htm:1]** **[0001857816-24-000216_a2024-11x12ex991pressrelea.htm:0]**                                        |
| Erica Wei             | Interim Chief Financial Officer   | August 19, 2024     | Erica Wei serves as the **Interim Chief Financial Officer**, effective **August 19, 2024**. She has a strong background in finance and holds a Bachelor of Science in accounting from the University of Southern California.  **[0001857816-24-000189_a2024-08x08exhibit991.htm:0]** **[0001857816-24-000189_gct-20240808.htm:1]**              |

699da2ec7f9ad622d99bf93a074cf34db81e00002a5f1eb4d43795fa0e12eba1

1. Given the anticipated increase in ground shipping costs of up to $4.5 million during the holiday season, how do you plan to mitigate the impact on your margins, and will you need to adjust pricing or absorb these costs entirely?
2. With the current market softness and economic headwinds affecting demand, how confident are you in achieving sustained revenue growth in the upcoming quarters, and what specific strategies are you implementing to offset potential declines?
3. As over half of your 1P supply chain servicing the U.S. market now comes from Southeast Asia, how are you managing risks associated with this diversification, such as supply chain disruptions or increased costs due to geopolitical tensions?
4. Noble House is expected to contribute substantially to the bottom line starting in Q3 of 2025; if the newly developed SKUs do not perform as expected, what contingencies are in place, and how might this affect your profitability targets?
5. You've noted a decrease in average buyer spending due to onboarding new buyers with lower initial volumes; are there signs that existing buyers are reducing their spending, and how will you ensure that new buyers scale up purchases to offset this trend?

27876e045038e62a97b4dc7c45adb2bdbc112c6113597ec656b2ce75918b7381

| **Program Details**       | **Program 1**                     | **Program 2**                     |
|---------------------------|------------------------------------|------------------------------------|
| **Approval Date**         | **June 14, 2023**  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:55]**           | **September 3, 2024**  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:19]**       |
| **End Date/Duration**     | **June 2024**  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:55]**               | **September 2025**  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:19]**          |
| **Total Additional Amount** | **$25.0 million**  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:55]**          | **$46.0 million**  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:19]**           |
| **Remaining Amount**      | **$0** (expired)  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:55]**            | **$34.6 million**  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:19]**           |
| **Details**               | Expired; no remaining funds  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:55]**  | Active; $11.4 million used  **[0001857816-24-000213_gct-20240930.htm:47]** **[0001857816-24-000213_gct-20240930.htm:19]**  |

59311d3b2a070863dc1f92ed9751e3544ee96c2adddb37831882a62b50d4bb10

Service Revenues

- Platform Commission

- Ocean Transportation

Product Revenues

- GigaCloud 1P

- Off-platform Ecommerce

b3cf5614022d344160e93891ea7aa15fc093ca7cc3504cea2efd3a14ddd2e5a2

1. **Margin Outlook for 2025**  
   **Q:** What are the expected margins in 2025?  
   **A:** Management did not provide specific guidance for 2025 margins but expects positive contributions from Noble House as newly developed SKUs come in, potentially improving margins. They cautioned that near-term headwinds could make margins challenging, especially early next year, and much depends on economic conditions and demand, particularly in the housing market.  **[GCT_3407188_12]** 

2. **Q4 Guidance and Beating Expectations**  
   **Q:** What is needed to exceed Q4 guidance?  
   **A:** To exceed guidance, the company relies heavily on market performance and demand. Management indicated that their exposure is broad across market participants, and while they are growing quickly with new additions, softness in clients' performance could offset gains. Beating guidance depends on how the market and all their clients perform during the quarter.  **[GCT_3407188_10]** 

3. **Impact of Tariffs on Marketplace Sellers**  
   **Q:** How do tariffs affect third-party sellers and transactions?  
   **A:** Many third-party sellers source products from China, and while some are shifting supply chains, it's not entirely feasible. Tariffs are applied to the product cost, adding to the cost structure with ocean freight and warehousing. However, the impact of increased tariffs on the final cost is not as large as it might seem, due to other cost components like fulfillment. In typical transactions, tariffs increase the product cost but do not significantly disrupt marketplace mechanics.  **[GCT_3407188_9]** 

4. **Strategic M&A Plans**  
   **Q:** What are your thoughts on future strategic M&A?  
   **A:** The company is actively seeking opportunities in three areas: targets that complement existing products and market connections (like **Noble House** and **Christopher Knight**), technology acquisitions that support long-term goals (such as **Wondersign**), and European targets to accelerate growth in infrastructure and local connections. They aim to enhance their offerings and expand market presence through these acquisitions.  **[GCT_3407188_14]** 

5. **European Growth Drivers**  
   **Q:** What's driving impressive growth in Europe?  
   **A:** Strong European growth is attributed to infrastructure improvements, increased market awareness, and a small base effect. Management believes Europe offers significant potential, with a total addressable market close to the U.S., and even more fragmentation, allowing GigaCloud to add substantial value to the market.  **[GCT_3407188_14]** 

6. **Pricing and Freight Costs**  
   **Q:** Can you pass on incremental freight costs to customers?  
   **A:** While the company has the ability to pass on increased freight costs, they consider market conditions and demand strength before doing so. Currently, they do not feel it's the best time to push costs downstream due to challenging market conditions. Instead, they focus on managing costs through partner relationships and contracts, similar to their approach with ocean freight.  **[GCT_3407188_15]** 

7. **Noble House Product Integration**  
   **Q:** How is integrating Noble House products as 1P progressing?  
   **A:** The company is executing its plan to gradually shift Noble House revenue onto their first-party (1P) platform. This includes new product development, with initial deliveries occurring now, and they expect sales and diversification to pick up more next year.  **[GCT_3407188_8]** 

8. **Q4 Revenue Outlook Breakdown**  
   **Q:** What's the Q4 outlook for service and product revenue?  
   **A:** Management expects the proportion of service and product revenues to remain similar to Q3. Noble House is contributing between **15% to 20%** of product revenue, and this contribution is likely to continue into Q4. They also noted that Q4 comparisons should consider that the previous year's Q4 included two months of Noble House revenue.  **[GCT_3407188_5]** 

9. **Growth Strategy: Existing vs. New Categories**  
   **Q:** How will you grow: ramp existing categories or add new ones?  
   **A:** The company focuses on becoming a more meaningful player in the furniture industry, which has a wholesale TAM of about **$60 billion** annually. While the platform is optimized for big and bulky items, and other categories are organically growing, the priority is to scale within existing categories like furniture before expanding into new ones.  **[GCT_3407188_13]** 

10. **Impact of Retailers' Fall Sales Events**  
    **Q:** How do major retailers' fall sales affect your results?  
    **A:** This year's seasonal promotions felt softer across the board, affecting many market participants including themselves. It's uncertain whether these events pulled forward sales or are accretive, and the impact will depend on future market developments.  **[GCT_3407188_15]** 

11. **Buyers' Reselling Platforms**  
    **Q:** Where are buyers mostly reselling your products?  
    **A:** Buyers are primarily reselling on major e-commerce platforms familiar to consumers. Some buyers are also vendors to larger platforms, with a smaller number operating independent stores and a few in brick-and-mortar retail.  **[GCT_3407188_7]** 

12. **Growth of Buyer Ecosystem**  
    **Q:** Where is the growth in the buyer ecosystem coming from?  
    **A:** Growth is driven by increased market awareness of GigaCloud in the furniture sector, effective go-to-market efforts including direct outreach, and word-of-mouth referrals. Buyers are attracted to the platform's efficiency and cost-saving solutions, especially in a challenging environment.  **[GCT_3407188_6]** 

b887a11e689b7b4950dbc5dd03f8c8c7fe8c3a616af53a363adaffa643809282

- **Impressive European Growth**: GigaCloud's revenue in Europe has grown organically by **140% year-over-year** in Q3, making it the company's fastest-growing market. They see significant potential in Europe, with the market size comparable to the U.S., and believe their platform adds substantial value due to the fragmented nature of the European market.  **[GCT_3407188_13]**
- **Expansion of Marketplace with Increased Buyer and Seller Onboarding**: The company has seen a significant step-up in onboarding buyers onto their platform, driven by direct outreach, market recognition in the furniture sector, and word-of-mouth referrals. This has led to increased efficiency, cost savings, and more efficient solutions for participants, even in a challenging environment.  **[GCT_3407188_6]**
- **Successful Strategic M&A and Future Opportunities**: GigaCloud has had success with strategic acquisitions like Noble House and Wondersign, enhancing their product offerings and technological capabilities. They are actively seeking additional M&A opportunities, focusing on targets that complement their existing businesses, provide technological advantages, and accelerate growth in Europe.  **[GCT_3407188_14]**

3c941089e19dcf2c042890023e4d330adf2cdb9f8795544cd311b53bde9e52e6

- **Decreased net income margins due to increased operating expenses:** Despite improvements in revenue and gross margin, the company experienced a decrease in net income margins in Q1 2024, attributed to costs of approximately **$2 million** associated with new fulfillment centers and unrealized foreign exchange losses of around **$2 million**.  **[GCT_3387800_6]**
- **Integration of Noble House dragging on profitability:** The integration of Noble House is creating a drag on margins, and the company does not expect to reach breakeven for Noble House until late 2024 or early 2025, potentially impacting overall profitability.  **[GCT_3387800_6]**
- **Rising shipping rates could pressure margins:** Although the company has hedged against future ocean shipping rate fluctuations, increasing shipping rates may still impact margins if hedging strategies are insufficient.  **[GCT_3387800_5]**

c6d8c5a11f942bd11ec7cee1d5c42d773a1e9eed608be0b369faa3e27c4ad166

- **Anticipated increased ground shipping costs of up to $4.5 million during the upcoming holiday season will temporarily compress margins**.  **[GCT_3407188_15]**  The company does not feel it's the best time to pass on these costs to customers due to challenging market conditions and the strength of demand.  **[GCT_3407188_15]**
- **The market environment is quite challenging, with softness across channels impacting demand**.  **[GCT_3407188_11]** **[GCT_3407188_6]** **[GCT_3407188_14]**  This softness experienced by their clients directly impacts GigaCloud's performance, potentially offsetting growth from new buyers.  **[GCT_3407188_11]**
- **GigaCloud expects strong headwinds in the near term, including the beginning of next year, making it tougher on margins**.  **[GCT_3407188_12]**  Uncertainty in the economy and housing market could affect demand and profitability moving forward.  **[GCT_3407188_12]**

4dd0218c9f3a67cc30b27d27093705da45c84269e3b5cdb32b37316867b0cf33

- The company is **facing macro challenges** such as **softening of the housing market** and **elevated shipping rates**, which could impact their ability to maintain margins going forward.  **[GCT_3378483_9]**
- Management is **unable to quantify cost synergies** from recent acquisitions, indicating potential uncertainty in realizing expected benefits.  **[GCT_3378483_14]**
- The company **incurred a minimal loss in Q4** due to recent acquisitions, and expects business stabilization only in Q1 with a pickup in Q2, suggesting potential short-term profitability issues.  **[GCT_3378483_14]**

39bcf9a5a4e4a358687e0bb7b01de47b04e1b931964bcc35ee1319e3e3411e7b

- **Integration of Noble House is driving significant revenue growth**, contributing **$57 million in GMV** in Q2 even with only **5% of SKUs accessible** to external buyers. Plans to gradually open more SKUs to external buyers could further boost revenues.  **[GCT_3397399_5]** ,  **[GCT_3397399_8]**
- **Unique business model provides better efficiency in the supply chain**, enabling GigaCloud Technology to **outperform the category with over 100% sales growth** in Q2, while the home category was down over 10%. This positions the company to continue **gaining market share**.  **[GCT_3397399_13]**
- **Protection against rising ocean freight rates** through fixed-rate contracts hedges against shipping cost increases, **limiting margin impact** and providing stability compared to competitors.  **[GCT_3397399_11]** ,  **[GCT_3397399_7]**

4b7776e85d1f089063992023353143a29cbf3ca4a767b929be58b0a1f136d55e

- **Marketplace GMV grew approximately 53% year-over-year to $794.4 million**  **[GCT_3378483_1]** , with **active buyers increasing 21%** to over **5,000** and **average spend per active buyer accelerating 27% to approximately $159,000**  **[GCT_3378483_1]** , demonstrating strong demand and engagement on the platform.
- Successful integration of **Noble House** and **Wondersign** acquisitions, expanding sourcing to **India** and operations into **Canada**  **[GCT_3378483_1]** , positioning the company to achieve profitability for Noble House within **6 quarters**.  **[GCT_3378483_1]**
- Expansion of the global supplier network by adding three new **3P sellers** from **Mexico, Colombia, and Turkey**  **[GCT_3378483_1]** , diversifying the product portfolio and fostering supply chain redundancy.

233cf00f6c015bb78b6e51b3962573ac1f62c81585cdc3077fc3cf9caf19fc43

- **Strong momentum in the 3P (third-party seller) business**, as sellers gear up for the outdoor furniture season, leading to increased velocity and momentum; despite rising shipping rates, GigaCloud has effectively hedged against ocean shipping rate fluctuations, maintaining comfortable margins.  **[GCT_3387800_5]**
- **Launch of the innovative Branding as a Service (BaaS) program**, offering competitive fees (about **4%** vs. industry standard of 10%), expected to enhance seller and buyer retention and drive additional revenue growth.  **[GCT_3387800_6]**
- **Integration of Noble House is progressing well**, with expectations to break even within 2024 and begin generating profitability by end of the year or early 2025, which should positively impact margins and growth.  **[GCT_3387800_6]**

b8404864fcffdd879db15f239711a1939f8ebe7c105fbc45d8c9b00f3e06df88

GigaCloud Technology Inc (GCT)

Financials