• Total Revenue: Surpassed $1 billion for the year, with a 21% year-over-year increase in Q4 to $296 million.
• Annual Revenue Growth: 65% increase from 2023, reaching over $1.1 billion.
• Marketplace GMV: Grew almost 70% to $1.3 billion for the trailing 12 months ended December 31, 2024.
• Service Revenue: Increased 40% year-over-year in Q4 to over $97 million; full year service revenue reached $350 million, a 76% increase year-over-year.
• Service Margin: 19.5% in Q4, expanding approximately 2 percentage points year-over-year.
• Product Revenue: Fourth quarter revenue increased by more than 13%; full year product revenue grew by 61% to $811 million.
• Net Income: $31 million in Q4, down 13% from $36 million in Q4 2023; full year net income was $126 million, a 34% increase from $94 million in 2023.
• Liquidity: Ended the year with approximately $303 million, up 65% from $184 million at the end of 2023.
• Active 3P Seller Base: Grew to more than 1,100.
• Active Buyer Base: Expanded to more than 9,300.
• European GMV Growth: Over 150% organic growth year-over-year.
• First Quarter 2025 Revenue Outlook: Expected to range between $250 million and $265 million.

• Warning! GuruFocus has detected 2 Warning Sign with GCT.

Release Date: March 03, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• GigaCloud Technology Inc (NASDAQ:GCT) achieved a significant milestone by surpassing $1 billion in total revenue for the first time in its history.
• The company's marketplace GMV grew almost 70% year-over-year, reaching $1.3 billion, indicating strong demand and platform efficiency.
• GigaCloud Technology Inc (NASDAQ:GCT) maintained a strong balance sheet with zero debt and robust cash flow generation, positioning it well for future growth.
• The company was recognized as the number one spot on Forbes America's most successful Small Cap Companies 2025 list and added to the Russell 2000 Index.
• GigaCloud Technology Inc (NASDAQ:GCT) successfully integrated Noble House, achieving breakeven and positioning it for sustainable growth within the ecosystem.

Negative Points

• The macroeconomic environment remains challenging, with high interest rates and inflation impacting consumer discretionary spending, particularly in the furniture industry.
• Average buyer spend declined slightly, reflecting the onboarding of new buyers with lower trading volumes.
• Product margins declined due to elevated ground delivery fees during the holiday season and increased procurement costs.
• The company anticipates temporary revenue declines in Q2 2025 due to SKU rationalization and the integration of Noble House.
• GigaCloud Technology Inc (NASDAQ:GCT) faced headwinds from channel-specific softness, particularly from large e-commerce retail partners experiencing sales declines.

Q & A Highlights

Q: What are the main drivers for the deceleration in growth rate for GigaCloud's first quarter guidance? A: Erica Wei, Chief Financial Officer, explained that the softer macro environment and specific channel partners being hit harder are contributing factors. Additionally, the Noble House integration is a significant factor, as they are scaling back and retiring older, less profitable SKUs, which impacts growth in the first two quarters, especially Q2.

Q: Should we expect improvement in gross margins as we progress through 2025? A: Erica Wei noted that while it's challenging to provide specific guidance due to macroeconomic factors, the pressure points for margins will persist in Q1 and Q2. The first quarter will still see some impact from higher capitalization ocean freight inventory, but moving forward, the use of fixed-rate contracts should stabilize costs.

Q: Can you provide more details on the impact of Noble House on the first quarter guidance? A: Erica Wei stated that there isn't a fixed target for the number of SKUs to retire, as it's a dynamic process. They identify successful new SKUs for larger reorders and retire less profitable ones. Noble House's revenue for Q1 is expected to be flat or slightly lower, depending on SKU retirement and channel partner performance.

Q: How are tariffs impacting GigaCloud's business, particularly for the 1P and 3P segments? A: Erica Wei mentioned that they don't expect a significant impact from tariffs. The cost structure of large and bulky items like furniture means the tariff increase translates to a very low single-digit impact on retail pricing. GigaCloud's platform supports seamless cross-border transactions, providing flexibility for supply chain adjustments.

Q: What are GigaCloud's current thoughts on strategic M&A given their strong balance sheet? A: Erica Wei indicated that they are open to strategic M&A opportunities that align with their growth strategy. They are particularly interested in expanding their infrastructure in Europe and enhancing brick-and-mortar penetration. They are also open to acquiring SaaS companies like Wondersign to expand their reach to marketplace participants.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.