GigaCloud Technology Inc Q1 FY2025 earnings call

Larry Wu:

• Started 2025 on solid footing with 8% year-over-year top-line growth, B2B marketplace GMV up 56% TTM. Focused on Noble House integration, Europe performance strong (80% YOY growth Q1), Wonder App positive traction, and BaaS program added a new partner.

Iman Schrock:

• Marketplace GMV grew over 56% TTM to $1.4B, active 3P sellers up 33% to 1,154, Europe GMV up 80% Q1. Noble House integration phase 3: phased out 400 legacy SKUs, launched 300 new ones, 600 new SKUs in development. Wonder App in closed beta with positive traction.

Erica Wei:

• Total revenues up 8% to $272M, service sales growth driven by demand, product sales details including Europe growth and U.S. decrease, gross margin improved to 23.4%, operating expenses 13% of total revenue, net income $27M, liquidity $288M.

Total revenues grew 8% to $272 million. Service sales revenue grew by approximately 23% year-over-year to $94 million in Q1 2025, with a service gross margin of 15.9%. Global product revenue grew by approximately 2% year-over-year to $178 million for the quarter. Europe product revenue grew by over 70% year-over-year, while domestic U.S. product revenue saw a 17% year-over-year decrease. Product margin improved to 27.4%. Service sales contributed 34.56% ($94M) of total revenue, and product sales contributed 65.44% ($178M) of total revenue.

Guidance:

• Expect total revenue for the second quarter to be between $275 million and $305 million.

Risks:

• Tariff developments have introduced new complexities into global trade and caused supply chain disruptions.

Q: Ryan Myers asked about Q1 results being ahead of expectations, A: Erica Wei mentioned strong growth on service side and Europe.

Q: Tom Forte asked about how the marketplace empowers buyers/sellers in Europe, A: Erica Wei talked about flexibility, reach, and pay-as-you-go model.

Q: Tom Forte asked about how tariffs translate to higher prices, A: Erica Wei explained tariffs don't directly translate to 100% price increase as they only apply to goods value.

Q: Tom Forte asked about entering new categories, A: Erica Wei mentioned auto parts, fitness equipment, etc., are on the marketplace.

Q: Tom Forte asked about strategic M&A, A: Erica Wei mentioned interest in Europe and technology to service bricks-and-mortar space.

Q: Matt Koranda asked about product revenue reclassification, A: Erica Wei explained retrospective adjustment for separate reporting of delivery services.

Q: Matt Koranda asked about Q2 guidance and tariffs, A: Erica Wei said tariff impact on Q2 is limited, mostly in Q3.