Company says it is beating industry headwinds due to explosive growth in B2B marketplace.
EL MONTE, Calif. — GigaCloud Technology, a provider of B2B technology solutions for large parcel merchandise including furniture, reported a robust third quarter with significant top line revenue growth in addition to strength across other key financial metrics.
The company’s total revenue for the quarter was reported at $303.3 million, a 70.2% increase from $178.2 million in the third quarter of 2023, with net income reaching a record-high of $40.7 million, marking a 68.2% growth from $24.2 million a year prior.
GigaCloud’s gross profit for the quarter was $77.3 million, a 58.1% increase from the prior year, with a gross margin of 25.5%. Net income margin slightly decreased to 13.4% from 13.6% in the 2023 period, reflecting the company’s investments in growth and efficiency. The company’s diluted earnings per share rose to 98 cents, up 66.1% from 59 cents in the same quarter last year.
For the first nine months of 2024, GigaCloud’s financial performance was equally strong, with total revenues of $865.3 million, an 88.5% increase from the same period in 2023. Year-to-date net income stood at $94.8 million, a 62.1% increase from $58.5 million in the comparable period last year.
It also reported a 41.4% increase in cash and investments, totaling $260.5 million as of Sept. 30.
Larry Wu, GigaCloud founder, chairman and CEO, highlighted the company’s resilience in a challenging market. “GigaCloud’s continued growth across all metrics, despite strong industry headwinds, underscores the strength and resilience of our Supplier Fulfilled Retail (SFR) model.”
Wu attributed much of the company’s success to its commitment to innovating the global supply chain for large-parcel merchandise. “We are optimistic about the transformative potential of digitizing the global supply chain for large-parcel merchandise and remain focused on managing near-term sector challenges as we position GigaCloud for sustained, profitable long-term growth,” he added.
Looking ahead at the fourth quarter, GigaCloud anticipates revenues between $275 million and $290 million, reflecting the company’s current outlook on market conditions. The company says that this projected growth aligns with its broader strategy to expand its B2B marketplace.
Marketplace strength
The company’s active 3P (third-party) seller base grew by 41.8%, totaling 1,051 sellers by the end of September. Active buyers increased by 85.5% to 8,535, with a spend per active buyer of $144,534 over the past 12 months. The GigaCloud Marketplace’s GMV grew by 80.2% year-over-year, reaching $1.23 billion.
Erica Wei, interim chief financial officer, noted that the company hopes to continue shifting much of its off-platform revenue (including product sold on common marketplaces like Amazon and Wayfair, as well as revenue streams from earlier acquisition Noble House) into its first-party revenue streams.
“Over time we are expecting to see more and more of that revenue shift from off platform onto our 1P revenue stream,” Wei noted. “This also goes hand in hand with (our focus on) new product development. Right now we’re seeing the initial impacts … and we expect to see the scale and diversification pick up more next year.”
Potential tariff impacts
Pressed on the potential for increased tariff exposure among sellers on its platform during an earnings call, the company pointed out the flexibility that its solution offers, with some clients making moves to diversify but others sticking to current supply chains and bracing for the impacts.
“On the 3P side, we’re indeed seeing more product coming out of China compared to Southeast Asia,” Wei noted. “But the platform is something that gives all participants a little more flexibility. And we are also encouraging our customers to think about the potential impact it has and plan accordingly.
“The impacts would be figured as a component of the product cost itself when leaving the manufacturing facility; the tariff would be added to that cost. So by the time it gets to the U.S., measured against the entire order cost when you throw in (warehousing and) fulfillment, it’s not a terribly large percentage,” Wei explained.
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