GigaCloud Technology Inc. Q4 FY2025 earnings call

• 2025 marked a record year for revenue and EBS. The company expanded geographic reach, scaled marketplace, and strengthened market platform through targeted acquisition. Acquisition of Noble House saw it turn from a losing business to a profitable and growing portfolio in under two years, and now applying the same playbook to New Classic. - Marketplace continued to deliver momentum with GMB increasing approximately 18% over the trailing 12 months to nearly $1.6 billion, seller base expanding 17% year - over - year, and buyer base increasing by nearly 2800 in 2025. Europe delivered 68% revenue growth, and strengthened marketplace operations and expanded infrastructure to seven facilities. - Noble House was acquired out of bankruptcy, turned profitable in the first half of 2025 and returned to growth in Q3, fully integrated into GigaCloud. New Classic acquisition broadens product offerings and deepens brick - and - mortar distribution foothold, with integration off to a strong start.

Fourth - quarter revenue was $363 million, up 23% year - over - year, and full - year revenue rose 11% to $1.3 billion. Service revenue increased 21% year - over - year to $129 million in the fourth quarter, driven by strong demand from marketplace participants, but ocean service revenue declined due to softer overall demand for ocean shipping. Product revenue increased by 24% year - over - year in the fourth quarter to $234 million. U.S. product revenue was $121 million, up 3% year - over - year. The Noble House portfolio saw over 40% year - over - year growth in Q4. Europe product revenue increased by 64% year - over - year to $98 million, and product margins increased 220 basis points sequentially to 32.1%. Total gross margins for the quarter was 22.9%.

• Fourth - quarter revenue was $363 million, up 23% year - over - year, and full - year revenue was $1.3 billion, up 11% year - over - year. Quarterly diluted EPS grew 37% to $1.04 per share, and full - year diluted EPS increased 18% to $3.59 per share. - Q1 revenue is expected to be between $330 million and $355 million. Noble House portfolio is expected to contribute strongly in Q1. New Classic portfolio is expected to have mid - teens revenue in Q1. Service gross margin is expected to recover in Q1 due to change in last - mile costs and pricing adjustments, but ocean freight impact is hard to predict future.

• Global macro trends and policy shifts are outside of control and may impact business. - Ocean freight fluctuations may affect service revenue and margin due to demand changes. - Integration of new acquisitions like New Classic may have uncertainties despite integration playbook.

Q: Thinking about where revenue ended up coming in well ahead of guidance that you previously gave, what were the sources of upside, and then how should we think about that as a potential lead - in for what you gave for the second quarter guidance and then the range that you guys gave there?

A: Ryan, Q4's strongest growers were Europe, which has had strong performance for several quarters and is expected to continue but slow down gradually, and Noble House. Noble House had a decline in the first half of 2025 due to SKU rationalization, but new SKUs kicked in in Q3 and Q4 with over 40% growth, and Q1 is expected to have strong contribution from it.

Q: About gross margin, you briefly had called it out. You know, it came down a little bit from last quarter but was up year over year. So what were the main drivers of that? And then how should we think about the gross margin in the first quarter here?

A: For overall margin, service side's main driver year - over - year is ocean as demand for ocean services globally has been down since April. Sequentially, Q4 has last mile surcharges from vendors which usually go away mid - January. Product side, Europe was strong and off - platform channel sales had higher gross margins.

Q: As we look to your 1Q sales outlook, is there any way you can break out service versus product here and growth? And also, anything Any color on new classic contributions as we look into 1Q?

A: We don't have a specific breakdown of service versus product, but trend is they were growing at similar speeds this quarter and expected to continue, and guidance includes new classic with revenue in Q1 probably mid - teens.

Q: Thoughts on service gross margin recovery, looks like services came in at, like, roughly 6%. I know you just answer that it's mainly coming from ocean spot rate, but any color as we're heading into 1Q in 2026 on gross margin expansion on that front.

A: Sequentially, Q1 is expected to have a bit of recovery mainly because of change in last - mile costs as it usually goes away mid - January, and there are also pricing increases in Q1.

Q: Just any preliminary thoughts on ocean freight. I know we've seen compression in 2025. Just want to see what are your preliminary thoughts are just on gross margin, on service gross margin this year and how it may be impacted.

A: Unfortunately, can't predict future ocean spot rates, but currently things are stable and at a fairly low level compared to last two years.