GCT - Earnings call 3 2023 | GigaCloud Technology Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the GigaCloud Technologies Third Quarter 2023 Earnings Call and Webcast.

Joining us today from GigaCloud Technology and the company's Founder Chairman and CEO, Larry Wu; the company's President, Dr. Iman Schrock; and the company's Chief Financial Officer, David Lau. On today's call, Iman will give an overview of the company's performance and details of the company's operational results, and David will share the company's financial results. [Operator Instructions] As a reminder, this conference contains statements about future events and expectations, which are forward-looking in nature. of may materially. Today's as include call measures the call results and non-GAAP this G. within differ Regulation may and meaning on be forward-looking deemed actual financial Statements SEC the webcast will when required measures most GAAP in comparable on directly as can presented company's non-GAAP be measures and today's with the to well press calculated release the financial accordance of reconciliation all financial the found website. in as the would note to conference today's turn being like Please over recorded. I first now Mr. that speaker, your to conference Wu, Larry Chairman and CEO. Please sir. go ahead,

Lei Wu

with you, today. thank Thank and you, operator, everyone, for joining us

First, won't I have The as our Giga in dedication only GigaCloud, my the we both also Since three closed it. of be that for to quarters to quarter. BXB two family our brick-and-mortar shown not have ecosystem the our success have consecutive is integral strengthen accelerate same record-breaking without strategic penetration well want acquisitions into results, on entire to express channels. you the growth we remarkable it for spoken last and posted another continued gratitude GigaCloud as

adjusted be Before in pleased our to turning two not these in with EBITDA. on And an year-over-year revenue. to total in high featured could year-over-year we our increase discuss details, results approximately which our the level, in quarter, acquisitions XX% Iman more increase XXX% incredible

to result BXB within of record organic of model. Keep did supplier of the our in participants. press the are GigaCloud our And either in ensuring our showcasing our consecutive release, purely close profitability success mentioned we that acquisition are results we quarter earning marks mind as the these As our business flexibility potential this incredible unwavering commitment marketplace period. retailing fulfilled not for and third

turn acquisition our enhancement the House two and supply the As brick-and-mortar Schrock, of Iman provide [Technical call for would diversity scale, detailed quarter product, like of and new speak package. And Iman? GigaCloud with more that, with launch to a our President shortly, will of Iman chain of acquisitions. additional Noble Difficulty] over the IQ GIGA I to our to will on market discussion

Iman Schrock

Thank everyone, again, us. thanks Larry, for you, and joining

Our this to earning of appeal, of commitment fulfilled the and retailing potential big supply our by itself A the for the model. quarter the team. entire results speaks testament execution GigaCloud

revolutionize a this We our on cross-border in of innovative are continue and platform, we products to and the big landscape bulky through way continued technology seeing transacting momentum front.

Wondersign Before first Noble operational of acquisitions, quarter, through we our detail. this for two House our in highlights and some go to more discuss I wanted

leading on a start House Noble Wonder is a and with Noble over furniture in (sic) million. House, Let's process, bankruptcy XXX outdoor transaction. Noble [ ] where we acquired acquired $XX a closed both with SKUs indoor substantially which X,XXX purchase assets across all price through covering House House distributor this October XX, We furniture. for of BXB categories

operations enhance XP coverage X.X offerings as and into in our ensure deliveries warehouse GigaCloud In to our shipping accurate and serving and new is sellers high-quality BXB addition expand existing million synergistic provide strengthen cost our and to we new expands origin a the and essential volume. marketplace. Further, feet the both as our for diversity, allowing which acquisition of attracting GigaCloud square infrastructure expansion an our partners Noble providing will network savings in Canada as fulfillment believe to buyers sourcing and by to world, and to India. expand will additional network House well warehouses and timely, of diversity from channel suppliers around third-party significantly supply significant newness XP This supplier chain product extensive sourcing and the with

the as relationships House Lowe's, Overstock of ability Wayfair, sellers known Target, our retailers, customers. their greatly formerly Beyond expand target Amazon, provides including reach to they with top Noble and Finally, Walmart,

on, processed Moving enhance with affiliates the digital our retail in pivotal user-oriented mirroring fulfillment physical retail intent to will in and footprint of landscape. the to is total reach streamlined is in Together, IQ million into BXB marketplace volume process momentum new ways purchases platform, an GIGA GigaCloud November a set to Wondersign end our of shipping avant-garde acquiring positioning us of These aim acquisition confident The transactional House and global drop within marketplace broaden XX, dive further ultimately catalog Noble and electronic and established diverse the in and store sector. will growth. of concluded operation. the a transact, organic the GigaCloud's of order $XX via GigaCloud's product Wondersign our on and customers is GIGA GigaCloud experience partners, strategic launch diverse signage GigaCloud's we to intuitive consumers to both accelerate behind and are network transact is the deeper our for the IQ the select as X,XXX retail that connect innovator beyond stores. These to transition offering and integrations package through retail more scale, a explore, marketplace package, journey BXB the facilitating Tampa, Wondersign clientele. of This consideration for with enhancing acquisition efficiency over the cloud-powered leader Florida-based offerings to Wondersign the management be into designed leveraging locations our cash. we'd outlets like integration offer Wondersign, a physical

operational walk organic let's highlights some quarter. the Now of the of through

Marketplace XX% GMV approximately the GigaCloud grew to $XXX.X year-over-year million in Our TTM period.

XP increase for quarter. an XXX saw side, On the approximate the at year-over-year seller active the ended XX% sellers, which in platform

of model. last expansion in of scale part a platform we and see expansion retailing I achieving XP crucial the our mentioned supplier our ecosystem our fulfilled As quarter, as

sellers. amount of number time Noble vetting While to and the to we see we continue platform, into to also House our quickly develop a third-party acquisition a significant and onboarding of add sellers resources expect to of significant

XP the TTM for see in million accounted to GMV which Marketplace GMV of the XX% total same period. our our period, to the continue in year-over-year seller quarter, XX% accelerated $XXX.X growth in increasing Marketplace We third

part XP ultimately, growth see our rate while we important be our remains business, and and mentioned will of very of our momentum we marketplace. continuing in on drive to productive of the integral strategy, GMV an As our to approach scaling organic larger the growth organic that believe a positive XP business calls, prior XP our our I more

months year from period Moving prior the active $XXX,XXX. significant a an spend active side. buyer XX, XX% the on X,XXX per year increased with buyers XXXX, saw approximately buyer XX to increase average September of the in to making from approximately to period, ended prior the XX.X% jump We

by growth -- We significant the high-quality, see that the of seek to platform, that spend. in to buyers continue number buyer average high-volume as in to demonstrated seek the we increase the to attract

and and the Wondersign. the fourth moves acquisitions, additional We of long the term. GigaCloud to quarter, in markets provided organic of we important as platform position near the believe for a in And will transformative which continue success world. that for believe this around invest GigaCloud. quarter runway scale one and can achieved be penetrate we company additional to saw the have subsequently GigaCloud it's long is a market still share Clearly, We needed our the reach and organic and results growth closed Noble a these there that new in two House blockbuster was

spend from profit, in as approximately TTM posted average that, we net seeing $XX.X period. detailed more of Lau, comparable call a we TTM of of XX.X% of active the mentioned, overview Larry our growth third GMV consecutive September Thank active I more period, quarter resulting year-to-date TTM. And over are to income quarter buyers of a record total the in promising increase financials. all in third KPIs comparable XX% of per XX. like turn comparable XX% As with the CFO, of you. million buyer would Organically, Approximately to across David for rise an over with

Kwok Hei Lau

Thanks, Iman.

discuss and our important I'd details, like financials to you corporate we the some share in with quarter. initiatives Before

we repurchase may that repurchase $XX year, pleased XXXX, shares for have of ordinary shares First, purchased the of to shares purchase $XX.X open a June remaining this of million XXX,XXX our on in market total the A continue with authorization, share level for when under have a in our the on of we which Class company launch price warrants. share period. I'm repurchase had XX approximately program, A which share to ordinary share million XX, XX-month Class of very our September repurchase up we'll through program share approximately look a Board approximately announced its Directors program $X.X million, to to valuation authorized repurchase

obligations issuers. XX-Ks to to continue engagement to track confidence XX-Qs, is we transition to and you year, such on to company. our of will FPI other will move the can will funneling from private build obligation we January GigaCloud and report when and S disclosure have to same the story, will GigaCloud this as reporting subject disclosure cadence the reporting as XXXX, filing domestic shareholder same believe filer be and or same status, transparency. which we pleased issuer S an and this We're the Starting filer to -- we're be S X, on expect next that in foreign on as Second, where filer a focused continue on transition

through more I'd our numbers to Now third walk you quarter in like detail.

had all organic that reiterate the in as GigaCloud I'd period closed September XXXX. discussing As acquisitions the Larry numbers XX, be like neither to mentioned mentioned, I'll are ending numbers

These e-commerce a in revenue XX.X% Our XX.X% revenue of $XX.X ended Breaking gain correspond XP $XXX.X Product quarter, for were service GMV, $XX.X a and increase off-platform total third was increase to million, basis. XP million. with revenues which million. Product year-over-year market saw XX% GigaCloud from the the to to third XX.X% year-over-year at XX.X% an quarter a increases million saw which a XX.X% increase saw this TTM $XX.X year-over-year on from total for year-over-year increase GigaCloud million. down from year-over-year quarter revenue $XXX.X quarter-over-quarter. third the

testament of Our revenue adoption of the is fulfilled a retail growth supplier business model. our and continued

the of in period. our the XXX.X% continued from XX.X% which These shipping of highs in an to to increase in versus first profit a was margin increases rates in of gross of gross all-time of normalization result largely margin resulted ocean on months for year were was return third $XX.X XX.X% quarter XXXX. million, the prior Moving the X the gross year-over-year

to to were marketing XX.X% which X% XXXX of costs year-over-year $XX.X third decreased technological admin incurred General expense an and expenses certain third-party $X.X were costs in for from marketing down increasing to in to million expenses. expenses this increase in decrease was upgrades services million, of to year-over-year growth. GigaCloud These quarter and that development Our quarter, were none quarter selling was a third quarter third marketplace versus and support increases increased by share-based to Research due the offset in and operating Working the million. staff primarily the and the relating personnel, year-over-year third decrease of a we expenses, due $XX.X compensation website which million. company's platform on e-commerce for G&A the million. $X.X decrease XX.X% $XX XXXX. The the system-wide were fee in total to selling and

line, million income ago. On which a our year-over-year This share increase was third an year basic the in from $XX.X net was share the per quarter $X.XX diluted shares X,XXX.X% of resulted bottom earnings for of $X.XX $X.X approximately and million. versus of

Our share-based $X.X third the $XXX,XXX year the in quarter prior. versus was comp in expense million

XXXX. our SBC IPO we to mentioned I million our in in onetime $X.X a incurred large previous charge As quarter related call, third of

SBC of Our $XX.X the such not in slow $XX.X million an for will adjusted XXXX forward, quarter be XXX.X% that of charge million. SBC expect increase spates year-over-year with This in do quarter and more see EBITDA in charges to future. resulted of a the third evenly going magnitude an we from

million to our of quarter cash $XXX XX, from an increase XXXX. the balance -- quarter the the XX, and in ended quarter sorry, increase ended Moving the $XX.X third a We June quarter XXXX, for December from with on of million $XX.X ended net third sheet. approximately million

these cash approximately $XX balance mentioned, House with approximately to off million Larry Both and we quarter, were of Wondersign our subsequent and exclusively funded acquisitions million. Iman for $XX Noble acquired sheet. the As for

Finally, want briefly financial I mention to our outlook.

million, all quarter, we're represent in like period joining. total to the year at line the fourth now XX% approximately questions. the I'd of the to midpoint. Thank For $XXX the expecting operator revenues will you to prior open gain million for With the range an which that, ask $XXX for over

Operator

from come questions from the And Koranda Instructions] [Operator Matt line of the ROTH.

Matt Koranda

if to fourth outlook you unpack the in could more provided Just wanted detail. bit quarter that see revenue you a

much organic to Maybe the you outlook So Wondersign And also fourth for speak your and revenue much to the outlook is House that's products million $XXX if acquisition? how million business? is coming contributing from how anything the services of to Noble could if $XXX quarter? and that the

Kwok Hei Lau

Matt, it's here. David

plan the fourth November we our anticipate don't X, million House guidance contributed going forward, until $XX we didn't Noble House. for Noble So acquisition of combined press business. we our close trying will integrate we to the our revenue by revenue release. quarter, provide But we're single two The revenue in be going and to approximately it Noble separate is look guidance at a to as House provide we're number way

guidance the to increasingly financial quarter. it's Wondersign, going Noble overall size for the to the So just what given to relative going House kind our profile, us And of to is be. didn't we any revenue then revenue of be for guidance account in single difficult out on Wondersign

Matt Koranda

a quarter for core back the $XXX outlook million. outlook of about And that could and there? you to the profitability So first? revenue Noble of what's come growth implies the wanted organic driving in Maybe and expectations then I I kind speak fourth the -- the to business guess to talk

Kwok Hei Lau

Sure.

you for our This appreciate platform. in resellers, through retailing see profitability. a buyers, environment, costs. more sellers seen you've operating in think suppliers' more And signed help to model. challenging particularly their asset-light is and microeconomic are starting fashion, fulfilled and we directly retailers supplier and streamline they're as quarter, more or on them third enhance and can quarter, able bring are operate Users see, which in up to onboarded our I this users understand the value you

participants. And count, a the key this situation SKU which our marketplace a for is for driver our continue then product XP which win-win we growth So of our to increase all business, business, business. diversify is for product is our and

see our you users, basis. volume an our to you recruit coming And logistics focus you more continue edge more competitive. on our once in gives to you to sellers mix start to and offering to a We onboard dedicate start it in, overall global more start pricing see

of will what you start and in quarter traction, kind once the feed the momentum So X continue. And and seeing growth will the that's other we're beyond. fourth and volume into expecting each pieces

Matt Koranda

what a guess that trying Okay. for at I'm like growth get fourth XX% I of to mark it's north guiding you're to year-over-year the is quarter.

sides. expect? outlook, is driving of It which probably accelerating about the to which component service the the of revenue So Any think get revenue out sounds just sort has trying like to breaking that. last business over been both that couple way to versus you'd product the of quarters

Kwok Hei Lau

level. what We XX% don't the now, split is guidance that XP. XX% is really provide to our I say right so XP, could But --

that on. consolidating deal, So think I will without Noble House split the to carry continue

kind of that you hope I in answers questions mind. the So that have

Matt Koranda

maybe XP Noble would you sort for could should just House then And thinking fourth helpful. we Noble, also into on making then fall directionally as of side I That's your likely we're sure to quarter, And just margins, guess, of business, the this Yes. would plug about the correctly, on about gross margins that about commentary I the like assume. product will House that of in revenue think to profitability how be system? a into you operating Noble it thinking general sort business how but of speak

Kwok Hei Lau

Yes.

to going early now, profitability hard and talk what right it's about the look think is overall I on to pretty really like.

initiatives. attention synergies now and management business. cost-cutting kind trying I all opportunities revenue think realize team energy the of the expansion to is We're of right drawing through integrate our to and the

the to synergies share priority our levers and couple effort specific to don't We you of one number our We're can know term Larry the to more if I medium Iman and trying long quarters. integrate potential have a profitability. in or next recognize anything of utmost that in Matt. pull with increase all the number have to if we

Iman Schrock

best And to putting synergies No, community is that investor effort things acquisition in think the good we're our redundancies. goal a that I and turn And team. to quarters create out our the was response. to around it to and for update as best this And obviously, next take GigaCloud the try acquisition to behind progress. a within to we'll is substantial to do few

Matt Koranda

Noble, few trying it's we model from the alluding and Okay. we profitability the then we XXXX. to plug to for But your assume dilutive Should quarters, if EBITDA you're get of margins it model. as I'm that into initial to within sort synergies

folks that into Just guys kind -- of the How is maybe just you just help model, it, that? that relatively should however directionally, want model to you we in have which already the profitable. core do do plug qualitatively,

Iman Schrock

was, Noble behind the I our but House be virtue where impact best of being dilutive, of said, Well, initial it. course, is it like by effort the would

We a we're the operation to members profitability of to And community lot like the have the inform quarters things possible. a community to you're to bring ahead. working -- going lot of as to really, our management effort try soon get really best going as quarter-by-quarter. few team within try the bandwidth, And turn investor around to said, hard to next I

Matt Koranda

Okay. me. for Last one

impact we we think But you beyond? key been the sellers growing about buyers could fourth particularly speak They've could those for metrics anticipate But very will the in think the Noble sellers, it's in what those metrics you we maybe report quarters. basis. just than couple active of speak to marketplace should Just and a more in metrics to nicely curious go-forward sort last should impact how maybe that how how acquisition. should going on obviously how probably about if quarter Noble you buyers of to about and your does

Iman Schrock

BXB they includes segment indoor U.S., decor home basically reputable distributor very collection of Noble across and mean in full accessories. and is furnishings extensive an and that I the home have a furniture Sure. outdoor House the

GigaCloud the will optimize the benefit our of and and standpoint, making distribution from process, robust perfect storage candidate the it acquisition because sales logistics our strategy. business Marketplace our from help can network product, and and So streamline the network

Additionally, into House massive access will we for any us to acquisition few us, big only also to a sellers, revenue market going be it as for extensive Noble sourcing, channel, to like and new base with not in to foothold enter a on us Noble markets well. Amazon has to that, is attracting commerce is give presence solid buyers emphasis need us expand House a which and obviously, helps Canadian of and they give India opportunity sales furniture going Target. our sellers. our market sellers provide opportunities for supplier further the as forward scale, a new which the And attract a in like that us but And have for that list BXB

Operator

come the Rommel Aegis Capital. the questions Dionisio line We from of from

Rommel Dionisio

of I may the wonder 'XX touched you the bit the the expand House you -- customers, synergies on U.S. and with of but it your product taking and that guys opportunities in cross-selling you could now, theirs some about and there Noble to theme that little to line bringing a just how just think you have Canada beyond?

Iman Schrock

Rommel.

load So been performance basically, the X business includes buyers. use a of a numbers you that dynamic for model record all a and the use between will interaction of successful with Noble on that synergies I retailing when and operation marketplace. the available trying synergies it's the lot is the powerful the in trying as there with of to us, of fulfilled logistics, by far that power be sellers SKU quarters to has are as this around provided That to to profitability regards we discussed diversity supplier it ways back. We're that, as comes and marketplace, are guys above the to But to like distribution, those House, default, balancing. the see turn you the

that's achieved buyers that, the more scale needed you So that The Noble that talking have for more the market through of as to which to the here. marketplace, pretty we chain, chance acquisition. Further something will basically means partners scale had, to the gain as Canadian we're is partners number their give House the more they they into by that giving them Noble that share, additional diversity us manufacturing the retail allows it and newness the on tap choices while two I of to us you giving also had, the about House new and far sourcing and supply BXB mentioned, markets India and the commerce. then substantial also that attract

Kwok Hei Lau

of the are. Yes. complementary Iman, a if off in quality SKUs from think the can segment the a superb. on right We're slightly bat. X,XXX is value adding are -- we They product I side, product I we that more House add, lot can acquisition. Noble there's Their extract around more premium than a

their designs, of obviously kind there's synergies a by XP XP product from can extract QC products. from that then own we process, lot can their learning reflect So that and our we business, their just of know-how, our

and the So just on Iman is that all. top you make sure then -- I of to delivered synergies all had and with that shared the being product want alluded. value

Rommel Dionisio

acquisitions the on quarter. the Congratulations Great. in

Kwok Hei Lau

You're Thank very much. you welcome.

Operator

The question's KFN. from Jay ] [ line of from Jamie the come

Unknown Analyst

can Management, hear me you right?

Kwok Hei Lau

Yes.

Iman Schrock

Yes.

Unknown Analyst

on two the I questions. results. Congrats strong Okay. got

first, still deal. Noble So House about

action company system? give into on it remark, Although you this forward, integrate talked our in what's color management's you us like existing to this deal, like plan more can about looking the

Kwok Hei Lau

to take want one? you that Iman,

Iman Schrock

restructure DXC that manufacturing, Sure. redundancies function business same turn coming both for the in quarter-by-quarter things that combined having a short-term the track be updates cost the being to the staffing Obviously, quarters. the around investor and identify on legacy on had retail Obviously, and continue progress in in to profitability few on strategic ] in after these time, the direction, going executing community and acted particular the core bringing quarters, which strongly the swiftly we're options like business. included we effects drive strategic to for we're synergies and At on to always component to that and we'll explore plan, acquisition, within are of to basis. dabbled headed House long-term focus the looking next midst [ make Noble right I we've actions. in, growth we're segments entities. to more on believe our the But we're to the And of said, still the and with right the

Unknown Analyst

you promotions event? one color Okay. any Black second you this do can is, did the on some And share sales year? the Friday this on And

Iman Schrock

Well, gone obviously, very general I haven't metric far partners, numbers with even Black was you, can in was e-commerce that the in that But particular. into we that I by for a ahead. anybody the strong online but news saw share Friday not broken down

Kwok Hei Lau

And November, bit guidance maybe what question. how and QX color if our I when the can we'll add performed more that account take Obviously, we we're like, sales. we budgeting obviously Friday Black projecting around a in little what which think into is looks of

I'd our like to guidance. you at of look So steer kind to

I good think think to look pretty that's quarter of we is a probably like. where going our indication

Operator

We have you I to no for further questions remarks. at will closing this hand time. back now

Kwok Hei Lau

for Great. Well, all joining. you thank

to as e-mail questions, our to any an feel to as and IR e-mail to We'll call, And in look we you to we next earnings have free talking forward everybody. to you respond our If you soon address. write please happy holidays can.

Operator

gentlemen, participating. call. today's and you for concludes Ladies Thank conference this

disconnect now lines. may your You

Iman Schrock

holidays, everybody. you, Thank and happy

Unknown Executive

you. Thank

GigaCloud Technology (GCT) 5 Dec 232023 Q3 Earnings call transcript