GigaCloud Technology Inc (GCT)

Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the 2025 Form 10-K and the unaudited condensed consolidated financial statements and related notes thereto included in this quarterly report on Form 10-Q.

In addition to historical information, this report contains forward-looking statements that involve risks and uncertainties which may cause our actual results to differ materially from plans and results discussed in forward-looking statements or those implied in historical results and trends. We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A. “Risk Factors” and “Forward-Looking Statements” included in the 2025 Form 10-K and this quarterly report on Form 10-Q.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

Overview

We are a pioneer of global end-to-end B2B technology solutions for large parcel merchandise. We generate revenues primarily through three revenue streams:

•GigaCloud 3P: generates service revenues, including revenues from platform commission, ocean transportation service, drayage service, warehousing service, packaging service, last-mile delivery service and others, by facilitating transactions between sellers and buyers in our GigaCloud Marketplace.

•GigaCloud 1P: generates product revenues through the sale of our inventory in our GigaCloud Marketplace.

•Off-platform: generates product revenues through the sale of our inventory to and through third-party ecommerce websites and to brick-and-mortar retailers.

GMV from GigaCloud 3P and GigaCloud 1P together make up our GigaCloud Marketplace GMV, and GMV from off-platform and GigaCloud Marketplace GMV together make up our total GMV across the platforms. These three revenue streams complement each other to improve our value proposition to sellers and buyers in our GigaCloud Marketplace.

Key Financial and Operating Metrics

We monitor the following key financial and operating metrics to evaluate the growth of our GigaCloud Marketplace, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.

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The following tables set forth our key financial and operating metrics for the periods indicated:

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(1)    See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation——Non-GAAP Financial Measures” for information regarding our use of Adjusted EBITDA and Adjusted EPS – diluted and a reconciliation of net income to Adjusted EBITDA and net income per ordinary share – diluted to Adjusted EPS – diluted.

GigaCloud Marketplace GMV

The growth in GigaCloud Marketplace GMV, including GMV from both GigaCloud 3P and GigaCloud 1P, reflects our ability to attract and retain sellers and buyers in the GigaCloud Marketplace. The revenues we generate in our marketplace are highly correlated to the amount of GMV transacted in the GigaCloud Marketplace.

GigaCloud Marketplace GMV increased to $1,664.6 million in the 12 months ended March 31, 2026 from $1,416.7 million in the 12 months ended March 31, 2025, representing a growth of 17.5% period-over-period, primarily due to the continued increase in the numbers of sellers and buyers transacting in our marketplace as our marketplace continued to gain scale and market position.

Active 3P Sellers

The number of active 3P sellers in the GigaCloud Marketplace increased to 1,377 in the 12 months ended March 31, 2026 from 1,154 in the 12 months ended March 31, 2025, representing an increase of 19.3% period-over-period. We view active 3P sellers as a key driver of the product catalog in our marketplace, which helps attract and retain buyers. The GigaCloud Marketplace offers SKUs across furniture, home appliances, fitness equipment and other large parcel categories from our active 3P sellers. The number of SKUs was over 50,000 as of March 31, 2026. We expect to grow the number of active 3P sellers through geographic expansion, suppliers outreach, marketing initiatives, referrals, and word-of-mouth. We also leverage our 1P inventory sales to establish new markets, reducing the risk in geographic expansion for new sellers, and increasing the appeal for new sellers to join our marketplace.

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3P Seller GigaCloud Marketplace GMV

3P Seller GigaCloud Marketplace GMV represents the GMV our 3P Sellers transact in the GigaCloud Marketplace. 3P Seller GigaCloud Marketplace GMV increased to $908.6 million in the 12 months ended March 31, 2026 from $734.3 million in the 12 months ended March 31, 2025, representing an increase of 23.7% period-over-period as our marketplace continues to gain scale and market position. 3P Seller GigaCloud Marketplace GMV represented 54.6% and 51.8% of total GigaCloud Marketplace GMV in the 12 months ended March 31, 2026 and March 31, 2025, respectively.

Active Buyers

The number of active buyers in the GigaCloud Marketplace increased to 12,473 in the 12 months ended March 31, 2026 from 9,966 in the 12 months ended March 31, 2025, representing an increase of 25.2% period-over-period as our marketplace continues to gain scale and market position. We view the number of active buyers as a key driver of our GigaCloud Marketplace GMV and revenue growth, and a key indicator of our ability to attract and engage buyers in our marketplace. We plan to expand our active buyers by enhancing our marketplace product offerings, and leveraging referrals from existing users.

Spend Per Active Buyer

The spend per active buyer in our GigaCloud Marketplace decreased to $133,457 in the 12 months ended March 31, 2026 from $142,156 in the 12 months ended March 31, 2025, representing a decrease of 6.1% period-over-period. Spend per active buyer is a key driver of GMV and revenue for our GigaCloud Marketplace. We generally grow spend per active buyer by expanding our product offerings, increasing buyers’ purchase frequency and raising the average price per purchase. The decrease in spend per active buyer in the 12 months ended March 31, 2026 was primarily due to new buyers onboarded during the period generally require longer period of time to increase their spending in our GigaCloud Marketplace.

Key Factors Affecting Our Results of Operations

Key factors affecting our results of operations include the following:

Our Ability to Attract and Retain Sellers

Sellers in our marketplace are typically manufacturers operating in Asia who are able to use our supply chain capabilities to establish overseas sales channels without having to invest in their own logistics or fulfillment centers overseas. We are focused on growing and retaining the number of sellers who choose to list their large parcel merchandise in our marketplace and utilize our fulfillment and logistics network for the shipping and handling of their products.

Our number of active 3P sellers was 1,377 in the 12 months ended March 31, 2026, compared to 1,154 in the 12 months ended March 31, 2025, representing an increase of 19.3% compared to the previous period. We believe this increasing trend will continue because of the growing recognition of our marketplace, our seller-friendly comprehensive logistics network enabling hassle-free delivery of large parcel merchandise and our expansion into new markets.

Using our marketplace, sellers are able to quickly gain access to key global markets in which we operate, including the U.S., the U.K., Germany, Japan and Canada. We provide a flat rate program for shipping and handling, and sellers are able to utilize the space in our fulfillment centers. We also create sales analytics which provide valuable information as sellers determine which products to bring to market.

We attract new sellers predominantly through organic channels such as geographic expansion, suppliers outreach, marketing initiatives, referrals and word-of-mouth. In the past, we have completed acquisitions that supplemented our supply chain, fulfillment and logistics capabilities, which attracted more sellers and buyers onto our GigaCloud Marketplace after these strategic acquisitions. In January 2026, we completed the acquisition of New Classic. We may consider future acquisitions to increase the number of sellers and buyers. We also plan to augment organic customer acquisition by adding additional sales and marketing employees to enhance seller and buyer growth.

Our Ability to Attract and Retain Buyers

Buyers in our marketplace are typically resellers operating in the U.S., Europe and Japan who procure large parcel merchandise to resell to other retailers or to end customers. Our marketplace is attractive to buyers because we minimize inventory risk from our buyers’ business operations. As of March 31, 2026, the number of SKUs from GigaCloud 1P was over 38,000. Combined with the SKUs offered by active 3P sellers, buyers had access to more than 80,000 SKUs in total. Our buyers can browse products in our marketplace and list products on their preferred ecommerce websites such as Wayfair, Amazon, Home Depot, Walmart and Overstock, or their own store prior to procuring and storing the product in a warehouse or shop. Once a sale to the end customer takes place, buyers can order the product in our marketplace and we will handle the fulfillment directly to the end customer.

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In the 12 months ended March 31, 2026, we had 12,473 active buyers in our marketplace with an average $133,457 spend per active buyer, representing a 25.2% increase in active buyers and a 6.1% decrease in spend per active buyer compared to the previous period, mirroring the macroeconomic challenges faced by retailers.

Recent and Future Acquisitions

In addition to organic growth, we have grown through acquisitions that have deepened and expanded our presence in current markets and facilitated entry into attractive new markets.

In the past, we have completed strategic acquisitions to broaden our product offerings, supplement our supply chain, fulfillment and logistics capabilities. In January 2026, we completed the acquisition of New Classic. We may consider future acquisitions of assets, companies, technologies or businesses that are complement

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Item 7.         Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with the consolidated financial statements and related notes thereto included in this annual report on Form 10-K.

In addition to historical information, this report contains forward-looking statements that involve risks and uncertainties which may cause our actual results to differ materially from plans and results discussed in forward-looking statements. We encourage you to review the risks and uncertainties discussed in the sections entitled Item 1A. “Risk Factors” and “Forward-Looking Statements” included at the beginning of this annual report. The risks and uncertainties can cause actual results to differ significantly from those forecasted in forward-looking statements or implied in historical results and trends.

We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the SEC, to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.

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Overview

We are a pioneer of global end-to-end B2B ecommerce solutions for large parcel merchandise. We generate revenues primarily through three revenue streams:

•GigaCloud 3P: generates service revenues, including revenues from platform commission, ocean transportation service, drayage service, warehousing service, packaging service, last-mile delivery service and others, by facilitating transactions between sellers and buyers in our GigaCloud Marketplace.

•GigaCloud 1P: generates product revenues through the sale of our inventory in our GigaCloud Marketplace.

•Off-platform ecommerce: generates product revenues through the sale of our inventory to and through third-party ecommerce websites.

GMV from GigaCloud 3P and GigaCloud 1P together make up our GigaCloud Marketplace GMV, and GMV from off-platform ecommerce and GigaCloud Marketplace GMV together make up our total GMV across the platforms. These three revenue streams complement each other to improve our value proposition to sellers and buyers in our GigaCloud Marketplace.

Key Financial and Operating Metrics

We monitor the following key financial and operating metrics to evaluate the growth of our GigaCloud Marketplace, measure our performance, identify trends affecting our business, formulate business plans and make strategic decisions.

The following tables set forth our key financial and operating metrics for the periods indicated:

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(1)     See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation——Non-GAAP Financial Measures” for information regarding our use of Adjusted EBITDA and Adjusted EPS – diluted and a reconciliation of net income to Adjusted EBITDA and net income per ordinary share – diluted to Adjusted EPS – diluted.

Below is a summary of our key financial and operating metrics for the periods indicated:

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GigaCloud Marketplace GMV

The growth in GigaCloud Marketplace GMV, including GMV from both GigaCloud 3P and GigaCloud 1P, reflects our ability to attract and retain sellers and buyers in the GigaCloud Marketplace. The revenues we generate in our marketplace are highly correlated to the amount of GMV transacted in the GigaCloud Marketplace.

GigaCloud Marketplace GMV increased to $1,576.8 million in 2025 from $1,341.4 million in 2024 and $794.4 million in 2023, representing a year-over-year growth of 17.5% and 68.8%, respectively, primarily due to the continued increase in the numbers of sellers and buyers transacting in our marketplace as our marketplace continues to gain scale and market position. In 2025, furniture products accounted for more than 78% of GigaCloud Marketplace GMV, garden and outdoor furniture products accounted for approximately 14% of GigaCloud Marketplace GMV, and various other products including bath and faucets, luggage, pet products and others accounted for approximately 8% of GigaCloud Marketplace GMV. Our GigaCloud Marketplace GMV continued to grow since inception, as shown below:

Active 3P Sellers

The number of active 3P sellers in the GigaCloud Marketplace increased to 1,299 in 2025 from 1,111 in 2024, which increased from 815 in 2023. We view active 3P sellers as a key driver of the product catalog in our marketplace, which helps attract and retain buyers. The GigaCloud Marketplace offers SKUs across furniture, home appliances, fitness equipment and other large parcel categories from our active 3P sellers. The number of 3P SKUs was over 40,000 as of December 31, 2025. We expect to grow the number of active 3P sellers through geographic expansion, suppliers outreach, marketing initiatives, referrals and word-of-mouth. We also leverage our 1P inventory sales to establish new markets, reducing the risk in geographic expansion for new sellers, and increasing the appeal for new sellers to join our marketplace.

The chart below displays the yearly GigaCloud Marketplace GMV of our 3P Sellers in our GigaCloud Marketplace from inception in 2019 to 2025. Each cohort represents the group of sellers who first sold products in our GigaCloud Marketplace in that particular year. Active 3P Sellers are the total number of sellers who had sold at least one item in our GigaCloud Marketplace in the last 12 months. The increasing trend of each cohort has demonstrated attractive and consistent growth in both number of sellers and GigaCloud Marketplace GMV, as shown below:

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3P Seller GigaCloud Marketplace GMV

3P Seller GigaCloud Marketplace GMV represents the GMV our 3P Sellers transact in the GigaCloud Marketplace. 3P Seller GigaCloud Marketplace GMV was $851.2 million in 2025, $693.9 million in 2024 and $426.3 million in 2023, representing a year-over-year growth of 22.7% from 2024 and 62.8% from 2023, respectively. 3P Seller GigaCloud Marketplace GMV represented 54.0%, 51.7% and 53.7% of total GigaCloud Marketplace GMV in 2025, 2024 and 2023, respectively.

Active Buyers

The number of active buyers in the GigaCloud Marketplace was 12,089 active buyers in 2025, 9,306 in 2024 and 5,010 in 2023, representing a year-over-year growth of 29.9% and 85.7%, respectively. We view the number of active buyers as a key driver of GMV and revenue for our GigaCloud Marketplace. We plan to expand our active buyers by enhancing our marketplace product offerings, and leveraging referrals from existing users.

The chart below displays the yearly GigaCloud Marketplace GMV of our buyers in our GigaCloud Marketplace from inception in 2019 to 2025. Each cohort represents the group of buyers who first purchased products in our GigaCloud Marketplace in that particular year. Active Buyers are the total number of buyers who had made at least one purchase in our GigaCloud Marketplace in the last 12 months. Our number of buyers and buyer GMV have grown consistently since inception, as shown below:

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Spend Per Active Buyer

The spend per active buyer in our GigaCloud Marketplace were $130,431 in 2025, $144,142 in 2024 and $158,569 in 2023, representing a year-over-year decrease of 9.5% in 2025 and a decrease of 9.1% in 2024, respectively. Spend per active buyer is a key driver of GMV and revenue for our GigaCloud Marketplace. We generally grow our spend per active buyer by expanding our product offerings, increasing buyers’ purchase frequency and raising the average price per purchase. The decrease in spend per active buyer in 2025 reflected the macroeconomic challenges faced by retailers.

Key Factors Affecting Our Results of Operations

Key factors affecting our results of operations include the following:

Our Ability to Attract and Retain Sellers

Sellers in our marketplace are typically manufacturers based in Asia who are able to use our supply chain capabilities to establish overseas sales channels without having to invest in their own logistics or fulfillment centers overseas. We are focused on growing and retaining the number of sellers who choose to list their large parcel merchandise in our marketplace and utilize our logistics network for the shipping and handling of their products.

Our number of active 3P sellers was 1,299 in 2025, compared to 1,111 in 2024, representing an increase of 16.9% from 2024. We believe this increasing trend will continue because of the growing recognition of our marketplace, our seller-friendly comprehensive logistics network enabling hassle-free delivery of large parcel merchandise and our expansion into new markets.

Using our marketplace, sellers are able to quickly gain access to key global markets in which we operate, including the U.S., Germany, Japan, the U.K. and Canada. We provide a flat rate program for shipping and handling, and sellers are able to utilize our warehouse space. We also create sales analytics which provide valuable information as sellers determine which products to bring to market.

We attract new sellers predominantly through organic channels such as geographic expansion, suppliers outreach, marketing initiatives, referrals and word-of-mouth. In the past, we have completed acquisitions that supplemented our supply chain, fulfillment and logistics capabilities, which attracted more sellers and buyers into our GigaCloud Marketplace. We may consider additional acquisitions to further increase the number of sellers and buyers. We also plan to augment organic customer acquisition by adding additional sales and marketing employees to enhance seller and buyer growth.

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Our Ability to Attract and Retain Buyers

Buyers in our marketplace are typically resellers operating in the U.S., Europe and Japan who procure large parcel merchandise to resell to other retailers or to end customers. Our marketplace is attractive to buyers because we minimize inventory risk from our buyers’ business operations. As of December 31, 2025, the number of SKUs from GigaCloud 1P was over 30,000. Combined with the SKUs offered by active 3P sellers, buyers had access to more than 70,000 SKUs in total. Our buyers can browse products in our marketplace and list products on their preferred ecommerce websites such as Wayfair, Amazon, Home Depot, Walmart and Overstock, or their own store prior to procuring and storing the products in a warehouse or shop. Once a sale to the end customer takes place, buyers can order the product in our marketplace and we will handle the fulfillment directly to the end customer.

In 2025, we had 12,089 active buyers in our marketplace with an average $130,431 spend per active buyer, representing a 29.9% increase in active buyers and a 9.5% decrease in spend per active buyer compared to the previous period, mirroring the macroeconomic challenges faced by retailers.

Recent and Future Acquisitions

In addition to organic growth, we have grown through acquisitions that have deepened and expanded our presence in current markets and facilitated entry into attractive new markets.

In the past, we have completed strategic acquisitions to broaden our product offerings and supplement our supply chain, fulfillment and logistics capabilities. We may consider future acquisitions of assets, companies, technologies or businesses that are complementary to our business. The costs of identifying and consummating acquisitions may be significant. Acquisitions could result in the use of substantial amounts of cash, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business.

Following any new acquisition, our results of operations may be affected by the newly acquired businesses or operations, any liabilities incurred in connection with the acquisitions, and expenditures made to integrate the newly acquired businesses or operations. As a result of our acquisitions and the consolidation of our operating subsidiaries’ financial results into our consolidated financial results, the periods presented in our historical financial statements may not be comparable to one another and our future results of operations and financial results may also differ.

Overall Economic Trends

The overall economic environment and related changes in customer behavior have a significant impact on our business. Consumer spending, which is discretionary, ultimately impacts platform users’ spending on our products and services, and therefore positive economic conditions generally drive stronger business performance.

Recent global economic uncertainties, inflation, fluctuating interest rates, lower consumer confidence and demand for discretionary goods, and geopolitical events such as recent international trade disputes and the ongoing conflicts in Ukraine and in Israel and Gaza could impact the demand of products and freight rates. Furthermore, the recent enactment of heightened tariffs by the U.S. government, along with the unpredictability of tariff, shipping and freight rates, poses significant uncertainty to our business operations as many of our sellers, buyers and suppliers are impacted. Other macroeconomic factors that can affect customer spending patterns include employment rates, availability of customer credit, interest rates, tax rates and energy costs.

Our Ability to Broaden Service Offerings

Our results of operations are also affected by our ability to introduce new service offerings. We have a history of expanding our service offerings to enhance our customer experience and to increase revenues. We started our business by primarily selling our own self-procured large parcel merchandise directly to end customers. We expanded our service offerings and launched our GigaCloud Marketplace in 2019. The platform has since become a significant contributor to our overall revenues, accounting for 62.2%, 64.7% and 70.9% of our total revenues in 2025, 2024 and 2023, respectively. We continue to evaluate opportunities to launch additional services.

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Our Ability to Effectively Invest in our Infrastructure and Technology Platform

Our results of operations depend in part on our ability to invest in our infrastructure and technology platform to cost-effectively meet the demands of our anticipated growth. Our global fulfillment and logistics network is a key part of our infrastructure, which consists of fulfillment centers and other facilities that are strategically located, designed and equipped to efficiently manage inventory and to fulfill customers orders and other needs. As of December 31, 2025, our global logistics network included 35 fulfillment centers with an aggregate gross floor area of approximately 11.3 million square feet in five countries, and two other facilities with storage and showroom functions with an aggregate gross floor area of approximately 18,348 square feet in the U.S.. Additionally, we maintain partnerships with several major shipping, trucking and freight service providers to supply our transportation network and shipping requirements.

Our ability to improve our operational efficiency depends on our ability to invest in our technology infrastructure and platform, including our virtual warehousing solution and AI technology. We also invest in our research and development personnel for the design, development, and testing of our platform, and incur software development costs for internal-use software and our Group's websites. We successfully improved our warehouse management solutions over the past years.

Seasonality

Our business is subject to seasonality. We expect the last quarter of the year to be the most active because of the November and December holiday sales period. Our GigaCloud Marketplace GMV is usually the largest in the fourth quarter of a year. It is uncertain whether this is an indicator of industry trends going forward.

Key Components of Results of Operations

Revenues

We generate service revenues from our GigaCloud 3P business, and product revenues from our GigaCloud 1P, off-platform ecommerce businesses and others. Service revenues from GigaCloud 3P, including revenues from platform commission, ocean transportation service, drayage service, warehousing service, packaging service, last-mile delivery service and others are generated by facilitating transactions between sellers and buyers in our GigaCloud Marketplace. Product revenues from GigaCloud 1P are generated through the product sales of our inventory through our GigaCloud Marketplace, and product revenues from off-platform ecommerce are generated from product sales of our inventory to and through third-party ecommerce websites.

The following table sets forth a breakdown of our revenues, both in absolute amount and as a percentage of our total revenues, for the periods presented:

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Revenues reported are attributed to geographic areas based on locations of our fulfillment centers, except for platform commission revenues which are attributed to Hong Kong, where the server of GigaCloud Marketplace is located. Revenues by geography for the years ended December 31, 2025, 2024 and 2023 is as follows:

(1) Other regions mainly include the U.K., Japan, Canada and Hong Kong, with variations across different product/ service lines. No other individual region's revenues exceeded 10% of the Company’s total revenues for the years ended December 31, 2025, 2024 and 2023.

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Service Revenues—GigaCloud 3P

We derive service revenues primarily through the various 3P activities of sellers and buyers in the GigaCloud Marketplace, including revenues from platform commission, ocean transportation service, drayage service, warehousing service, packaging service, last-mile delivery service and others. When a seller and buyer enter into a transaction in the GigaCloud Marketplace, we generate revenues from platform services by earning a percentage commission depending on the transaction value. The standard commission ranges between 1% and 5%. Additionally, we charge a fulfillment fee for other freight services such as delivery of products via ocean transportation. We charge drayage service fees in connection with transportation of products from ports to warehouses at a flat fee. We charge the sellers storage fees based on the number of days and the size of the products that are stored in our fulfillment centers, and we charge buyers a flat fee for last-mile delivery services for delivery of products to end customers directly from our fulfillment centers, which varies by the weight and size of the products. We also charge packaging fees in connection with merchandise that we pack and ship.

From time to time in 2025, 2024 and 2023, when we had excess fulfillment capacity, we utilized such excess fulfillment capacity and our extensive logistics network to offer third-party logistics services to customers to help fulfill their large parcel transportation needs. As we continue to grow our GigaCloud Marketplace, we expect to dedicate our logistics capacity to customers using our marketplace and to products sold on our own marketplace, and will opportunistically provide third-party logistics services when there is excess capacity within our network.

Product Revenues—GigaCloud 1P

We derive product revenues from the sale of our own inventory in our marketplace. Our 1P business creates more products for buyers, gives us insights into seller needs, provides us with proprietary data and increases the velocity of sales in our marketplace.

Product Revenues—Off-platform Ecommerce

We derive product revenues primarily from the sales of our own inventory through two sales models, which are (i) product sales made to third-party ecommerce websites, or Product Sales to B, such as Wayfair, Amazon, Home Depot, Walmart and Overstock; and (ii) product sales to individual customers through third-party ecommerce websites, or Product Sales to C, such as Amazon, OTTO, Real and Target, where end customers can visit our online stores and purchase directly from us. Regarding Product Sales to B, as expenses charged by these websites are not in exchange for a distinct good or service, the payments to these websites are not recognized as expenses but are netted against revenues. With respect to Product Sales to C, expenses incurred for product sales made through these websites are recorded as selling and marketing expenses.

Cost of Revenues

Our cost of revenues primarily consists of cost of services and cost of products. The following table sets forth a breakdown of our cost of revenues, both in absolute amount and as a percentage of our total revenues, for the periods presented:

Cost of Services

Cost of services primarily consists of delivery costs, an allocated portion of fulfillment center rental expenses, and costs associated with the operation of the GigaCloud Marketplace.

Cost of Products

Cost of products primarily consists of the purchase price of merchandise, shipping and handling costs for self-owned merchandise, rental expenses for fulfillment centers excluding the portion allocated to cost of service revenue and abnormal capacity, packaging fees and personnel related costs. Shipping and handling costs primarily consist of those costs incurred during the delivery process, including the expenses attributable to shipment and handling activities, when we deliver a good to a customer.

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Gross Profit and Margin

The table below sets forth our gross profit and gross profit margin for each of the periods presented:

Operating Expenses

Our operating expenses consist of selling and marketing expenses, general and administrative expenses, research and development expenses and losses on disposal of property and equipment. The following table sets forth a breakdown of our operating expenses, both in absolute amount and as a percentage of our total revenues, for the periods presented:

Selling and Marketing Expenses

Our selling and marketing expenses primarily consist of staff cost which included share-based compensation, payroll and related expenses for personnel engaged in selling and marketing activities, platform service fees charged by third-party ecommerce websites arising from Product sales to C on Off-platform ecommerce channels, advertising expenses and traveling expenses. Advertising expenses include advertisements through various forms of media and marketing and promotional activities.

The following table sets forth a breakdown of our selling and marketing expenses, both in absolute amount and as a percentage of our total revenues, for the periods presented:

General and Administrative Expenses

Our general and administrative expenses primarily consist of staff cost which included share-based compensation, payroll and related costs for employees involved in general corporate functions, professional fees, rental and depreciation expenses associated with the use of facilities and equipment by these employees, rental expenses during the initial start-up period in our fulfillment centers and other abnormal capacity costs, property insurance, donations, provision for bad debt and other general corporate expenses.

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The following table sets forth a breakdown of our general and administrative expenses, both in absolute amount and as a percentage of our total revenues, for the periods presented:

Research and Development Expenses

Our research and development expenses primarily consist of IT- and platform-related personnel costs, including share-based compensation expense associated with our engineering, programming, data analytics, and product development personnel responsible for the design, development, and testing of our platform, rental and depreciation expenses associated with the use of facilities and equipment of research and development personnel, and information technology costs.

Losses on Disposal of Property and Equipment

Our losses on disposal of property and equipment primarily consist of the losses on the disposal of old and obsolete property and equipment.

Interest Expense

Our interest expense primarily consists of our financial lease interest expense for leased equipment used in our fulfillment centers and other facilities.

Interest Income

Our interest income primarily consists of interest income from bank deposits, wealth management products and short-term investments.

Foreign Currency Exchange Gains (Losses), Net

Our foreign exchange gains and losses represent the gains or losses due to appreciation or depreciation of the U.S. dollar against the Japanese Yen, the Euro, the Canadian dollar and the British Pound.

Others, Net

Our others, net primarily consists of credit card cash back and payments received from and paid for legal claims.

Income Tax Expense

Our income tax expense primarily consists of current tax expense, deferred tax expense and uncertain tax positions.

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Results of Operations

The following table sets forth a summary of our consolidated results of operations, both in absolute amount and as a percentage of our total revenues, for the periods presented. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of our future trends.

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Revenues

Our revenues, which primarily consist of service revenues generated from GigaCloud 3P and product revenues generated from GigaCloud 1P and off-platform ecommerce sales, increased by 11.1% to $1,289.9 million in 2025 from $1,161.0 million in 2024. This increase was primarily due to the increased market recognition and scale of our GigaCloud Marketplace, leading to increases in our GigaCloud Marketplace GMV, sales volume and number of sellers and buyers.

•Service Revenues from GigaCloud 3P. Our service revenues increased by 10.0% to $428.2 million in 2025 from $389.3 million in 2024. The increase was attributable to:

◦an increase in revenues from last mile delivery services by 25.2% to $245.0 million in 2025 from $195.6 million in 2024 as our GigaCloud Marketplace GMV and delivery volume continued to increase;

◦an increase in revenues from warehousing services by 26.4% to $58.3 million in 2025 from $46.2 million in 2024 as we handled more products as our GigaCloud Marketplace GMV continued to increase;

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◦an increase in revenues from packaging service by 14.7% to $34.4 million in 2025 from $30.0 million in 2024 as we handled more products as our GigaCloud Marketplace GMV continued to increase;

◦an increase in revenues from platform commission by 16.6% to $19.7 million in 2025 from $16.9 million in 2024 as our GigaCloud Marketplace GMV continued to increase;

◦an increase in revenues from other services by 7.6% to $21.2 million in 2025 from $19.7 million in 2024 as revenues from other ancillary logistics and platform services increased; partially offset by

◦a decrease in revenues from ocean transportation services by 43.3% to $37.2 million in 2025 from $65.8 million in 2024 as the pricing of ocean transportation services decreased during the period; and

◦a decrease in revenues from drayage services by 18.4% to $12.4 million in 2025 from $15.2 million in 2024 as drayage prices decreased.

•Product Revenues from GigaCloud 1P. Our product revenues from GigaCloud 1P increased by 3.5% to $374.2 million in 2025 from $361.5 million in 2024. The increase was primarily due to increases in GigaCloud Marketplace GMV and the number of buyers as our marketplace continued to grow in scale.

•Product Revenues from Off-platform Ecommerce. Our product revenues from off-platform ecommerce increased by 18.8% to $486.8 million in 2025 from $409.6 million in 2024. The increase was primarily due to increases in sales channels and sales volume in certain third-party off-platform ecommerce.

Cost of Revenues

Our cost of revenues increased by 12.9% to $989.2 million in 2025 from $875.8 million in 2024.

•Our cost of services increased by 20.9% to $384.5 million in 2025 from $318.1 million in 2024, primarily due to:

◦an increase in delivery cost by 17.0% to $273.8 million in 2025 from $234.1 million in 2024 as last mile delivery costs and last mile volume increased during the period, partially offset by a decrease in ocean freight costs;

◦an increase in rental cost by 41.5% to $72.6 million in 2025 from $51.3 million in 2024, an increase in depreciation cost by 100.0% to $3.2 million in 2025 from $1.6 million in 2024 and an increase in utility cost by 109.1% to $2.3 million in 2025 from $1.1 million in 2024, due to an increase in the total square footage of our fulfillment centers and the utilization of more warehousing space and equipment for service revenue generating activities; and

◦an increase in staff cost by 5.4% to $25.2 million in 2025 from $23.9 million in 2024 as our business operations continued to increase.

•Our cost of products increased by 8.4% to $604.7 million in 2025 from $557.7 million in 2024, primarily due to:

◦an increase in procurement cost by 8.4% to $475.7 million in 2025 from $438.7 million in 2024 as sales volume and unit prices increased during the period;

◦an increase in delivery cost by 26.3% to $42.2 million in 2025 from $33.4 million in 2024 as our sales volume and the pricing of delivery increased;

◦an increase in staff cost by 9.9% to $24.4 million in 2025 from $22.2 million in 2024 as we increased the number of employees; and partially offset by

◦a decrease in depreciation cost by 37.2% to 2.7 million in 2025 from 4.3 million in 2024 due to less warehousing space and equipment being used for product revenue generating activities.

As a result of the foregoing, our gross profit increased by 5.4% to $300.7 million in 2025 from $285.2 million in 2024. Our gross margin was 23.3% in 2025 and 24.6% in 2024.

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Selling and Marketing Expenses

Our selling and marketing expenses increased by 38.9% to $98.2 million in 2025 from $70.7 million in 2024, which was primarily due to (i) an increase in platform service fee we incurred on certain third-party ecommerce websites by 46.3% to $44.9 million in 2025 from $30.7 million in 2024 as sales volume and sales channels both increased, (ii) an increase in staff cost related to selling and marketing personnel by 37.7% to $41.3 million in 2025 from $30.0 million in 2024 primarily due to increase in the number of staff and the commission paid to them, and (iii) an increase in traveling expense by 88.9% to $1.7 million in 2025 from $0.9 million in 2024 primarily due to increase in business trips for our staff.

General and Administrative Expenses

Our general and administrative expenses decreased by 36.9% to $46.6 million in 2025 from $73.9 million in 2024, which was primarily due to (i) a decrease in staff cost related to general and administrative personnel by 41.3% to $18.3 million in 2025 from $31.2 million in 2024, primarily driven by a reduction in headcount and reclassification of certain roles to other operational departments, (ii) a decrease in rental expense by 56.3% to $8.4 million in 2025 from $19.2 million in 2024, primarily because the fulfillment centers acquired in previous periods became fully operational in 2025 and the related expenses were moved from general and administrative expenses to cost of revenues as more warehousing space was utilized for revenue generating activity, (iii) a decrease in professional service expense by 10.5% to $9.4 million in 2025 from $10.5 million in 2024 as we required less professional services during the period, and (iv) a decrease in office supplies and utility expense by 40.5% to $2.2 million in 2025 from $3.7 million in 2024.

Research and Development Expenses

Research and development expenses increased by 10.2% to $10.8 million in 2025 from $9.8 million in 2024. The increase was primarily due to our dedication in expanding our research and development efforts, including an increase in the number of employees that performed research and development function in 2025.

Losses on Disposal of Property and Equipment

We had losses on disposal of property and equipment of $0.1 million in 2025 and $0.2 million in 2024.

Interest Expense

We had interest expenses of $0.2 million in 2025 and $0.3 million in 2024.

Interest Income

We had interest income of $11.7 million in 2025 and $9.4 million in 2024. The increase was primarily attributable to higher average bank deposits, wealth management products and investment in 2025 compared to the previous period.

Foreign Currency Exchange Gains / (Losses), Net

We had foreign currency exchange gains, net of $0.2 million in 2025 due to the fluctuation in foreign currency exchange rates between the U.S. dollar and both the Japanese Yen and the Euro during the period. Foreign currency exchange losses, net was $1.2 million in 2024, .

Others, net

Other gains, net was $4.5 million in 2025, primarily attributable to credit card cash back, payments to be received from or paid to legal claims and others. Other gains, net was $2.1 million in 2024.

Income Tax Expense

We had income tax expense of $23.8 million in 2025 and $14.8 million in 2024. Income tax expense in 2025 was higher than in 2024 primarily due to higher pre-tax income.

Net Income

As a result of the foregoing, our net income was $137.4 million in 2025 and $125.8 million in 2024.

Year Ended December 31, 2024 Compared to Year Ended December 31, 2023

We discussed the results of operations for the year ended December 31, 2024 compared to year ended December 31, 2023 in our annual report on Form 10-K for the fiscal year ended December 31, 2024, which was filed with the SEC on March 3, 2025 (File No.: 001-41454) (the “2024 Form 10-K”). See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Year Ended December 31, 2024 Compared to Year Ended December 31, 2023” therein, which was incorporated by reference herein.

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Segment Information for Fiscal Years 2025, 2024 and 2023

For the purpose of internal reporting and management's operation review, we do not segregate our business by revenue stream or geography. Our management has determined that our company has one operating segment. See Note 2, Segment Reporting, in the notes to the consolidated financial statements included elsewhere in this annual report.

Long-lived assets consist of property and equipment and operating lease right-of-use assets. The geographic information for long-lived assets as of December 31, 2025, 2024 and 2023 is as follows:

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Revenues reported are attributed to geographic areas based on locations of our fulfillment centers, except for platform commission revenues which are attributed to Hong Kong, where the server of GigaCloud Marketplace is located. Revenues by geography for the years ended December 31, 2025, 2024 and 2023 is as follows:

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(1) Other regions mainly include the U.K., Japan, Canada and Hong Kong, with variations across different product/ service lines. No other individual region's revenues exceeded 10% of the Group’s total revenues for the years ended December 31, 2025, 2024 and 2023.

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Non-GAAP Financial Measure

To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use Adjusted EBITDA and Adjusted EPS – diluted, to understand and evaluate our core operating performance. Adjusted EBITDA is net income excluding interest, income taxes and depreciation and amortization, further adjusted to exclude share-based compensation expenses and non-recurring items. Adjusted EPS – diluted is a financial measure defined as our Adjusted EBITDA divided by our diluted weighted-average shares outstanding. Management uses Adjusted EBITDA and Adjusted EPS – diluted as measures of operating performance, for planning purposes, to allocate resources to enhance the financial performance of our business, to evaluate the effectiveness of our business strategies and in communications with our Board of Directors and investors concerning our financial performance. Non-GAAP financial measures, which may differ from similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

The table below sets forth a reconciliation of Adjusted EBITDA from net income for the years indicated:

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(1)    One of our fulfillment centers in Japan experienced a fire in March 2024. The fire destroyed our inventories located within the fulfillment center. We recognized losses of $2.0 million as a result of the fire. Based on the provisions of our insurance policies, the gross losses were reduced by the insurance proceeds received $1.9 million from our insurance carrier for the claim. We do not believe such losses to be recurring or frequent in nature.

The table below sets forth a reconciliation of Adjusted EPS – diluted for the years indicated:

____________________

(1)    One of our fulfillment centers in Japan experienced a fire in March 2024. The fire destroyed our inventories located within the fulfillment center. We recognized losses of $2.0 million as a result of the fire. Based on the provisions of our insurance policies, the gross losses were reduced by the insurance proceeds received $1.9 million from our insurance carrier for the claim. We do not believe such losses to be recurring or frequent in nature.

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Liquidity and Capital Resources

Liquidity

To date, we have financed our operating and investing activities mainly through cash generated from our business. As of December 31, 2025, we had $379.8 million in cash and cash equivalents, $0.8 million in restricted cash and $36.3 million in short-term investments.

In July 2022, we entered into a two-year credit facility agreement with Wells Fargo Bank, National Association, under which we are able to borrow up to $30 million during the term of the facility. The credit facility also requires us to comply with various customary covenants and other restrictions. In July 2024, we renewed the credit facility with a maturity date of June 30, 2026. As of the date of this annual report, we have not made any draw downs from this credit facility.

In December 2025, we entered into a credit facility agreement for letter of guarantee with China CITIC Bank, or CITIC Bank, under which we are provided with a credit facility not exceeding RMB60 million, commencing from December 2025 to September 2026. As of the date of this annual report, we have not made any draw downs from this credit facility.

We believe our cash on hand will be sufficient to meet our current and anticipated needs for general corporate purposes for at least the next 12 months. We may, however, need additional cash resources in the future if we experience changes in business conditions or other developments. We may also need additional cash resources in the future if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that our cash requirements exceed the amount of cash we have on hand, we may seek to issue equity or equity-linked securities or obtain debt financing. The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict our operations. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

The following table sets forth a summary of our cash flows for the periods presented:

Operating Activities

Net cash provided by operating activities in 2025 was $190.7 million, as compared to $158.1 million in 2024. This was attributable to net income of $137.4 million in 2025, as adjusted by non-cash items and the effects of changes in working capital and other activities. Adjustments to reconcile net income to net cash provided by operating activities primarily consisted of (i) changes in accounts payable, accrued expenses and other current liabilities of $52.9 million, (ii) changes in inventories of $11.5 million, (iii) depreciation and amortization of $8.3 million, (iv) changes in accounts receivables of $5.8 million, (v) operating lease of $5.3 million, (vi) changes in prepayments and other assets of $5.2 million, (vii) share-based compensation of $5.0 million, (viii) changes in income tax payable of $3.7 million and (ix) deferred income taxes of $3.0 million.

Investing Activities

Net cash used in investing activities in 2025 was $5.1 million, primarily consisting of (i) sale and maturities of investments of $98.3 million, (ii) purchase of investments of $94.7 million for U.S. treasury bonds and other wealth management products, (iii) and cash paid for purchase of property and equipment of $7.9 million and (iv) advances paid for acquisition of New Classic of $1.0 million.

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Financing Activities

Net cash used in financing activities in 2025 was $67.8 million, consisting of (i) payment of share repurchase of $67.4 million and (ii) repayment of finance lease obligations of $0.4 million.

We discussed our net cash provided by/used in operating activities, investing activities and financing activities in 2024 in the 2024 Form 10-K. See the titles named operating activities, investing activities and financing activities in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” therein, which was incorporated by reference herein.

We discussed our net cash provided by/used in operating activities, investing activities and financing activities in 2023 in the 2023 Form 10-K. See the titles named operating activities, investing activities and financing activities in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” therein, which was incorporated by reference herein.

Share Repurchase Program

On August 13, 2025, the Board approved a new share repurchase program which authorized the repurchase of its Class A ordinary share up to $111.0 million, effective August 17, 2025 for three years. The previously authorized share repurchase program was terminated effective August 16, 2025. Under the share repurchase program, we may purchase our ordinary shares through various means, including open market transactions, privately negotiated transactions, block trades, any combination thereof or other legally permissible means. We may effect repurchase transactions in compliance with Rule 10b5-1 and Rule 10b-18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The number of shares repurchased and the timing of repurchases will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with our working capital requirements, general business conditions and other factors. Our board of directors will review the share repurchase program periodically, and may modify, suspend or terminate the share repurchase program at any time. We plan to fund repurchases from our existing cash balance.

See “Item 5—Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” of this annual report on Form 10-K for more information.

Capital Resources

Our capital expenditures consist primarily of purchase of property and equipment. Our capital expenditures were $7.9 million in 2025. We intend to fund our future capital expenditures with our existing cash balance, short-term investments and anticipated cash flows from operations. We will continue to make well-planned capital expenditures to meet the expected growth of our business.

Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2025:

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(1)Lease commitment consists of the commitments under the lease agreements for our fulfillment centers and storage shelves.

On December 3, 2026, we entered into a definitive share purchase agreement to acquire New Classic, a U.S.-based distributor serving the home furnishings market. Under the terms of the agreement, we will acquire 100% of the outstanding equity of New Classic for a total consideration of $18 million on a debt-free basis, including a post-close earn-out. The transaction closed on January 1, 2026 and it was funded from our existing cash on hand. See “Item 8. Financial Statements and Supplementary Data—Note 19. Subsequent Events—Acquisition” for further information.

Except for those disclosed above, we did not have any significant capital or other commitments, long-term obligations, or guarantees as of December 31, 2025.

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Off-Balance Sheet Commitments and Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any unconsolidated third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. Moreover, we do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

Holding Company Structure

The Cayman Islands currently has no exchange control regulations or currency restrictions which may affect the import or export of capital, including the availability of cash and cash equivalents for use by our company, or the remittance of dividends, interest or other payments to non-resident holders of our securities.

Our company, GigaCloud Technology Inc, is a holding company incorporated in the Cayman Islands. We conduct our operations primarily through our principal subsidiaries. As a result, our ability to pay dividends depends upon dividends paid by our subsidiaries. If our subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.

In addition, as determined in accordance with local regulations, our subsidiaries in certain of our markets may be restricted from paying us dividends offshore or from transferring a portion of their assets to us, whether in the form of dividends, loans or advances, unless certain requirements are met or regulatory approvals are obtained. In addition, our subsidiaries may be restricted in their ability to pay dividends or distributions or make other transfers to us as a result of the laws of their respective jurisdictions of organization and agreements of our subsidiaries. See “Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividends.” Even though we currently do not require any such dividends, loans or advances from our entities for working capital and other funding purposes, we may in the future require additional cash resources from them due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends or distributions to our shareholders.

Trend Information

Other than as disclosed elsewhere in this annual report, we are not aware of any known trends, uncertainties, demands, commitments or events for the year ended December 31, 2025 that are reasonably likely to have a material adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that are reasonably likely to cause a material change in the relationship between costs and revenues, or that would cause reported financial information to be not necessarily indicative of future operating results or financial conditions.

Critical Accounting Estimates

We prepare our financial statements in conformity with U.S. GAAP. The preparation of these financial statements requires our management to make estimates and assumptions based on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. For the year ended December 31, 2025, we have not identified critical accounting estimates that involve a significant level of estimation uncertainty and would have a material impact on our results.

Recent Accounting Pronouncements

A list of recently issued accounting pronouncements that are relevant to us is included in Note 2 “Recently Adopted Accounting Pronouncements” to our consolidated financial statements included elsewhere in this annual report.