GigaCloud Technology Inc (GCT) 2024 Q3 法說會逐字稿

Thank you, all, for standing by. Welcome to GigaCloud Technology's third-quarter 2024 earnings conference call. (Operator Instructions)

謝謝大家的支持。歡迎參加極雲科技 2024 年第三季財報電話會議。（操作員說明）

Joining us today from GigaCloud are the company's Founder, Chairman, and CEO, Larry Wu; its President, Dr. Iman Schrock; and its Interim Chief Financial Officer, Erica Wei. Iman will provide an overview of our performance and operations, and Erica will discuss our financial results. After that, there will be a question-and-answer session.

今天從GigaCloud 加入我們的是該公司的創始人、董事長兼執行長Larry Wu；主席 Iman Schrock 博士；及其臨時財務長 Erica Wei。伊曼將概述我們的業績和營運情況，艾莉卡將討論我們的財務表現。之後，將進行問答環節。

As a reminder, this conference call contains statements about future events and expectations that are forward-looking in nature, and actual results may differ materially. Additionally, today's call will include non-GAAP measures within the meaning of SEC Regulation G.

提醒一下，本次電話會議包含有關未來事件和預期的陳述，這些陳述本質上是前瞻性的，實際結果可能存在重大差異。此外，今天的電話會議將包括 SEC G 條例含義內的非 GAAP 措施。

When required, a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP, can be found in today's press release as well as on the company's website.

如有需要，可以在今天的新聞稿以及公司網站上找到所有非公認會計原則財務指標與根據公認會計原則計算和呈現的最直接可比較財務指標的調節表。

With that, I would like to turn the call over to Larry for his opening remarks. Please go ahead, sir.

說到這裡，我想將電話轉給拉里，讓他發表開場白。請繼續，先生。

Thank you, operator, and welcome, everyone, to today's call. The third quarter built upon the very strong growth path we have followed since the launching of our B2B online marketplace. Despite the continued industry headwinds, we are successfully navigating these challenges.

謝謝接線員，歡迎大家參加今天的電話會議。自 B2B 線上市場推出以來，我們一直遵循非常強勁的成長道路，第三季建立在這一基礎上。儘管產業逆風持續存在，我們仍成功應對這些挑戰。

This is shown by the new record high net income and adjusted EBITDA, and growing numbers of marketplace participants due to its unique ability to streamline operations and enhance efficiency for buyers and sellers of big, bulky nonstandard item globally.

淨收入和調整後 EBITDA 創下歷史新高，以及市場參與者數量不斷增加，都證明了這一點，因為它具有簡化營運並提高全球大型非標準產品買家和賣家效率的獨特能力。

Among other accomplishments, our acquisition of Noble House is on track to reach breakeven by the end of this year. Additionally, we are enhancing our technology through Wondersign, expanding its capability to better serve the brick-and-mortar stores. We believe that GigaCloud's current valuation doesn't fully capture the progress we have made or the exciting path ahead.

除其他成就外，我們對 Noble House 的收購預計將在今年年底實現收支平衡。此外，我們正在透過 Wondersign 增強我們的技術，擴大其能力，以更好地為實體店提供服務。我們認為，GigaCloud 目前的估值並沒有完全反映我們已經取得的進展或令人興奮的未來道路。

To demonstrate our confidence in the future, on September 3, 2024, our Board authorized a $46 million share repurchase program. As of November 6, 2024, we have repurchased an aggregate of approximately 467,000 Class A ordinary shares in the open market at a total consideration of $11.4 million, pursuant to a repurchase plan under Rule 10b5-1.

為了表明我們對未來的信心，我們的董事會於 2024 年 9 月 3 日批准了一項 4,600 萬美元的股票回購計畫。截至 2024 年 11 月 6 日，根據規則 10b5-1 的回購計劃，我們已在公開市場回購了總計約 467,000 股 A 類普通股，總代價為 1,140 萬美元。

Our approach to creating lasting shareholder value is anchored in the strong operational performance and disciplined strategic capital decisions. In line with this commitment, we plan to retire the shares we have repurchased, effectively reduce our total issued shares.

我們創造持久股東價值的方法植根於強勁的營運績效和嚴格的策略資本決策。根據這項承諾，我們計劃回購已回購的股份，有效減少我們已發行的股份總數。

This step shows our belief in GigaCloud's long-term potential and strengthens each shareholder's stake in that journey. We view this as one of the many actions aligned with our vision for sustainable growth. And we are dedicated to building on our momentum in the quarters ahead.

這項措施顯示了我們對 GigaCloud 長期潛力的信心，並增強了每位股東在過程中的權益。我們認為這是符合我們永續成長願景的眾多行動之一。我們致力於在未來幾季鞏固我們的勢頭。

We maintain a very strong balance sheet with no debt and are generating positive cash flow from operations, allowing us to fund future profitable growth. We are extremely proud of what we have been able to accomplish this year to date. And we'll continue driving progress as a leader and innovator of B2B e-commerce technology solutions.

我們保持著非常強勁的資產負債表，沒有債務，並且透過營運產生正現金流，使我們能夠為未來的獲利成長提供資金。我們對今年迄今所取得的成就感到非常自豪。作為 B2B 電子商務技術解決方案的領導者和創新者，我們將繼續推動進步。

Thank you, everyone, for joining us. Now I will turn the call over to Iman.

謝謝大家加入我們。現在我將把電話轉給伊曼。

Thanks, Larry. I would like to add my welcome to those joining us today. It was another great quarter for GigaCloud. We're especially gratified by our ability to continue growing at a fast clip, even as we manage through those industry headwinds Larry mentioned.

謝謝，拉里。我謹對今天加入我們的人表示歡迎。對於 GigaCloud 來說，這又是一個很棒的季度。即使我們克服了拉里提到的行業逆風，我們仍然能夠繼續快速成長，對此我們感到特別滿意。

Because our B2B platform has become a powerful and proven way for buyers and sellers of nonstandard items to seamlessly transact, our GigaCloud Marketplace GMV continued to grow for the trailing 12 months ended September 30, 2024. Specifically, GigaCloud Marketplace GMV increased by more than 80% year over year, keeping pace with our second-quarter growth.

由於我們的 B2B 平台已成為非標準商品買家和賣家無縫交易的強大且經過驗證的方式，因此我們的 GigaCloud Marketplace GMV 在截至 2024 年 9 月 30 日的過去 12 個月中持續成長。具體來說，GigaCloud Marketplace GMV 年成長超過 80%，與我們第二季的成長保持同步。

We continue to see significant increases in our buyer and seller basis, which drove overall GMV growth. Our active 3P sellers has crossed the 1,000 mark for the first time, now standing at 1,051. Meanwhile, our active buyer base has grown to 8,535. These milestones reflect our platform's growing momentum and appeal.

我們繼續看到買家和賣家基礎顯著增加，這推動了整體 GMV 的成長。我們的活躍 3P 賣家首次突破 1,000 名大關，目前達到 1,051 名。同時，我們的活躍買家群體已增至 8,535 名。這些里程碑反映了我們平台不斷增長的勢頭和吸引力。

Our plans to further increase participation in our marketplace include adding 3P sellers through geographical expansion, enhanced outreach, and marketing initiatives. We expect to increase active buyers through a combination of onboarding brick-and-mortar retailers that are subscribed to the Wondersign catalog kiosk, enhancing our marketplace product categories, and leveraging referrals from existing users, among others.

我們計劃進一步提高市場參與度，包括透過地理擴張、加強外展和行銷活動來增加 3P 賣家。我們希望透過結合訂閱 Wondersign 目錄亭的實體零售商、增強我們的市場產品類別以及利用現有用戶的推薦等方式來增加活躍買家。

GMV in our 3P seller marketplace grew 72% from a year ago and was $635 million for the trailing 12 months ended September 30, 2024. This represents a healthy 51.5% of our total marketplace GMV. Our combined 1P and 3P strategies are helping us build critical mass, enhancing the network effects that drive incremental value for all participants, while average buyer spending saw a modest 2.9% decrease compared to Q3 of last year, primarily reflecting the recent onboarding of a large number of over 1,000 buyers, who typically begin with a lower trading volume as they familiarize themselves with the platform.

截至 2024 年 9 月 30 日的過去 12 個月，我們的 3P 賣家市場的 GMV 比一年前成長了 72%，達到 6.35 億美元。這占我們市場總 GMV 的 51.5%。我們結合的1P 和3P 策略正在幫助我們建立臨界質量，增強網路效應，為所有參與者帶來增量價值，而平均買家支出與去年第三季相比略有下降2.9%，這主要反映了最近大型企業的加入超過 1,000 名買家，隨著他們熟悉平台，他們開始時的交易量通常會較低。

We're encouraged by the continued expansion of our marketplace, which is becoming a central and dynamic hub for buyers and sellers of large parcel goods to connect and transact. As more participants experience the benefits of our supplier-fulfilled retailing model, we're confident this ecosystem will continue to grow, empowering businesses to drive efficiency and profitability.

我們對市場的持續擴張感到鼓舞，該市場正在成為大包裹貨物買家和賣家進行聯繫和交易的中心和動態樞紐。隨著越來越多的參與者體驗到我們的供應商履行的零售模式的好處，我們相信這個生態系統將繼續發展，使企業能夠提高效率和獲利能力。

I also want to call attention to the strong momentum we're building in the European market. Diversifying across different regions is one of GigaCloud's core strengths, creating a balanced approach that benefits both our market reach and our marketplace ecosystem. Revenue from Europe has grown organically by 140% year over year for Q3, and we're excited about this region's further growth potential.

我還想提請大家注意我們在歐洲市場建立的強勁勢頭。跨不同地區的多元化是 GigaCloud 的核心優勢之一，它創造了一種平衡的方法，有利於我們的市場覆蓋範圍和市場生態系統。第三季度，來自歐洲的營收年增 140%，我們對該地區的進一步成長潛力感到興奮。

I would now like to spend a few minutes on Noble House. We're on track to reach breakeven for Noble House by the end of this year. Here's a recap of what we've done so far and how it will impact us going forward.

我現在想在 Noble House 上花幾分鐘。我們預計在今年底實現 Noble House 的損益平衡。以下是我們迄今為止所做工作的回顧以及它將如何影響我們的未來。

After closing the acquisition during Q4 of last year, we prioritized placing large orders for existing SKUs. This helps support our existing vendor base, many of which had been hit hard by the bankruptcy process; and build up inventory for off-platform sales as we begin the integration process.

去年第四季完成收購後，我們優先考慮對現有 SKU 下大訂單。這有助於支持我們現有的供應商基礎，其中許多供應商受到破產程序的嚴重打擊；並在我們開始整合過程時建立平台外銷售的庫存。

While these existing SKUs have made meaningful top-line contributions to the company in 2024 and help diversify our product offerings, the operation has not been making bottom-line contributions yet. Having a well-prepared portfolio of products and a steady supply of new offerings is critical to profitability.

雖然這些現有的 SKU 在 2024 年為公司做出了有意義的營收貢獻，並幫助我們實現產品供應多元化，但該業務尚未做出獲利貢獻。擁有準備充分的產品組合和穩定的新產品供應對於獲利能力至關重要。

During its bankruptcy process, Noble House experienced an extended period of approximately a year without development of new SKUs, which significantly harmed profitability and further diminished vendors' capacity to collaborate effectively with the company in meeting new development needs. As such, the second phase of our integration effort focused on developing new SKUs. And we submitted our first production orders in Q2 of this year.

在破產過程中，Noble House 經歷了大約一年的時間沒有開發新的 SKU，這嚴重損害了盈利能力，並進一步削弱了供應商與公司有效合作以滿足新開發需求的能力。因此，我們整合工作的第二階段重點是開發新的 SKU。我們在今年第二季提交了第一批生產訂單。

As of today, I am pleased to share that we have developed approximately 300 new SKUs and continue to develop more. Do keep in mind that furniture typically has a long manufacturing and fulfillment cycle that requires one to two months at each stage of design, sampling, manufacturing, and ocean shipment. Order deliveries for our newly developed products have started trickling in starting October, and this starts phase three of our integration plan.

截至今天，我很高興地告訴大家，我們已經開發了大約 300 個新 SKU，並且還在繼續開發更多。請記住，家具通常具有較長的製造和履行週期，設計、取樣、製造和海運的每個階段都需要一到兩個月的時間。我們新開發的產品的訂單交付從 10 月開始就開始陸續交付，這也是我們整合計畫的第三階段的開始。

Phase three will focus on identifying winning products and capturing profitability. Sales in the coming months will help us identify successful products and focus on those with larger reorder sizes, which will typically take another three to five months to be ready for sales. We expect to begin seeing more substantial bottom-line contribution from the legacy Noble House operation beginning in the third quarter of 2025, that will initiate a productive cycle of profitability and new product growth.

第三階段將重點放在確定獲勝產品並獲取獲利能力。未來幾個月的銷售將幫助我們識別成功的產品，並專注於那些重新訂購規模較大的產品，這通常還需要三到五個月才能準備好銷售。我們預計從 2025 年第三季開始，傳統 Noble House 業務將開始帶來更實質的利潤貢獻，這將啟動獲利和新產品成長的生產週期。

I also want to take a moment to talk about how Wondersign strengthens our already solid tech-driven model here at GigaCloud. It's a natural addition that enhances our platform's power efficiency, particularly for our brick-and-mortar clients. Wondersign is a part of a broader upgrade to our tech advancement facilitating smoother transactions and driving more value across the board.

我還想花點時間談談 Wondersign 如何加強我們在 GigaCloud 已經穩固的技術驅動機型。這是一個自然的補充，可以提高我們平台的能源效率，特別是對於我們的實體客戶。Wondersign 是我們技術進步更廣泛升級的一部分，促進更順暢的交易並全面推動更多價值。

Right now, we're focused on advancing Wondersign's tech stack and aligning it with our own, so we're even better equipped to meet our client needs. In the coming months, we'll be rolling out detailed updates to the market with key functionality upgrades, including advancement with Wondersign. Please keep an eye for that, what's ahead.

目前，我們專注於推進 Wondersign 的技術堆疊並將其與我們自己的技術堆疊保持一致，以便我們能夠更好地滿足客戶的需求。在接下來的幾個月中，我們將向市場推出詳細的更新，包括關鍵功能升級，包括 Wondersign 的改進。請留意接下來會發生什麼事。

Our unique business model is a proven success. And we plan to continue our growth trajectory by adding new products, buyers, and sellers through the GigaCloud Marketplace. We remain excited about our future opportunities. And we believe that our unique platform will become more and more necessary for adding increasing value for buyers and sellers of big and bulky items.

我們獨特的商業模式已被證明是成功的。我們計劃透過 GigaCloud Marketplace 新增產品、買家和賣家來繼續我們的成長軌跡。我們對未來的機會仍然感到興奮。我們相信，我們獨特的平台將變得越來越有必要為大型物品的買家和賣家增加價值。

Now I will turn the call over to Erica for a more detailed review of our financial results.

現在我將把電話轉給艾麗卡，讓她更詳細地審查我們的財務表現。

Thank you, Iman, and thanks to everyone joining us today. As I review our third-quarter results, please keep in mind that all figures I'll be referencing are rounded for clarity. Our third-quarter and year-to-date financial results continue to exemplify our ability to successfully execute our growth strategy, even amid heavy industry headwinds that is outside of our control.

謝謝伊曼，也謝謝今天加入我們的所有人。當我回顧第三季的業績時，請記住，為了清楚起見，我將引用的所有數據都經過四捨五入。我們的第三季和年初至今的財務表現繼續證明了我們成功執行成長策略的能力，即使在我們無法控制的重工業逆風中也是如此。

Before diving into the quarterly details, I'd like to briefly touch on our anticipated growth trajectory and the impact of seasonality to our business. Regarding seasonality, our second and fourth quarters remain our strongest, driven by outdoor product demand from Noble House in Q2 and heightened holiday demand in Q4.

在深入了解季度細節之前，我想先簡單介紹一下我們的預期成長軌跡以及季節性對我們業務的影響。就季節性而言，受第二季 Noble House 戶外產品需求和第四季度假日需求增加的推動，我們的第二季和第四季仍然是最強勁的。

As we look forward, it's important to recognize that while GigaCloud has experienced rapid expansion, the pace of growth will naturally moderate as we reach larger scale. This trend reflects the typical progression for companies reaching critical mass, and it reinforces the stability and resilience of our business as we mature.

展望未來，重要的是要認識到，雖然 GigaCloud 經歷了快速擴張，但隨著規模的擴大，成長速度自然會放緩。這一趨勢反映了公司達到臨界規模的典型進展，並且隨著我們的成熟，它增強了我們業務的穩定性和彈性。

Total revenues grew 70% for the third quarter to $303 million. The improvements were primarily driven by the increased market recognition and scale of our marketplace, which resulted in increases to our marketplace GMV, sales volume, and the number of active sellers and buyers.

第三季總營收成長 70%，達到 3.03 億美元。這些改進主要是由於我們市場的市場認可和規模的提高，導致我們的市場 GMV、銷售以及活躍賣家和買家數量的增加。

Breaking down our third-quarter revenues. In the third quarter, we saw significant growth across our revenue stream, underscoring the strength and adaptability of our platform. Service revenue from our 3P business grew substantially to $100 million, reflecting strong marketplace demand and continued engagement from our participants.

細分我們第三季的營收。第三季度，我們的收入來源顯著成長，凸顯了我們平台的實力和適應性。我們的 3P 業務的服務收入大幅成長至 1 億美元，反映出強勁的市場需求和參與者的持續參與。

We also saw a significant increase in service revenue margin of 8.7% sequentially from Q2 as we have utilized more fixed-rate ocean freight contracts this quarter, that stabilizes cost in a heightened freight environment.

我們還看到，服務收入利潤率比第二季度連續大幅增長 8.7%，因為本季度我們使用了更多的固定費率海運合同，這在貨運環境緊張的情況下穩定了成本。

On the product side, revenue growth of over 60% speaks of enhanced reach of our product offerings. Sales from our GigaCloud 1P delivered healthy year-over-year growth, as we continue to scale naturally with the growth of our marketplace.

在產品方面，超過 60% 的收入成長顯示我們產品範圍的擴大。隨著我們隨著市場的成長而自然擴展，GigaCloud 1P 的銷售額實現了健康的年成長。

Our off-platform product growth of 110% is driven by an increase in both sales channels and volume across third-party e-commerce platforms. This balanced growth reinforces the resilience of our business model, positioning us effectively as we deepen our engagement with the platform and expand our presence in external markets.

我們的平台外產品成長了 110%，這得益於第三方電子商務平台銷售管道和銷售的成長。這種平衡的成長增強了我們業務模式的彈性，隨著我們加深與平台的互動並擴大我們在外部市場的影響力，我們可以有效地定位我們。

Product revenue margin decreased 1.6% sequentially due to higher procurement costs incurred that are accounted for as part of cost of goods sold. This is because products sold during the third quarter were procured during the second quarter where ocean freight costs was elevated and our use of fixed rate contracts were limited.

由於計入銷售成本的採購成本增加，產品收入利潤率較上季下降 1.6%。這是因為第三季銷售的產品是在第二季採購的，而第二季海運費上漲，而且我們對固定費率合約的使用受到限制。

When looking at our cost structure into the future, we are expecting increased ground shipping cost of potentially up to $4.5 million during the upcoming holiday season, that would temporarily compress margins. We expect those costs to decrease starting from the first quarter of next year once peak season ends. In response, we're implementing a targeted approach to manage these fluctuations and strengthen our relationships with providers to secure favorable rates and mitigate volatility.

考慮到我們未來的成本結構，我們預計在即將到來的假期期間，地面運輸成本可能會增加高達 450 萬美元，這將暫時壓縮利潤率。我們預計，一旦旺季結束，這些成本將從明年第一季開始下降。作為回應，我們正在實施有針對性的方法來管理這些波動並加強我們與提供者的關係，以確保優惠的價格並減輕波動。

Driven by our rapid growth and higher business volume, operating expenses increased compared to prior year, as we invested strategically to expand our fulfillment network. Breaking that down by expense category, selling and marketing expenses have remained stable at approximately 6% of revenue.

在我們的快速成長和業務量增加的推動下，由於我們進行策略性投資以擴大我們的履行網絡，營運費用與去年相比有所增加。按費用類別細分，銷售和行銷費用穩定在收入的 6% 左右。

General and administrative expenses amounted to $15 million compared to $6 million last year, primarily due to an increase in rental and insurance expenses relating to excess capacity in newly leased fulfillment centers this year. Third-quarter net income grew more than 68% year over year to $41 million and increased 62% year over year to $95 million for the first nine months of 2024.

一般及管理費用為 1,500 萬美元，而去年為 600 萬美元，主要是由於今年新租用的營運中心產能過剩導致租金和保險費用增加。第三季淨利潤年增超過 68% 至 4,100 萬美元，2024 年前 9 個月年增 62% 至 9,500 萬美元。

For the third quarter, foreign currency exchange gain on a net basis were approximately $3 million, primarily attributable to the depreciation of US dollars against the Japanese yen and euros. We generated similar growth rates in adjusted EBITDA, which improved nearly 64% to $49 million for the third quarter. We ended Q3 with a liquidity of approximately $260 million, which includes cash, cash equivalents, restricted cash, and investments.

第三季度，淨匯兌收益約300萬美元，主要歸因於美元兌日圓和歐元貶值。我們的調整後 EBITDA 也實現了類似的成長率，第三季成長了近 64%，達到 4,900 萬美元。第三季末，我們的流動性約為 2.6 億美元，其中包括現金、現金等價物、限制性現金和投資。

We incurred $14 million in CapEx for the third quarter, primarily for the purchase of equipment and racking to be used in our fulfillment center infrastructure. As Larry mentioned earlier, we remain debt-free with no outstanding borrowings, and the primary liabilities on our balance sheet relate to our fulfillment centers.

第三季我們的資本支出為 1,400 萬美元，主要用於購買履行中心基礎設施中使用的設備和貨架。正如拉里之前提到的，我們仍然沒有債務，沒有未償還的借款，我們資產負債表上的主要負債與我們的履行中心有關。

We know that tariffs remain a central topic of interest and want to take a minute to talk about how these would impact our business. We began our supply chain diversification journey several years ago to manage potential risks arising from tariffs and changing political landscapes.

我們知道關稅仍然是人們關注的中心話題，因此想花一點時間談談這將如何影響我們的業務。幾年前，我們開始了供應鏈多元化之旅，以管理關稅和不斷變化的政治格局帶來的潛在風險。

We are happy to share today that more than half of our 1P supply chain servicing the US market is coming from Southeast Asia. By continuously diversifying our supply chain, we limit our exposure from overconcentration and potential impact from tariff increases.

今天我們很高興與大家分享，我們為美國市場提供服務的 1P 供應鏈中有一半以上來自東南亞。透過不斷實現供應鏈多元化，我們限制了過度集中的風險以及關稅上漲的潛在影響。

When it comes to our 3P business, where we are connecting suppliers and resellers, the GigaCloud Marketplace is providing a strong diversified supply chain foundation and ecosystem that empowers our customers to stay flexible and make adjustments as the market evolves. We are confident that the solutions and infrastructure provided by GigaCloud puts us in a good position to manage potential tariff impacts effectively while continuing to deliver value across our marketplace.

就我們連接供應商和經銷商的 3P 業務而言，GigaCloud Marketplace 提供了強大的多元化供應鏈基礎和生態系統，使我們的客戶能夠保持靈活性並隨著市場的發展進行調整。我們相信，GigaCloud 提供的解決方案和基礎設施使我們能夠有效管理潛在的關稅影響，同時繼續在整個市場創造價值。

I'll close my remarks today with our outlook for the fourth quarter. We expect total revenues to range between $275 million and $290 million. As you consider this, please keep in mind the temporary margin impact from the profitability levers that I mentioned earlier. Nevertheless, we are confident in our ability to drive sustained long-term profitability.

我將以對第四季度的展望來結束今天的發言。我們預計總收入將在 2.75 億美元至 2.9 億美元之間。當您考慮這一點時，請記住我之前提到的獲利槓桿對利潤率的臨時影響。儘管如此，我們對推動持續長期獲利的能力充滿信心。

The GigaCloud team continues to work toward our common goals, and I sincerely believe that we can continue to grow our leadership in the global B2B e-commerce landscape. While we continue to face some macro headwinds that may persist for a little bit longer, we are extremely confident that the resiliency in our model and believe our significant expertise will help us successfully navigate those temporary challenges.

GigaCloud 團隊將繼續努力實現我們的共同目標，我真誠地相信我們能夠繼續增強我們在全球 B2B 電子商務領域的領導地位。雖然我們繼續面臨一些可能持續更長時間的宏觀阻力，但我們對我們模型的彈性非常有信心，並相信我們豐富的專業知識將幫助我們成功應對這些暫時的挑戰。

Thank you for all joining us today. Operator, we're ready for questions.

感謝大家今天加入我們。接線員，我們準備好回答問題了。

(Operator Instructions) Matt Koranda, ROTH Capital.

（操作員指令）Matt Koranda，羅斯資本。

Hey, guys. So maybe just starting off on the outlook for the fourth quarter, wanted to get a sense for the breakdown between service and product revenue in the fourth quarter. It just looks like pretty big deceleration on a year-over-year basis.

嘿，夥計們。因此，也許剛開始展望第四季的前景，希望了解第四季度服務和產品收入之間的細分情況。與去年同期相比，看起來減速相當大。

And if I sort of assume that Noble House gives you a full contribution in the fourth quarter this year, organically, that might imply a little bit more deceleration. Maybe just what's going on there and then the mix between service and product.

如果我假設 Noble House 在今年第四季為您提供了全額貢獻，有機地，這可能意味著更多的減速。也許只是那裡發生的事情以及服務和產品之間的混合。

Yeah. Hi, Matt. Thanks for the question. So in terms of looking forward, a few things to think about. So service and products proportionately, we expect to somewhat stay similar to Q3.

是的。嗨，馬特。謝謝你的提問。因此，就展望未來而言，有一些事情需要考慮。因此，從服務和產品的比例來看，我們預計與第三季保持相似。

And then specifically on your question towards Noble House. So Noble House from a product perspective is contributing somewhere between 15% to 20% of product revenue even though we don't do a separate breakout of -- in terms of disclosure. And that will likely continue for Q4. Do keep in mind when comparing Q4 this year against Q4 last year that Q4 of 2023 had two months of Noble House included already.

然後特別是關於你對貴族之家的問題。因此，從產品的角度來看，Noble House 貢獻了產品收入的 15% 到 20% 之間，儘管我們沒有在揭露方面進行單獨的細分。第四季這種情況可能會持續下去。請記住，在將今年第四季與去年第四季進行比較時，2023 年第四季已經包含了兩個月的 Noble House。

Yeah, okay. Got it. And then maybe just on the service side, a pretty decent step-up in onboarding buyers onto the platform. Maybe just where did you see success? Could you talk a little bit about like sort of where we're essentially getting growth out of the buyer ecosystem?

是啊，好吧。知道了。然後也許只是在服務方面，在吸引買家進入平台方面取得了相當不錯的進展。也許你在哪裡看到了成功？您能否談談我們從買家生態系統中本質上獲得成長的情況？

Sure. So I think a big part of it has to do with the market -- the furniture sector getting a better understanding of who we are and what we do. So it's very much a combination of our go-to-market efforts, including direct outreach. And it's also equally important word-of-mouth referrals that we're receiving, folks that are [seeing] more efficiency, more cost savings, more efficient solutions, especially right now when the environment is quite challenging.

當然。所以我認為這很大程度上與市場有關——家具行業更好地了解我們是誰以及我們做什麼。因此，這在很大程度上是我們進入市場努力的結合，包括直接推廣。我們收到的口碑推薦也同樣重要，人們[看到]更高的效率、更多的成本節省、更有效的解決方案，尤其是在目前環境充滿挑戰的情況下。

Yeah. Where are those buyers mostly sort of reselling? I'm just curious. You guys probably have good data on that, I would assume, or maybe just platforms where they're sort of plugged into where they're seeing growth and success.

是的。這些買家主要在哪裡轉售？我只是好奇。我想，你們可能有這方面的良好數據，或者可能只是他們所看到的成長和成功的平台。

Yeah. So it's a lot of folks that are on the [e-commerce] platforms, right? So those are big players that folks like you and I would be shopping from. There's a lot of that. There's also -- some of these are also vendors to those larger platforms.

是的。所以很多人都在[電子商務]平台上，對吧？所以這些都是像你我這樣的人會買的大公司。這樣的事很多。還有——其中一些也是那些更大平台的供應商。

We also have a smaller number of non-large-scale e-commerce, such as smaller independent stores and a very small number of brick-and-mortar as well.

我們也有少量的非大型電商，例如規模較小的獨立店，還有極少數的實體店。

Okay. Got it. And then maybe just on the product revenue side. Curious how -- like last quarter, I think you mentioned trying to get more Noble House product as 1P on the GigaCloud platform. Maybe just speak of success there, how we've seen that progress over the last quarter or so.

好的。知道了。然後也許只是在產品收入方面。很好奇——就像上個季度一樣，我想你提到過試圖在 GigaCloud 平台上獲得更多 Noble House 產品作為 1P。也許只是談論那裡的成功，以及我們在上個季度左右看到的進展。

Yeah. We're still executing the original plan, where over time, we are going to slowly open up the (technical difficulty) expect to see more and more of that revenue shifting from off-platform into our 1P revenue stream, right?

是的。我們仍在執行最初的計劃，隨著時間的推移，我們將慢慢打開（技術難度），期望看到越來越多的收入從平台外轉移到我們的 1P 收入流中，對嗎？

This also goes hand in hand with what Iman has talked about earlier in terms of new product development. So right now, we're seeing the initial influx of -- in terms of deliveries. And we expect to see sales pick up and diversification pick up more next year.

這也與伊曼先前談到的新產品開發的內容不謀而合。所以現在，我們看到了交付量的最初湧入。我們預計明年銷售量將回升，多元化程度將進一步提高。

Okay. Got it. On the tariff front, I guess, you addressed part of it up front there. What I'm curious about, I guess, is if we think about the impact to the sellers on the marketplace, your third-party sellers, maybe just talk about sort of how much of their capacity -- do you have a view into how much of their capacity comes out of China?

好的。知道了。我想，在關稅方面，您已經在前面討論了其中的一部分。我想，我好奇的是，如果我們考慮對市場上的賣家、第三方賣家的影響，也許只是談論他們的能力有多大——你是否有觀點認為他們的大部分產能來自中國？

And then maybe just refresh everybody on how tariffs would even flow through the marketplace in a typical transaction. I guess, you don't take [title] of the inventory. I assume you don't pay import duties. So does it just take effect as sort of a higher potential order value on the marketplace, and you would take a take rate on that, so it may even be beneficial? Maybe just walk us through the mechanics of how that works.

然後也許只是讓大家了解關稅在典型交易中如何在市場中流動。我想，你不會拿走庫存的[標題]。我猜你不用繳進口關稅。那麼它是否只是作為市場上更高的潛在訂單價值而發揮作用，並且您會對此採取利率，因此它甚至可能是有益的？也許只是引導我們了解其工作原理。

Sure. So a few questions packed into one there. I'll try to answer them one by one in order. So first off, from a seller perspective, yes, on the 3P side, we're seeing more that's coming out of China compared to Southeast Asia, right? So the platform is something that gives kind of all participants a little more flexibility.

當然。因此，幾個問題集中在一起。我會嘗試按順序一一回答。首先，從賣家的角度來看，是的，在 3P 方面，與東南亞相比，我們看到更多來自中國的產品，對吧？因此，該平台為所有參與者提供了更多的靈活性。

And we are also encouraging our clients or our customers to think about the potential impact on us accordingly as well. However, I do want to clarify that because of a lot of the inherent limitations, it's not -- we're seeing a lot of folks make a move in terms of where the supply chain is located. But it's not something that could 100% be moved nor is it a terribly easy thing, right?

我們也鼓勵我們的客戶或客戶相應地考慮對我們的潛在影響。然而，我確實想澄清，由於許多固有的限制，我們看到許多人在供應鏈的位置方面採取了行動。但這並不是百分之百可以移動的東西，也不是一件很容易的事情，對吧？

And then in terms of mechanically how this flows through us. So as we think about the typical 3P seller who's listing on the marketplace, that would include a component of the product cost itself, leaving the manufacturing facility. There would be a tariff added to that cost and ocean freight added to that product, right? And then there would be warehousing cost that's incurred and drayage services incurred for the aforementioned.

然後從機械角度來說，它是如何流經我們的。因此，當我們考慮在市場上上市的典型 3P 賣家時，這將包括離開製造工廠的產品成本本身的一部分。該成本中會增加關稅，該產品也會增加海運費，對吧？然後也會產生上述費用的倉儲費用和拖運服務。

So by the time it gets to the US, if you think about, let's call it, a hypothetical jump of 25% tariff to maybe 50% or 60% and you think about the percentage of the product itself, which is what the tariff would be applied to, and the fraction of that against the entire cost when you throw in fulfillment, it's not a terribly large percentage, right?

因此，當它到達美國時，如果你想一想，假設關稅從 25% 躍升至 50% 或 60%，你會想到產品本身的百分比，這就是關稅將產生的百分比。佔總成本的一小部分，這並不是一個很大的百分比，對嗎？

So the question becomes, when the seller is facing the buyer, which is the retailer, especially when considering the margin a typical seller would expect, how impactful is that increase in tariff? It's not as large as what sound if we're thinking about a number of 60%. Does that make sense?

那麼問題就變成了，當賣方對買方（即零售商）時，特別是考慮到典型賣方期望的利潤時，關稅增加的影響有多大？如果我們考慮 60% 的數字，這個數字並不像聽起來那麼大。這樣有道理嗎？

Yeah, I think I have the mechanics of it. Maybe we'll take the rest of mine offline around tariffs. And I'll turn it over to whoever wants to ask other questions here. Thank you.

是的，我想我有它的機制。也許我們會讓我剩下的關於關稅的事情下線。我會將其轉交給任何想在這裡問其他問題的人。謝謝。

Thank you, Matt.

謝謝你，馬特。

Ryan Meyers, Lake Street Capital Markets.

瑞安·邁耶斯（Ryan Meyers），湖街資本市場。

Hey, guys. Thanks for taking my questions. Just curious, if we think about the guidance that you gave for Q4 here -- I mean, obviously, if you think both the guidance that you gave for third quarter here, you came in well ahead of that expectation. So maybe what would you need to see to come in maybe at the high end of the guide for next quarter or even kind of beat like you guys have sort of shown a history of doing?

嘿，夥計們。感謝您回答我的問題。只是好奇，如果我們考慮您在這裡為第四季度提供的指導 - 我的意思是，顯然，如果您認為您在這裡為第三季度提供的指導，那麼您的表現就遠遠超出了預期。那麼，也許你需要看到什麼才能進入下個季度指南的高端，甚至像你們已經展示過的？

Thank you for the question. So there's -- a big component of that is how the market performs. So given that we have a very large number of market participants that are really covering all major channels when it comes to furniture e-commerce, our exposure is really [entirety], right?

謝謝你的提問。所以其中一個重要組成部分就是市場的表現。那麼我們有非常多的市場參與者，在家具電商方面確實涵蓋了所有主要管道，所以我們的曝光度真的是[全部]，對嗎？

Obviously, we're growing very, very quickly with the newcomers and new additions. But that would be offset by -- partially -- by any softness that is experienced by all of our clients. So to answer your question, depending on how the market performs, how all of the retailers, the suppliers -- how their results are in the quarter, that would directly impact us.

顯然，隨著新人和新成員​​的加入，我們的成長速度非常非常快。但這將被我們所有客戶所經歷的任何疲軟所部分抵消。因此，回答你的問題，取決於市場表現如何，所有零售商、供應商如何——他們在本季度的業績如何，這將直接影響我們。

Okay. Got it. So it sounds like it's mainly just kind of a demand type thing is where a lot of that would kind of drive that maybe upside or downside.

好的。知道了。因此，聽起來這主要是一種需求類型的事情，其中​​許多可能會推動上行或下行。

That's a big part of it.

這是其中很大一部分。

Okay. Yeah, okay. It does makes sense. And then it sounds like there'll be some nuances kind of on the margin side in Q4 here.

好的。是啊，好吧。這確實有道理。然後，聽起來第四季的利潤率會出現一些細微差別。

But maybe can you provide a little bit of commentary on what we should be expecting as far as margins in 2025, especially if there's some of the initiatives investments that you guys are making, just kind of how we think that margin should show in '25?

但也許您可以就我們對 2025 年利潤率的預期提供一些評論，特別是如果你們正在進行一些投資舉措，就像我們認為 25 年利潤率應該如何表現一樣？

So Ryan, I'm sure you know we don't typically give a year-long or beyond-the-quarter guidance. But we can kind of maybe talk about the color or what we're seeing a little bit.

所以瑞安，我相信你知道我們通常不會給出為期一年或超出季度的指導。但我們可以談談顏色或我們所看到的一些東西。

So we do expect positive things from Noble House, right? As our newly developed SKUs come in, we expect to see better margins on that front. But when it comes to the bigger market, it's hard to say at this point what exactly would happen.

所以我們確實期待 Noble House 帶來正面的東西，對嗎？隨著我們新開發的 SKU 的上市，我們預計這方面的利潤率會更高。但當涉及到更大的市場時，目前很難說到底會發生什麼。

We definitely think in the near term, including maybe the beginning of next year, there are still going to be strong headwinds that's going to make it a little tougher on the margin side for everybody, including us. Towards the later of the year, it's going to depend on a number of things, including how the economy is doing and the demand side, especially the housing market. If we see differences there, that could really drive up demand for us.

我們肯定認為，在短期內，可能包括明年初，仍然會存在強大的阻力，這將使包括我們在內的所有人的利潤率變得更加困難。到今年晚些時候，這將取決於許多因素，包括經濟狀況和需求方面，尤其是房地產市場。如果我們看到那裡的差異，那確實會增加對我們的需求。

Sure. Okay. Got it. Thanks for taking my questions.

當然。好的。知道了。感謝您回答我的問題。

Of course.

當然。

Thomas Forte, Maxim Group.

托馬斯福特，馬克西姆集團。

Great. So first off, Larry and team, congrats on the quarter. I have five questions. I'll go one at a time. So the first question is, can you talk about the ability to grow the business by ramping existing categories, such as home exercise equipment, versus adding new categories, such as auto parts or other bulky items?

偉大的。首先，拉里和他的團隊祝賀本季的表現。我有五個問題。我一次就去一個。因此，第一個問題是，您能否談談透過增加現有類別（例如家庭健身器材）與添加新類別（例如汽車零件或其他大件物品）來發展業務的能力？

Hey, Tom. Thanks for the question. Iman, you want to take that one?

嘿，湯姆。謝謝你的提問。伊曼，你想拿那個嗎？

Absolutely. So basically, we have to discuss the TAM when it comes to furniture alone. The TAM for the furniture industry on the wholesale front is about $60 billion a year. And like a quick back-of-the-napkin math will kind of show you that we're presenting a small fraction of that as of right now. So there's a lot of runway.

絕對地。所以基本上，我們必須單獨討論家具的TAM。家具業批發領域的 TAM 每年約為 600 億美元。就像餐巾紙背面的快速數學運算一樣，我們會告訴您，我們目前所展示的只是其中的一小部分。所以有很多跑道。

And absolutely, the platform is optimized for big and bulky nonstandard products. So -- but at the same time, while they are not the core focus because we're so dialed in on becoming a more meaningful player in the furniture industry and home furnishings, the other categories are starting to trickle in by default.

當然，該平台針對大型非標準產品進行了最佳化。因此，但同時，雖然它們不是核心焦點，因為我們致力於成為家具行業和家居裝飾中更有意義的參與者，但其他類別也開始默認加入。

Okay. And then for my second question, can you talk about what's driving the impressive growth in Europe?

好的。對於我的第二個問題，您能談談是什麼推動了歐洲令人印象深刻的成長嗎？

Hey, Tom. I'll take that one. So Europe is -- we're still quite small in Europe, right? The scale is nowhere near what the United States is. So we've kind of entered a phase where things have fallen in line. The infrastructure is at a good place, and we've also attracted enough attention for ourselves.

嘿，湯姆。我會接受那個。所以歐洲——我們在歐洲仍然很小，對吧？規模遠不及美國。所以我們已經進入了一個一切都順理成章的階段。基礎設施很好，我們自己也吸引了足夠的關注。

So combining those factors with a small base or small denominator, that's very, very fast year-over-year growth. And we do feel quite positive on the outlook there, right? We feel like Europe is, in terms of potential market size, quite close to the US. And in terms of how fragmented it is, it actually seems to be a little more, which really adds on to how much value-add GigaCloud could provide to the market. So hopefully, good things there for us.

因此，將這些因素與小基數或小分母結合起來，就會達到非常非常快的年成長。我們確實對那裡的前景感到非常樂觀，對嗎？我們認為，就潛在市場規模而言，歐洲與美國相當接近。就其分散程度而言，實際上似乎更多一些，這確實增加了 GigaCloud 可以為市場提供的附加價值。希望這對我們有好處。

Great. And then for my next one, I wanted to talk about -- the last two years, for example, Amazon has had big fall sales in October in addition to Prime Day, which is usually June, July.

偉大的。然後，對於我的下一篇，我想談談 - 例如，在過去的兩年中，除了通常在六月和七月的 Prime Day 之外，亞馬遜在 10 月也有很大的秋季銷售。

And then you saw from Target, Walmart, and others, others having big sales in October. How, if at all, is that impacting your results? And do you see that as kind of a pull forward in sales, or do you see it as accretive?

然後你會看到塔吉特 (Target)、沃爾瑪 (Walmart) 和其他公司在 10 月的銷售量很大。這對您的結果有何影響（如果有的話）？您是否認為這是對銷售的一種推動，或者您認為它是一種增值？

So this time of year compared to some of the more -- the recurring holiday seasons that we see and promotions that we see, this year feels a little softer. And it's not necessarily limited to any specific channels, kind of across the board, and it's hitting a lot of folks.

因此，與每年的這個時候相比，我們看到的一些反覆出現的假期季節和促銷活動，今年感覺有點溫和。而且它不一定局限於任何特定管道，有點全面，而且它影響了很多人。

The names you mentioned earlier are part of that list. So in terms of would it be a pull forward, it kind of depends on where we land early next year and how things develop from here. It's very hard to say exactly what the impact is right now.

您之前提到的名字是該清單的一部分。因此，就這是否會向前推進而言，這在某種程度上取決於我們明年初的著陸點以及事態的發展。現在很難確切地說出影響是什麼。

All right. So last two -- and thanks again for taking my questions -- can you give your current thoughts on strategic M&A following the very successful deals you've had to date?

好的。最後兩點——再次感謝您回答我的問題——在迄今為止非常成功的交易之後，您能否談談您目前對策略併購的想法？

Yes, absolutely. So we're always on the lookout for the right opportunities. There's kind of, I'd like to call it, the three buckets that we are interested in.

是的，絕對是。因此，我們一直在尋找合適的機會。我想稱之為我們感興趣的三個桶子。

Bucket one is going to be a target that complements our existing businesses on the product side, so a target that will fit in nicely and enhance our portfolio offerings both on the product side and in terms of the market connections from a channel and supplier perspective. So think of Noble House here. It's a good example. Also, brands such as Christopher Knight are also very nice additions that help us broaden our market presence a little.

第一桶將成為在產品方面補充我們現有業務的目標，因此該目標將很好地適應並增強我們在產品方面以及從通路和供應商角度的市場聯繫方面的產品組合。所以想想這裡的貴族之家。這是一個很好的例子。此外，克里斯多福奈特 (Christopher Knight) 等品牌也是非常好的補充，可以幫助我們稍微擴大市場佔有率。

The second category would be a technology target that helps us execute our long-term goals. So this is someone that would help us both understand and reach the brick-and-mortar market a little bit better. So Wondersign here is a good example.

第二類是幫助我們實現長期目標的技術目標。因此，這個人可以幫助我們更好地了解和接觸實體市場。Wondersign 這裡就是一個很好的例子。

Third bucket we're interested in is Europe. So Europe, obviously, right now, is our fastest-growing market. And we are very confident in good things that will happen in the future. So from that perspective, we're looking for a target that will help us accelerate our growth a little more in terms of infrastructure and connections locally.

我們感興趣的第三個桶子是歐洲。因此，歐洲顯然是目前我們成長最快的市場。我們對未來會發生的好事充滿信心。因此，從這個角度來看，我們正在尋找一個目標，以幫助我們在當地基礎設施和連接方面加快成長。

Thank you. And then for my last question, can you talk about your pricing and your ability to pass on the incremental freight costs. You identified, I think, some specific freight costs. But I was wondering if you have any pricing power and ability to pass on any of that.

謝謝。對於我的最後一個問題，您能否談談您的定價以及轉嫁增量貨運成本的能力。我認為您確定了一些具體的運費。但我想知道你們是否有任何定價能力和能力來傳遞這些。

Yeah. So direct and short version is, yes, we do. However, it's very, very important to consider market conditions and the strength of demand, right? So it's always a balance. And right now, the market is a little harder.

是的。所以直接而簡短的版本是，是的，我們這樣做。然而，考慮市場狀況和需求強度是非常非常重要的，對嗎？所以它總是一個平衡。現在，市場有點困難。

But on the topic of ocean freight specifically, I think, Tom, you're thinking of the sequential decline in products margin. So important thing to keep in mind there is --

但具體到海運這個主題，我認為，湯姆，你正在考慮產品利潤率的連續下降。需要記住的重要事情是--

Yeah, I think you gave a specific comment on like $5 million or something like that in the fourth quarter, I believe.

是的，我認為您在第四季度對 500 萬美元或類似的內容發表了具體評論。

I see. Yes. So that's referring to ground delivery, not ocean freight. On the ocean freight front, we're doing a lot more --

我懂了。是的。所以這是指地面運輸，不是海運。在海運方面，我們正在做更多的事情--

Okay. So (multiple speakers) the ability to take price to offset any of that inflation on freight costs?

好的。那麼（多位發言者）是否有能力透過價格來抵銷貨運成本的通貨膨脹？

So we don't feel like right now is necessarily the best time to be pushing costs downstream. Alternatively, our strategy on this front is going to be more focusing on managing cost and limiting the volatility there to the extent we can. So that would entail us working with different partners and strengthening the relationships and contracts there, similar to how we did with our ocean freight.

因此，我們認為現在不一定是降低成本的最佳時機。或者，我們在這方面的策略將更加重視管理成本並盡可能限制波動性。因此，這需要我們與不同的合作夥伴合作，加強那裡的關係和合同，類似於我們在海運方面的做法。

Thanks, Erica. Thanks for taking my questions.

謝謝，艾麗卡。感謝您回答我的問題。

Of course.

當然。

There are no further questions at this time. I'll hand back to Ms. Erica Wei for closing remarks.

目前沒有其他問題。我將請魏女士致閉幕詞。

So thank you, everyone, for joining the call today. The future looks extremely bright as we work to bring everyone -- to bring even more value to our marketplace participants and our investors. We will speak to you again next quarter. But in the meantime, don't hesitate to reach out to our team if you have additional questions. Thank you, and take care.

謝謝大家今天加入電話會議。當我們努力讓每個人為我們的市場參與者和投資者帶來更多價值時，未來看起來非常光明。我們將在下個季度再次與您交談。但同時，如果您還有其他問題，請隨時聯繫我們的團隊。謝謝你，保重。

That does conclude our conference for today. Thank you for participating. You may now disconnect.

我們今天的會議到此結束。感謝您的參與。您現在可以斷開連線。