GigaCloud Technology (NASDAQ:GCT) reported second-quarter revenue growth of 28% and record quarterly earnings per share, as the company cited marketplace expansion, European momentum and contributions from its New Classic acquisition despite continued pressure in the broader furniture market.
Revenue for the quarter rose to $412 million, including 23% organic growth and a 5% contribution from New Classic, Chief Financial Officer Erica Wei said. Diluted GAAP earnings per share increased 28% year over year to $1.16, while net income climbed 22% to a quarterly record of $42 million, or 10.3% of revenue.
Marketplace activity and U.S. share gains
President Iman Schrock said trailing 12-month gross merchandise value, or GMV, rose 21% year over year to $1.7 billion as of June 30. Active third-party sellers increased 26% to 1,465, while active buyers grew 17% to 12,823.
Domestic GMV increased 9% during the quarter despite declines in the U.S. furniture industry, according to Schrock. He attributed the company’s performance to its marketplace model and supplier-fulfilled retailing approach.
Service revenue rose 25% to $121 million, supported by demand for ocean freight, warehousing and last-mile services, as well as higher commission revenue tied to transaction volume. Service gross margin improved 3.2 percentage points sequentially to 11.7%, which Wei said reflected carrier optimization, responsive pricing and favorable ocean freight conditions.
The company’s long-term ocean freight contracts allowed service margins to benefit as spot rates increased during the quarter, Wei said. However, she added that future service margins will depend in part on market pricing, which she described as difficult to predict amid volatility in ocean freight markets.
Product revenue grew 29% to $291 million. U.S. product revenue increased 17%, aided by a strong outdoor furniture season and capabilities obtained through the Noble House acquisition. Product gross margin was 31.4%, unchanged from the preceding quarter, while total company gross margin increased 1.7 percentage points sequentially to 25.6%.
Europe drives growth and third-party participation
Europe was a major contributor to growth during the quarter. Quarterly GMV in the region rose 66% year over year, while European product revenue increased 54% to $109 million.
Schrock said the company is seeing its international marketplace strategy gain traction as it uses first-party supply to establish product availability, attract buyers and support third-party seller participation. Third-party sellers in Europe increased more than 400% year over year and accounted for more than 15% of European marketplace GMV, up from 6% a year earlier.
Wei said Europe is the company’s fastest-growing region and is becoming a strong product-margin contributor. The region’s service and logistics margin remains below that of the U.S. because logistics requires density and scale, she said, but she expects that gap to narrow as GigaCloud expands infrastructure and vendor relationships.
New Classic integration advances
New Classic generated $16.3 million in quarterly revenue. Its sales declined 8% year over year, an improvement from an approximately 20% decline reported in the first quarter following the acquisition’s close.
Management said the initial decline reflected both industry challenges facing traditional wholesalers and disruption associated with the ownership transition. The company expects the integration to be completed by the middle of next year.
Wei said the first stages of integration have focused on aligning teams, systems, processes and operations. GigaCloud has begun introducing some new products to New Classic customers, though management expects a more significant contribution over the next several quarters as integration advances and products are developed, shipped and sold.
“We believe New Classic is following a similar path to Noble House, where operational improvements and disciplined execution unlock meaningful value over time,” Wei said.
Liquidity, buybacks and outlook
Operating cash flow was $48 million during the quarter. GigaCloud ended the period debt-free with $379 million in total liquidity, including cash equivalents, restricted cash and short-term investments.
The company repurchased about $30 million of shares during the second quarter at a weighted average price of $39.55 per share. After June 30, it bought another $18 million of shares at an average price of $36 per share. Total repurchases under its prior $111 million authorization reached $81 million.
GigaCloud’s board canceled the prior authorization and approved a new $120 million share repurchase program effective immediately, with a three-year duration. Wei said the company’s near-term merger-and-acquisition priority remains the New Classic integration, though it may evaluate future targets that expand product distribution, add technology capabilities or strengthen European logistics infrastructure.
For the third quarter, GigaCloud expects revenue of $375 million to $400 million. Wei said the outlook includes expected inorganic contributions from New Classic and assumes continued operational stabilization at the acquired business.
About GigaCloud Technology (NASDAQ:GCT)
GigaCloud Technology Inc (NASDAQ:GCT) is a China-based provider of software-as-a-service (SaaS) and cloud computing solutions tailored for cross-border e-commerce. The company’s core offering, its Supply Chain Embedded E-commerce as a Service (SCEaaS) platform, integrates procurement, order management, warehousing, logistics and payment services into a unified cloud-based system. This end-to-end digital supply chain solution is designed to help small and medium-sized Chinese exporters efficiently connect with global buyers without the need to build and maintain their own infrastructure.
Through its modular, subscription-based SaaS model, GigaCloud enables merchants to scale operations on demand and minimize upfront capital expenditures.
