| Source: GigaCloud Technology
Central, HONG KONG
HONG KONG, Nov. 30, 2022 (GLOBE NEWSWIRE) — GigaCloud Technology Inc (Nasdaq: GCT) (“GigaCloud” or the “Company”), a pioneer of global end-to-end B2B ecommerce solutions for large parcel merchandise, today announced its unaudited financial results for the quarter and nine months ended September 30, 2022.
Mr. Larry Lei Wu, Founder, Chairman of the Board of Director and Chief Executive Officer of GigaCloud, commented, “We are very pleased to deliver another quarter of healthy growth despite a challenging macroeconomic backdrop. We leverage our technology and ecommerce platform to reach continuing growth in our revenue, GMV and positive operating cash flows. Our revenue grew by approximately 23% in the third quarter of 2022, compared to the third quarter of 2021. During the third quarter of 2022, our GigaCloud 3P GMV continued to increase as a percentage of total GigaCloud Marketplace GMV, demonstrating an increased economies of scale and user base achieved through our current marketplace model. Coupled with our successful IPO and improvement in operating cash flows in the third quarter, our liquidity and capital resources also saw an increase, providing sufficient capital for us to pursue our business objectives. Going forward, we will continue to leverage our data driven solutions, technological capability and resources to expand and optimize our marketplace, gain market share and better serve our global customers with a stable and efficient B2B ecommerce platform.”
Mr. David Lau, Chief Financial Officer of GigaCloud, added, “Despite a challenging market environment, our GigaCloud Marketplace GMV has grown over 30% year-over-year, which demonstrated our ability in creating values for our 3P sellers and buyers and expanding our marketplace. We continued to invest in key strategic areas in our Company which had resulted in robust growth in our business during the quarter. With ample cash reserves and positive cash flow generated in the third quarter, we are well positioned to expand the Company globally on a sustainable path.”
Third Quarter 2022 Financial and Recent Highlights
Operational Highlights
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1 Adjusted EBITDA is a non-GAAP financial measure. For more information on the non-GAAP financial measure, please see the section of “Non-GAAP Financial Measure” and the table captioned “Unaudited Reconciliation of Adjusted EBITDA” set forth at the end of this press release.
2 GigaCloud Marketplace GMV means the total gross merchandise value of transactions ordered through our GigaCloud Marketplace including GigaCloud 3P and GigaCloud 1P, before any deductions of value added tax, goods and services tax, shipping charges paid by buyers to sellers and any refunds.
3 Active 3P sellers means sellers who have sold a product in GigaCloud Marketplace within the last 12-month period, irrespective of cancellations or returns.
4 Active buyers means buyers who have purchased a product in the GigaCloud Marketplace within the last 12-month period, irrespective of cancellations or returns.
5 Spend per active buyer is calculated by dividing the total GigaCloud Marketplace GMV within the last 12-month period by the number of active buyers as of such date.
6 3P seller GigaCloud Marketplace GMV means the total gross merchandise value of transactions sold through our GigaCloud Marketplace by 3P sellers, before any deductions of value added tax, goods and services tax, shipping charges paid by buyers to sellers and any refunds.
Third Quarter 2022 Financial Results
Revenues
Total revenues were $128.0 million in the third quarter of 2022, an increase of 23.4% from $103.7 million in the third quarter of 2021. The increase was primarily due to an increase in service revenue from GigaCloud 3P and product revenue from GigaCloud 1P, partially offset by the decrease in product revenue from off-platform ecommerce.
Cost of Revenues
Cost of revenues was $105.4 million in the third quarter of 2022, increased by 26.3% from $83.5 million in the third quarter of 2021. The increase was primarily due to the overall increase in our revenue, as well as an increase in staff cost and warehouse cost.
Gross Profit and Gross Margin
Gross profit was $22.5 million in the third quarter of 2022, increased by 11.6% from $20.2 million in the third quarter of 2021. Gross margin was 17.6% in the third quarter of 2022, compared to 19.5% in the third quarter of 2021.
Operating Expenses
Total operating expenses were $18.3 million in the third quarter of 2022, decreased by 5.6% from $19.4 million in the third quarter of 2021.
Operating Income
Operating income was $4.2 million in the third quarter of 2022, increased by 423.2% from $0.8 million in the third quarter of 2021.
Income Tax Expenses
Income tax expenses were $2.0 million in the third quarter of 2022, increased by 6.9% from $1.8 million in the third quarter of 2021. The effective income tax rate was higher than the PRC statutory income tax rate of 25%, primarily due to the tax effect of share-based compensation expenses recognized upon the effectiveness of the IPO. Such expenses were considered not deductible in developing its full-year forecast for computing the interim tax provision.
Net Income
Net income was $0.7 million in the third quarter of 2022, compared to net loss of $1.6 million in the third quarter of 2021.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share was $0.01 in the third quarter of 2022, compared to basic and diluted loss per share of $0.19 in the third quarter of 20217.
Adjusted EBITDA
Adjusted EBITDA was $11.9 million in the third quarter of 2022, compared to $10.0 million in the third quarter of 2021.
Balance Sheet
As of September 30, 2022, the Company had cash of $116.2 million and restricted cash of $1.5 million, compared to $63.2 million and $0.7 million as of December 31, 2021, respectively.
Cash Flow
Net cash provided by operating activities was $23.3 million in the nine months ended September 30, 2022, compared to net cash used in operating activities of $15.3 million in the nine months ended September 30, 2021, primarily due to a decrease in the changes in inventories in the nine months ended September 30, 2022.
Net cash used in investing activities was $0.6 million in the nine months ended September 30, 2022, compared to $1.5 million in the nine months ended September 30, 2021, primarily consisted of cash paid for purchase of property and equipment.
Net cash provided by financing activities was $33.8 million in the nine months ended September 30, 2022, compared to net cash used in financing activities of $1.8 million in the nine months ended September 30, 2021, primarily consisted of proceeds from the initial public offering.
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7 When the Company’s IPO was consummated, the issued and outstanding Preferred Shares were converted into the Company’s common shares at a par value of US$0.05 per share on a one-for-one-basis. Since then, from August 18, 2022 to September 30, 2022, such shares were included in the calculation of basic net income per ordinary share on a weighted average basis.
Business Outlook
The Company expects its total revenues to be between $117 million and $122 million in the fourth quarter of 2022. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change and cannot be predicted with reasonable accuracy as of the date hereof.
Conference Call
The Company will host an earnings conference call to discuss its financial results at 8:30 am U.S. Eastern Time (9:30 pm Beijing/Hong Kong Time) on November 30, 2022.
For participants who wish to join the call, please access the link provided below to complete the online registration process.
Registration Link: https://s1.c-conf.com/diamondpass/10027101-gdtf6r.html
Upon registration, participants will receive the dial-in number and unique PIN, which can be used to join the conference call. If participants register and forget their PIN or lose their registration confirmation email, they may simply re-register and receive a new PIN. All participants are encouraged to dial in 15 minutes prior to the start time.
A live and archived webcast of the conference call will be accessible on the Company’s investor relations website at: https://investors.gigacloudtech.com/.
A telephone replay of the call will be available until December 7, 2022 via the following dial-in details:
About GigaCloud Technology Inc
GigaCloud Technology Inc is a pioneer of global end-to-end B2B ecommerce solutions for large parcel merchandise. The Company’s B2B ecommerce platform, which it refers to as the “GigaCloud Marketplace,” integrates everything from discovery, payments and logistics tools into one easy-to-use platform. The Company’s global marketplace seamlessly connects manufacturers, primarily in Asia, with resellers, primarily in the U.S., Asia and Europe, to execute cross-border transactions with confidence, speed and efficiency. The Company offers a truly comprehensive solution that transports products from the manufacturer’s warehouse to the end customer’s doorstep, all at one fixed price. The Company first launched its marketplace in January 2019 by focusing on the global furniture market and has since expanded into additional categories such as home appliances and fitness equipment. For more information, please visit the Company’s website: https://investors.gigacloudtech.com/.
Non-GAAP Financial Measures
The Company uses Adjusted EBITDA, which is net income excluding interest, income taxes and depreciation, further adjusted to exclude share-based compensation expense, a non-GAAP financial measure, to understand and evaluate its core operating 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.
For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliation of Adjusted EBITDA” set forth at the end of this press release.
Forward-Looking Statements
This press release contains “forward-looking statements”. Forward-looking statements reflect our current view about future events. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue” or similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the SEC.
For investor and media inquiries, please contact:
GigaCloud Technology Inc
Victor Neal
Email: investor.relations@gigacloudtech.com
Ascent Investor Relations LLC
Tina Xiao
Tel: +1-917-609-0333
Email: tina.xiao@ascent-ir.com
GigaCloud Technology Inc
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