GigaCloud Technology Inc

Thank you all for standing by. Welcome to GigaCloud Technologies' first quarter 2024 earnings conference call. During today's call, all participants will be in listen-only mode. Joining us today from GigaCloud Technology are the company's founder, chairman, and CEO, Larry Wu, its president, Dr. Iman Jaraq, and its chief financial officer, David Lau. Iman will give a performance and operational review, and David will share the financial results. After that, we will conduct a question and answer session. As a reference, this conference call contains statements about future events and expectations that are forward-looking in nature, and actual results may differ materially. Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, 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 website. With that, I would like to turn the call over to Larry for opening remarks. Please go ahead.

Thank you, operator, and welcome everyone to today's call. Building on last year's considerable success, our first quarter of 2024 demonstrated GigaCloud's ability to drive sustainable and profitable growth. Amidst industry challenges and headwinds, We're pleased to share GigaCloud's strongest ever first quarter results and our fifth consecutive quarter of revenue growth. This comes even as a consumer spending softens. For instance, the US Consensus Bureau reported an almost 8% year-over-year decline in retail furniture sales for Q1 2024. Despite these headwinds, GigaCloud achieved the top-line results that nearly doubled year-over-year. while also generating significant improvement in other key financial and operational metrics. These achievements demonstrate our resilience and ability to thrive amidst the market downturns. As we continue to integrate Noble House and the Wondersign acquisitions, we expect to see ongoing revenue growth and the powerful synergies that we believe will create an even more robust and efficient online B2B marketplace. In addition to the strategic nature of these acquisitions, we have taken extra steps to further accelerate the growth of our business. Firstly, we launched a new marketplace service called the Branding as a Service, or BaaS, to help sellers amplify their product competitiveness in the cloud marketplace. Secondly, we expanded our supplier base by adding products from Colombia, Mexico, and Turkey As a result, we have increased our product diversity, allowing buyers to source a wider range of quality products from these new markets. And lastly, we expanded our global fulfillment network to address increasing demand for our marketplace, further enhancing our world-class support for buyers and sellers. You will hear more about these important initiatives shortly. We are very excited to continue our growth journey and believe that Giga Cloud will further enhance its position as a leader and the disruptor of a B2B e-commerce technology solution. Going forward, we remain committed to streamlining the global supply chain journey for all our marketplace participants. Now I will turn it over to Imang.

Thanks, Larry. I'd also like to add my welcome to everyone for joining us today. Despite challenging market conditions experienced by the industry, we're thrilled to share that the Giga Cloud Marketplace GMV for the trailing 12 months as of March 31st increased by 64% year over year, with 263 new sellers and 1,238 new buyers. Our growth is driven by Giga Cloud's highly robust technology suite that transforms and facilitates the way suppliers and retailers of large parcel items connect and transact. Our supplier-fulfilled retailing model streamlines the global supply chain, offering a seamless end-to-end experience. Our acquisition of Noble House and Wonder Sign are further transforming our company by adding diversified products and services to our already robust offerings. I'll provide an update on the integration progress shortly. First, I'd like to discuss our latest groundbreaking initiative, BaaS, or Branding as Service, which we launched last month. This program is an industry-first and holds significant opportunities for both our Marketplace participants and for GigaCloud. This unique solution was developed to tackle the long-standing challenges associated with branding in the furniture industry. These industries have been fragmented, crowded and low purchase frequency nature, furniture suppliers have traditionally had great difficulties when attempting to create brand recognition, including the need for significant amount of capital resources and time, of course. But with BaaS, Giga Cloud is changing the game. At its core, the BaaS program enables qualified sellers for the Giga Cloud Marketplace to offer their products under the banner of industry-leading furniture, a solution that effectively solves the disability of brand building and allows qualified sellers to compete more effectively, enjoy greater margins, and stand out in the market. The BaaS program is an example of yet another addition to our services toolbox. By providing effective solution to the industry challenges, we're creating a powerful magnet for the marketplace. We're attracting not only established sellers, but also new suppliers eager to join our vibrant marketplace community as we gear up for the inaugural transaction in the second quarter. This translates to widespread enthusiasm, both from seasoned veterans and those new to the platform. Our first brand partner, Christopher Knight Home, has been a consumer favorite with products that have generated over 1 million five-star reviews online and currently sold through some of the world's largest and best-known retailers. We also look forward to expanding this program with additional industry-leading brands in the future. As part of the BaaS program, we've created the Giga Cloud Brand Center Group. The Brand Center equips sellers with the tools they need to thrive, including strategic guidance to maximize their visibility and marketability. while simultaneously maintaining strict quality standards and stylistic standards set by participating brands. Through inspections and imposing other quality control processes on suppliers, we aim to protect the reputation of participating furniture brands and ensure that end consumers receive products that not only meet but also exceed their expectations. As always, sellers will be able to utilize our B2B marketplace's advanced fulfillment capabilities. Due to accelerating demand, we have added three new fulfillment centers in the U.S. and one fulfillment center in Germany during the first quarter of 2024. Our latest addition in April 2024 has brought us to 42 prime locations in five countries with over 10 million square feet of fulfillment space. We believe the expansion will enhance our global fulfillment operation by further improving efficiencies and transactions among marketplace participants. The new facilities are currently undergoing racking installation and will soon add to what is already a seamless, broad, and strategic global network designed for ease of use and efficiency. By growing our infrastructure to keep pace with a dynamic market, we believe we are well positioned to capitalize on the amazing growth of the Giga Cloud marketplace. We're seeing increased attention from suppliers in new regions, as Larry alluded to, a clear indicator of our growth. This reinforces our focus on enhancing our transaction experience by expanding our product breadth. We're committed to growing our marketplace buyer community through diversifying the selection of on-trend furniture design and providing a broader product range. Our integration of Noble House and Wondersign is progressing as planned and is helping drive additional innovation and transformation. The integration of Noble House has successfully enhanced our reach and global presence, and we remain on track with our original plan to break even in 2024. The integration of WonderSign is a testament of our ongoing technological advancement, and our combined expertise will unlock new avenues for innovation across the entire business ecosystem. Together, these acquisitions signify more than just an expansion. They are driving innovation and fostering a powerful synergy that will empower us to deliver greater value to our customers. Now let's dive into our operational highlights, showcasing the strength of our platform for the trailing 12 months ending March 31st, 2024, our Giga Cloud Marketplace, GMV, or the total gross merchandise value of transactions ordered through the marketplace, was $908 million, an increase of 64% year over year. We generated a nearly 44% increase in active 3P or third-party sellers, ending the quarter with a total of 865. We are successfully adding scale to our supplier-fulfilled retailing network, which should continue to grow organically and through our acquisition of Noble House. GMB and our three-piece seller marketplace grew almost 72% from the year ago and totaled approximately $490 million for the trailing 12 months. Three-piece sellers represented 54% of our total marketplace GMB for the same period. We believe the combination of our 3P and 1P are vital to our growth strategy, with a focus on continuing to drive organic growth of 3P GMV to build a larger, more efficient, and more sustained marketplace. Active buyers also grew substantially to 5,493 for the trailing 12 months, which is an increase of more than 29% from the same period last year, average spend per active buyer increased 27% to $165,000. With ever-growing high-quality seller participation in our marketplace and a growing product portfolio, we look forward to additional expansion of our buyer metrics. Before I wrap up, I want to provide a brief update on the fire in one of our Japanese fulfillment centers that we disclosed last quarter. On March 9, 2024, one of our facilities in Japan suffered damages due to a warehouse fire, estimated at approximately $1.8 million with respect to the cost of inventory held at this fulfillment center. Insurance coverage is expected to extend up to $1.5 million. It's worth noting that the impact on our overall operation is expected to be minimal, as the affected inventory in the fulfillment center represented less than 1% of our total inventory holding. I hope today's discussion has showcased our enthusiasm for GigaCloud's ongoing evolution and its promising future. Our financial performance remains robust with consistent growth quarter after quarter. We're strategically expanding our global fulfillment network to better serve our marketplace participants and to meet growing demands. And let's not forget the integration of two key acquisitions, further accelerating our scalability and technological innovation. We're actively driving the future of global e-commerce, and we're thrilled to have you with us on this journey. Now, I will turn the call over to David for a more detailed review of our financials.