GigaCloud Technology Inc

Thank you all for standing by. Welcome to GigaCloud Technologies' third quarter 2024 earnings conference call. During today's call, all participants will be in listen-only mode. Joining us today from GigaCloud are the company's founder, chairman, and CEO, Larry Wu, its president, Dr. Iman Shrock, and its interim chief financial officer, Erica Way. 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. 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. 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. With that, I would like to turn the call over to Larry for his opening remarks. Please go ahead, sir.

Thank you, operator, and welcome everyone to today's call. The third quarter built upon the very strong growth paths we have followed since the launching of our B2B online marketplace. Despite the continued industry headwinds, we are successfully navigating these challenges. This is shown by the new record high in net income and adjusted EBITDA and the growing numbers of marketplace participants due to its unique ability to streamline operations and enhance efficiency for buyers and sellers of big, bulky, non-standard items globally. Among other accomplishments, our acquisition of a 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. To demonstrate our confidence in the future, on September 3rd, 2024, our board authorized a $46 million shared 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 of a consideration of $11.4 million, pursuant to a repurchase plan under Rule 10b-5-1. Our approach to creating lasting shareholder value is anchored in the strong operational performance and the disciplined strategic capital decisions. In line with this commitment, we plan to retire the shares we have repurchased, effectively reduce our total issue shares. This step shows our belief in Giga Cloud's long-term potential and strengthens each shareholder's stake in that journey. We view this as one of many actions aligned with our vision for sustainable growth, and we are dedicated to building on our momentum in the quarters ahead. 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 will continue driving progress as a leader and innovator of B2B commerce, e-commerce technology solutions. Thank you, everyone, for joining us. Now I will turn the call over to Ima.

Thanks, Larry. I'd 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. Because our B2B platform has become a powerful and proven way for buyers and sellers of non-standard items to seamlessly transact, our Giga Cloud Marketplace GMV continued to grow for the trailing 12 months end of September 30, 2024. Specifically, Giga Cloud Marketplace GMV increased by more than 80% year-over-year, keeping pace with our second quarter growth. We continue to see significant increases in our buyer and seller bases, which drove overall GMV growth. Our active 3P seller has crossed the 1,000 mark for the first time, now standing at 1051. Meanwhile, our active buyer base has grown to 8,535, These milestones reflect our platform's growing momentum and appeal. 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. GMV in our 3P seller marketplace grew 72% from a year ago and was $635 million for the trading 12 months into 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. 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. 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. I'd now like to spend a few minutes on Noble House. We're on track to reach break-even 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. 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. 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. 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. 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 shipments. Order deliveries for our newly developed products have started trickling in starting October, and this starts phase three of our integration plan. 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. 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 and 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. 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. 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. Now, I will turn the call over to Erica for a more detailed review of our financial results.