GigaCloud Technology Q2 2026 Earnings Report

GigaCloud Technology EPS Results

• Actual EPS: $1.16
• Consensus EPS: $0.90
• Beat/Miss: Beat by +$0.26
• One Year Ago EPS: N/A

GigaCloud Technology Revenue Results

• Actual Revenue: $411.64 million
• Expected Revenue: $380.63 million
• Beat/Miss: Beat by +$31.01 million
• YoY Revenue Growth: N/A

GigaCloud Technology Announcement Details

• Quarter: Q2 2026
• Date: 8/6/2026
• Time: Before Market Opens
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 8:00AM ET

GigaCloud Technology (NASDAQ:GCT) (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. The platform leverages data analytics and cloud computing to automate order processing, customs clearance and last-mile delivery. In addition to its software tools, the company partners with third-party logistics providers and freight forwarders to offer value-added logistics services, helping clients manage international shipping complexities within a single ecosystem.

Since its founding in 2018 and Nasdaq listing in 2020, GigaCloud Technology has extended its reach beyond China to serve buyers in North America, Europe and Latin America. The company continues to enhance its platform capabilities and expand its logistics network through strategic partnerships and technology investments. Led by a management team with deep experience in e-commerce, supply chain management and cloud computing, GigaCloud is positioned to capitalize on the accelerating trend of global cross-border trade.

GigaCloud Technology Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 revenue rose 28% to $412 million and diluted EPS increased 28% to a record $1.16, while net income reached $42 million. Operating cash flow was $48 million, and the company remained debt-free with $379 million in total liquidity.
• Positive Sentiment: Marketplace momentum remained strong, with trailing 12-month GMV up 21% to $1.7 billion, active sellers up 26%, and active buyers up 17%. Europe was a standout, with quarterly GMV up 66% and third-party sellers increasing more than 400% year over year.
• Neutral Sentiment: New Classic’s year-over-year sales decline improved to 8% in Q2 from approximately 20% in Q1 as integration progressed, but management expects the more significant product and synergy benefits to take several additional quarters. Integration is targeted for completion by mid-2027.
• Positive Sentiment: GigaCloud accelerated share repurchases during the quarter, buying approximately $30 million of stock at an average price of $39.55, followed by another $18 million after quarter-end. The board replaced the remaining authorization with a new $120 million, three-year buyback plan.
• Negative Sentiment: Management guided for third-quarter revenue of $375 million to $400 million, implying slower growth than Q2, while noting that tariff refunds received so far are not expected to have a material long-term impact.

Presentation

[Operator]

Good morning, and welcome to the GigaCloud Technology second quarter 2026 earnings conference call. With us today are GigaCloud's founder and Chief Executive Officer, Larry Wu, its President, Iman Schrock, and its Chief Financial Officer, Erica Wei. Larry will give opening remarks, Iman will discuss the company's operational progress, and Erica will review the financial results. After that, we will open the call to questions from the audience. As a reminder, this conference contains statements about future events and expectations that are forward-looking in nature, and actual results may differ materially.

[Operator]

Additionally, today's call will include a discussion of non-GAAP measures with the meaning of the 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 the press release issued today by GigaCloud, which is posted on the company's website. I will turn the call over to Larry. Please go ahead, sir.

[Larry Wu, CEO at GigaCloud Technology]

Thank you, operator, thank you all for joining us. Our second quarter demonstrated GigaCloud's resilience and adaptability. Despite ongoing pressure from across the broader furniture landscape, we delivered 28% revenue growth and record earning per share, underscoring our commitment to profitable growth. We're actively shaping the company's future by expanding our marketplace, growing our international presence, and making strategic investment that create multiple growth opportunities. Europe is a strong example of this strategy in action. The momentum we're building overseas is driving meaningful growth and demonstrating our model can scale and succeed across borders. Through disciplined execution, long-term investment, and local expertise, we are replicating our success globally. Beyond organic marketplace expansion, we are leveraging our strong balance sheet and cash flow generation to set the foundation for steady long-term growth. New Classic is a prime example.

[Larry Wu, CEO at GigaCloud Technology]

Building on experience gained with Noble House, we're executing a proven integration strategy that is squarely on track. The acquisition expands our reach, broadens our offerings, and strengthens our ability to serve a larger portion of the industry. We're not simply industry participants. We're shaping its future by building the industry's digital infrastructure for large parts of B2B transactions. By seamlessly connecting buyers and sellers across channels and geographies, we have created an ecosystem that meets today's demands while positioning GigaCloud for future growth. This quarter reinforces that our strategy is working. Even in the challenging environment, we continue to gain share, expand our capabilities, and deliver profitable growth. With a scalable platform, disciplined execution, and long-term focus, we believe GigaCloud remains well-positioned to create meaningful value in the years ahead. I will turn the call to Iman for discussion of our ongoing and continued progress.

[Iman Schrock, President at GigaCloud Technology]

Thank you, Larry. Hello, everyone. Our marketplace remains GigaCloud's core engine, delivering another strong quarter. Trailing 12-month GMV grew 21% year-over-year to $1.7 billion as of June 30th, 2026, demonstrating the continued value buyers and sellers find in our platform, even in today's challenging environment. Marketplace fundamentals remain healthy. Active third-party sellers increased to 26% to 1,465, while active buyers grew 17% to 12,823. These gains reinforce the network effect at the heart of our platform. More sellers attract more buyers, and more buyers create greater opportunities for sellers, strengthening the marketplace over time. Despite declines in the U.S. furniture industry, domestic GMV increased 9% during this quarter, significantly outperforming the broader market. We continue to gain market share, reflecting the strength of our marketplace and the value of our supplier-fulfilled retailing model.

[Iman Schrock, President at GigaCloud Technology]

Our platform serves suppliers and retailers through an integrated ecosystem designed to make large parcel B2B commerce more efficient. By providing greater flexibility, efficiency, and risk management capabilities, we help customers navigate challenging market conditions while supporting long-term growth. We remain focused on disciplined execution and operational efficiency. GigaCloud was built to perform across market cycles. Our adaptability is a key competitive advantage. Tools such as dynamic pricing allow us to respond quickly to changing conditions while remaining focused on our long-term strategy. The strength of our platform and operating model gives us confidence in our ability to continue creating value, gaining share, and advancing our growth objective. Europe remains one of our most exciting growth opportunities. Quarterly GMV increased 66% year-over-year, making the region both a meaningful growth vector and an important source of diversification.

[Iman Schrock, President at GigaCloud Technology]

We are seeing the same strategy that fueled our U.S. success gain traction internationally, building a strong supply foundation with 1P, attracting buyers, and creating a flywheel that drives 3P seller participation, product selection, transaction volume, and efficiency. That flywheel is gaining momentum. We are now seeing meaningful 3P participation in response to marketplace buying demand. 3P sellers in Europe increased more than 400% year-over-year, and now represent over 15% of Europe marketplace GMV, compared to 6% just a year ago, reinforcing our belief that we are still in the early stages of a significant opportunity. Turning to New Classic, the integration remains on track for completion by mid-next year and continues to be an important strategic priority. Our teams are aligning systems, processes, and operations while identifying opportunities to introduce new product offerings, improve efficiency, capture synergies, and leverage the scale of our platform.

[Iman Schrock, President at GigaCloud Technology]

As we had shared during the last call, the New Classic portfolio saw an approximately 20% year-over-year decline in Q1, immediately following the close of the acquisition. The decline was due to both challenges faced by traditional wholesalers in the industry and by initial disruptions following the change in ownership. Encouragingly, that decline improved to 8% in the second quarter, reflecting stabilization and early progress from our integration efforts. We believe the larger opportunity still lies ahead. New Classic brings a strong brand, established customer relationships, and a meaningful brick-and-mortar distribution that complement our existing strengths. These channels create new opportunities for growth, and we are already introducing additional product and offerings to this customer base. While we are pleased with the progress made so far, we are even more excited about the opportunity ahead.

[Iman Schrock, President at GigaCloud Technology]

We believe New Classic is well positioned to benefit from the scale, resources, and capabilities of the GigaCloud platform, creating long-term value for customers, partners, and shareholders. I'll turn the call over to Erica for a discussion of our second quarter financial results.

[Erica Wei, CFO at GigaCloud Technology]

Thank you, Iman, and thank you all for joining us today. As a quick reminder, all figures covered today are rounded, and unless otherwise noted, comparisons are against the same period last year. Let's get into it. Despite continued market uncertainty, we delivered record revenue and record quarterly EPS through disciplined execution and a focus on profitable growth. Revenue increased 28% year-over-year to $412 million, including 23% organic growth and a 5% inorganic contribution from New Classic. EPS rose 28% to $1.16 per share, a testament to our team's strong execution and the enduring strength of our business model. Let's break it down further. Starting with service revenue. Strong marketplace activity drove service revenue growth of 25% to $121 million. Service revenue growth was supported by higher demand for ocean freight, warehousing, and last-mile services, as well as increased commission revenue from higher transaction volumes.

[Erica Wei, CFO at GigaCloud Technology]

Service gross margin improved 3.2% sequentially to 11.7%, driven by ongoing carrier optimization, responsive pricing for our service offerings, and favorable ocean freight dynamics. Because much of our ocean freight capacity is secured through long-term contracts, our service margins benefited as spot rates moved higher during the quarter. Moving on to product revenue. Product revenue increased 29% year-over-year to $291 million, with growth across all regions. In the U.S., product revenue grew 17%, despite continued softness in the broader furniture market. We benefited from a strong outdoor furniture season in Q2, and our ability to deliver was driven by capabilities gained from acquiring Noble House, an asset that has become an ongoing and growing contributor to our revenue and earnings. That success gives us a proven playbook as we turn to our newest addition, New Classic.

[Erica Wei, CFO at GigaCloud Technology]

New Classic generated $16.3 million of revenue during the quarter. While sales declined 8% year-over-year, performance improved significantly from the first quarter as we stabilized operations and advanced integration efforts. We believe New Classic is following a similar path to Noble House, where operational improvements and disciplined execution unlock meaningful value over time. Europe remained a standout performer, with product revenue increasing 54% year-over-year to $109 million. Growth was driven by continued marketplace expansion, increasing buyer and seller participation, and stronger relationships with international partners. Europe continues to validate the scalability of our model outside the U.S. It has become a meaningful contributor, an important source of diversification, and a powerful growth vector that we believe can remain a significant opportunity for years to come. Product gross margin was 31.4%, in line with the previous quarter.

[Erica Wei, CFO at GigaCloud Technology]

On a combined basis, total company gross margin was 25.6%, a sequential increase of 1.7% from prior quarter. Sales and marketing expense was $36 million, or 9% of total revenue, compared with 8% a year ago, primarily due to higher channel commission and spend supporting our European expansion. General and administrative expense was $19 million, or 5% of revenue, compared to 4% in prior year quarter. As we previously discussed, our annual stock-based compensation is granted in the second quarter each year, with a substantial portion vesting immediately upon grant. Consequently, the resulting expense is directly tied to our share price on the grant date, meaning the higher share price this year resulted in an increased total SBC expense. As a result, share-based comp was $11 million in the second quarter of 2026 compared to $3 million in the second quarter of 2025.

[Erica Wei, CFO at GigaCloud Technology]

Dilutive effects from our 2026 SBC grants have already been offset by buybacks executed in the second quarter, which we will go into more details on shortly. We generated record quarterly net income of $42 million, or 10.3% of revenue, up 22% year-over-year. Supported by share repurchases, diluted GAAP EPS increased 28% to $1.16 per share. Operating cash flow was $48 million during the quarter. We remain debt-free as of quarter end and ended the quarter with $379 million of total liquidity, which includes cash equivalents, restricted cash, and short-term investments. We continue to execute on our share buyback plan. As we had previously communicated, we retain the flexibility to execute our share repurchase plan opportunistically during periods of market volatility.

[Erica Wei, CFO at GigaCloud Technology]

As our share prices experienced a downward dislocation during the second quarter, we leaned into that approach and accelerated our repurchases, executing approximately $30 million in buybacks at a weighted average price of $39.55 per share. All repurchased shares as of June 30th, 2026, have been retired. Subsequent to June 30th, 2026, we further executed another $18 million in buybacks at a weighted average price of $36 per share. This brings our total execution under our $111 million authorized plan to $81 million as of today. This leaves us with $30 million remaining under our previous authorization and two years still left on that plan. In our view, that level of capacity is insufficient to act decisively when opportunities arise. As a result, our board has approved the cancellation of our existing plan and authorized a new buyback plan of $120 million, effective immediately, with a duration of three years.

[Erica Wei, CFO at GigaCloud Technology]

Regarding M&A, our near-term priority remains the successful integration of New Classic. Once that progress is further along, we expect to become more active in pursuing additional acquisition opportunities that support our long-term growth strategy. Looking ahead, we expect third quarter revenue to be in the range of $375 million-$400 million. Operator, we are now ready to begin the Q&A session.

[Operator]

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. The first question comes from Tom Forte from Maxim Group. Please go ahead.

[Tom Forte, Analyst at Maxim Group]

Great. Thanks. Larry, Iman, Erica, Greta, congratulations on the very strong results. I have three questions. I'll go one at a time. Erica, I didn't hear two words in your prepared remarks, so I'd appreciate if you could comment on tariffs refunds and if it's something that you have an opportunity to do, given that a lot of other companies are talking about it this quarter.

[Erica Wei, CFO at GigaCloud Technology]

Yes. Good morning, Tom, and thank you for your question. We have been applying for tariff refunds just like everyone else has, and we have already received a portion of them. So far, the amounts received are not terribly material to date. In the grand scheme of things, given the acquisition situation with New Classic and customers that had previously received price increases because of purchasing containers, I think in the net of things, I don't think it will be a meaningful effect for GigaCloud as a whole in the long run, since we may not be able to retain all of the economic benefits.

[Tom Forte, Analyst at Maxim Group]

Thank you. The second question I had is, during the quarter, Amazon launched Supply Chain as a service. I'd appreciate you explaining to the market why you think it is or is not a competitor, and if it is a competitor, why you believe you're better situated to succeed in your efforts?

[Iman Schrock, President at GigaCloud Technology]

Hey, Tom. We continuously monitor developments across the logistic landscape. Amazon's logistic network is broad, but our value proposition extends beyond transportation. Our strength lies in the combination of our B2B marketplace and integrated logistics solutions that we provide for large parcel products. We are purpose-built for large parcel and are completely channel-agnostic, enabling customers to fulfill orders across multiple sales channels through a neutral platform. We believe this flexibility, combined with our marketplace, continues to differentiate our offering.

[Tom Forte, Analyst at Maxim Group]

Excellent. Thank you, Iman. Third and final question. As you get bigger, M&A activity also needs to get bigger to move the needle. What's your appetite for larger scale acquisitions?

[Erica Wei, CFO at GigaCloud Technology]

Hi, Tom. It really is target specific. I think there is appetite for perhaps something a little bigger as we grow, once we are past the initial stages of integrating New Classic. Now, when it comes to a topic of specific size, it really depends on who the target is and how well they fit in with GigaCloud's long-term objectives strategic-wise, rather than a fixed specific range we are trying to hit. Does that answer your question?

[Tom Forte, Analyst at Maxim Group]

Yes, thank you. Congrats again on a very strong quarter.

[Erica Wei, CFO at GigaCloud Technology]

Thank you, Tom.

[Operator]

The next question comes from Matt Koranda from ROTH Capital. Please go ahead.

[Matt Koranda, Analyst at ROTH Capital]

Hey, guys. Good morning. I just wanted to hear a little bit more about the third quarter growth outlook, the 17% growth that you've incorporated into the outlook. How is New Classic factored into that, just given some of the headwinds you mentioned on New Classic's products?

[Erica Wei, CFO at GigaCloud Technology]

Hi, Matt. Our current guidance incorporates, it's inclusive of the inorganic contribution we should be seeing from New Classic. As we go further down with our integration efforts, we should continue to see New Classic stabilizing more operational-wise and continue to see improvement when it comes to performance.

[Matt Koranda, Analyst at ROTH Capital]

Okay, maybe you could just unpack some of the drivers of the improvements at New Classic that you're making? I just wanted to hear a little bit more about the integration there.

[Erica Wei, CFO at GigaCloud Technology]

Yes. The first two quarters of our integration efforts have mostly surrounded integrating the teams, the processes, the operations. What that means exactly, as you know, when we make an acquisition, we tend to integrate the two teams together right away with the intention of running just one big organization, one big team, rather than having the acquired target operate as a standalone company. There's a lot of initial work surrounding simply having the right systems talk to each other, the right folks working together, and having an improved processes that considers the differences in the acquired business and what GigaCloud already has. That takes a good amount of time to straighten out, and that's where most of our energy has been going to in the first two quarters.

[Erica Wei, CFO at GigaCloud Technology]

Once we get past that initial stage of smoothing things out and having everyone operate as one, we enter the stage of introducing, on a more significant scale, new products that reflect the capabilities of the original GigaCloud and the acquired company, and that better suit our customers' needs.

[Matt Koranda, Analyst at ROTH Capital]

Okay. Those new products should be rolling out within the next quarter or so? I guess you're two quarters into the integration, just where are we in terms of the process you laid out?

[Erica Wei, CFO at GigaCloud Technology]

We have already begun introducing a little bit of new products, just not at a very significant scale. I think over the next several quarters, we should be seeing more of a pickup. If you think back about our timeline with Noble House, it usually takes about three to four quarters before we see that pick up more. Because think about day one, when we start the integration to being past the original system integration and the timing that is needed, the amount of time simply needed to develop new product, have it ordered, have it shipped, and then have it sold. That alone takes several quarters.

[Matt Koranda, Analyst at ROTH Capital]

Okay. Got it. Then just on the service margin improvement, I guess now that you've locked in ocean freight contracts for the year and maybe have a little bit of visibility into the trajectory of spot rates, is it safe to say that gross margins should expand next quarter, and maybe even for the remainder of the year? Maybe just speak to the service gross margin improvement and the trajectory there.

[Erica Wei, CFO at GigaCloud Technology]

Yes. What we do have visibility into is our cost, the other end that we can't necessarily have long visibility into is the market pricing. That's the price part of our equation, right? Ocean specifically has been quite volatile in the past few months because of everything that's going on in the world these days. Unfortunately, I don't know we're going to be able to predict where the world is in another three to six months, but cost-wise, I do think we are in a very good position.

[Matt Koranda, Analyst at ROTH Capital]

Okay, got it. I guess the inverse of that is you guys have always said, or for the past couple of quarters you've said that I guess the service and the product businesses act as sort of a natural hedge. If we do have, I guess, firmer ocean spot, does that eventually weigh on product gross margins? I mean, I've noticed they've been going up despite that, maybe just a little bit on the product gross margin side of the business as well.

[Erica Wei, CFO at GigaCloud Technology]

Yes, great question. You're right, they do hedge each other a little bit naturally. For ocean specifically, on the pure service front, it is both a revenue and a cost to us. On the product side, it is simply a cost. Naturally, we treat it like any other cost increase if there are fluctuations. We bake it into the product price and try to capture the margins there when there is a cost increase in the form of a product price increase. There will be additional pressure on the product margins when ocean spot rates go up, and there is margin support on the service side when ocean goes up.

[Matt Koranda, Analyst at ROTH Capital]

Okay. All right, got it. I'll leave it there. Thank you.

[Erica Wei, CFO at GigaCloud Technology]

Thank you.

[Operator]

The next question comes from Bill Dezellem from Tieton Capital Management. Please go ahead.

[Bill Dezellem, Analyst at Tieton Capital Management]

Thank you. That's Tieton Capital Management. Tying into your discussion about your next acquisition, as you think about the capabilities that you will be looking for with that acquisition or maybe the strategy that you will have for it, would you walk us through how you're thinking about that, please?

[Erica Wei, CFO at GigaCloud Technology]

Yes. First off, I want to be clear. Right now, the priority is New Classic. We don't want to kind of overload the team until we're ready for our next move. To answer your question, generally, it's all going to be about our strategic growth initiatives and how well a certain target might fit in with those objectives. There's right now generally three types of targets that we would consider. First one is a product distribution-oriented kind of target, meaning someone, for example, similar to New Classic, who is a more in lines of a traditional wholesaler or distributor that connects already with a lot of brick-and-mortar type retailers. That is a very advantageous merge with what our platform already has in terms of customer reach and giving us the ability to serve more corners of the market or the industry.

[Erica Wei, CFO at GigaCloud Technology]

The second type would be a technology add that helps us better serve our customers. A good example of this would be the Wondersign acquisition that we made in 2023. It's a technology company that gives us a tool or the capabilities to better serve our retailer clients, brick-and-mortar retailers. That is something we would also be open to down the line. Third, last but not least, for Europe, we would also be open to considering targets that give us more of a boost on the logistics front. Europe, as you know, has been growing incredibly well for us. We've seen a tremendous amount of addition from new sellers and buyers and overall transaction volume, and that volume needs to be supported by good and efficient infrastructure for us to capture all of the value there.

[Erica Wei, CFO at GigaCloud Technology]

We have been growing that infrastructure organically with our own team. However, the growth is quite fast, and it certainly wouldn't hurt if there were external forces that we could leverage to accelerate. Does that answer your question?

[Bill Dezellem, Analyst at Tieton Capital Management]

It does. Really appreciate the thorough response and, to be clear, not trying to get ahead of New Classic being fully integrated and you being ready. Let me take that a step, kind of twist that a bit. If you were to find a Category 3, the addition that would boost European logistics, is that something that you would be open to doing now since that would be geographically separate from New Classic? Am I getting ahead of myself at this point?

[Erica Wei, CFO at GigaCloud Technology]

Great question. It would really depend on the specific case, meaning, or said simply, it's a weighing of the advantages and the cost. How much do we think we can gain from this acquisition versus how much integration efforts and cost of purchasing we see from doing the deal? I guess it's really a case-by-case scenario, depending on what the target or who the target is, rather than a predetermined hard line equation that we are trying to hit, if that makes sense.

[Bill Dezellem, Analyst at Tieton Capital Management]

That does. Thank you, appreciate it, and congratulations on a terrific quarter.

[Erica Wei, CFO at GigaCloud Technology]

Thank you.

[Operator]

As a reminder, if you have a question, please press star one. The next question comes from Rommel Dionisio from Aegis Capital. Please go ahead.

[Rommel Dionisio, Analyst at Aegis Capital]

Yeah, good morning. Thank you. I wonder if you could provide just a little more granularity on the real strength in Europe. Obviously, really impressive performance there on the top line. Which particular regions are doing well for you? I think you mentioned Germany in the past. Could you refresh our memory on what's the margin profile there? Is it approaching margins or reaching or exceeding margins from your core U.S. revenues? Thank you.

[Erica Wei, CFO at GigaCloud Technology]

Yes. Hi, thank you for the question. I heard a little bit of echo, but I think the question was, what are the biggest region contributors and what's the margin performance? Is that right?

[Rommel Dionisio, Analyst at Aegis Capital]

That's right. Yeah. Thank you.

[Erica Wei, CFO at GigaCloud Technology]

Perfect. Thank you. Yeah, the fastest-growing region for us is Europe. Europe as a whole has been performing quite well. We've seen a tremendous amount of new seller addition and a lot of buyer activity. In the previous few quarters, Europe growth has been mainly driven by our product numbers, or said simply, our 1P activity, which is a common approach for us when we enter a new market. We leverage our 1P as the initial product supply to ensure the market is properly seeded with good product, which draws in buyers. When there is sufficient buying power, that is usually when we tend to see 3P start doing more. Once that happens, 3P a lot of times enters a fast-track growing stage. Right now, we're seeing three-digit growth come out of Europe because of that.

[Erica Wei, CFO at GigaCloud Technology]

We're at that phase, 3P is really starting to pick up. On a combined basis, we're seeing high double-digit growth come out of Europe, that's our strongest growing region. In terms of margin, we only report on one segment, and we don't disclose region-specific margins. Europe as a whole, especially on the product front, is a very strong margin contributor. Where it is lagging slightly compared to the U.S. is the service front or logistics, because logistics naturally is a game of density, a game of scale. Comparing Europe to the United States size-wise, the time of duration-wise, it's still not where the U.S. market is. Over time, as we continue to grow that market, build up more infrastructure, build deeper relationships with our vendors, I do expect that margin gap to close over time.

[Rommel Dionisio, Analyst at Aegis Capital]

Thank you so much.

[Erica Wei, CFO at GigaCloud Technology]

Thank you.

[Operator]

This concludes our question-and-answer session, and the conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Larry Wu, CEO
• Iman Schrock, President
• Erica Wei, CFO

Analysts

• Tom Forte, Analyst at Maxim Group
• Matt Koranda, Analyst at ROTH Capital
• Bill Dezellem, Analyst at Tieton Capital Management
• Rommel Dionisio, Analyst at Aegis Capital