GigaCloud Technology Inc

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

GigaCloud Technology Inc (the “Company”), a limited liability company based in the Cayman Islands, with its subsidiaries (collectively referred to as the “Group”, “we” or “our”) are principally engaged in large parcel merchandise sales and the provision of ecommerce solutions for small cross-border business owners utilizing the Group’s online platform (“GigaCloud Marketplace”) and fulfillment centers primarily located in the United States, Japan, Europe, and Canada.

Organization

The accompanying unaudited condensed consolidated financial statements as of March 31, 2025 included the financial statements of the Company and its subsidiaries, and the consolidated statements in this Form 10-Q, should be read in conjunction with the consolidated financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Group have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2024 Form 10-K.

There were no significant changes to our significant accounting policies as disclosed in the 2024 Form 10-K.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of cash on hand and highly liquid investments purchased with original maturities of three months or less. Cash that is restricted for withdrawal or use is reported separately on the unaudited condensed consolidated balance sheets. The Group’s restricted cash represents security deposits held in designated bank accounts for issuance of letters of guarantee.

A reconciliation of cash, cash equivalents and restricted cash in the unaudited condensed consolidated balance sheets to the amounts in the unaudited condensed consolidated statements of cash flows is as follows:

Concentration and Risk

Concentration of customers and suppliers

No customers individually represented greater than 10.0% of total revenues of the Group for the three months ended March 31, 2025 and 2024.

One customer individually represented greater than 10.0% of total accounts receivable balance as of March 31, 2025 and December 31, 2024, and no other customers accounted for 10.0% or more of total accounts receivable balance as of March 31, 2025 and December 31, 2024.

During the three months ended March 31, 2025 and 2024, one service provider individually represented 19.1% and 17.7% of total purchases, and no other vendors individually accounted for 10.0% or more of total purchases.

Concentration of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist principally of cash, cash equivalents, restricted cash, investments, accounts receivable, and amounts due from third-party payment platforms.

The Group’s investment policy requires cash, cash equivalents, restricted cash and investments to be placed with high quality financial institutions and to limit the amount of credit risk from any one institution. The Group regularly evaluates the credit standing of the counterparties or financial institutions.

Accounts receivable (Note 3) from product and service sales are exposed to credit risk. The assessment of the counter parties’ creditworthiness is primarily based on past payment history and current ability to pay, taking into account information specific to the counter parties as well as pertaining to the economic environment in which the counter parties operate.

Segment Reporting

The Group’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group. For the purposes of internal reporting and management’s operational review, the Group’s chief executive officer and management personnel do not segregate the Group’s business by revenue stream or geography. Management has determined that the Group hasone operating segment. The measurement of segment assets is reported on the unaudited condensed consolidated balance sheets as total consolidated assets. The revenue, costs and expenses, and the net income for the reportable segment are the same as those presented on the unaudited condensed consolidated statements of comprehensive Income.

Long-lived assets consist of property and equipment and operating lease right-of-use assets. The geographic information for long-lived assets as of March 31, 2025 and December 31, 2024 was as follows:

Revenues reported are attributed to geographic areas based on locations of the Group’s fulfillment centers, except for platform commission revenues which are attributed to Hong Kong, where the server of the GigaCloud Marketplace is located. Revenues by geographic regions for the three months ended March 31, 2025 and 2024 are as follows:

(1)No other individual region’s revenues exceeded 10% of the Company’s total revenues for the three months ended March 31, 2025 and 2024.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, amending existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. For public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption permitted and can be applied on either a prospective or retroactive basis. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The ASU amends existing income statement disclosure guidance, primarily requiring disaggregated disclosure of specific expense categories, such as purchases of inventory, employee compensation, depreciation and intangible asset amortization. For public business entities, the ASU is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and the ASU can be applied on either a prospective or retroactive basis. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

Change in Accounting Principle

In the first quarter of fiscal 2025, the Group voluntarily changed the method of accounting for last-mile fulfillment activities associated with 1P product sales in certain regions from applying the policy election to account for shipping services as fulfillment activities to recognizing last-mile shipping as a promised service, which the Group determined to be a separate performance obligation. The change was made due to the introduction of new GigaCloud marketplace functionalities that provide added flexibility for marketplace buyers when electing last-mile services.

The Group believes that this change in accounting method is preferable, as it results in a disaggregation of revenue and related costs that provides more transparency to users of its financial statements and is more aligned with the nature of marketplace transactions. In accordance with US GAAP, comparable periods presented have been retrospectively adjusted to reflect the change. This change did not have any material impact to the Group's prior period net income or earnings per share, and as such the Group did not retroactively adjust prior periods for such immaterial effects.

Certain financial statement line items included in the unaudited condensed consolidated statements of comprehensive income for the three month periods ended March 31, 2025 and 2024, respectively, were adjusted as follows:

Reclassification

Certain reclassifications have been made to our prior period's financial statements to conform to our current period presentation. These reclassifications had no effect on our previously reported results of operations or retained earnings.

2. FAIR VALUE MEASUREMENTS

The Group utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Group determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The carrying amounts for the Group’s accounts receivable, accounts payable and accrued liabilities approximate fair value due to their short-term maturities. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

•Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full-term of the asset or liability.

•Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

Investments and cash equivalents are measured at fair value on a recurring basis. As of March 31, 2025, investments in the unaudited condensed consolidated balance sheets include time deposits, with maturity of three months to 12 months.

All fixed income securities are classified as available-for-sale with unrealized gains and losses included in “accumulated other comprehensive income or loss”. The related unrealized gains recorded in accumulated other comprehensive income were $1 thousand andnil as of March 31, 2025 and 2024. No realized gains or losses were recorded for the three months ended March 31, 2025 and 2024, respectively.

(1)Balance sheet location is determined by the duration to maturity at date of purchase and whether the assets are restricted for particular use.

(2)Fair value determined using broker quotes reflecting current market conditions.

3. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net, consisted of the following:

The movement of the allowance for doubtful accounts is as follows:

4. INVENTORIES

Inventories consisted of the following:

5. LEASES

The Group leases its office space, fulfillment centers and other facilities under non-cancelable operating leases with various expiration dates. The Group also has equipment that is leased under non-cancelable finance leases. The Group considers various factors such as market conditions and the terms of any renewal options that may exist to determine whether it will renew or replace the lease. In the event the Group is reasonably certain to exercise the option to extend a lease, the Group will include the extended terms in the operating lease right-of-use asset and operating lease liability. Certain storage shelves and certain forklifts used in the fulfillment centers are leased under finance leases, which have a fixed lease term ofthree tofive years from the lease commencement dates. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Group recognizes lease expense for these leases on a straight-line basis over the lease term.

The gross amounts of assets and liabilities related to both operating and finance leases are as follows:

The components of lease cost are as follows:

Lease terms and discount rates are as follows:

Future minimum lease payments as of March 31, 2025, including rental payments for lease renewal options the Group was reasonably certain to exercise, are as follows:

6. ORDINARY SHARES

Share Repurchases

In the three months ended March 31, 2025, the Group repurchased a total of 1,400,986 Class A ordinary shares at an average price of $16.19, totaling approximately $22.7 million. Direct and incremental costs incurred in relation to the repurchases were $56 thousand. Under existing repurchase plans authorized by our Board of Directors, $16.0 million remain available for Class A ordinary share repurchases as of March 31, 2025.

The following table presents the shares of treasury shares repurchased and reissued:

7. SHARE-BASED COMPENSATION

Restricted share units (the “RSU”)

A summary of the Company’s share-based compensation activities for the three months ended March 31, 2025 is presented below:

Compensation expenses recognized in connection with RSUs are allocated to the following expense items.

8. INCOME TAX

The Company’s provision for income taxes for the three months ended March 31, 2025 and 2024 was $5,359 thousand, and $6,125 thousand respectively, representing effective income tax rates of 16.5% and 18.4%, respectively. The difference between the U.S. federal income tax rate of 21.0% and GigaCloud Technology’s overall income tax rate was primarily due to a lower effective tax rate on foreign earnings.

9. NET INCOME PER ORDINARY SHARE

The following table sets forth the basic and diluted net income per ordinary share computation and provides a reconciliation of the numerator and denominator for the periods presented:

For the three months ended March 31, 2025, the potential dilutive securities that have been included in the calculation of diluted net income per ordinary share are presented as follow:

10. REVENUES

The Group’s revenues are disaggregated by major products/service lines and timing of revenue recognition. Detailed information is specified as follows:

Contract Liabilities

Changes in the contract liabilities balances for the three months ended March 31, 2025 and 2024 are as follows:

Contract liabilities relate to considerations received in advance for merchandise sales and services provided for which control of the services occur at a later point in time. The contract liabilities will be recognized as revenue when the Group fulfills its performance obligations to transfer the promised products or services to customers, which is expected to occur withinone year.

The Group has elected the practical expedient under ASC 606-10-50-14(a) not to disclose information regarding remaining performance obligations which are part of contracts that have an original expected duration of one year or less.

11. COMMITMENTS AND CONTINGENCIES

The Group leases offices and fulfillment centers under non-cancelable operating lease agreements. Future minimum lease payments under these noncancelable lease agreements with initial terms longer than three months are disclosed as maturity of lease liabilities in Note 5.

The Group had no other material commitments or long-term obligations as of March 31, 2025.

12. SUBSEQUENT EVENTS

Subsequent to March 31, 2025, the Group executed a series of share repurchase transactions under a Rule 10b5-1 plan. As of May 12, 2025, the Group repurchased a total of 1,261,657 Class A ordinary shares at an average price of $12.64, totaling approximately $15.9 million. Direct and incremental costs incurred in relation to the repurchases were $51 thousand.