GigaCloud Technology Inc

1. DESCRIPTION OF BUSINESS AND ORGANIZATION

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, Europe, Japan and Canada.

Organization

The accompanying consolidated financial statements include the financial statements of the Company, its subsidiaries and consolidated variable interest entities (“VIEs”) (prior to 2024).

In 2017 and 2018, the Company entered into Account Control Agreements with other entities that were VIEs to facilitate operations in certain jurisdictions. The functions of the VIEs include the sales of merchandise on third-party ecommerce websites or providing warehousing and logistic services to users' registered on the GigaCloud Marketplace.

The Account Control Agreements allowed the Company to (i) exercise effective control over the consolidated VIEs, (ii) receive substantially all of the economic benefits of the consolidated VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the consolidated VIEs. The Company is regarded as the primary beneficiary of the VIEs, and consolidates the financial results of the VIEs in accordance with U.S. GAAP requirements. As of January 2024, the Company has terminated all Account Control Agreements with its VIEs and acquired 100% equity interest of all such entities. No VIEs remain as of December 31, 2025 and 2024. The Company's involvement with the VIEs in 2023 affected the Company's results of operations and cash flows as indicated below.

The Company has the power to direct activities of the VIEs, and there are no restrictions limiting their assets to only obligations of the VIEs. The creditors of VIEs do not have recourse to the general credit of the Company and its wholly-owned subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

The accompanying consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below.

(b) Principles of Consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, and the VIEs for which the Company is the primary beneficiary. All intercompany transactions and balances have been eliminated upon consolidation.

(c) Use of Estimates

The preparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet dates, and the reported revenues and expenses during the reported periods. Accounting estimates include, but are not limited to, fair valuation of financial instruments, fair valuation of assets acquired and liabilities assumed in a business combination, valuation and recognition of share-based compensation arrangements, inventory reserve for excess and obsolete inventories, useful lives of long-term assets, collectability of receivables, impairment of property and equipment, operating lease right-of-use assets, and valuation allowance of deferred tax assets. Incremental borrowing rate of leases, and the length of lease terms which vary by country and often include renewal options, are important factors in determining the appropriate accounting for leases including the initial classification of the lease as finance or operating and the recognition of rent expense over the duration of the lease. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements.

(d) Foreign Currency

The Group’s reporting currency is U.S. Dollars (“USD” or “$”). The functional currency of the Group’s entities incorporated in the Cayman Islands, the U.S. and Hong Kong is USD. The Group’s entities incorporated in Japan, Germany, the United Kingdom, PRC and other jurisdictions use their respective local currencies as their functional currencies. The determination of the respective functional currency is based on the criteria of Accounting Standards Codification (“ASC”) Topic 830, Foreign Currency Matters.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates quoted by authoritative banks prevailing at the dates of the transactions. Exchange gains and losses resulting from those foreign currency transactions denominated in a currency other than the functional currency are recorded as “Foreign currency exchange gains (losses), net” in the consolidated statements of comprehensive income.

Functional currencies of the Group's entities other than the USD included Great Britain Pounds (“GBP”), Japanese Yen (“JPY”), Euros (“EUR”), Renminbi (“RMB”), Canadian Dollars (“CAD”), Hong Kong Dollars (“HKD”), Malaysian Ringgits (“MYD”), Vietnamese Dongs (“VND”) and Mexican Pesos (“MXN”). These entities translate their operating results and financial positions into USD, the Group’s reporting currency. Assets and liabilities denominated in foreign currencies are translated into USD using the applicable exchange rates at the balance sheet date. Equity accounts other than earnings generated in the current period are translated into USD at the appropriate historical rates. Revenues, expenses, gains and losses are translated into USD using the periodic average exchange rates. The resulting foreign currency translation adjustments are recorded in accumulated other comprehensive income as a component of shareholders’ equity.

(e) Commitments and Contingencies

In the normal course of business, the Group is subject to loss contingencies, such as legal proceedings and claims arising in the normal course of business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, and non-income tax matters. An accrual for a loss contingency is recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. If a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, is disclosed.

(f) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments purchased with original maturities of three months or less. As of December 31, 2025 and 2024, cash and cash equivalents were held at financial institutions at the locations listed below:

(g) Restricted Cash

Cash that is restricted for withdrawal or use is reported separately on the consolidated balance sheets. The Group’s restricted cash represents security deposits held in designated bank accounts for issuance of letters of guarantee. As of December 31, 2025 and 2024, restricted cash held by the Group amounted to $760 thousand and $685 thousand, respectively.

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

(h) Contract Balances

The timing of revenue recognition, billings and cash collections results in accounts receivable and contract liabilities. A contract liability is recognized when the Group has an obligation to transfer goods or services to a customer for which the Group has received consideration from the customer, or for which an amount of consideration is due from the customer.

Accounts receivable are recognized in the period when the Group has transferred products or provided services to its customers and when its right to consideration is unconditional. Amounts collected on accounts receivable are included in net cash provided by operating activities in the consolidated statement of cash flows. The Group maintains a general and specific allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. Accounts receivable balances with large creditworthy customers are reviewed by management individually for collectability. All other balances are reviewed on a pooled basis. A percentage of general allowance is applied to the balances of accounts receivable in each aging category, excluding those which are assessed individually for collectability. Management considers various factors, including historical loss experience, current market conditions, the financial condition of its debtors, any receivables in dispute, the aging of receivables and current payment patterns of its debtors, in establishing the required allowance.

Amounts deemed uncollectible are recorded as an allowance in the consolidated balance sheets with an offsetting charge to general and administrative expenses in the consolidated statements of comprehensive income. Accounts receivable which are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Group does not have any off-balance sheet credit exposure related to its customers.

(i) Inventories

Inventories, consisting of products available for sale, are stated at the lower of cost or net realizable value. Cost of inventory is determined using the first-in, first-out method. Adjustments are recorded to write down the cost of inventory to the estimated net realizable value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and the promotional environment. The Group takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the consolidated statements of comprehensive income.

(j) Property and Equipment, net

Property and equipment are stated at cost less accumulated depreciation and any recorded impairment.

Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets as follows:

When items are retired or otherwise disposed of, income is charged or credited for the difference between net book value and the proceeds received thereon. Ordinary maintenance and repairs are charged to expense as incurred.

(k) Software Development Costs

The Group incurs software development costs related to internal-use software and the Group's websites. No software development costs were capitalized for the years presented. All costs, including those related to design or maintenance, are expensed as incurred.

(l) Business Combinations

The Group applies the provisions of ASC 805, Business Combinations (“ASC 805”), in accounting for our acquisitions. ASC 805 requires that we evaluate whether a transaction pertains to an acquisition of assets, or to an acquisition of a business. A business is defined as an integrated set of inputs and processes that is capable of being conducted and managed for the purpose of providing an output, or a return to investors. Asset acquisitions are accounted for by allocating the cost of the acquisition to the individual assets acquired and liabilities assumed on a relative fair value basis, whereas the acquisition of a business requires the Group to recognize separately from goodwill the assets acquired and the liabilities assumed at the acquisition date fair values.

The Group accounts for business combinations using the acquisition method. Accordingly, identifiable assets acquired and liabilities assumed are recorded at their acquisition date fair values. Goodwill as of the acquisition date is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed. Goodwill recorded in an acquisition is assigned to applicable reporting units that are expected to benefit from the synergies. Identifiable intangible assets with finite lives are amortized over their useful lives. Amortization of intangible assets is recorded in the consolidated statements of comprehensive income. While we use our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date as well as any contingent consideration, where applicable, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the business acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of a business acquisition’s measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of comprehensive income.

The Group also incurs acquisition-related expenses including legal, banking, accounting and other advisory fees of third parties which are recorded as general and administrative expenses as incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date.

(m) Goodwill

The primary drivers that generate goodwill are the value of synergies that are expected from combining the activities of the acquirer and acquiree. The Group assesses goodwill impairment at the reporting unit level annually or more frequently if indicators of impairment are present. The group initially evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than it’s carrying amount. If the qualitative assessment is not conclusive, we quantitatively assess the fair value of a reporting unit to test goodwill for impairment. The Group didnot incur impairment charges for goodwill in the years ended December 31, 2025, 2024 and 2023.

The determination of reporting units requires judgment, and if the Group changed the definition of our reporting units, it is possible that the Group would have reached different conclusions when performing the Group's impairment tests. The group initially evaluates qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than it’s carrying amount. If the qualitative assessment is not conclusive, we quantitatively assess the fair value of a reporting unit to test goodwill for impairment.

(n) Intangible Assets Other than Goodwill

Intangible assets, other than goodwill, primarily include customer relationships and technology assets acquired in business combinations. Intangible assets are amortized over periods ranging from 1 to 15 years, using a straight-line basis or on a basis consistent with the pattern in which the economic benefits are realized.

Intangible assets with finite useful lives are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment for the intangible assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. No impairment of intangible assets was recognized for the years ended December 31, 2025, 2024 and 2023.

(o) Leases

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-02 or ASC 842, which increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The FASB subsequently issued amendments to clarify the implementation guidance. The Group adopted these standards on January 1, 2022, using a modified retrospective method for leases that exist at, or are entered into after, January 1, 2022, and has not recast the comparative periods presented in the consolidated financial statements. Additionally, the Group elected the package of practical expedients that allowed it not to reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. The Group also elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases.

The Group categorizes leases at their inception as either operating or finance leases. Lease agreements mainly cover office space, fulfillment centers, storage racks and other heavy equipment used in the fulfillment centers. Most of these leases are operating leases; however, certain warehouse storage racks from third-party lessors are leased under finance leases. Leased assets pursuant to operating leases are included in operating lease right-of-use assets (“ROU”), while leased assets pursuant to finance leases are included in property and equipment, net. Operating lease right-of-use assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Group uses a secured incremental borrowing rate as the discount rate for present value of lease payments when the rate implicit in the contract is not readily determinable. Leases that have a term of twelve months or less upon commencement date are considered short-term in nature. Accordingly, short-term leases are not reported on the consolidated balance sheets and are expensed on a straight-line basis over the lease term, which commences on the date the Group has the right to control the property. For leases acquired in business combinations or asset acquisitions, ROU assets are measured at the same amount as the lease liability as adjusted to reflect favorable or unfavorable terms of the lease when compared with market terms. The Group elected, as a lessee, the single component practical expedient, which requires the Group, for all classes of underlying assets, not to separate nonlease components from the lease component and instead to account for the lease component and the nonlease components associated with that lease component as a single lease component.

(p) Revenue recognition

The Group recognizes revenues when the Group satisfies a performance obligation by transferring a promised good or service to a customer in accordance with ASC 606. An asset is transferred when the customer obtains control of that asset.

The Group evaluates whether it is appropriate to record the gross amount of merchandise sales and related costs or the net amount earned as commissions. When the Group is a principal, and the Group obtains control of the specified goods or services before they are transferred to the customers, the revenues are recognized at the gross amount of consideration to which it expects to be entitled in exchange for the specified goods or services transferred. When the Group is an agent and its obligation is to facilitate third parties in fulfilling their performance obligation for specified goods or services, the revenues are recognized at the net amount of commission that the Group earns in exchange for arranging for the specified goods or services to be provided by other parties. Revenues are recorded net of value-added taxes.

The Group focuses on selling large parcel merchandise to various distributors, resellers and individual customers, as well as the provision of ecommerce solutions on its own platform (“GigaCloud Marketplace”) and other third-party ecommerce websites, with which the Group could democratize access and distribution globally to manufacturers (“Sellers”) and resellers (“Buyers”) without borders. The Group’s revenues include revenues from product sales and services. Product sales include sales on the GigaCloud Marketplace (“GigaCloud 1P”) and sales to and through third-party ecommerce websites (“Off-platform ecommerce”). Service revenues are generated from services provided to registered users, including Sellers and Buyers on GigaCloud Marketplace (“GigaCloud 3P”).

GigaCloud 1P

We derive product revenues from the sale of our own inventory in our marketplace. The Group recognizes revenues net of discounts and return allowances. Such revenue is recognized at the point in time when control of the merchandise is transferred to the Buyer, which occurs upon shipment out of the Group’s fulfillment centers to the destination designated by the Buyer.

Off-platform ecommerce

There aretwo business lines subject to Off-platform ecommerce, which include (a) product sales made to third-party ecommerce websites (“Product sales to B”) and (b) product sales to individual customers through third-party ecommerce websites (“Product sales to C”).

Product sales to B

The Group sells its merchandise to third-party ecommerce websites, who typically designate carrier companies to pick up merchandise from our fulfillment centers. The Group recognizes revenue net of discounts and return allowances. Such revenue is recognized at the point in time when the third-party ecommerce websites obtain control of the merchandise, which is shipment out of the Group’s fulfillment centers and pick-up by the carrier companies designated by the third-party ecommerce websites. As expenses charged by these websites are not in exchange for a distinct good or service, payments to these websites, which are the Group’s customers, are not recognized as expenses but recorded net of revenues.

Product sales to C

The Group sells its merchandise to individual customers through third-party ecommerce websites. The Group recognizes revenue when control over the merchandise is transferred to the individual customers at an amount that reflects the consideration to which we expect to be entitled to in exchange of that merchandise. Revenue is recognized at the point in time when the individual customers take possession of merchandise, which is when the merchandise is delivered to the customers. Expenses incurred for product sales made through these websites, which are considered as platform commission, are recorded as selling and marketing expenses in the consolidated statements of comprehensive income.

With respect to GigaCloud 1P and Off-platform ecommerce, the Group recognizes revenue on a gross basis as the Group is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified merchandise. Judgment is required to estimate the variable consideration incurred, which refers to return allowances. The Group estimates the variable consideration based on the volatility of markets and its past experience with similar types of product sales, and include the amounts of variable consideration in the transaction price to the extent that it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Such estimates are made using the ‘expected value’ method and is updated as and when additional information is available. Liabilities for variable consideration are included as accrued expenses and other current liabilities in the consolidated balance sheets.

Service

The Group enters into contracts with GigaCloud 3P and other customers, which often include promises to transfer multiple services. For these contracts, the Group accounts for individual performance obligations separately if they are capable of being distinct and distinct within the context of the contract. Determining whether services are considered distinct performance obligations may require judgment.

The Group charges commission fees for sales transactions consummated on the GigaCloud Marketplace. The Group acts as an agent, as it does not take control of the merchandise provided by Sellers at any time during the transactions and does not have latitude over pricing of the merchandise. The Group initially sets a percentage of the transacted product value as commission fee that is charged upon transaction completion; varying levels of credits are applied retrospectively to customers whose monthly transaction value reaches certain specified hurdles. Revenue from commission fees is recognized upon successful sales of the merchandise by Sellers when Buyers take ownership of the merchandise and are able to control the merchandise at their discretion. As credits, and hence the effective rate of commission fees, are refreshed and adjusted at the end of each calendar month, no estimation is required beyond the end of each month.

The Group also offers comprehensive supply chain solutions for Sellers. The Group provides services that help Sellers ship merchandise from the Sellers’ manufacturing plant to the Group’s overseas fulfillment centers, utilizing the Group’s extensive shipping network consisting of ocean transportation providers, custom declaration agents, drayage service providers and domestic shipping companies. Furthermore, the Group also provides warehousing services to Sellers and Buyers through storage of merchandise in the Group’s fulfillment centers, as well as packaging and last-mile delivery services from the Group’s fulfillment centers to domestic destinations designated by Buyers. Revenues resulting from storage, ocean transportation services, drayage services and last-mile delivery services are recognized over time, as the Group performs contractual obligations through continuous transfer of control to Sellers or Buyers, and they could simultaneously receive and consume the benefits of the Group’s performance as it occurs; revenues from packaging services are recognized at the time the merchandise is packed and shipped, at which time the packaging service is considered completed. The Group is acting as a principal in providing aforementioned services and accordingly recognizes revenue on a gross basis as the Group determines the price and selects carriers at its own discretion.

Sellers and Buyers could choose one or several of the above-mentioned services on the GigaCloud Marketplace. Therefore, there may be multiple performance obligations included in one transaction. Revenue is allocated to each performance obligation based on its standalone selling price. The Group generally determines standalone selling prices based on observable prices. If the standalone selling price is not observable through past transactions, the Group estimates the standalone selling price based on multiple factors, including but not limited to management approved price lists or cost-plus margin analysis.

(q) Cost of Revenues

Cost of revenues are comprised of cost of product sales and cost of services. Cost of product sales primarily consist of the purchase price of merchandise, shipping and handling costs for self-owned merchandise, fulfillment center rental expenses excluding the portion allocated to cost of service revenue and abnormal capacity, packaging fees and personnel related costs. Cost of services primarily consist of delivery costs, an allocated portion of fulfillment center rental expenses, and costs associated with the operation of the GigaCloud Marketplace.

(r) Selling and Marketing Expenses

Selling and marketing expenses mainly consist of platform service fees charged by third-party ecommerce websites arising from Product sales to C on Off-platform ecommerce channels, advertising expenses, payroll and related expenses for personnel engaged in selling and marketing activities, and rental and depreciation expenses relating to facilities and equipment used by those employees.

(s) Advertising Expenses

Advertising expenses, including advertisements through various forms of media and marketing and promotional activities, are included in “selling and marketing expenses” in the consolidated statements of comprehensive income when incurred. Total advertising expenses incurred were $7.4 million, $6.7 million and $3.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

(t) General and Administrative Expenses

General and administrative expenses mainly consist of share-based compensation, payroll and related costs for employees involved in general corporate functions, rental and depreciation expenses associated with the use of facilities and equipment by these employees, professional fees, and other general corporate expenses.

(u) Research and Development Expenses

Research and development expenses mainly consist of personnel costs, including share-based compensation expense associated with the Group’s engineering, programming, data analytics, and product development personnel responsible for the design, development, and testing of the Group's platform, rental and depreciation expenses associated with the use of facilities and equipment of aforementioned personnel, and information technology costs. Research and development costs are expensed as incurred.

(v) Share-based Compensation

The Group applies ASC 718 (“ASC 718”) Compensation—Share Compensation to account for its share-based payments. In accordance with ASC 718, the Group determines whether an award should be classified and accounted for as a liability award or an equity award.

Share-based awards in the form of share options, restricted shares, restricted share units and ordinary shares that are equity-classified awards are measured at the grant date fair value of the awards. Compensation expenses are recognized on a straight-line basis over the requisite service period, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant date value of such award that is vested at that date. When no future services are required to be performed in exchange for an award, and if such award does not contain a performance or market condition, the cost of the award is expensed on the grant date.

Share-based awards in the form of restricted share units granted to Audit Committee members are liability-classified awards, as the awards are share-settleable for a fixed monetary amount. The Company recognizes compensation cost for an award with only service condition that has a graded vesting schedule on a straight-line basis over the requisite service period for the entire award, provided that the cumulative amount of compensation cost recognized at any date at least equals the portion of the grant date value of such award that is vested at that date.

The Group has elected to recognize the effect of forfeitures in compensation cost as they occur. To the extent the required vesting conditions are not met resulting in the forfeiture of the share-based awards, previously recognized compensation expense relating to those awards is reversed.

(w) Employee Benefits

The Company’s subsidiaries participate in a government mandated, multiemployer, defined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees. The Group has no further commitments beyond its monthly contribution. Employees in the United States are eligible to participate in one or more of savings plans that provide for periodic contributions by the Group based on plan-specific criteria, such as base pay, level and employee contributions.

For the years ended December 31, 2025, 2024 and 2023, the costs and expenses of the obligations to the defined contribution plans amounted to $10.9 million, $7.4 million and $3.7 million, respectively.

(x) Income Taxes

The Group is subject to income taxes in the U.S. and other foreign jurisdictions. The Group accounts for income taxes using the asset and liability method. Current income taxes are provided on the basis of income before income taxes for financial reporting purposes, and adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax laws and rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the consolidated statements of comprehensive income in the period that includes the enactment date. A valuation allowance is provided to reduce the amount of deferred income tax assets if based on the weight of available evidence, it is more-likely-than-not that some portion, or all, of the deferred income tax assets will not be realized. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of futures profitability, the duration of statutory carryforward periods, the Group’s experience with operating loss and tax credit carryforwards, if any, not expiring.

The Group applies a “more-likely-than-not” recognition threshold in the evaluation of uncertain tax positions. The Group recognizes the benefit of a tax position in its consolidated financial statements if the tax position is “more-likely-than-not” to prevail based on the facts and technical merits of the position. Tax positions that meet the “more-likely-than-not” recognition threshold are measured at the largest amount of tax benefit that has a greater than fifty percent likelihood of being realized upon settlement. Unrecognized tax benefits may be affected by changes in interpretation of laws, rulings of tax authorities, tax audits, and expiry of statutory limitations. In addition, changes in facts, circumstances and new information may require the Group to adjust the recognition and measurement estimates with regard to individual tax positions. Accordingly, unrecognized tax benefits are periodically reviewed and re-assessed. Adjustments, if required, are recorded in the Group’s consolidated financial statements in the period in which the change that necessities the adjustments occur. The ultimate outcome for a particular tax position may not be determined with certainty prior to the conclusion of a tax audit and, in certain circumstances, a tax appeal or litigation process. The Group records interest and penalties related to unrecognized tax benefits (if any) in income tax expense on the consolidated statements of comprehensive income.

(y) Unused Commitment

Credit Arrangements with Wells Fargo Bank

The Group has an unused committed revolving line of credit in the amount of $30 million, which expires in June 2026. The line of credit bears interest at a variable rate based on Secured Overnight Financing Rate (“SOFR”) plus 1.5% and requires the Group to maintain compliance with certain financial covenants, including minimum liquidity, income and debt-to-equity ratios and is secured by substantially all of the Group’s assets. As of December 31, 2025, no amounts were drawn and no balances were outstanding under this facility. The Group was in also compliance with all applicable covenants by a significant margin.

Credit Arrangements with China CITIC Bank

The Group entered into a credit facility agreement for letter of guarantee with China CITIC Bank (“CITIC Bank”) in December 2025. The Group is provided with a credit facility not exceeding RMB 60 million, commencing from December 2025 to September 2026. Each time the Group applies for the issuance of a letter of guarantee, it is required to deposit the agreed-upon collateral into the designated collateral account and pay all reasonable fees incurred in the process of issuing of the letter of guarantee. As of December 31, 2025, no amounts were drawn and no balances were outstanding under this facility.

(z) Concentration and Risk

Concentration of customers and suppliers

No customers individually represented greater than 10.0% of total revenues of the Group for the years ended December 31, 2025, 2024 and 2023.

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

During 2025 and 2024, one service provider individually represented 17.4% and 19.5% of total purchases, and no other vendors 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, accounts receivable, and amounts due from third-party payment platforms.

The Group’s investment policy requires cash, cash equivalents, and restricted cash 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 its counterparties.

Accounts receivable (Note 4) from product and service sales on the GigaCloud Marketplace, as well as amounts due from third-party payment platforms (Note 6), 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.

Foreign currency exchange rate risk

The Group is exposed to risks from foreign currency exchange rate fluctuations on the translation of foreign operations into U.S. dollars and on the purchase of goods by these foreign operations that are not denominated in their local currencies. Changes in currency rates resulted in gains (losses) of $175 thousand, ($1.2 million) and $2.1 million for the years ended December 31, 2025, 2024 and 2023, respectively, primarily due to foreign currency exchange rate fluctuations against the U.S. dollar.

(aa) Earnings per Share

Basic earnings per share is calculated by dividing net income attributable to ordinary shareholders, considering the accretions to redemption value of the preferred shares, if any, by the weighted average number of ordinary shares outstanding during the year using the two-class method. Under the two-class method, any net income is allocated between ordinary shares and other participating securities based on their participating rights.

Diluted earnings per share is calculated by dividing net income attributable to ordinary shareholders, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the conversion of the preferred shares using the as-converted method, and exercise of outstanding warrant and share-based awards using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted earnings per share calculation when inclusion of such shares would be anti-dilutive.

(ab) 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.

Certain non-financial assets and liabilities are measured at fair value on a nonrecurring basis, including property and equipment and intangible assets acquired in a business combination as well as goodwill recognized. These assets are subject to fair value adjustments in certain circumstances, such as when there is evidence of an impairment or when an asset or disposal group is classified as held for sale.

In accounting for business acquisitions, the Group allocates the fair value of purchase consideration to the assets acquired and liabilities assumed based on their estimated fair values. Estimating the fair value of assets acquired and liabilities assumed requires judgment, especially with respect to identified intangible assets as there may be limited or no observable transactions within the market, requiring us to develop internal models to estimate fair value. For example, estimating the fair value of identified intangible assets may require us to develop valuation assumptions, including but not limited to, future expected cash flows from these assets, synergies and the cost of capital. Certain inputs require us to determine assumptions that are reflective of a market participant view of fair value. Changes in any of these assumptions may materially impact the amount the Group recognize for identifiable assets and liabilities, in addition to the residual amount allocated to goodwill.

Investments and cash equivalents are measured at fair value on a recurring basis. As of December 31, 2025, investments in the consolidated balance sheets include time deposits, U.S. treasury securities and treasury enhanced notes, with maturity ofthree 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 (loss)”. The related unrealized gains recorded in accumulated other comprehensive income were $3 thousand, $7 thousand andnil as of December 31, 2025, 2024 and 2023, respectively. No realized gains or losses were recorded for the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025 and 2024, all available-for-sale securities are expected to mature withinone year.

(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.

(ac) 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 purpose of internal reporting and management’s operation 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 measure of segment assets is reported on the 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 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 December 31, 2025 and 2024 is as follows:

Revenues reported are attributed to geographic areas based on locations of the Company’s fulfillment centers, except for platform commission revenues which are attributed to Hong Kong, where the server of GigaCloud Marketplace is located. Revenue by geography for the years ended December 31, 2025, 2024 and 2023 is as follows:

(1) Other regions mainly include the U.K., Japan, Canada and Hong Kong, with variations across different product/ service lines. No other individual region's revenues exceeded 10.0% of the Group’s total revenues for the years ended December 31, 2025, 2024 and 2023.

(ad) Recently Adopted Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, to update reportable segment disclosure requirements. The amendment is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied retrospectively to all prior periods presented in the financial statements. The Group adopted this ASU on January 1, 2024 with no material impact to the Group’s consolidated financial statements. The required segment disclosures are included above.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU amends 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 ASU is effective for annual periods beginning after December 15, 2024. Early adoption is permitted and the ASU can be applied on either a prospective or retroactive basis. The Group adopted this ASU on January 1,2025 prospectively. See Note 15 for further details.

(ae) Accounting Pronouncements Not Yet Adopted

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.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendments in this update provide a practical expedient permitting an entity to assume that conditions at the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current classified accounts receivable and contract assets. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those annual reporting years. If the practical expedient is elected, the amendments should be applied prospectively. Early adoption is permitted. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures, and does not expect this ASU to have a material impact.

In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The amendments in this update improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those annual reporting years. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in the update permit an entity to apply the new guidance using any of the three transition approaches: a prospective transition approach, a modified transition approach and a retrospective transition approach. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The amendments in this update establish authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. This update is effective for annual periods beginning after December 15, 2028, including interim periods within those annual reporting years, with early adoption permitted. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments clarify the guidance in Topic 270 to improve the consistency of interim financial reporting. The update provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those annual reporting years, with early adoption permitted. The Group is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures.

(af)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 consolidated statements of comprehensive income for the year ended December 31, 2025, 2024 and 2023, respectively, were adjusted as follows:

(ag) Reclassification

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

3. BUSINESS COMBINATIONS

Noble House

In October 2023, the Group completed its acquisition of Noble House Home Furnishings LLC (“Noble House”) as the successful bidder in connection with Noble House’s Chapter 11 bankruptcy proceedings. Noble House is a business to business ("B2B") distributor of indoor and outdoor home furnishing; the acquisition of Noble House accelerates our core strategy of building a diverse, large-scale B2B marketplace with high-quality, differentiated products. Noble House provides the Group with expansion of our operations into Canada and significant fulfillment center space.

The aggregate consideration was approximately $77.6 million. The Noble House acquisition was funded using cash on hand from operations. The acquisition of Noble House had no impact on the Group's weighted-average shares as no shares were issued. Of the total $77.6 million purchase price, $511 thousand was cash acquired, $1.1 million was attributed to intangible assets, $69.3 million was attributed to other net assets acquired, and $6.8 million was attributed to goodwill. The goodwill of $6.8 million is attributable to expected synergies from future growth, including synergies in expansion into other markets and product types. Acquisition-related costs for Noble House were approximately $1.6 million. These were expensed as incurred and are included in general and administrative expenses within the consolidated statements of comprehensive income.

Wonder

In November 2023, the Group acquired all outstanding equity interest of Apexis, Inc., a Florida corporation dba Wonder (“Wonder”), a cloud-based interactive digital signage and e-catalog management SaaS company headquartered in Tampa, Florida, with access to thousands of storefronts across the United States. Wonder provides the Group access to brick-and-mortar retail stores and allows the Group to launch to new customer solutions. The aggregate purchase price was approximately $10 million. The Wonder acquisition was funded using cash on hand from operations. The acquisition of Wonder had no impact on the Group's weighted-average shares as no shares were issued. Of the total $10 million purchase price, $428 thousand was cash acquired, $7.6 million was attributed to intangible assets, $3.9 million was attributed to other net liabilities assumed, and $5.8 million was attributed to goodwill. The goodwill of $5.8 million is attributable to expected synergies from future growth, including synergies in expansion into other markets and product types.

Acquisition-related costs for Wonder were approximately $338 thousand. These were expensed as incurred and are included in general and administrative expenses within the consolidated statements of comprehensive income.

4. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net, consisted of the following:

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

5. INVENTORIES

Inventories consisted of the following:

6. PREPAYMENTS AND OTHER CURRENT ASSETS

Prepayments and other current assets are consisted of the following:

Deposits recorded in prepayments and other current assets include those made to lessors for leasing fulfillment centers and equipment, service deposits, and other deposits which are receivable within a year. Deposits of $11.3 million and $9.0 million as of December 31, 2025 and 2024, respectively, that are expected to be received beyond a year are recorded in the non-current assets in the consolidated balance sheets.

7. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, as of December 31, 2025 and 2024 consisted of the following:

The carrying amounts of the Group’s property and equipment, net, acquired under finance leases as of December 31, 2025 and 2024 were as follows:

Depreciation expenses on property and equipment were allocated to the following expense items:

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table summarizes goodwill activity:

Intangible Assets, net

The gross amounts and accumulated amortization of intangible assets with finite useful lives as of December 31, 2025 and 2024, included in intangible assets, net in the accompanying consolidated balance sheets, are as follows:

Amortization of intangible assets with finite useful lives included in the Group's consolidated statements of comprehensive income was $1.2 million, $2.2 million and $310 thousand for the year ended December 31, 2025, 2024 and 2023. The Group had no intangible assets prior to 2023.

Future estimated amortization expense as of December 31, 2025, for identifiable intangible assets is as follows:

9. ACCOUNTS PAYABLE

10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

*Receipts on GigaCloud Marketplace include (1) refundable deposits on GigaCloud Marketplace, representing the balance of deposits from Buyers and Sellers which could be withdrawn or used for their future purchase of the Group’s services or merchandise on GigaCloud Marketplace; and, (2) amounts payable to Sellers that the Group collects from Buyers in relation to the GigaCloud 3P services it provides on GigaCloud Marketplace.

11. LEASES

The Group leases its office space and warehouse facilities under non-cancelable 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 fulfillment center storage shelves and certain forklifts used in the fulfillment centers are leased under finance leases, which have a fixed lease term ofone 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 were as follows:

The components of lease cost were as follows:

Lease terms and discount rates are as follows:

Future minimum lease payments as of December 31, 2025, including rental payments for lease renewal options the Group is reasonably certain to exercise were as follows:

Supplemental cash flow information related to leases was as follows:

*This supplemental non-cash disclosure for right of use assets obtained in exchange for new lease liabilities refers to an increase in lease liabilities associated with obtaining new right of use assets.

12. ORDINARY SHARES

Ordinary Shares

During the Group’s IPO, our Board of Directors authorizedtwo classes of shares, Class A and Class B ordinary shares at $0.05 par value per share. The rights of the holders of Class A and Class B ordinary shares are identical, except with respect to voting and conversion. Each share of Class A ordinary shares is entitled toone vote per share. Each share of Class B ordinary shares is entitled to 10 votes. Shares of Class B ordinary shares may be converted at any time at the option of the shareholder to Class A ordinary shares. Class A ordinary shares may not be converted to Class B ordinary shares. Class B ordinary shares are held only by our founder and chief executive officer Mr. Larry Lei Wu and his vehicles. In the three years ended December 31, 2025, 2024 and 2023,800,000,1,250,000, andnil Class B ordinary shares were converted into equivalent number of Class A ordinary shares, respectively.

Share Repurchases

In the years ended December 31, 2025, 2024 and 2023, the Group repurchased $67.4 million, $23.2 million and $1.6 million, respectively, of the Company's Class A ordinary shares through Rule 10b5-1 plans at an average price of $17.57, $22.45, and $7.37, respectively. Share repurchase costs incurred in the three years ended December 31, 2025, 2024 and 2023 were $153 thousand, $42 thousand, and $8 thousand.

In the years ended December 31, 2025, 2024 and 2023, the Group retired 4,154,134,683,760 andnil shares of the Company's Class A ordinary shares. The difference between the cost of the treasury shares and the stated value of the shares is allocated between additional paid-in capital and retained earnings in accordance with ASC 505 requirements.

Under existing repurchase plans authorized by our Board of Directors, $89.6 million remain available for Class A ordinary share repurchases as of December 31, 2025.

The following table presents treasury shares issued, repurchased and subsequently retired:

13. SHARE-BASED COMPENSATION

In March 2017, our shareholders and board of directors approved and adopted the 2017 share incentive plan (the “2017 Plan”) for the purpose of granting share-based compensation awards. As of December 31, 2025, the maximum aggregate number of shares which may be issued pursuant to all awards under the 2017 Plan was 7,996,565 ordinary shares.

Restricted share units

Each year from 2023, the Group grants restricted share units (RSUs) to a broad based group of eligible employees and from time to time, eligible non-employee service providers, under the 2017 Plan. RSUs are generally granted during the second quarter of the year with two types of vesting schedules of (1) vesting immediately upon grant or (2) vesting 50% immediately upon grant and cliff vesting the remaining 50% over aone year requisite service period. RSUs are measured at the grant date fair value of the awards. Compensation expense for RSUs is recognized ratably over the requisite service period of the award, or immediately upon grant if there is no requisite service.

Each year from 2023, the Group also grants the independent directors RSUs awards which are share-settleable for a fixed monetary amount of $342 thousand, $342 thousand, and $300 thousand for the years ended December 31, 2025, 2024 and 2023. For each award, the shares are generally vested on a graded basis over four quarters of services.

Each share granted subject to an RSU award reduces the number of shares available under the Group's stock incentive plan by one share. The Group satisfies vesting of RSUs with newly issued shares and treasury shares. RSUs may be forfeited by employees who terminate prior to vesting.

A summary of the Group’s RSU activities for the years ended December 31, 2025, 2024 and 2023 is presented below:

As of December 31, 2025, unrecognized compensation expenses of $264 thousand related to the 91,043 unvested RSUs will be recognized in the next twelve months.

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

Share options

Prior to its IPO in 2022, the Group granted share options to a broad based group of eligible employees under the 2017 Plan. Share options granted were exercisable upon a qualified IPO before an expiration period often years after grant, and certain share options granted to key employees had requisite service periods up to 42 months. Share options were measured at the grant date fair value using the binomial option pricing model with the following assumptions.

The expected volatility was estimated based on the historical volatility of comparable peer public companies with a time horizon close to the expected term of the Group’s options. The risk-free interest rate was estimated based on the yield to maturity of U.S. treasury bonds denominated in USD for a term consistent with the expected term of the Group’s options in effect at the option valuation date. Expected dividend yield iszero as the Group does not anticipate any dividend payments in the foreseeable future. The expected exercise multiple was estimated as the average ratio of the stock price to the exercise price of when employees would decide to voluntarily exercise their vested options. Expected term is the contract life of the option.

In August 2022, the Group consummated its IPO and all outstanding share options were vested and expensed. All share options outstanding were exercised as of December 31, 2023, andno new share options were granted in 2024 and 2025. No outstanding share options remained as of December 31, 2025. The following table summarizes activities of share options for the year ended December 31, 2023.

Total intrinsic value of options exercised wasnil, nil and $5.2 million for the years ended December 31, 2025, 2024, and 2023.

Total compensation expenses recognized for the years ended December 31, 2025, 2024, and 2023 are nil.

Restricted shares

In 2022, the Group granted restricted shares to its eligible employees and certain non-employee service providers. Restricted shares granted had an exercise price of $7.48 per share and were exercisable upon (1) a qualified IPO and (2) satisfaction of a requisite service period ofthree years starting from the date of service commencement with the Group. In the event of early service termination, the Company has the right (but not the obligation) to repurchase all or any of the restricted shares in cash, for the amount of the original purchase price paid by the grantee.

Restricted shares were measured at the grant date fair value using the income approach and equity allocation method. Estimation of fair value involves significant assumptions that might not be observable in the market, and a number of complex and subjective variables, discount rate, risk-free interest rate and subjective judgments regarding the Group’s projected financial and operating results, its unique business risks, the liquidity of its ordinary shares and its operating history and prospects at the time the grants are made. The fair value of these awards was determined by management with the assistance from an independent valuation firm. The grant date fair value of the restricted shares was determined to be $0.0015 per share.

In 2022, the Group further granted restricted shares to one non-employee service provider directly attributable to the Group’s IPO. Restricted shares granted were exercisable at $0.05 per share, which is the par value of the Company’s ordinary shares. No other restrictions were stipulated and such restricted shares were vested immediately upon consummation of the Group’s IPO. No restricted shares have been granted after the year ended December 31, 2022, and no unvested restricted shares remained as of December 31, 2025.

A summary of the Company’s restricted shares for the year ended December 31, 2024 is presented below:

A summary of the Company’s restricted shares for the year ended December 31, 2023 is presented below:

14. WARRANTS

On July 1, 2022, the Group entered into an agreement with Aegis Capital Corp. (the “Underwriter”), pursuant to which, the Group agreed to issue warrants to the Underwriter upon the completion of its IPO as additional compensation for the Underwriter’s services, which entitles the Underwriter to purchase up to 1.0% of Class A ordinary shares sold in the IPO in the par value of $0.05 per share, at the exercise price of 150% of the public offering price of $12.25 per share.

The Group issued warrants to the Underwriter at the closing of the offering on August 22, 2022, and the Underwriter is entitled to subscribe for, purchase and receive, in whole or in part, up to 29,400 Class A ordinary shares in the par value of $0.05 per share, at the exercise price of $18.375 per share, at any time beginning February 17, 2023, and at or before February 17, 2025. In February 2024, the Underwriter exercised 29,400 of its warrants under cashless exercise for the Company to issue 13,372 Class A ordinary shares in aggregate. No warrants have been issued since and no warrants remain outstanding as of December 31, 2025.

The warrants are classified as equity under ASC 718. The Group initially recognized the warrants in the amount of $748 thousand in addition paid in capital based on the fair value of the warrants, which was determined using the binomial option pricing model on the issuance date. In addition, given the warrants were directly attributable to the IPO consummated, the Group recorded the cost incurred against the gross proceeds of the offering.

15. INCOME TAX

Income tax

The components of income before income taxes are as follows:

For the years ended December 31, 2025, 2024 and 2023, the details of income tax expense are set forth below:

The reconciliation of taxes at the statutory federal rate to our provision for income taxes for the years ended December 31, 2025,2024 and 2023 was as follows:

*Offshore sourced profits not subject to Hong Kong taxes and taxable in Mainland China as cross-border transfer pricing adjustments.

In 2025, state and local income taxes in California, Georgia, New Jersey and Texas comprise the majority of the domestic state and local income taxes, net of federal effect category.

Deferred tax assets and deferred tax liabilities

The deferred taxes noted above are classified as follows in the Group’s consolidated balance sheets:

Changes in valuation allowance are as follows:

Net Operating Losses and Valuation Allowances

The net operating loss carryforwards of the Company’s subsidiaries incorporated in the U.S. amounted to$4.5 million,$4.5 million, $3.0 million as of December 31, 2025, 2024 and 2023. As of December 31, 2025, $2.8 million net operating loss carryforwards does not expire, the remainder will begin to expire in 2037. The net operating loss carryforwards of the Company’s foreign subsidiaries amounted to$4.6 million,$8.8 million and$9.7 million as of December 31, 2025,2024 and 2023. $19 thousand, $185 thousand, $45 thousand, $52 thousand,$206 thousand, $403 thousand,$1.2 million and$4 thousand will expire if unused by December 31, 2026, 2027, 2028, 2029,2030, 2033, 2034 and 2035, respectively. As of December 31, 2025, the net operating loss carryforwards of the Company’s foreign subsidiaries amounted to$2.5 million, do not expire.

As of December 31, 2025 , 2024 and 2023, the Group had valuation allowances of $1.4 million, $2.6 million and $2.8 million.

Unremitted Earnings

As of December 31, 2025 , 2024 and 2023 respectively, the Group has not recorded approximately$29.0 million,$19.9 million and $12.5 million of deferred tax liabilities associated with remaining unremitted foreign earnings considered indefinitely reinvested, for which foreign income and withholding taxes would be due upon repatriation.

Uncertain Tax Positions

The benefits of uncertain tax positions are recorded in the Company’s consolidated financial statements only after determining a more-likely-than-not probability that the uncertain tax positions will sustain, if examined by taxing authorities. A recognized tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement.

As of December 31, 2025, 2024 and 2023 , the amounts of unrecognized tax benefits were $4.6 million, $4.3 million and $3.3 million, respectively, which would affect the Group’s effective income tax rate.

A reconciliation of unrecognized tax benefits is as follows:

The Group classifies interest and penalties related to uncertain tax benefits as income tax expense. Due to uncertainties under the tax law, positions taken on tax returns may be challenged and ultimately disallowed by taxing authorities. Accordingly, it may not be appropriate to reflect a position taken on the tax return when the outcome of that tax position is uncertain. For the years ended December 31, 2025, 2024 and 2023, the Group recorded the amounts of $283 thousand, $1.0 million and $408 thousand, respectively, which are related to uncertainties mainly with regards to the tax impact of transfer pricing adjustment and open interpretation of tax laws in application to our facts and circumstances. The unrecognized tax benefits balances, if recognized upon audit settlement or statute expiration, would affect the effective tax rate. The Group is currently unable to provide an estimate of a range of total amount of unrecognized tax benefits that is reasonably possible to change significantly within the next twelve months.

As of December 31, 2025, the statute of limitations remains open for U.S. federal tax returns for 2015 and following years. In non-U.S. jurisdictions, the years open to audit represent the years still open under the statute of limitations. With respect to major jurisdictions outside the United States, our subsidiaries are no longer subject to income tax audits for years before 2015.

Income Taxes Paid

16. 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 years presented:

For the year ended December 31, 2023,29,400 Class A ordinary shares to be issued to the Underwriter upon the exercise of the warrant (disclosed in the Note 14) were not included in the calculation of dilutive net income per ordinary share under the treasury stock method, as their exercise prices were higher than the fair market value of the Company’s ordinary shares, representing out-of-the-money impact from the holder’s perspective. All warrants were exercised in February 2024.

The potential dilutive securities that have been included in the calculation of diluted net income per ordinary share are presented as follow:

17. REVENUES

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

Contract Liabilities

As of December 31, 2025 and 2024, the amounts of contract liabilities are $6.5 million and $4.5 million, respectively. Changes in the contract liabilities balances for the years ended December 31, 2025, 2024 and 2023 are as follows:

Contract liabilities relate to considerations received in advance for merchandise sales and services provided on GigaCloud Marketplace 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 in ASC 606-10-50-14(a) not to disclose the information about remaining performance obligations which are part of contracts that have an original expected duration of one year or less.

18. 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 twelve months are disclosed as maturity of lease liabilities in Note 11.

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

19. SUBSEQUENT EVENTS

Share Repurchases and Retirement

Subsequent to December 31, 2025, the Group executed a series of share repurchase transactions under a Rule 10b5-1 plan. As of February 26, 2026, the Group repurchased a total of 297,944 Class A ordinary shares at an average price of $40.28, totaling approximately $12.0 million. Direct and incremental cost incurred in relation to the repurchase were $12 thousand.

In January 2026, the Group retired 237,269 shares of the Company's Class A ordinary shares. The difference between the cost of the treasury shares and the stated value of the shares is allocated between additional paid-in capital and retained earnings in accordance with ASC 505 requirements.

Acquisition

On January 1, 2026, the Group completed its acquisition of New Classic Home Furnishings, Inc. (“New Classic”), a U.S. based distributor primarily serving the domestic home furnishings market. The Group acquired 100% of the outstanding equity of New Classic for total consideration of $18 million on a debt-free, cash-free basis, including a post-closing earn-out. The acquisition was funded with existing cash on hand and expands the Group's channel-agnostic B2B marketplace along with domestic distribution capabilities. As the transaction was completed subsequent to December 31, 2025, it is not reflected in the accompanying consolidated financial statements.