Hi. Good afternoon, everyone. My name is Stefanos Crist from Needham Equity Research, and welcome to the 21st Annual Needham TMT and Consumer Conference. It is my pleasure to introduce GigaCloud Technology, and with us today we have Larry Wu, Chairperson and CEO. We'll start with a presentation and leave time for Q&A at the end. If you're watching, you could submit questions through the portal, and I'll try to address them. Larry, please go ahead.
Thank you. Hello, everybody. Thank you for joining the conference and spending time on my presentation. I'm Larry Wu. I'm the Founder and CEO of GigaCloud Technology, and we're listed on Nasdaq. What we do is, actually, we are an operator, a global B2B marketplace that is specialized in helping the wholesalers and retailers to transact the big and bulky product of furniture globally. We create, you know, a marketplace called the gigab2b.com. That's our business model. Our vision is trying to become the infrastructure for global, digitalize the global supply chain of, for, you know, big and bulky items.
First, we are really honored to be recognized by, you know, a lot of, you know, business media, including Forbes and Time magazine, and also Newsweek. Especially for Forbes, actually, we were ranked number one in small- cap company. For any company under market cap of $2 billion, we were ranked the number one by Forbes in 2025. In 2026, we also ranked the top 20 on that ranking. Also, we got recognized by a few industry media like the Furniture Today. We were ranked as a top e-commerce solution provider and the top logistics provider, logistics service provider in 2023 and 2024.
Also myself, you know, got recognized by EY Entrepreneur of the Year of Greater Los Angeles area for the year 2024. Next slide, we're going to give you a kind of a quick look at our financials because we just released our Q1 numbers roughly a week ago. The financials are, you know, pretty kind of, you know, robust. The top line we had for the Q1 2025, $660 million. That reflects the 32% year-over-year growth. Net income of $38 million, that's a 41% growth.
Thanks to the share repurchase program we have been doing for the past year, actually, our EPS growth is even better, which is 53% year-over-year. We kind of have a very strong balance sheet as well. We're debt-free. We have roughly $380 million in cash in hand. We do have liability, but most of them are actually associated with the lease contract we had of warehouses that we operate globally. The total GMV of the marketplace right now is $1.7 billion, we're helping 1,377 sellers or suppliers to do business with roughly 12,000 resellers or retailers globally.
We also, you know, are kind of, pretty aggressive in using our cash generated from allocation, to the allocation, capital allocation purpose that we kind of, you know, did the repurchase program of, in the past, three years, we spent more than $100 million on the share repurchase program. Although they only raised $41 million for, you know, IPO, the repurchase program already cost 2.5x more than the money we raised from the capital market. We give the capital back from the cash we generated from operation. Last year, we generated roughly $190 million from operation.
We also use the cash we generated, we actually put that back into our business with the three acquisitions in the past three years. One is acquisition of an e-commerce company called Noble House, which specializes in outdoor furniture. We spent $87 million acquiring that company out of a bankruptcy. We also spent $18 million to acquire a furniture company that specialized in offline, brick-and-mortar distribution. There's 1 case missing, which is the company called Wondersign, who actually provide SaaS service to distribute e-catalog of, you know, furnitures to retail stores. They have 2,000 retail stores using their service to get the pictures, the descriptions from different suppliers.
We're trying to take advantage of, for that company to expand our reach to the retailer community. This is our revenue breakdown by different regions. What you can see is actually we're pretty well diversified because we used to generate 70% of our revenue from the U.S. For Q1 2026, that number already declined to 71% you know, because Europe right now is representing 33% of our total business. You're going to see later that's where the strongest growth actually coming from, given the macroeconomic situation here in the U.S. is not really in the most of, you know, favorable situation for discretionary consumer spending.
We're really leveraging the growth in Europe to help us to deliver the impressive growth rates you have been, you know, seeing for our Q1 numbers. This is in talking about specifically about the growth rate of Europe first of Q1, which is the last quarter. The revenue in Europe is, you know, delivering 86% year-over-year. That's the how well diversified our operation really is. How, you know, we kind of make it happen, which is, you know, we think we delivered a pretty good result, although that we're dealing with pretty kind of a challenging economical environment. It goes to the business model, which is the fundamental competitiveness, where the competitiveness is coming from.
Before talking about that, I probably need to spend a little bit of time on talking about the characteristics of the industry we're servicing, which is use of furniture as example, although it is our biggest category, it's not the only one category. Actually, the furniture represents roughly 70% of all the total GMV. Similar to furniture, what we're dealing with is a non-standard, big and bulky, and fragmented market. Non-standard meaning for furniture, there's, you know, probably millions of different SKUs out there that have a different color, fabric, size, and the price point. This is a huge variety.
Also, and, you know, all the products that we're dealing with are big and bulky, meaning actually the fulfillment cost is a very big portion of the total dollar amount the consumer are, you know, spending on those products. The third characteristic is very, very fragmented from both end, from both manufacturing end and the retail end. From the manufacturer end, you don't really see, you know, Fortune 500, kind of, big furniture manufacturers, just because of the nature of the product. It's really hard to consolidate the production to really generate the economy of scale. That's why you are seeing thousands of thousands furniture manufacturers.
You know, every single one of them is competitive on their own thing, no one can really consolidate the whole market into, you know, a really big operation. From the retail end, it's the same. The biggest retailer in the U.S. only represents roughly 10% of the total market. It's completely different from books or home appliances that, you know, you are seeing a lot of concentration. These three factors are contributing to why, you know, our business model works because actually it's pretty rare globally to really see the B2B marketplace. I think what really making our model work in these categories are these three very unique characteristics. Next slide, we're talking about the business model.
First, obviously we're a kind of a B2B commerce company, so it's already very obvious how technology can improve the efficiency in distribution, because, you know, everybody already see how much e-commerce did to the B2C business. I don't want to, you know, spend too much time in explaining why technology can really improve the efficiency here. Another thing which is also very critical to why our business model works is the very unique business model we're promoting, which is Supplier Fulfilled Retailing, or SFR. It's a trademark that we kind of the first company that are promoting this business model. Why is a, you know, better setup to the industry?
It goes back to the characteristic I just, you know, talk about, which is, you know, the product, the bid, and the industry fragmented, and also there's a huge variety in the product offering. In the past, what the industry was doing is if you really look at the flow, the physical flow of the product, actually, was the yearly, the factories or suppliers will sell the product to distributors who is able to consolidate the demand from different retailers, just because we're dealing with a huge variety of different products. In most of the cases, retailers won't be able to really make a purchase directly from the manufacturer because they cannot really meet the minimum order quantity.
They rely on, you know, distributors to really do the consolidation of the volume. The physical flow will be in the way that I described, which is the wholesaler, then the wholesaler sells to the retailer or reseller, then the reseller or retailer sells the product, you know, to the consumers. We think that there is a better way to do it, which is we always make the supplier to hold the inventory without really moving those products to the warehouse of the retailers. We fulfill when there is a sale happening. You know, we are saying the retailer, what they need to do is only keep a sample on their floor without the need of holding any inventory.
They sell, you know, to the consumer just against the inventory that the suppliers are offering to them. They don't need to physically handle the inventory themself. When the sales happen to the consumer, what we do is we make the shipment directly from the supplier to the consumer without really, you know, shipping them to the warehouse of the retailers. Again, because we're talking about big and bulky, removing that redundant touch point can create efficiency or cutting the fulfillment cost. That's very obvious from the logistics perspective. There is another very fundamental benefit for this model, which is so obvious, is again it goes back to the nature of the industry. There's a huge variety of products out there. Okay.
If we are making, you know, the retailer to be the one to hold the inventory, which they, you know, make a purchase based on their forecast of the sales. The problem with that setup is when they are dealing with so many different SKUs, number one, the sales for each SKU is not going to be very significant, a very big number. For example, for any specific kind of a, you know, model of office chair, maybe a local retail store can only sell like 10 pieces, five pieces each month. It's very likely because they are dealing with so many different products. When they are making forecast or projection based on such a small number, there is a very likely that then, you know, obviously, the forecast cannot be perfect.
If the base number is only five or 10 pieces, any single, you know, piece of error in that forecast will translate to 10% or 20% of either wrong purchase of the inventory, or 10% or 20% of missing the sales opportunity, which is, you know, either way, it's a huge waste for the retailers. What we are, you know, suggesting or what we're pushing is, again, you know, it's always better to keep the supplier to hold the inventory instead of, you know, making the supplier, the retailer to make the forecast based on such a small number. If you pool all those demands into the supplier end, which is, you know, gives you a way bigger volume.
The variance of that volume, because they are accumulating everybody's every retailer's volume to their hand. From their perspective, actually, the variance is going to be substantially reduced. It's, you know, just like the mechanism that the insurance company was using. When they are, you know, the one that pooling all the risk of individuals that the, you know, the consumer's car is going to be hit by someone. If the individual is taking that, you know, taking care of that risk, the variance is huge. It's either zero or one. If you pool the risk of 100,000 people, that likelihood or probability become a pretty stable number. It's, you know, way easier to make, you know, sales forecast that way.
That, the whole ecosystem is, you know, better off by having this set up. That's why we believe, and we're really pushing, you know, to the industry that, you know, allows our customers enjoy the benefit of the Supplier Fulfilled Retailing. You know, again, meaning, you know, no supplier, you know, no retailer or reseller is supposed to hold any inventory. The inventory is always, you know, stored in the warehouse of, you know, the supplier or the manufacturer. Why, you know, there is a need for us? It goes to the fundamental kind of nature of industry, and it's fragmented. If the supplier is supposed to hold inventory, a lot of them are pretty small factories.
They need someone to really help them to provide the service, to really do the load balancing of the inventory across the whole U.S., and make the fulfillment to the consumer based on the order that they're receiving from the retailers. That's why both sides need an infrastructure if they want to really, you know, adopt this business model. They need a service provider to help them trade, you know, facilitate the transaction, but also do the fulfillment. That's why, you know, they need a service provider like GigaCloud to get the job done.
From the revenue you know, perspective, in order to understand our business model, it's critical really to see, you know, how the 1P, 3P logistics component of our business model is helping each other here. Because, although that we're facilitating the transaction between the sellers, the 3P sellers, and our buyers, which is the reseller or retailers, but we also, you know, have a 1P operation in which a situation that we purchase our inventory and also do the distribution through the marketplace to the retailers or resellers.
The way that 1P, 3P is helping each other is that in the early stage of, you know, the inception of the business model, like every single marketplace concept out there, you always, you know, have that kind of a chicken egg challenge because we're recruiting customers from both side. We're recruiting both buyer and seller. When we're dealing with the global trade, which is, you know, an industry that have a very long lead time.
When we try to recruit the buyers or retailers, you know, the very natural question they will ask will be, you know, "Where are the product?" At that time, you know, we actually, in the early stage, that we don't have any 3P sellers are willing to provide the inventory to us yet, just because they didn't see those buyers are buying from the ecosystem. From the other side is the same. When we are trying to sell this business model to those factories or suppliers, they will also ask a similar question, "Who is buying?" The reason we can really, you know, jumpstart the business model is we have been doing the furniture B2C model for quite some time.
When we introduced the concept in 2019, actually we started with 1P, by offering our 1P product to be on the GigaCloud Marketplace to attract the buyers or retailers to buy from us. When they come on board, we go back to the 3P seller telling them, there are already some buyers are joining the ecosystem, already making the purchase. Why don't you just, you know, also, you know, join with us, you know, to kind of, you know, entrust the inventory with us and allow us to help you to sell? That's how the 1P was helping the whole business model to, you know, start with.
Also today, the 3P is helping 1P a lot, just because a lot of those 3P supply are directly from the manufacturer, which is bringing the, you know, the best value because this is directly from the factories. A lot of our buyers are interested in those 3P products, and just because they're actively making purchases in the ecosystem. We are kind of also relying on the 3P, pretty much is piggybacking them to really attract those buyers and allow us to sell our product to the retailers at a very low, you know, marketing expense. That's how the 1P, 3P is helping each other.
For logistics, because, you know, we are doing the model we call Supplier Fulfilled Retailing, so it's a kind of, you know, logistics operation to some extent because we fulfill directly to the consumer, which is, you know, the game of scale. Just because of we are putting 1P and 3P volume all together, it's helping us to create the, you know, a larger volume than ourselves can really provide, and it helps us to create the better scale and the better efficiency and the cost. That's how the 1P, 3P logistics are helping each other, and we're using our, you know, technology stack to connect every component of the business model and bring them to the ecosystem to make that kind of a comprehensive solution to the retailer customers.
This is showing the breakdown of 1P, 3P, GMV today. Right now, that we're very happy that we're already a 3P, you know, kind of a dominated marketplace. Right now, the 1P is only representing 43% of the market and the 3P actually already representing 57%. If you really, n ext slide is showing the breakdown in Europe, which is a relatively newer market compared with the U.S. market. You're seeing exactly the mechanism that I was talking about, that we started with 1P. Today , the 1P is still representing 86% in Europe. The 3P is actually representing 14%. The 3P actually in the Q1 2026 is delivering very impressive 500% year-over-year growth.
Eventually, I think that Europe will be similar to U.S., that you'll definitely be seeing that the 3P have a larger market share compared with the 1P and then make the whole ecosystem better balanced, as you are seeing in the U.S. today. These are the key KPIs of the marketplace. Again, we have 1,200 active buyers making purchases from the ecosystem and on average, they are spending $133,000 per year. This is something to, you know, allow you to really visually understand how the marketplace functions. Basically, the difference of this website from the B2C marketplace is that you're seeing different fulfillment options, including different pricing options.
For example, we allow the participant to trade, margin trade, also future trade sometimes, allow the participant to, you know, for margin trade, they can spend only 20% of amount of the product and already, you know, get the ownership of that product. Before the product gets shipped out of the warehouse, they just, you know, pay the outstanding, you know, balance. The whole idea is, you know, just because we're handling all the transactions, the physical movement of the product, we're allowing our customers to trade big and bulky products like, you know, trade securities in a completely digital way. They don't have to worry about the warehouse cost. They don't need to, you know, physically handle anything.
They just do the purchase and the business in the way they want, you know, with the functionalities that we're providing to them. Yeah, right now we offer roughly 80,000 different SKUs and again, the furniture is our strongest category. We also facilitate transactions of fitness equipment, bath, auto parts, toys as well. Yeah, to support those transactions, we have a two-layer infrastructure we are continuously building, which is a software part.
You know, it's a tech stack that, you know, we kind of, it's a pretty much an industrial software system connecting all the transacting parties, bring them into the Marketplace. I just, you know, showed you a few minutes ago, you know, to allow them to do the transaction in an electronic way. There is another layer of the infrastructure which we call the hardware kind of a layer, which consists of, you know, different warehouses globally that right now. Right now, we have, you know, globally we're operating 36 DCs, and we are handling 35,000 containers every year. We have 19 different ports as our shipping destination. The total square feet of the warehouses we operate are roughly 12 million sq ft.
The next slide is showing how the infrastructure, you know, look like, you know, how many warehouses that we're operating in different countries and which are the countries that we're sourcing from or our, you know, seller customers are sourcing from. This is pretty much the presentation, and I welcome any questions.
All right. Thanks, Larry. That was great. Just looking for any questions. Maybe on the mix of 1P versus 3P, obviously, the 3P has been growing. How do you view that split maybe in a steady state, you know, over the medium to long term?
We definitely see the 3P growth will always outpace the 1P, just because we have, you know, 1,000 of different suppliers sort of working the ecosystem. You know, the combination of the 1,000, you know, different companies obviously are stronger than our 1P. We don't have any intention to really, you know, to really assign something we really believe is the most kind of, you know, comfort kind of a breakdown, because we are just allow them naturally grow, you know, to the point that, you know, where the markets need them. We see different values from both sides.
You know, actually 1P is contributing, more, you know, profitability from the dollar amount perspective, but 3P is more assets light, you know, approach, is allowing us to enjoy the growth without, you know, taking too much inventory risk.
Got it. Makes sense. You discussed Europe being, maybe a newer, geographic entry. Could you just talk about maybe the different structures there in Europe versus your other geographies? That'd be great. Thank you.
Right now, we don't have any plan for new geographic coverage.
You know, what we do is we just digitalize the wholesale industry. We have enough, you know, addressable market, because we're already dealing with the very big market, which is U.S. and Europe. There is some kind of, you know, difference between U.S. and Europe, but Europe is, you know, a little bit more kind of fragmented. They have a different language, different kind of legal system, so make our job a little bit more difficult because you are not really dealing with a unified kind of market like we're doing in U.S.
That kind of a fragmentation also provides more value to our customer if we can really offer a, you know, kind of a unified, you know, ecosystem, allow our customers to do business, you know, allow them to sell to different countries smoothly and digitally, without them having to deal with the complication I just talk about. I think that that's a, you know, something that allow us to provide more value to our customers.
Got it. Makes sense. Well, I think we're coming up on time. I really appreciate it. Thank you, Larry. If you have any closing remarks, please go ahead.
Yeah. Thank you for the opportunity and I think, you know, it's not really the most straightforward business model that everybody is seeing because it's B2B. If you have any follow-up questions, you are more than welcome to contact our division and, we can, you know, do more follow-up interaction from there.
All right. Sounds good. Thank you.
Thank you. Bye.