GigaCloud Technology (GCT) Q3 2026 Earnings Call: Umsatz steigt um 27 %, Q4-Ausblick

Wichtigste Erkenntnisse

• Der Umsatz im dritten Quartal 2026 stieg im Jahresvergleich um mehr als 27 % auf 424 Millionen US-Dollar, was sich aus 23 % organischem Wachstum und einem Beitrag von 4 % durch New Classic zusammensetzt.
• Das GAAP-EPS stieg um 42 % auf 1,41 US-Dollar, während der Nettogewinn um 36 % auf einen Quartalsrekord von 51 Millionen US-Dollar zulegte. Der operative Cashflow belief sich auf 56 Millionen US-Dollar.
• Das Bruttowarenvolumen (GMV) des GigaCloud Marketplace auf Zwölfmonatsbasis überstieg zum 30. September 2026 1,8 Milliarden US-Dollar, ein Plus von 24 %. Die Zahl der aktiven Drittverkäufer stieg um 22 % auf über 1.500, während die Zahl der aktiven Käufer um 21 % auf knapp 14.000 zulegte.
• Europa blieb der wichtigste regionale Wachstumsmotor. Das Marketplace-GMV stieg um 65 %, das GMV von Drittanbietern kletterte um fast 330 % auf rund 30 Millionen US-Dollar und der Produktumsatz legte um 46 % auf 129 Millionen US-Dollar zu.
• Für das vierte Quartal 2026 stellte das Management einen Umsatz von 425 bis 450 Millionen US-Dollar in Aussicht und erwartet im Vergleich zum dritten Quartal keine wesentlichen strukturellen Veränderungen im Umsatzmix aus Produkten und Dienstleistungen.
• GigaCloud beendete das Quartal schuldenfrei mit einer Gesamtliquidität von 418 Millionen US-Dollar. Das Unternehmen kaufte im dritten Quartal eigene Aktien im Wert von 17,7 Millionen US-Dollar zurück und nach Quartalsende für weitere rund 5 Millionen US-Dollar.

Wichtigste Finanzkennzahlen

Geschäftliche und operative Entwicklung

Der Dienstleistungsumsatz stieg um 26 % auf 136 Millionen US-Dollar, getragen vom Marktplatzwachstum und der Nachfrage nach Seefracht, Lagerhaltung, Zustellung auf der letzten Meile sowie Verpackungsdienstleistungen. Höhere Plattformprovisionen trugen ebenfalls dazu bei.

Die Bruttomarge im Dienstleistungsbereich verbesserte sich auf 15,3 %. Das Management führte den Anstieg gegenüber dem Vorquartal vor allem auf gestiegene Spotmarktpreise für Seefracht zurück. Durch das dynamische Preismodell von GigaCloud wurden die Kundenpreise an das Marktniveau angepasst, während langfristige Verträge und Partnerschaften mit Frachtdienstleistern den Kostenanstieg bremsten. Zudem verbesserte sich die operative Leistung in der Landlogistik.

Der Produktumsatz stieg um 28 % auf 288 Millionen US-Dollar. In den USA legte der Produktumsatz um 16 % auf 141 Millionen US-Dollar zu, was 5 % organisches Wachstum und einen Beitrag von 11 % durch New Classic beinhaltet. In Europa kletterte der Produktumsatz um 46 % auf 129 Millionen US-Dollar und machte 45 % des weltweiten Produktumsatzes aus.

Die Produkt-Bruttomarge ging im Quartalsvergleich auf 29,4 % zurück. Gründe hierfür waren höhere Kosten für Seefracht und die Logistik auf der letzten Meile, ein verstärkter Wettbewerb für die First-Party-Produkte von GigaCloud infolge des Ausbaus des europäischen Drittanbieter-Marktplatzes sowie saisonale Preisnachlässe auf Outdoor-Produkte.

Der US-Marktplatz erzielte trotz der anhaltenden Schwäche am Möbelmarkt ein GMV-Wachstum von 13 %. Nach Angaben des Managements spiegelte diese Entwicklung Marktanteilsgewinne des Marktplatzes und des Modells „Supplier Fulfilled Retail“ wider.

Expansion in Europa

Das Marketplace-GMV in Europa stieg im Jahresvergleich um 65 %. Das GMV von Drittanbietern wuchs um fast 330 % und steuerte im Quartal rund 30 Millionen US-Dollar bei.

Laut Management wirft Europa derzeit etwas höhere Margen ab als die USA, da der Markt dort weniger überlaufen und umkämpft ist. Das Unternehmen geht jedoch davon aus, dass sich die Margen in beiden Regionen im Laufe der Zeit angleichen könnten, wenn weitere Teilnehmer in den europäischen Markt eintreten.

Integration von New Classic

New Classic erzielte im Quartal einen Umsatz von 14 Millionen US-Dollar und lag damit rund 30 % unter dem vergleichbaren Zeitraum vor der Übernahme. GigaCloud bereinigt das Sortiment um schwächelnde Produkte und führt Angebote mit höherem Umsatz- und Margenpotenzial ein.

Auf der Möbelmesse High Point Market im Oktober stellte das Unternehmen 140 neue Kollektionen mit rund 500 neuen SKUs vor. Das Management geht davon aus, dass der Großteil der entsprechenden Umsatzbeiträge erst im Jahr 2027 zum Tragen kommt.

Zudem baut New Classic den Zugang zum stationären Einzelhandel aus. Rund zwei Dutzend Einzelhandelskunden haben seit der Übernahme begonnen, Bestände über den GigaCloud Marketplace zu beziehen; mehr als 60 weitere Kunden befinden sich in der Pipeline.

Ausblick des Managements

GigaCloud erwartet für das vierte Quartal 2026 einen Umsatz von 425 bis 450 Millionen US-Dollar. Das Management rechnet im Vergleich zum dritten Quartal mit keinen wesentlichen strukturellen Veränderungen im Umsatzmix aus Produkten und Dienstleistungen.

Das Unternehmen geht davon aus, dass Europa weiterhin ein wichtiger Wachstumstreiber bleibt, wenngleich sich die Wachstumsraten im Jahresvergleich mit zunehmender Skalierung und anspruchsvolleren Vergleichswerten abschwächen dürften.

Das Management plant, sich zunächst auf den Abschluss der Integration von New Classic zu konzentrieren, bevor es bei Fusionen und Übernahmen wieder aktiver wird. Zu den potenziellen Zielkategorien zählen traditionelle Großhändler, europäische Logistikdienstleister und Technologieunternehmen zur Verbesserung von Kundenservices.

Risiken und Beobachtungspunkte

• Der US-Möbelmarkt steht weiterhin durch einen schwachen Immobilienmarkt und geringe Immobilientransaktionen unter Druck.
• Erhöhte Kosten für Seefracht, Treibstoff, Energie und die Zustellung auf der letzten Meile könnten die Fulfillment-Aufwendungen und Produktmargen belasten.
• Das rasante Wachstum von Drittanbietern in Europa verstärkt den Wettbewerb mit den First-Party-Produkten von GigaCloud.
• Die Portfolio-Umstrukturierung von New Classic dämpft kurzfristig den Umsatz, während der Großteil der Erlöse aus den neu eingeführten Produkten erst für 2027 erwartet wird.
• Das Wachstumstempo in Europa dürfte sich mit zunehmender Umsatzbasis verlangsamen, und der aktuelle Margenvorteil gegenüber den USA könnte sich im Laufe der Zeit verringern.
• Das operative Umfeld bleibt anfällig für Zölle, Frachtkosten und eine allgemeinere Marktvolatilität. Nach Angaben des Managements wurden Zollrückerstattungen vereinnahmt; der derzeitige Nettoeffekt auf das Unternehmen sei nicht wesentlich, auch weil ein Teil der Rückerstattungen an qualifizierte Großhandelskunden weitergegeben werde.

Highlights der Analysten-Fragerunde

Expansion in den stationären Handel: Das Management sieht im traditionellen Einzelhandel eine Chance mit geringerem Wettbewerbsdruck als auf den großen E-Commerce-Marktplätzen. GigaCloud will deren Lieferketten über seine Logistikinfrastruktur und das Modell „Supplier Fulfilled Retail“ digitalisieren, sodass Händler auf Bestände zugreifen können, ohne ganze Container kaufen oder die Waren selbst vorhalten zu müssen.

Abfederung der Inflation: Laut Management bieten die geringe Kauffrequenz und der nicht standardisierte Charakter sperriger Großgüter („Big-and-Bulky“) mehr Flexibilität bei Preisanpassungen. Zudem erneuert das Unternehmen sein Produktportfolio, um die Margen bei steigender Inflation neu auszurichten.

M&A-Pipeline: GigaCloud hat seine Übernahmeaktivitäten zuletzt begrenzt, um der Integration von New Classic Priorität einzuräumen. Das Management bezeichnete das Akquisitionsumfeld dennoch als günstig, da Möbelgroßhändler und Distributoren durch den geringen Immobilienumschlag und die verhaltene Nachfrage der Käufer unter Druck stehen.

Erweiterung der Produktkategorien: Der Schwerpunkt liegt weiterhin auf Möbeln. Das Management wies darauf hin, dass das GMV des GigaCloud-Ökosystems im Vergleich zu dem in der Telefonkonferenz genannten US-Möbelgroßhandelsmarkt von über 60 Milliarden US-Dollar nach wie vor gering sei. Künftige Kategorien müssten groß, sperrig, dem Long-Tail zuzuordnen und nicht standardisiert sein; Fitnessgeräte wurden als bestehendes Beispiel genannt.

Kapitalrückflüsse: GigaCloud kaufte im dritten Quartal rund 492.000 Aktien zu einem Durchschnittspreis von 36 US-Dollar und einem Gesamtvolumen von 17,7 Millionen US-Dollar zurück. Anschließend erwarb das Unternehmen weitere 88.000 Aktien zu einem Durchschnittspreis von 56,90 US-Dollar für insgesamt rund 5 Millionen US-Dollar. Von der bis August 2029 genehmigten Rückkaufermächtigung über 120 Millionen US-Dollar verbleiben noch 115 Millionen US-Dollar. Das Management erklärte, dass ein am Ende des Programms nicht ausgeschöpfter Betrag für eine einmalige Sonderdividende in Betracht gezogen werde.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Good day and welcome to GigaCloud Technology's third quarter 2026 earnings conference call. [Operator Instructions] With us today are GigaCloud Founder and Chief Executive Officer Larry Wu, its President Iman Schrock, and Chief Financial Officer Erica Wei.

Larry will give opening remarks, Iman will discuss the company's operational progress, and Erica will review the financial results. After that, we will open the call for the question and answer with the audience. As a reminder, this conference call contains statements about future events and expectations that are forward-looking in nature and actual results may differ materially. Additionally, today's call will include a discussion of non-GAAP measures within the meaning of SEC Regulation G, where a reconciliation of all non-GAAP financial measures to the most directly comparable financial measures, calculated and presented in accordance with GAAP, can be found in the press release issued today by GigaCloud, which is posted on the company's website. Please note that this event is being recorded. Now I will turn the call over to Larry. Please go ahead, sir.

Unknown Speaker

Thank you, operator, and thank you all for joining us this morning. Our record third quarter financial results reflect the strength of our strategy, our expanding marketplace, and our steadfast focus on profitable growth. Despite ongoing industry headwinds, we delivered 27% revenue growth year-over-year. Earnings per share grew even faster at 42%. These results demonstrate the resilience of our business and our ability to deliver strong performance in a challenging environment. Our growth reflects the continued execution of a long-term strategy built around multiple growth vectors. We are expanding our offering through ongoing new product developments, extending our geographic reach into markets such as Europe, expanding our sales channels by deepening partner relationships and strategic M&A, and introducing new models to better serve our customers. Each of these initiatives represents deliberate long-term planning and consistent execution. Growth is not built in a single quarter.

It is built over time with patience, sustained investment, and disciplined execution to turn today's opportunities into tomorrow's growth. As we pursue these opportunities, we remain disciplined in how we grow. We continue to adapt to changing market conditions while maintaining a clear focus on profitability. Growth remains a priority, but we will not pursue growth for its own sake. Our goal is to grow profitably and build a sustainable business that creates long-term value. The same approach guides how we expand our capabilities, including growth through strategic acquisition. As we continue to progress on New Classic integration, we are beginning to realize synergies through new customer opportunities, expanded product offerings, and broader marketing channels, such as using showrooms to showcase products and strengthen customer engagement.

Taken together, our financial performance, expanding geographic reach, and disciplined execution demonstrate how we are building multiple growth opportunities while maintaining financial discipline. We believe these efforts position us well to navigate the current environment and continue creating long-term value for our shareholders. With that, I will turn the call over to Iman to discuss our operational progress in more detail.

Iman Schrock

Thank you, Larry, and hello everyone. In an environment where efficiency matters more than ever, our GigaCloud Marketplace continues to gain traction. As businesses look for more effective ways to buy and sell big and bulky goods, especially in a difficult market, they continue to turn to our platform. As of September 30, 2026, trailing 12-month GMV surpassed $1.8 billion, up 24% year-over-year. Core drivers of marketplace growth remain solid. Active third-party sellers increased by 22% to more than 1,500. Similarly, active buyers increased by 21% to almost 14,000. The marketplace becomes stronger with scale as expanding seller participation drives buyer engagement and growing buyer activity fuels seller success.

Despite continued weakness in the U.S. furniture market, our domestic marketplace delivered 13% GMV growth during this quarter. That performance reflects ongoing market share gains driven by the differentiated value of both our marketplace and the Supplier Fulfilled Retail model. While the furniture industry continues to face pressure from a soft housing market, elevated logistics costs, and ongoing volatility, our team has remained focused on disciplined execution, operating with agility and purpose to adapt quickly and capitalize on opportunities as they emerge. Europe continues to showcase the strength of our expansion strategy. During the third quarter, marketplace GMV in the region grew 65% year-over-year, reflecting strong demand for our platform and validating our approach to entering and scaling new markets. Our strategy begins with establishing a strong foundation by leveraging our 1P business to establish product availability and attract buyers. As demand builds, the marketplace becomes increasingly attractive to third parties, or 3P sellers, with its increasing transaction activity and improving operating efficiency.

Think of it as a self-reinforcing cycle. More products attract more buyers, more buyers attract more sellers, and greater scale enhances the value of the marketplace for all participants. We are seeing that dynamic play out clearly in Europe today, where 3P GMV grew nearly 330% year-over-year and contributed approximately $30 million to the marketplace ecosystem during this quarter. Moving to New Classic, we are encouraged by the progress we have made and the opportunities that continue to emerge as we unite the businesses. One of our key priorities has been refreshing and strengthening the product portfolio, a playbook that many of you may recognize from our successful work with Noble House. When we acquired Noble House, we streamlined underperforming products and replaced them with stronger, more relevant offerings. While this created some short-term disruption during the early stages, the approach proved successful in the long run, and we are applying the same discipline at New Classic today.

As part of that effort, we debuted 140 new collections, representing roughly 500 new SKUs at the October High Point Furniture Market, while phasing out older and underperforming products. Initial customer feedback has been incredibly encouraging. Customers responded positively to the new introductions, recognizing our ability to continuously deliver fresh designs and an evolving assortment. This positive response provides further validation of our broader strategic direction and strengthens our confidence in the path ahead. Given the timing of these introductions, we expect the majority of sales contributions to materialize in 2027 rather than this year. We are approaching the integration with a clear focus on both growth and profitability. Every decision we make is guided by its impact on the long-term strength of the business.

What excites us the most is the combination of complementary strengths across the two organizations. GigaCloud brings proven product development capabilities, supply chain efficiency, and the ability to bring new products to market quickly. New Classic brings strong brick-and-mortar relationships, an experienced sales organization, and deep industry expertise. Together, these capabilities create meaningful opportunities to drive growth, improve execution, and unlock additional value across the combined business. We are still in the early stages of this integration, but the progress we have made so far reinforces our confidence in this strategy. We have successfully used this playbook before, and we believe New Classic is well positioned to benefit from the same disciplined approach as we continue building a stronger, more competitive business. I will turn the call over to Erica for a discussion of our third quarter financial results.

Unknown Speaker

Thank you, Iman, and thank you all for joining us today. As a quick reminder, all figures I will cover are rounded and, unless otherwise noted, comparisons are against the same period last year. We delivered a record-setting quarter, achieving all-time highs in both revenue and EPS through consistent execution and our continued focus on profitable growth. Revenue grew by more than 27% year-over-year to $424 million, including 23% organic growth and a 4% inorganic contribution from New Classic. EPS grew 42% to $1.41, outpacing revenue growth and reflecting operating leverage and ongoing cost discipline. Service revenue increased 26% to $136 million, supported by sustained marketplace growth and greater demand for ocean freight, warehousing, last-mile delivery, and packaging services. Higher platform commissions contributed as well.

Service gross margin improved 3.6% sequentially to 15.3%, primarily due to favorable ocean freight pricing dynamics. While elevated fuel and energy costs increased fulfillment expenses during the quarter, long-term contracts and strong relationships with our ocean freight partners limited the increase. Meanwhile, our dynamic pricing approach allowed customer pricing to reflect higher market spot rates. The resulting spread between comparatively slower rising costs and higher customer pricing contributed to margin expansion during the quarter. Moving to product revenue, sales increased 28% year-over-year to $288 million, driven by growth across all operating regions. In the U.S., product revenue grew 16% to $141 million, outperforming a furniture market that remains under pressure. Of this growth, 5% came from organic growth, with the remaining 11% contributed by New Classic.

Growth was supported by stronger relationships with existing customers and increased transaction volumes. Our diversified customer base and product offerings continue to provide resilience amid challenging market conditions. The New Classic portfolio generated $14 million of revenue during the quarter, about 30% lower than the prior-year period prior to the acquisition. This is consistent with our integration strategy and reflects deliberate actions we are taking to strengthen the business for the future. As Iman shared earlier, we have begun the process of optimizing the portfolio by exiting lower-performing products and introducing new offerings with stronger sales and margin potential, similar to how we had done with the Noble House portfolio in the past. This process requires discipline and does not happen overnight, but it lays the foundation for a healthier, more competitive business over the long run. Our focus remains on building a business that generates profitable, durable growth, rather than pursuing revenue for its own sake.

We have utilized this playbook successfully in the past with Noble House, which reinforces our confidence that New Classic can become a meaningful contributor to both growth and profitability in the years ahead. Europe continued to deliver exceptional results, with product revenue increasing 46% year-over-year to $129 million, driven by ongoing marketplace expansion, growing participation across our ecosystem, and deeper engagement with our channel partners. Europe accounted for 45% of global product revenue during the quarter, underscoring both its growing role with our business and the significant opportunity we continue to see in the region. Looking ahead, we expect Europe to remain a key growth driver. While year-over-year growth rates will naturally moderate as the business scales and the comparison base becomes larger, we remain confident in the underlying momentum and long-term growth opportunities in Europe. We generated product gross margin of 29.4%, a sequential decrease of about 2%, primarily due to higher ocean and last-mile logistics costs, competition for our 1P products from the rapid growth of 3P in Europe, and normal seasonal discounting following the summer selling season for outdoor products. To support product margins over time, we are executing on several initiatives.

We are expanding our portfolio with higher-margin products, leveraging New Classic brick-and-mortar customer networks to access less competitive sales channels, and broadening our reach beyond the largest e-commerce platforms to include channels with more attractive competitive dynamics. In addition, the New Classic acquisition is supporting our overall expansion strategy by introducing retailers to the GigaCloud Marketplace. Since the acquisition, about 2 dozen retailer customers have begun sourcing inventory through the marketplace, with another 60-plus customers in the pipeline. On a combined basis, total company gross margin was 24.9% compared to 25.6% in the previous quarter. Selling and marketing expenses came in at $35 million, or 8% of revenue, in line with the same period last year. General and administrative expenses totaled $9 million, or 2% of revenue, compared with 3% in the prior-year quarter. We again produced record quarterly net income, delivering $51 million, or 12% of revenue, to the bottom line.

This represents growth of 36% year-over-year. GAAP EPS was further amplified by our share buybacks, increasing by 42% to $1.41 per share. We generated $56 million of operating cash flow in the third quarter while maintaining a debt-free balance sheet. We ended the quarter with $418 million of total liquidity, including cash, cash equivalents, restricted cash, and short-term investments, providing significant financial flexibility to support our strategic priorities and long-term growth initiatives. Consistent with our previous capital allocation strategy, we continue to return capital to shareholders through buybacks. During the quarter, we repurchased approximately 492,000 shares at an average price of $36, for a total of $17.7 million. Subsequent to the third quarter, we repurchased an additional 88,000 shares at an average price of $56.90 per share, totaling approximately $5 million.

As of today, $115 million remains under our most recently authorized $120 million repurchase plan that is active through August 2029. We are committed to returning capital to our shareholders while maximizing value and will remain flexible with respect to our buyback approach, buying at a slower and more steady rate when our stock price is stable, and opportunistically executing against the plan during times of volatility. If any authorized balances under our $120 million buyback plan remain unused at the end of the program, such balances will be considered for a 1-time special dividend to our shareholders. Also consistent with our capital allocation plans, M&A will remain an integral part of our long-term growth strategy. Our current focus is on the successful integration of New Classic and we will become more active in the M&A market once we are closer to integration completion. Looking forward to the fourth quarter, we expect revenue to be in the range of $425 million to $450 million. Thank you, everyone. Operator, we are now ready to begin the Q&A session.

Operator

[Operator Instructions] The first question comes from the line of Thomas Forte with Maxim Group. Please go ahead.

Fragen und Antworten

Thomas Forte

Yes, can you hear me?

Operator

Yes, we can hear you.

Thomas Forte

Okay, excellent. So, Larry, I would appreciate your thoughts on agentic commerce, what it could mean for GigaCloud, and if you think it's going to drive incremental volume for marketplaces like Amazon and Wayfair, or if it's going to result in greater distribution of sales for companies participating in the category.

Unknown Speaker

Can you say that again, Tom?

Thomas Forte

Sure. So on agentic commerce, Larry, I would appreciate your thoughts on the opportunity for GigaCloud, and if you think it's going to result in a disproportionate amount of sales on marketplaces like Amazon and Wayfair, or if you think it's going to be some sort of equalizer and drive sales across a larger number of participants?

Unknown Speaker

Yes, we have a pretty strong supply chain to support participants from Amazon's and Wayfair's traditional B2C marketplace participants, but we're expanding to more brick-and-mortar-focused retailers right now. I think it's a more attractive opportunity because it is less competitive, and also the complication of connecting those participants is allowing us to create more value for our customers by building the infrastructure to digitalize the supply chain, the infrastructure of logistics capability that we are building. So we remain very confident and optimistic that those initiatives will allow us to help our sellers to generate more reach and will generate better value for both our customers and the company itself as well.

Thomas Forte

When you look at the industry, it's been multiple consecutive years of contraction, partly due to higher interest rates and just fewer housing turns. How do you think about the replacement cycle for bulky furniture and bulky items in general? Is there an opportunity over the next couple of years that we'll see a replacement cycle rebound in sales versus waiting for lower mortgage rates and housing turns to improve?

Unknown Speaker

Yes, we do very little trying to predict what is going to happen. We spend most of our time and energy trying to focus on how we adapt to the changing environment. I think part of the effort is, for example, to expand to a market like Europe that is providing a little bit more promising opportunity, but we are adjusting ourselves to deal with a challenging environment. For example, we become more aggressive in pursuing M&A opportunities to try to overcome this kind of softening in the market. So we are seeing pretty good results from this diversified toolbox that we're using to deal with the challenges, including high ocean shipping, tariff challenges, and softness of the environment in the past several years. So that's pretty much a new normal for our business.

Thomas Forte

Have you been able to secure any refunds on tariffs?

Unknown Speaker

Yes, we have received refunds from the government. And also, we are communicating with our customers very transparently because, for example, for the wholesale customers, some of the funds we are receiving we are actually paying back to our customers if they work with us on terms where they get the price based on the adjustments of the tariff. So we are not really seeing that net impact as significant to the company right now.

Thomas Forte

Great. And then my last question is, how are you managing the inflation in diesel, and do you have the ability to implement surcharges as a way to mitigate the impact?

Unknown Speaker

Yes, we are actually more resilient to those changes because, again, we focus on big and bulky non-standard items, which category actually has lower customer purchase frequency. Although in general it could be a challenging factor, once it comes to price adjustments, it gives us more room to make adjustments if needed because customers have less experience in shopping those items. So they don't have a very clear price reference system usually for regular items. And also, another way we deal with that is usually we try to replace our product portfolio more quickly when inflation happens, which allows us to readjust our margin usually for those new products. These are the reasons we are a little bit more resilient than people thought.

Thomas Forte

Great, thank you, Larry.

Unknown Speaker

Thank you, Tom.

Thomas Forte

Thank you.

Operator

Next question comes from the line of Matt Koranda with ROTH Capital Partners. Please go ahead.

Joseph Gonzalez

Good morning, guys. It's Joseph on for Matt. Looking at 3Q, your beat came in ahead of the top of the guide. Can you split for us in buckets across, say, ocean pricing, off-platform, international, and where those beats came from versus your expectations or range you guys provided 3 months ago? And then if you can, to any extent, comment on the monthly progression of sales during the quarter?

Unknown Speaker

Hey Joseph, it's Erica. Thank you for your question. So there were a few areas where we outperformed our initial expectations. One is Europe. We naturally had expected a little more slowing down in the growth pace because of how big the base has already gotten, and Europe again surprised us. The second big one that we couldn't have necessarily anticipated was the continued high logistics market spot rates. So that's the part we talked about during our earlier discussion where if you look at our service margins, you see a pretty strong move from Q2 to Q3. There was a 3.6% sequential expansion. A big driver of that was seeing consistently high spot rates throughout the market, which, when we use a dynamic pricing approach, we always price according to whatever the prevailing spot rate is.

Hence, our unit prices for those services did see a strong boost.

Joseph Gonzalez

Got it. Thank you for that. And for my follow-up, as we look to your 4Q guide, based on the commentary, how should we think about the split between product and services going forward for 4Q? Is there anything to call out from a seasonality perspective between both businesses? It is roughly growing at the same pace in the third quarter, so is that the expectation as we look forward?

Unknown Speaker

Yes, that is about right. So we don't expect any major structural differences for revenue in terms of where we will be in Q4 and where we are right now in Q3. Those things don't tend to turn very sharply at all.

Joseph Gonzalez

Okay, got it. Then turning to margin there, how much of the service gross margin expansion was attributable to ocean rates, if all, versus other drivers that you can mention? Just anything to call out there as we think about service forward?

Unknown Speaker

Not all of it was from ocean. Ocean certainly gave us a bump because of what recent market prices have been, but we did also see better performance on things like ground as well.

Joseph Gonzalez

Got it. And then if you can remind us on the international business, is there any meaningful difference as it pertains to the margin there versus the U.S. business? And as it scales, will it roughly fall in line with the U.S. business? Just early thoughts there.

Unknown Speaker

Yes, so Europe sees slightly better margins compared to the United States. It is partially because it is a newer market, I think not just for us, but for many other participants as well, and the market at the moment does not seem to be as crowded and competitive as the U.S. However, over the long run, as more folks turn to that area, especially with interest getting a little higher after all the volatility we've had in the States, I do think over the long run, those 2 will eventually meet at some point. We don't necessarily know an exact timing on that, but especially with folks like us who offer the infrastructure and services for other sellers or manufacturers to access that market more easily, which is very helpful for the 3P side of what we operate, I think we are also supporting that movement.

Joseph Gonzalez

Okay, thank you for that color. For my final question here, if I could squeeze 1 more in, you mentioned M&A potential to occur after integration of New Classic. Just any preliminary thoughts as you guys think about the pipeline for M&A and anything that's lingering in terms of buckets that you're bucketing some potential opportunities in?

Unknown Speaker

Great question, thank you. The strategy and the buckets of different targets we would be interested in haven't changed. It's the same as what we were looking for in the past. There are a few different buckets here. Bucket 1 would be someone who is a traditional wholesaler that strengthens our ecosystem and helps us achieve our strategic goals in the long run a little faster. New Classic would be a really good example of this. Noble House also falls into this bucket. These two particular examples brought different strengths to our ecosystem. For example, Noble House brought us outdoor products that are now a very important part of our overall portfolio and strategy, which is expertise we didn't necessarily have as much of prior to the acquisition.

And New Classic brings us access and the expertise, know-how, and relationships with the brick-and-mortar retailer network. So down the line, we would also be interested in looking for targets in this type of positioning that would not necessarily have the same 2 aforementioned attributes, if that makes sense. There are also other types of targets that we would be looking for. Someone who is a logistics player in Europe might be of interest, especially considering how fast we are growing in that region. The infrastructure does need to keep up in order for us to service all of the incoming opportunities that we are seeing, and it would certainly not hurt if we could see some support from the M&A side of things and accelerate the process a little bit. And then there is Bucket 3, which is a technology player that helps us service our customers better. An example of this from the past would be Wondersign, right? It's not a distributor or a logistics provider; it is a technology provider that helps us better service our brick-and-mortar customers, provide them with solutions that better enhance their business, and makes our ecosystem overall a little stickier.

Joseph Gonzalez

Got it. Thank you, Erica. I appreciate the color. We'll go ahead and take the rest offline.

Unknown Speaker

Thank you, Joseph.

Operator

Thank you. Next question comes from the line of Bill Dezellem with Tieton Capital Management. Please go ahead.

William Dezellem

Thank you. Following up on that last question relative to the acquisition pipeline, would you provide your insights in terms of perspective on how full that pipeline is and just the general level of robustness, please?

Unknown Speaker

Hey Bill, thank you for the question. So we haven't been too active in the market as of late because we do want to focus on what we have on hand right now, which is the integration of New Classic. We certainly don't want to put ourselves in a position where there's too much going on all at the same time and we can't properly focus on the right thing. If we're going to do something, we want to do it right and execute the right way with the right focus. So with that said, I do think the market is quite favorable in terms of buying opportunities because of the not most ideal environment we are seeing with furniture overall. Because of the challenge caused by low housing turns, a lot of wholesalers and distributors in the industry are currently facing a little more pressure than they normally are, and there's not necessarily as much buying activity or buying interest, if that makes sense.

William Dezellem

Yes, that does. Thank you very much. And then my next question is relative to the commentary earlier in the call about new models that you're introducing to better serve customers. Would you all please expand further on that commentary?

Unknown Speaker

Yes, absolutely. So what we offer to our customers is not simply product. It is also services that are ways that allow our customers to engage and run their businesses a little more efficiently and perhaps in a manner that is different from what they are used to. For example, we have traditional brick-and-mortar retailing and e-commerce retailing that in the past may have been running in more isolated lanes with each other. However, if you think about what we could do with the brick-and-mortar customer, we are now able to bring them solutions and technology that offer the same efficiency an online supply chain has with the SFR model, right? A brick-and-mortar retailer, if they are working with us, doesn't necessarily need to buy containers of inventory up front, store it in their warehouse, and take on the inventory risk. They are able to access the large pool of SKUs and products we offer, not hold on to that inventory and pay working capital, allow the supplier to hold that inventory, and start marketing to the end consumer that way, which fundamentally changes what their capital structure and what their net working capital spend looks like. At the same time, for those brick-and-mortar retailers who are interested in venturing into the e-commerce world, which has really become a huge part of the furniture industry overall, we are also a partner that can provide them with the right solutions to help get that website off the ground and running.

William Dezellem

Thank you. One additional question, please. You've referenced a couple of times how the furniture category is challenged. At what point do you hit the throttle harder on new categories beyond furniture, and when that time comes, what category or categories would you suspect that would be?

Unknown Speaker

I don't have an exact timing in terms of when. Right now, we are still primarily focused on furniture because there is still so much room left. If you look at our overall ecosystem, we just crossed over $1.8 billion, which feels like a lot, but that's the global GMV size. If we look at the United States alone for furniture wholesale, that's probably upwards of $60 billion. So we have quite a long runway and we want to focus on that and do that right before we necessarily start growing sideways. However, once the right time comes for us to expand horizontally, the right category for us would be something that hits the following keywords: first one would be big and bulky, naturally; and the second one would be long-tail or non-standardized.

A point of reference for this would be our current second-biggest category. It's much smaller than furniture, but serves as a good example, which would be fitness equipment, right? That is also a type of product where it's large, it's heavy, and difficult to move around, and at the same time, there is so much variability if you start thinking about things like price points, designs, different treadmills, stairmasters, that kind of thing.

William Dezellem

Great. Thank you. Appreciate taking all the questions and congratulations on a fantastic quarter.

Unknown Speaker

Thank you, Bill. Thank you so much.

Operator

Ladies and gentlemen, that was the last question for today. With that, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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