GigaCloud Technology Inc (NASDAQ: GCT) saw its stock price plummet by 7.20% during Thursday's trading session, despite reporting better-than-expected third-quarter results. The significant drop came as investors digested the company's financial performance and forward-looking guidance.
GigaCloud announced its Q3 2025 financial results, reporting revenue of $332.6 million and net income of $37.2 million. The company's adjusted EBITDA reached $43.4 million, surpassing the IBES estimate of $33.1 million. Additionally, GigaCloud reported a gross margin of 23.2%. Looking ahead, the company provided Q4 revenue guidance in the range of $328-344 million.
The stock's sharp decline, despite seemingly strong Q3 results, suggests that investors may have been concerned about the Q4 outlook. The projected revenue range for Q4 indicates a potential sequential decrease from Q3, which could be interpreted as a sign of slowing growth. Moreover, the market's overall risk-off sentiment on Thursday, particularly affecting AI-linked stocks, may have contributed to GigaCloud's significant drop as investors reassessed valuations in the tech sector.