GigaCloud Technology IncGCT
GigaCloud Technology Inc Stock Compensation Disclosure
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 a one 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:
| Number of shares | Weighted average grant-date fair value | ||||||||||
| Outstanding as of January 1, 2025 | 150,260 | $ | 30.82 | ||||||||
| Granted | 322,210 | 11.58 | |||||||||
| Vested | (380,852) | 19.15 | |||||||||
| Forfeited | (575) | 28.28 | |||||||||
| Outstanding as of December 31, 2025 | 91,043 | $ | 11.58 | ||||||||
| Number of shares | Weighted average grant-date fair value | ||||||||||
| Outstanding as of January 1, 2024 | 159,773 | $ | 5.01 | ||||||||
| Granted | 567,130 | 30.72 | |||||||||
| Vested | (572,402) | 23.71 | |||||||||
| Forfeited | (4,241) | 5.01 | |||||||||
| Outstanding as of December 31, 2024 | 150,260 | $ | 30.82 | ||||||||
| Number of shares | Weighted average grant-date fair value | ||||||||||
| Outstanding as of January 1, 2023 | — | $ | — | ||||||||
| Granted | 412,397 | 5.23 | |||||||||
| Vested | (252,624) | 5.37 | |||||||||
| Outstanding as of December 31, 2023 | 159,773 | $ | 5.01 | ||||||||
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.
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In thousands) | |||||||||||||||||
| Cost of revenues | $ | 318 | $ | 970 | $ | 9 | |||||||||||
| Selling and marketing expenses | 1,215 | 2,457 | 169 | ||||||||||||||
| General and administrative expenses | 2,383 | 11,024 | 1,501 | ||||||||||||||
| Research and development expenses | 692 | 2,058 | 211 | ||||||||||||||
| Total share compensation expenses | $ | 4,608 | $ | 16,509 | $ | 1,890 | |||||||||||
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 of ten 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 is zero 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, and no 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.
| Number of shares | Weighted average exercise price | Weighted average grant- date fair value | |||||||||||||||
| Outstanding at January 1, 2023 | 4,556,061 | $ | 0.05 | $ | 1.15 | ||||||||||||
| Granted | — | — | — | ||||||||||||||
| Exercised | (4,556,061) | 0.05 | 1.15 | ||||||||||||||
| Outstanding at December 31, 2023 | — | $ | — | $ | — | ||||||||||||
Total intrinsic value of options exercised was nil, 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 of three 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:
Number of shares | Weighted average grant date fair value | ||||||||||
| Outstanding as of January 1, 2024 | 10,545 | $ | 0.0015 | ||||||||
| Vested | (10,545) | 0.0015 | |||||||||
| Outstanding as of December 31, 2024 | — | — | |||||||||
| Expected to be vested | — | $ | — | ||||||||
A summary of the Company’s restricted shares for the year ended December 31, 2023 is presented below:
Number of shares | Weighted average grant date fair value | ||||||||||
| Outstanding as of January 1, 2023 | 69,034 | $ | 0.0015 | ||||||||
| Vested | (58,489) | 0.0015 | |||||||||
| Outstanding as of December 31, 2023 | 10,545 | 0.0015 | |||||||||
| Expected to be vested | 10,545 | $ | 0.0015 | ||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 3, 2025 | |
| 2023 | Mar 27, 2024 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.