Q2 2022 Xometry Inc Earnings Call
Yeah.
Good day, and thank you for standing by and welcome to Zelma Tree incorporated second quarter 2022 financial results Conference call.
At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session you'll need to press star one one on your telephone. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Sean Mill.
Head of Investor Relations. Please go ahead.
Good morning, and thank you for joining us on geometry, as Q2 2022 earnings call.
Joining me are Randy I'll, Schuller, our Chief Executive Officer, and Jim Rallo, Our Chief Financial Officer.
During today's call, we will review our financial results for the second quarter and discuss our guidance for the third quarter and full year 2022.
During today's call, we will make forward looking statements, including statements related to the expected performance of our business future financial results strategy long term growth and overall future prospects.
Such statements may be identified by terms such as believe expect intend and may.
These statements are subject to risks and uncertainties, which could cause them to differ materially from actual results.
Information concerning those risks is available in our earnings press release distributed before the market opened today and our SEC filings included in our Form 10-Q for the quarter ended June 32022 that will be filed with the SEC.
We caution you not to place undue reliance on forward looking statements and undertake no duty or obligation to update any forward looking statements as a result of new information future events or changes in our expectations.
We'd also like to point out that on today's call. We will report GAAP and non-GAAP results. We use these non-GAAP financial measures internally for financial and operating decision, making purposes and as a means to evaluate period to period comparisons non-GAAP financial measures are presented in addition to and not as a substitute or superior.
To measures of financial performance prepared in accordance with U S GAAP to.
Please see the reconciliations of these non-GAAP measures. Please refer to our earnings press release distributed today and our Investor presentation, both of which are available on the investors sections of our website at investors <unk> Dot com.
A replay of today's call will also be posted on our IR website.
With that I'd like to turn the call over to Randy.
Thanks, John .
Good morning, everyone and thank you for joining us for our Q2 2022 earnings call. We are pleased to report another strong quarter with record revenue and gross profit.
We delivered 89% revenue growth and 217% gross profit growth year over year in Q2.
We reduced our adjusted EBITDA loss by $4 4 million quarter over quarter to $8 3 million, making significant progress to being adjusted EBITDA positive in 2023.
We are rapidly delivering on our mission to build a leading global digital manufacturing marketplace transforming one of the largest industries in the world.
While we are still in the early innings of the secular shift to the digital for manufacturing.
<unk> 1000 companies are increasingly rethinking their supply chains and manufacturing strategies.
Dmitry is uniquely positioned to meet their needs through the breadth of our platform across verticals processes and capabilities like.
Likewise, we are uniquely positioned to meet the needs of our suppliers through our growing suite of supplier services.
At the end of Q2, we hosted our first cemetery summit to showcase product releases that enables <unk> to increasingly become the de facto operating system for buyers and suppliers to connect and deliver an hour over two trillion dollar market.
By providing buyers with more choices, we will capture more of their spend and gradually become their one stop shop for all of their needs.
The same thing is true for the suppliers many of whom are not currently as almond tree partners.
With our new cloud based software platform commentary work center.
We aim to be the operating system for hundreds of thousands of suppliers.
We are opening up worked centered at third party developers to create integrated applications to benefit suppliers.
If we can find additional ways to provide value to those suppliers the.
The size of our supplier base will grow exponentially.
For those who did not CV event. It is archived at live dot geometry dot com.
I will discuss these launches in more detail later in the call.
Since our founding in 2013 cemetery has grown very quickly. This growth has continued unimpeded during the disruptive events over the last two years proving that our marketplace can deliver durable growth irrespective of the macro environment.
Our unique ability to match buyers and suppliers in real time, and our weekly updates to our AI driven pricing model provides reliable pricing and predictable margins even during periods of inflation.
Likewise, with our supplier network, expanding domestically and abroad, we offer our customers resilient supply chain.
Moving on to our Q2 results.
Ill provide a review of our second quarter performance and provide an update on key business initiatives, including the recent launches of the new industrial buying engine on Thomas net and <unk>.
Then I will turn the call over to our CFO , Jim Rallo for a more in depth review of our financial results and outlook.
We had a strong Q2 with revenues of $95 6 million driven by accelerated marketplace growth and expanding supplier services with the addition of Thomas.
Q2 marketplace revenue was $75 $6 million growing over 55% year over year, and 17% quarter over quarter.
Market place revenue consists entirely of the historical commentary business, excluding <unk> supplies and financial services.
Marketplace revenue growth was driven by continued strong growth in active buyers and the rapid adoption of the platform by larger accounts across both North America and Europe .
Likewise, we experienced strong year over year growth in many of the different manufacturing processes offered in our marketplace.
In Q2 active buyers increased 40% year over year to 33491, adding.
Adding a record 2808 in Q2.
We saw strength across multiple verticals, including automotive electronics, and semiconductors, robotics and automation as well as ongoing strength in general manufacturing.
The number of accounts with last 12 months spend of at least $50000 increased 76% year over year to 894, adding a record 104 accounts in Q2.
As we discussed in our Q1 call. We continue to see growing traction in production orders from several customers across industries and manufacturing processes.
<unk> robotic assemblies in agriculture, and injection molding for electrical vehicle company.
Given the success of our land and expand strategy, we continue to invest in our enterprise sales engine.
Q2 supplier services revenue was $20 million, including Thomas which we acquired in December of 2021.
The vast majority of supplier services revenue is the Thomas marketing services and advertising business, plus historical geometry supplies and financial services.
We provide convenient access to supplies, enabling manufacturers to lower their cost of operations.
We also improve their cash flow through our growing basket of Fintech products.
With Thomas we've expanded our baskets supplier services, including marketing and advertising solutions.
Our international business continues to deliver strong growth with revenue, increasing 136% year over year.
In Q2, we further expanded our sales presence in the UK, Germany, France and Nordic regions.
Alongside strong topline growth Europe continues to rapidly expand gross margins.
Underscoring the success and demand for our marketplace across geographies.
In addition, we formally launched the platform in China at <unk> Dot Asia in late Q1 and began taking orders from Chinese customers in April .
We are pleased with the initial launch and continue to scale up the in country team and supplier base and expect China to contribute to revenue growth in 2023.
On top of strong revenue growth gross profit grew 217% year over year in Q2, driven by significant improvements in marketplace gross margin and the addition of higher margin supplier services.
In Q2 marketplace gross margin increased 180 basis points quarter over quarter to 29, 2% and increased significantly year over year.
Over the past three years marketplace gross margins have grown from 18% in 2019 to now to close to 30%.
As our marketplace continues to scale and as the number of transactions grow our machine learning becomes smarter driving better matches for buyers and suppliers and helping improve gross margins.
At the same time, we continue to ramp up our network of active suppliers, which further enables our marketplace to successfully match supply and demand and improve gross margins.
The combination of these factors gives us significant confidence in reaching our long term marketplace gross margin target of 35% to 40%.
On top of strong financial results Q2 marked the largest product release schedule in <unk> history, as we introduce new products and services to provide an integrated solution for buyers and suppliers and further scale our networks.
On June 29, we hosted our first Summitry summit with the theme of powering tomorrow supply chain.
<unk> unique ability to match buyers and suppliers in real time and through our expanding supplier networks in the United States and internationally.
<unk> is helping buyers and suppliers come together and create locally resilient supply chain.
At the event, we announced the launch of the industrial buying engine on Thomas net Dot com.
The industrial buying engine helps enterprise customers source and purchase from a large network of suppliers all within the Thomas net dot com ecosystem.
The industrial buying engine provides buyer choice.
Including cemeteries instant quoting engine for those customers, who want to buy it now.
It also digitizes, the cumbersome and time consuming request for quote process, taking what was once done off platform and integrating it into the heart of Thomas net Dot com.
The buyer gets to work with trusted high valued suppliers and benefits from the convenience of the secured checkout payment options and customer support.
Suppliers benefit from additional exposure to high quality buyers and can take advantage of convenient payment options.
With the industrial buying engine, we're creating an incremental and scalable revenue stream on Thomas net Dot Com. We are pleased with the early activity in the industrial buying engine and are seeing healthy buyer demand at the top of the funnel as the number of projects initiated is beginning to scale at a good pace and we're seeing increased engagement on the platform from suppliers.
As we review the data and received feedback from buyers and suppliers in the IV. We are regularly making changes to the user experience to optimize transaction flows.
Also at the summit, we introduced our new cloud based software work center to help suppliers digitize all aspects of their operation.
<unk> Centre is a fully featured all in one manufacturing execution system that gives suppliers a one stop view into all of their orders.
The freemium version of the software was developed with the acquisition of factory for in Q4 of 2021.
So how much of your work center brings everything our suppliers love about commentary like our popular job board and our financial services and everything they love about Thomas net all into one easy to use system.
By digitizing all aspects of their operations and lets manufacturers focus on what they need to do to grow their business and to attract new buyers.
One of the best features of work center is that our suppliers can use it to manage all of their work <unk>.
Including work from their non commentary customers all.
All the cash flow benefits suppliers know and love our integrated seamlessly in the geometry work center.
Through the shop finances dashboard suppliers contract payouts take advantage of our instant pay fast pay and advanced card financial products.
We are pleased with the adoption of active suppliers and work center since the launch.
Additionally, we're opening up the API enabled work center to third party developers by expanding the ecosystem. We can provide a rapidly expanding supplier base with even more innovative products and services.
Additionally, late in Q2, we expanded the menu on our marketplace, extending our quoting capabilities into new categories based on the data and suppliers from the Thomas network.
Buyers can choose from expanded categories and processes.
The new processes include laser tube cutting and to bending these.
These processes improve the marketplace the ability to offer production orders and increasingly become a one stop shop for our buyers.
We have limitless opportunities to fuel our growth.
This year will see us expand our marketplaces domestically and abroad and deliver additional services to buyers and suppliers.
Our Tam is over two trillion.
And the massive 35 trillion global manufacturing industry, we will continue to invest to further capitalize on our position as the leading two sided marketplace.
In 2020, our revenue was $141 million and.
In 2022, we expect that to nearly triple to $400 million at.
At the same time, we expect gross profit dollars to grow over four fold with significant gross margin expansion.
We are well on our path to adjusted EBITDA profitability.
With that I will turn the call over to our CFO , Jim Rallo for a closer look at second quarter financial results and business outlook.
Thanks, Randy and good morning, everyone as Randy mentioned, we had a strong second quarter and we're expecting continued significant revenue and gross profit growth for the balance of 2022, we generated Q2 revenue of $95 6 million up 89% year over year, driven by strong marketplace growth and the addition of Thomas <unk>.
Supplier services.
Let's start with Q1 2020 to financial results that we provided an additional disclosure for marketplace and supplier services, including revenue and cost of goods sold for each.
Q2 marketplace revenue was $75 6 million in supplier service revenue was $20 million.
Marketplace growth was driven by a strong increase in the number of active buyers as well as existing buyers increasing their spend on the platform.
Q2 active buyers increased 40% year over year to 33000 and 491 in Q2 the percentage of revenue from existing accounts was 95% underscoring the efficiency and transparency of our business model that lead to increasing accounts stickiness and spend over time.
We believe the repeat purchase activity from existing accounts reflects the underlying strength of our business and provides us with substantial revenue visibility and predictability.
Once an account joins our platform, we aim to expand the relationship and increase engagement and spending activities from that account over time. The number of accounts with last 12 months spend of at least $50000 on our platform reached 894 at the end of Q2 up 76% year over.
For year.
Q2, gross profit was $37 7 million, an increase of 217% year over year gross profit margin was 39, 4% Q.
Q2 gross margin for marketplace was 29, 2% up 180 basis points quarter over quarter.
As our marketplace continues to scale and as the number of transactions grow and.
And as we expand our network of suppliers or machine learning becomes smarter driving better matches, increasing our gross margin over time.
Q2 gross margin for supplier services was 77, 9% driven by the high gross margin of Thomas marketing and advertising services and growing financial services.
Moving onto Q2 operating costs.
Q2, total non-GAAP operating expenses increased 120% year over year.
To $46 million driven by the addition of Thomas continued investments in the business and incremental public company costs.
Within our operating expenses sales and marketing is our largest variable component.
Q2, GAAP sales and marketing expenses were $18 1 million, including a $1 9 million onetime noncash measurement benefit related to purchase accounting for the <unk> acquisition.
In Q2, non-GAAP sales and marketing expenses were $18 million, excluding the onetime benefit stock based compensation and amortization as compared to $8 5 million in Q2 2021.
The increase in non-GAAP sales and marketing expenses on a year over year basis was driven by the addition of Thomas sales and marketing costs continued investment to expand our network of buyers and sellers and hiring of additional salespeople to support strong growth in our land and expand strategy. Our adjusted EBITDA loss for Q2 was $8.
$3 million or eight 7% of revenue compared with 17, 9% of revenue in Q2 2021.
Our Q2 adjusted EBITDA does not include the $1 9 million onetime noncash accounting benefit.
One quick note on GAAP EPS in Q2 as part of the IPO, we pushed 1% of the company's capitalization were approximately 403000 shares.
<unk> dot org for charitable contributions to nonprofit organizations as a result, we recorded a non operating charge in general and administrative expenses, which is excluded from adjusted EBITDA and.
In Q2, we recorded a six month charge of $1 3 million as we did not record a charge in Q1 due to restrictions on trading windows.
Turning to segment reporting in Q2 revenue from our U S and international operating segments was $87 7 million and $7 9 million respectively.
Segment loss from our U S and international operating segments for Q2 was $11 2 million and $5 3 million respectively.
We continue to invest in our international business, which grew 136% year over year in Q2 with improving gross margins at.
At the end of the second quarter cash and cash equivalents and marketable securities were $356 7 million.
Now moving onto guidance.
We expect Q3 2022 revenue in the range of $102 million to $104 million, representing year over year growth of $80 to 83%.
In Q3, we expect adjusted EBITDA loss to be in the range of $6 million to $7 million.
Or 6% to 7% of revenue compared to a loss of $10 million or 17, 7% in Q3 2021.
As a reminder, as marketplace revenue grows at a faster rate and supplier services. We would expect total gross margin to be slightly lower in Q3 than Q2.
In Q3, we expect stock based compensation expense to be approximately $5 million to $6 million.
Which we will exclude from adjusted EBITDA.
For fiscal year 'twenty, two we are raising the bottom end of our revenue guidance and now expect revenue in the range of $395 million to $400 million representing year over year growth of 81% to 83% versus prior guidance of $392 million to $400 million.
We expect strong growth from marketplace revenue and the 50% to 60% range year over year.
We are raising our gross margin range for fiscal year 'twenty two.
To 38, 5% to 39%.
<unk>, 38% to 39%.
Just on better than expected trends for marketplace gross margin.
We expect our adjusted EBITDA loss to be in the range of 31% to $33 million for 2022 versus our prior guidance of a loss of $32 million to $36 million.
We expect operating leverage to improve going forward driven by strong revenue and gross profit growth and the anniversary of our public company costs from our June 2021 IPO.
We expect to be profitable on an adjusted EBITDA basis for 2023 with that operator can you. Please open up the call for questions.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone please standby, while we compile the Q&A roster.
One moment for your first question.
First question comes from the line of drab with William Blair. Your line is now open.
Hey, good morning, Congrats on the great quarter I'm, just wondering can you just talk a little bit more about.
The reception and traction youre getting with industrial buying engine.
And then also the <unk>.
Work Center adoption.
And how.
What the adoption rate has been or has the momentum you have there.
How exactly does that work how do you get.
Someone.
To use work center the mechanics of that.
Sure So Brian let me and Glenn and good morning. This is Randy So let me take the second question second half of it and then I'll go back to the first one.
So as you as we talk.
Talking about Brian we're intending for work center to be the single pane of glass that suppliers are working with non metairie.
And with Thomas night, so they're getting a.
Orders were work from geometry network, you will see that in.
<unk> and likewise, if theyre getting jobs to the industrial buying engine on Thomas <unk>, you'll also see it there as well.
And equally important theyre going to be able to manage their own work using work center. So we're giving we've got hundreds of thousands of manufacturers and Thomas many of them have no manufacturing execution system at all and we're offering them a free version of that so we've been.
Transitioning people away from the geometry.
Our <unk> system that we had managing our suppliers and we've also been moving things on the Thomas managed as well.
And we've gotten a great reception, so far and.
And we're continuing to develop it but we're very encouraged by what we've been seeing and will continue to move more and more suppliers, there and expect to have strong adoption.
In terms of the IV.
As I mentioned in my prepared and that's the IV the industrial buying engine, which we've now got on Thomas net.
As I mentioned in my prepared remarks, we're seeing a good pace of our activity at the top of the funnel from the launch in early July we rolled it out just at the end of June .
And we expect that the number of new active buyers in Q3 will be very strong in part, reflecting our recent product launches, including IV. So again when you see the active buyer number that will be.
And youre showing in Q3 that should be reflecting the progress we're making there.
And then likewise at the end of this year, we will evaluate and provide a set of supplier metrics for 2023. So we'll then come out in 2023 and start giving metrics to measure the success of our various supplier services, including IV and works out.
Okay. Thanks, Randy I'll pass it on with obviously very impressive that you are in the marketplace gross margin continue to climb.
There are a lot of people that werent werent sure you're going to be able to do that so congrats.
Thanks, so much Brian .
Thank you.
One moment for our next question.
And our next question comes from the line of Matthew Hedberg with RBC capital markets. Your line is open.
Hey, great. Thanks, guys for taking my questions Randy maybe just dovetailing on the last question.
I think we all look at the Thomas Cross sell opportunity is significant can you and obviously work center feels like it's sort of the next evolution of that ability to cross sell can.
Can you maybe sort of like Kantar.
Contextualize sort of.
Some of the milestones youre looking at before bringing over buyers and sellers from Thomas and perhaps what sort of time horizon, because it feels like even if you just.
Bring over I don't know, 10% it could be beneficial, but maybe just a little bit more sort of philosophically, how youre thinking about cross selling Thomas.
Yeah. So.
Look I think as I said.
Go back to what I was saying to Brian before I think youre going to be seeing a strong increase in the number of new active buyers in Q3.
And I think that will be an increase at that is stronger than what we've had historically and that's that's a good indication that buyers are particularly from from.
Tom its historical buyers are adopting our products.
And we're benefiting we're finding those revenue synergies.
And I think just overall when we at the time of the acquisition.
We had several goals in terms of product development, and reaching revenue up to $400 million in 2022.
The good news is you know, particularly from a product perspective, and also financially we delivered on our target to date and we feel really good where we are in the second half of this year.
And just in 2021, we grew revenue about 52% organically as we're sort of guiding to this year, we expect marketplace growth to be from 50% to 60% and that in part reflects the synergies we're getting from that Thomas buyer base that you talked about so.
I think we're.
We're feeling good about it and as we get to the end of this year as I mentioned, we'll have some more specific metrics to report out next year on and supplier services overall.
Got it Okay, and then maybe one for Jim.
Strong results in sort of raised full year guidance, a little bit on both revenue and adjusted EBITDA. There was really no mention of macros or anything like that on the call I'm curious.
Maybe just a little bit of comment on sort of macros. I mean was there anything supply chain related or anything else that you sort of saw I think about as we think about the second half of the year.
Yes.
We have not seen anything from a macro standpoint that is slowing us down.
So I think again when you look at the size of our market right. The Tam that we have.
And the opportunity.
We're still really small so we've got a lot of room to grow as we continue to rollout our products, we're getting a lot more traction if you look at the number of buyers that we added this quarter.
Believable growth there if you look at revenue per buyer, that's up as well so really right now firing on all cylinders.
Matt It's Sean mill in the only the only thing just to keep in mind in your model is.
We're basically silicon up $2 million in FX.
A headwind in the second half of the year and so we still raise the bottom end of the range.
Super helpful. Thanks, Thanks for that FX nugget. Thanks.
Thank you.
One moment for our next question.
And our next question comes from the line of Eric Sheridan with Goldman Sachs. Your line is now open.
Thanks, so much for taking the question and thanks for all the details maybe.
Maybe two.
Two following up on the path to adjusted EBITDA profitable can you just refresh a little bit some investors understand some of the building blocks that we should be watching for in terms of elements of dollar growth and leverage in the business against that broader goal for fiscal 'twenty three and then maybe.
Sort of more micro question as you called out the AI and machine learning.
And how that will improve supply and matching and possibly be a tailwind for gross margin could you go a little bit deeper there in terms of how we should think about that as a gross margin amplifier within the broader bridge on adjusted EBITDA. Thanks, So much.
Yes, no I appreciate I appreciate the question.
Look I think that last quarter, obviously was.
Really.
Forward forward looking.
For what is going to continue to happen over the next several quarters right. We've told people that we would be fully.
Profitable on adjusted EBITDA basis by the end of next year for the full year.
We're making good progress towards that it's being driven by phenomenal revenue growth and continued increase in gross profit margin on the marketplace side of the business. So we believe we're going to continue to do that.
And so when you look at.
The topline revenue the increased gross profit margin and we're getting efficiencies in our operating lines. So we've got good efficiencies in our sales and marketing this quarter.
We expect to get.
Good synergies or what I would say is.
Good leverage in the rest of our operating lines, where we're annualizing now our public company costs and we went public last year. This quarter. So we will get some leverage there as well. So I think again, we will youll see youll see continued step function as we move through this year.
And as we move through as we move through next year, we would expect to have a small adjusted.
Adjusted EBITDA loss, probably in Q1 and Q2 next year and then be profitable for the last two quarters.
And then let me just Eric just jump on the second half of that question is Randy now about gross profit and again just to provide some context. If you look at as almond trees. Overall gross margin in Q2 of last year. We were at 23, 5% and then if you look at the gross margin for marketplace, which is all of the historical.
Zhao Metairie business, excluding supplies in our financial products were at 39, 4%. So.
And that was driven by.
We've got more data and we've got more active buyers.
And huge uptick.
And Thats also up just to be clear the growth in our gross margin for our marketplace was up over 180 basis points from Q1 of this year, so really strong growth.
In that number and I'm, sorry, I, just misspoke I'm, sorry, we're at 29, 2% for marketplace versus.
The $23 five that we had last year, so a big jump in that.
And.
And machine learning as we get more and more data and as we get more active suppliers that helps us.
Make sure that the algorithms are doing the right matching and it helps us grow those gross margins.
And we're continuing to enhance those algorithms and we will expect to continue to see growth in that gross margin, which will provide some of that leverage as we talked about getting to profitability next year, that's an important component to that and getting to our long term goals.
A $40 to 45% gross margins.
And thank you.
One moment for our next question.
Our next question comes from the line of Karl Keirstead with UBS. Your line is now open.
Oh, great. Thanks, Randy.
Randy as you mentioned in your remarks last quarter, you called out the anticipated mix shift to what you called larger production orders and.
That might create a little bit of Lumpiness I'm wondering if you can give an update on that phenomenon did did you in fact secure a number of those in <unk> or is that a little bit more of a second half phenomenon. Thank you.
Yes, I think a good metric.
Carl Thanks for that question is when you look at customers, who have more than $50000 of LTM span and that number grew in Q2 year over year, 76% and we added a record net add of 104, so going back to that question, we're continuing to see a really nice trend here.
And we are increasing we are seeing increased activity and production orders in areas such as injection molding die casting sheet metal stampings and these are continue to be huge opportunity for growth for that.
So.
I think.
That growth in large.
Customers more than 50000, <unk> span has a good sense of where we are.
Got it okay. Thanks, and then for Jim you, obviously raised the full year guidance for marketplace gross margins from 75 to 80 to $80 to 85 fairly material bump. If you could put your finger on one thing thats driving your confidence in the durability of those marketplace gross margins into the second half.
That motivated you to make that guidance change what would it be.
Yes. So when you look at it really is just about the more transactions, we get right. The more data, we have and the better the matches our.
For our suppliers. In addition, we continue to grow the supplier base. So again I think firing on all cylinders with the artificial intelligence right now and we see continued continued opportunity there.
Okay terrific. Thank you Beth.
Thank you.
Again, Thats star one one to ask a question.
Yes.
One moment for our next question.
Our next question comes from David Silver with CL King Your line is now open.
Yes, hi, good morning.
I had a couple of I guess more targeted questions, but I'm thinking about your strategies for.
Buyers to adopt your your platform and your services.
Just a couple of things I think that you've launched very recently the instant quote.
Function on the Thomas platform for example.
You've discussed the work center.
Product.
Just curious, but can you tell let's say the adoption rate in other words can you.
Figure out how many people are using the instant quote function or how many people are taking the work center software and actually.
Plugging it into their to their workplace.
I don't know resource planning system more.
Computer operations. Thanks.
Yes, we do have access to those metrics, we're carefully tracking them.
Andrew just as we sort of talked about by the end of this year, we'll take a look at what we think are some good metrics to report starting reporting out in 2023, they give people some good visibility on the progress that we're making and the adoption of these products.
So absolutely we're all over it we're tracking them.
And we'll be reporting some out next year. So people have a greater visibility so David when you look at the instant quoting right, that's really being measured by our active buyer metric.
Active buyers are up 40% year over year, they are up nine 2% quarter over quarter and revenue per buyer is up was up as well we are over $2800 per buyer right now.
Okay.
Shifting just to the seller's side, but for a moment, but how would you.
Characterize I guess the.
The activity of sellers, let's say shifting from that advertising base Thomas platform.
Over to you know.
The zama tree marketplace.
Be eager to adopt.
But.
Most of your comments have been on the buyer side here. So I'm just wondering about seller adoption of the marketplace product.
Yeah.
The option of the marketplace product.
Okay.
Thank you.
Both options kind of like buyers by different ways to purchase suppliers like different ways to operate their business as well. So some like the idea of getting work Vietnam entry sunlight getting work via Thomas net so I think the idea that we're offering both opportunities.
And we're using more center is just a single planet payment fashion in the managed growth is is attractive to folks so where we're encouraged by what we're seeing and David I'd point to again.
Seller the seller adoption rate is increasing when you look at again, the gross profit margin in marketplace. So the more sellers we get involved.
The better gross profit margin, we can drive throughout the marketplace.
Absolutely it has to be a balance there I guess.
And then just maybe a more philosophical question, but.
And recent comments Randy.
Definitely have noticed the your focus on the supply or supply chain Brazilians.
The driver for demand and when I think about all of the big macro pushes and pulls over the last year or so.
I'm just wondering.
No.
Is that a is that an especially poignant to were you.
Useful.
Element, let's say for for your overseas business in other words, where maybe there is not just fundamentally just not going to be the same amount of options and a particular.
Local region and.
Is that kind of a driver for.
Penetration in new geographies in particular or is there.
Another area, where you think that.
Less.
Sure.
Less secure supply chain is really driving people to to your platform.
Yes look I think.
Thank you.
<unk> experienced durable growth term all sorts of environments and obviously when we started the company.
And in 2013, we opened our doors for vintage in 2014, we werent facing the issues today and <unk> grew very rapidly we grew rather rapidly during the shutdowns with Covid and now we've been growing rapidly. During this so I think we built a very durable model.
And we're really taking advantage of this secular shift.
To the digital and we are the leading two sided marketplace and this has been done successfully and so many other industries.
We're the leader here now in the switch from manufacturing due to the same so I think irrespective of the macro environment commentary will continue to have robust growth.
I think.
One thing that we're seeing is that customers want options. So one option is is a local supply chain and then sometimes they want the option to have an international as well and that's what we're endeavoring to do we're endeavoring to build these locally resilient supply chains, whether it's in North America, whether it's in Europe and now we've opened up in China.
For China.
And then we also can give customers options if they want to avail themselves of international So I think giving customers options and <unk>.
<unk> them too.
Bill their supply chain in a way that suits them, the vast and with our marketplace model.
We have the technology and extensible platform to do just that.
Okay. Thank you very much.
Yes.
Thank you.
This concludes today's conference call you may now disconnect everyone have a wonderful day.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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Okay.
Sure.
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