Q2 2025 Xometry Inc Earnings Call
Good day and thank you for standing by.
Welcome to the xometry Q2 2025 earnings call.
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I would now like to hand the conference over to your first Speaker today, Shaun millani VP of investor relations. Please go ahead
Good morning, and thank you for joining us on Xometry's Q2 2025 earnings call.
Joining me are Randy altshuler, our chief executive officer.
Sanjiv Singh. Suhani. Our president and James Mill. Our Chief Financial Officer.
During today's call, we will review our financial results for the second quarter 2025 and discuss. Our guidance for the third quarter and full year 2025
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 in 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 open today. And in our filings with the US Securities and Exchange Commission, including our form, 10 Q for the quarter ended, June 30th 2025.
Non-GAAP financial measures are presented in addition to and not as a substitute for, or superior to, measures of financial performance prepared in accordance with U.S. GAAP. To see the reconciliation of these non-GAAP measures, please refer to our earnings press release distributed today and our investor presentation, both of which are available in the investor section of our website at investors.xometry.com.
A replay of today's call will also be posted on our website with that. I'd like to turn the call over to Randy.
Thanks Sean. Good morning and thank you for joining our Q2 2025 earnings call. Q2 was another strong quarter with record Revenue, gross margin and adjusted ebit dots.
Q2 Revenue increased 23% year-over-year to 163 million as we gained significant share in the large and fragmented Custom Manufacturing Market Marketplace growth, remained robust, increasing 26% year-over-year driven by our rapidly expanding networks of buyers and suppliers and deepening Enterprises engagement. Our Global marketplaces continue to respond well to the volatile supply chain environment
Powered by our improving AI, pricing and selection, algorithms Marketplace gross margin reached. A record 35.4% in Q2 up 190 basis points year-over-year contributing to a record overall company gross margin 40.1%.
Expanding Marketplace, gross margin. Underscores the value. We're creating with our AI powered Marketplace.
our efficacy and competitive mode continues to increase as we grow our networks buyers and suppliers and gain more data to continuously train our algorithms
This is driven significant and steady increases in our Marketplace growth margins. From the 25% level 4 years ago, the 35% plus today.
Each quarter of growth and improvements in our technology helps to incrementally power. The quarters that follow
In Q2 we delivered strong operating, leverage with adjusted, Eva of 3.9 million and Improvement of 6.6 million year-over-year. Our results industry-leading growth and significant market share gains underscore the differentiated and durable advantages of our Marketplace model.
We're building a superior business model that delivers strong experience for both buyers and suppliers while driving, increasing operating scale and expanding adjusted to dial margin.
We deliver these results, even as we continue to invest in our key growth initiatives, and drive further use of AI throughout our platforms,
Since joining xometry in January, in the new role as president Sanji, singhani has accelerated. Our efforts to embed technology and AI across the organization to enhance our position as a digital rails in this massively, fragmented and traditionally offline Custom Manufacturing Market.
We are deploying generative AI at scale to improve experience and drive additional value. For both. Our buyers and suppliers our pace of product, introductions is increasing including several new releases in Q2 and early Q3
These include in Q2, we continue to improve the buyer experience. In our Marketplace, we enhanced our instant quoting and selection expanded. Instant quoting for a new additive materials and added the ability to dynamically view 2D drawings in the quote flow.
In Q2 xometry EU launched our team. Space solution in Europe, UK and turkey.
Teamspace is a cloud-based solution with an isometry platform that enables customers to collaborate with other users and projects and custom parte orders.
This Global expansion enables xometry to drive deeper enterprising and enhanced viral. Buyer growth. We are pleased with the initial results.
In Q3 xometry EU launched integration capabilities for Enterprise customers to streamline procurement.
This feature enables buyers to order custom parts directly from the xometry EU site while still within the buyer's procurement platform. Streamlining the purchasing process, reducing errors and improving efficiency by automating data transfer between systems,
In July, we began testing an improved mobile experience. For our suppliers and work center. Our cloud-based platform for suppliers.
The new work center, mobile app, enables suppliers to interact more easily. Within xometry platform, including viewing 3D part design files sharing images of work in progress and receiving push notifications.
This capability will be further enhanced to accelerate our initiatives to instantly quote technical drawings.
On Thomas net. We are pleased with the initial test results of our new search experience. Using natural language algorithms to improve buyer, search results based on intent.
We are pleased to see a 10% plus improvement in our buyer engagement levels. Now in Q3, we will begin selling on the new ad serving technology platform for new customers. We expect that the new technology will increase advertising, penetration and engagement.
There's much more to come in the following months and quarters on the technology front as we focus on further improving, buyer and supplier experience and expanding our platforms.
Our technology and initiatives combined with our Enterprise sales and marketing efforts are powering our land and expand strategy. For example, in Q2 xometry became a preferred supplier for a major European Aerospace company.
The customer chose xometry for easy to use platform and business model. Enabling the customer to start transitioning from its Legacy procurement system.
Embedded in the customer supply chain geometry is now being used for quick term projects and long-term production programs.
It's a good example of an Enterprise customer which we believe can generate 10 plus million dollars in annual revenue.
And before I hand it over to James, I want to take a moment to highlight how we're winning, especially with large customers, and why we believe Xometry is increasingly becoming a strategic sourcing partner to some of the world's most demanding buyers.
First, driving Technology, Innovation to deliver improving Marketplace price, speed and selection.
We continue to strengthen our AI driven marketplace with smarter quoting, Dynamic, pricing and integrated workflows to make the platform more valuable to our networks of buyers and suppliers. For buyers. This means faster more accurate sourcing with greater transparency, increasing agility and speed to Market.
Second, we're improving supply chain resiliency.
Our Marketplace helps customers mitigate supply chain volatility and disruptions by offering access to a diverse expanding Global manufacturing network of over 4,000 active suppliers. This allows buyers to instantly diversify, their supplier base reducing dependencies on a single Source or region and enhancing overall resilience.
Our Global sourcing efforts and flexible asset. Light model are resonating with customers. Given the rapidly changing global trade environment.
Third, delivering a scalable enterprise offering.
Our land and expand Playbook is powered by technology. As Enterprise accounts, increasingly adopt our software Solutions including team space and Erp Integrations.
As we drive adoption of Enterprise technology, we become more embedded in customer workflows reducing buyer, friction and expanding wallet share in these large accounts.
Fourth driving value to our Global supplier Network.
Our Marketplace is driving increasing value for suppliers. Enabling them to sell their capacity, digitally unlock access to global demand and increase asset utilization and profitability.
Suppliers. Leverage our cloud-based software platform work center to more efficiently, manage their operations and they utilize our fintech products to improve cash flows.
We continue to win and momentum remains strong in Q3. We are raising our 2025 Revenue. Growth Outlook, given robust demand, and our Marketplace and strong execution of our teams.
I will now turn the call over to James for a more detailed review of Q2 in our business Outlook.
Thanks, Randy and good morning, everyone.
Q2 was another strong quarter for geometry, delivering strong Revenue growth robust expansion in Marketplace, gross margin and significant, adjusted ebit, D leverage as our Marketplace responds to customers needs in real time.
Summary is becoming their digital rails in this massively fragmented, and lastly, offline. Custom Manufacturing Market,
As we scale towards 1 billion, dollars of Revenue, we expect to deliver improving profitability. Even as we continue to invest in our growth initiatives,
Q2 Revenue increased, 23% year-over-year to 163 million driven by strong Marketplace growth.
Q2 Marketplace Revenue was 148 million and supplies Services Revenue was 14.3 million.
Q2 Marketplace, Revenue, increased 26% year-over-year, driven by strong execution and growth with larger accounts as we continue to capture significant market share.
Medical including Aerospace and defense, automotive and Robotics.
Q2 active buyers increased 22% year-over-year to 74,777 with a net addition of 3,323 active buyers.
Q2 Marketplace Revenue per active buyer increased 4% year-over-year, primarily due to strong Enterprise growth in the United States.
In Q2, 2025 us, Marketplace Revenue, increased 25% year-over-year.
Growth accelerated to 31% year-over-year growth.
And we continue to expand our Marketplace capabilities, including the recent launch of teamspace in Europe.
In Q2 the number of accounts with last 12 months, spend of at least $50,000 on our platform increased 15% year-over-year to 1,653 an increase of 108 from quarter 1 2025.
We view accounts with at least $50,000 spend as the top of the Enterprise funnel.
We expect to continue to grow this base of accounts over time.
Enterprise Investments continue to show returns with strong Revenue growth in Q2 for Marketplace accounts with last 12 months, spend of at least 500,000.
Our Enterprise strategy focuses on our largest accounts, which we believe each have 10 million plus in potential annual account Revenue.
supplier Services Revenue declined, approximately 2% over quarter, as we have largely stabilized, the core advertising business ahead of key product upgrades later in 2025,
We are focused on improving engagement and monetization on the platform which remains a leader in industrial sourcing Supply, a selection and digital Marketing Solutions.
Q2 grows profit was 65.2 Million, an increase of 23% year-over-year with a record. Gross margin of 40.1%.
Q2 gross margin for Marketplace, was a record 35.4% and increase of 190 basis points here over the year.
Q2 Marketplace, gross profit dollars, increased 34% year-over-year.
We are focused on driving Marketplace. Gross profit dollar growth through the combination of Topline growth and gross margin expansion.
We continue to adjust our pricing to reflect changing tariffs.
And our AI cost algorithms update regularly, to reflect changes in our supplier Network.
Q2 gross margin for supplier Services. Remain strong at 888.7% driven by our increasing focus on the higher gross margin Thomas advertising and marketing services.
Moving on to Q2 operating costs.
Q2 total non-gaap operating expenses, increased 10% year-over-year the 61.7 million. Well, below Revenue growth rates,
We are applying strong discipline and rigor to our capital and resource allocation across teams while investing in our growth initiatives.
In Q2 sales and marketing and DNA decreased 180 and 170 basis points year-over-year respectively to 16.4% and 8.9% of Revenue.
this reflects improving Enterprise sales execution and discipline advertising spend
Marketplace advertising spend was 5.6% of marketplace Revenue, which was down 130 basis points year-over-year. As we balanced growth and profitability.
Q2 adjusted ebitda was 3.9 million compared with a loss of 2.6 million in Q2 of 2024.
Q2 adjusted ebit, Dart improved. 6.6 million year-over-year driven by growth in Revenue gross profit and operating efficiencies.
In Q2, we delivered an incremental adjusted ibida margin of 22% above our Target of at least 20%.
Primarily driven by strong Marketplace, gross margin expansion.
In Q2 our us segment adjusted ibida was 6.9 million or 5.1% adjusted ibida, margin a 6.6 million Improvement year-over-year, driven by expanding gross profit and strong operating expense leverage, particularly in sales and marketing.
Loss was 2.9 Million in Q2 2025.
Roughly flat year-over-year driven by Investments to further Drive global scale.
At the end of the second quarter cash and cash, equivalents and marketable, securities were 226 million from q1 2025.
The decreasing cash was driven by a CapEx primarily software-related of $6.9 million, reflecting our technology investments in the platform and accelerating product rollouts shared earlier by Randy.
We are focused on improving working capital efficiency and cash flow conversion given our asset light model and limited Capital spending.
We expect capex to remain approximately 7 million per quarter for the balance of 2025.
In June, we completed our convertible debt refinancing and closed $250 million of new 0.75% convertible notes, due 2030.
This transaction enabled us to extend the maturity of most of our existing debt with improved terms, a lower coupon and reduce potential dilution to the existing capital structure.
The transaction fortifies our balance sheet by addressing over 200 million principal amount that had 2027 maturities while providing us with financial flexibility to continue focusing on our growth initiatives and margin expansion.
Importantly, this transaction was structured to minimize the potential future dilution for our Equity shareholders, with an effective 75% conversion premium.
Q2 demonstrates the ability of our AI-powered Marketplace to deliver strong revenue, gross profit growth, and operating leverage as we remain disciplined in our execution.
As we scale towards 1 billion dollars of Revenue. We expect continued 20% plus incremental adjusted. Debit our leverage, on an annual basis.
Given our large Market opportunity and low. Penetration rates, we will continue to balance investing in the future with driving operating Leverage.
Now, moving on to guidance.
For the third quarter, we expect Revenue in the range of 167 to 169 million or 18 to 19% growth year-over-year.
We expect Q3 Marketplace growth to be approximately 20 to 22% year-over-year.
As Randy mentioned Trends, remain strong in Q3 even as we are mindful of the uncertain macro environment.
We expect Q3 supply of services revenue to decrease approximately 2% to 4% year-over-year and be approximately flat quarter-over-quarter.
We expect Q3 Marketplace growth margin to improve year-over-year and continue to expect full year, Marketplace growth margin to also increase year-over-year.
In Q3, we expect adjusted evida of 4 to 5 million compared to a loss of 0.6 million in Q3 2024.
In Q3, we expect stock-based compensation expenses, including related payroll taxes to be approximately 9 million or approximately 6% of Revenue.
For the full year. 2025, we are raising our Marketplace growth Outlook from our previous guidance of at least 22%.
To 23 to 24% growth.
Driven by our growth initiatives in our large fragmented Market.
We expect Supply services to be down approximately 5% year-over-year.
We are raising our revenue outlook for the full year. We expect overall growth in 2025 of at least 20%, exceeding 2024 growth of 18%.
Lastly, for the full year, 2025 we expect incremental adjusted margin of approximately 21%.
I want to close by thanking our dedicated xometry team members around the world, their commitment to our buyers, and suppliers is instrumental to our continued growth and core to our mission of making the world's manufacturing capacity accessible to all
With that, operator, can you please open up the call for questions?
Thank you. At this time. We will conduct the question and answer session.
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Our first question today comes from Corey Carpenter with J.P. Morgan. Your line is open.
Good morning, thanks for the questions. Uh, Randy, uh, 1 for you and then James 1 for you. Uh, for Randy, you talked to a number of product initiatives at the company. You know, I wanted to ask where you're seeing the most impact on the business and, and what your focus area is on a product side are for the second half of the year. And, and then James more more financially related, a lot of press around manufacturing reading slowing in July. It sounds like you're still seeing strong Trends continue but perhaps any insights, you could provide on what you're seeing so far. This quarter in what you're assuming in the guide would be helpful. Thank you.
Yeah, you know what? I'm actually uh, Corey great to hear from you. I'm going to have some G start on on that first question about the product introduction, and then then I'll chime in as well, and then we'll get to James. So send you go ahead and thank you. Thank you for the question.
I have now been in the role of president. For 7 months, I focused on driving the data. The other day was giving the value from our current setup.
The bends and he asked me to join.
I believe there was a significant opportunity to embed, e-commerce principles to improve the buyer and supplier experience.
And efficiently rapidly scale, our business.
In my experience.
Asset, like marketplaces has a scale when they can efficiently and effectively ingest significant amounts of data about the customers and their orders.
And then use the insights from the data to find the mosul supplier, and the least cost who can fulfill the order on time.
My focus has been to accelerate the technology and AI deployment to capture more and more of this data.
And scale, our AI models to improve pricing speed and selection for our buyers and suppliers on the platform.
I'm Proud To Echo. What? Randy shared earlier that we are already seeing an increase of cortisol and technology deployments in Duty due to and Q3 already.
This includes things like instant.
Quoting selections and in and increased additive materials launching team space and Enterprise indication in Europe, testing a mobile app experience in work centers, motivating, extraction, of information from technical drawing and then on Thomas net.
Testing of a new search experience using natural language.
Overall, AI is Central to driving significant Authority improvements in our operating Leverage.
In all functions across all markets.
Great. Thank you Sanji, uh, Corey on on this on your second question. Uh, you know, we're raising our full year Marketplace. Growth Outlook to 23 to 24%, from at least 22%. So Q2 really teases the quarter 26% growth. Uh, we saw great growth in the US and in international, um, and Enterprise continues to show, good traction. As Randy mentioned, I think xometry is really purpose Built For This rapidly changing global environment and our marketplaces prospered in terms of macro volatility in the past.
Uh now you know, we remain somewhat cautious on the macro environment, it continues, you know, manufacturing Industries continues to suggest some buyers remain cautious, but as we've done in the first half, we're very focused on uh, our initiatives, our growth initiatives. Uh, what we're seeing uh, that we can drive through Enterprise through growing. Our buyer Network that we expect to be able to continue to do. We've taken all those Trends into account in in terms of the guidance.
Okay, thank you, Beth.
Thank you.
Our next question comes with from Brian drab with William, Blair, your line is open.
Hi. Thanks for taking my questions, just a, a couple on gross margin to start. Um, you know, the first quarter you had
Little pressure on gross margin, as you were making some adjustments to your International manufacturing base. Can you talk about?
Um, how that went? It seems like.
You know that was successfully completed at at at this point and with the rebound and and gross margin really impressive rebound and gross margin and uh so can you just talk about that Dynamic and and also was there anything unusual in the second quarter of gross margin?
And does, does the guidance uh, imply that maybe gross margin ticks down a little bit sequentially in the second half or can you sustain this really high level in the second half? Thanks.
In the quarter 35.4%.
Uh, up 190 basis points. Year-over-year into our long-term guidance range of 35 to 40%
As you noted, and as we discussed before, you know, in Q1, we proactively made.
Investments in order to ramp up volume in geographies that we felt would be helpful in.
And we were able to see a much more normalized progression of our growth margin in in the second quarter. So as up sharply curve over Q. Um and really the core of this is being AI driven, it's the main driver of our gross margin expansion. The continual improvements. Uh as Sanji was was talking about as well, on our AI pricing prediction machine learning with more data and our AI driven sourcing.
With respect to 3 margin to continue to be up year-over-year. It's not always linear quarter over quarter. So I think that is an important Point as we think about, you know, progression from here into Q3 into Q4. Uh, but we do expect it to continue to show, uh, nice improvements year-over-year, uh, for the quarter and for the full year.
Okay, thank you. And um, I I'll just ask 1 more. I don't know if you guys noticed, but the ism index has been basically below 50 for like 30 months. It's not really showing up in your results. Um, and I'm just wondering, like are you having conversations internally where you're just saying? Like, if if the
situation, improves, you know, in in the US, Europe internationally
You know, we really feel like, you know, you're like you're leaving a lot on the table like growth could accelerate and we're we're not seeing growth for anyone really in Europe and you're talking about 31% International growth with strength in Europe. Um just wondering if you could comment on that like the potential for even further acceleration in a better environment.
Yeah, I know Brian. It's Randy. I'd appreciate that question, look. I mean I I think we've been you know we're talking about now for a while as as you rightly noted you know, the indices have all been down for for a couple of years. And as long as she's been maintaining is, is is strong growth because we're gaining market share, and there's more and more adoption, uh, by customers of our of the marketplace. It's the best way for sourcing. Uh, so, you know, we can see it.
Forecast, you know, strong growth based on that. But absolutely, if the macro turns around, that would be a nice tailwind for us. So, good days ahead. But again, we’re optimistic about it. As we talked about coming into Q3, we're off to a strong start in Q3, as well as more and more people are adopting our Global Marketplace and taking advantage of, you know,
The I driven algorithms and matching.
Yeah, Brian and Sean and just if you look at the guidance, I mean, again we've been consistent, we don't expect any Improvement the way, we give our guidance and if you've heard on the call from Randy Sanji, we're really focused on driving product information. Uh, Innovation on the platform, uh, and you know, really improving the buyer and supplier experience and controlling what we can control.
Right. And and so the Outlook does not include any Improvement in the environment, is what you're saying? Sean, we're continuing to temper, our, our Outlook with being cautious, conservative that with the macro will be
Yeah, understood. Okay, thanks for taking my questions.
Thank you.
Our next question comes from Ron Hoy with City. Your line is open.
Great. Thanks for taking the question here. I wanted to follow up on the product question and another 1 just on, um, the overall macro Trends. So, uh, Randy, you talked to, I just want to understand your thoughts on instant quoting and the benefits to conversion rate is that just goes to more and more products. Uh, so that's on its including and then James, in the on your prepared remarks you mentioned, I think adjustments to pricing in the quarter and I want to understand the pricing environment as it relates to macro and tariffs and everything else. Thank you.
Thanks, thanks Ron. Uh, I'll I'll jump in here and send you can can add anything. So, uh, we are very focused on increasing the scope of what we can instantly quote that includes additional manufacturing processes materials post-processing. Uh and uh you know that's reducing friction in our Marketplace. Uh it's increasing the speed by which customers not only can order but where there can be delivery um and can also uh, you know, leads to better outcomes so that is definitely a focus. Uh you'll continue to see that as we're investing in our algorithms and and that expansion in our offering itself.
Thanks, thanks Andy. Just go ahead tap with that. I think our Focus remains on improving buyer and customer experience but deploying
Expand the digital Park AI algorithms across the board and he pointed to several examples in his remarks earlier where we've launched, uh, products in Q2 continue to see a gaining based on that in Q3. So we are very proud of that.
We're on, on, on the question, on pricing and tariffs. So, uh, you know, as we talked about on my last call in tariffs, or inputs into our pricing, like other changes in in duties and shipping Etc. So, uh, as we see and and as our algorithms and uh, you know, our network, uh, sees impacts of, you know, on costs or on pricing in the network, then our Marketplace reflects that.
Uh and I think I just, you know, zoom out a bit in terms of, you know, as a global Marketplace, we're investing in the ability, you know to give our customers the best sourcing options. So as we adjust pricing that allows, you know, customers to to make their choices in terms of the options on our Marketplace.
Uh, we're able to operate the engines. They're able to uh you know account for changes in international fulfillment. We can work with many of our Enterprise customers to secure the domestic Supply that they that they're looking for um and as relevant provide them with the offshore Solutions. So it's really about you know the marketplace is purposeful for for you know, these sorts of environments where flexible and resilient. We've got a great strong domestic Supply base. Uh but also
Global base of over 4,300 players. And we're so, we feel like we're giving our customers, the choice and flexibility that they need, uh, to find a sec and secure, the sourcing that they want.
Got it. Thank you all.
Thank you. Thank you.
And the next question comes from Andrew bun with citizens, your line is open.
Thanks much for taking the questions. Um, I wanted to ask about the Step Up in sales marketing from 1 2 to 2. Is there anything to call out there and then how do we think about just marketing efficiency on a go forward basis? And then 00000 accounts accelerated in a quarter? Is there anything you guys can call out in terms of just the move up Market?
And the success you're seeing in terms of driving dollars, in terms of larger accounts, understood that there may be a threshold.
That you guys don't necessarily solve for, but how do we think about that growth and the sustainability of it? Thanks so much.
I got you. I'll I'll I'll kick off on the sales and marketing Point. Uh you know, we did see you uh uh pick up as we saw more normalized. Let's say marketing, spend in the quarter. Uh, remember back on, on, on, in q1, we were balancing growth and profitability in an uncertain environment waiting on on sort of the, the announcements of the, with some caution into the people tarot changes. Uh, we were able to continue to see really great leverage Euro.
A year uh both on overall sales and marketing where we saw 180.0 the year and our Marketplace advertising where we saw 130 basis point, leverage year-over-year and now that at 5.6%. So really, it's a case of sort of seeing some Q on Q normalization, but the trend that we're going down continues to be that 1 and continuously greater leverage from our sales and marketing uh Investments.
Yeah, and Andrew and Sean. I would just maybe tie the 2 questions together, as, as advertising spend, normalized from q1 to Q2 part of that. Uh, the outcome there was was faster growth than the, the 50,000 accounts spend kpi which was very strong on the net. Add basis.
Yeah, I think I mean 180 accounts had, uh, you know, year over year. That's a that's, you know, 1 of the best supporters that we've had, uh, I think the strongest net ads since Q4 of 23. Uh, I think, uh, you know, a lot of coming from our focus on the driving, the land and expand strategy. Uh and you know at this point again to our earnings presentation, we have some nice case studies in there and how we're skating Enterprise accounts. And we really think that, you know, with our offerings on the technology side as well as our partnering through our sales and operations organization.
Daniel Spence. So it's really technology driven and and we're continuing to invest in that.
Thank you.
Thank you.
Our next question is from Matt Swanson with RBC. Your line is open,
Great. Thank you and congratulations on the results. Um, Randy you actually led me in perfectly here on that team space in Erp commentary. I I guess just as you're seeing Enterprises start to spend more and more time in the xometry platform. Can you just talk about maybe some logical Jason's of kind of maybe what you know, team space Space 2 is in terms of where you think you can kind of expand the platform and other things you can do in the Enterprise.
Yeah, I think, you know, we've talked about that a lot. Our strategy revolves around our portfolio strategy, about increasing our share of wallet with our customers. In the manufacturing world, one of the reasons why there's not much of a marketplace model being adopted more and more is that there are a lot of different use cases and lots of variety. These different, what seemingly are small businesses, make a big difference to our customers. So, more and more, we want to enable that enterprise customer to go in and be able to do all their shopping in the Xometry Marketplace. As we expand the things that we can auto quote, whether it's manufacturing technologies, materials, or processing, there are lots of different options.
Fulfillment option that will enable us to gain more and more share with the Enterprise customers. So, going back to the 3 basis and selection. Um, and reducing the friction with a technology. If we stick to that strategy and continue to invest in that, that will enable us to grow that, share wallet, and become deeper and deeper embedded in those Enterprise customers, uh, Supply chains.
And and then you mentioned as 1 of the reasons you actually wouldn't uh large customers. Is that supply chain resiliency. I I there's obviously a lot of tariff noise, a lot PMI noise. Does that seem like kind of the biggest theme in terms of like what's driving some of this outperformance maybe even more. So from the Enterprise side is that like the big takeaway from all this noise that people just know that they need to figure out a more, maybe elastic supply chain.
No, look. I think does that we've had durable growth? Uh you know, since the founding of the company and since we've been a public company. So I think it's more that more and more people are adopting the marketplace model. It's been successful in so many other Industries. I think you know as time is is progressing and is our awareness grows. And as we continue to innovate, more invest in those technology initiatives reduce the friction customers are just realizing uh that this is a great option and certainly when there's some noise in the market that helps that certainly helps raise awareness but this is a global Trend. We've always talked about in a secular shift to the digital that's inevitable and and it's convenient.
Thank you, and just to be clear. You have an answer, but there's no poll for a year or anything like that. This is just an ongoing trend that we've been seeing.
Thank you for your question.
Our next question is from Eric Sheridan, with Goldman Sachs, your line is open.
Thanks so much for taking the questions, maybe 1. Uh, the first 1 may be building on that last question, you know, as you see some ships in, uh, the global macro behavior and elements of the way in which Supply chains are built. Are you seeing any theme around broader domestic sourcing? And and, is there any way that you might be able to benefit or align some of the platform to benefit? If you do see elements of shifts towards more domestic sourcing on the manufacturing side. Uh and then the second 1, you talked to, in the prepared remarks about, um, improving the mobile experience. Can you talk a little bit about what we should be watching from the outside in on rolling out uh, a new and improved mobile experience? And how either might uh reduce friction or improve conversion on the platform? Thank you.
That's great. Eric, I'll take the first 1 and then send you both. We'll, we'll we'll take the second. So we are a continuing to expand. Our domestic supplier base. You know, we've talked about that as a majority of our us orders are sourced domestically. Uh, you know, we're we're definitely expanding that to Firebase. It's over 4,300 and to give our customers more choice and flexibility,
um, certainly, you know, rejoining Trends could be beneficial to the marketplace But Eric is it's still too early to tell
and so, you know, again, I'll rearrange that we're off to a strong start in Q3, uh, it's exciting times for us but uh, the macro continues to be, you know, we're conservative about it. We're not really seeing any uptick on it. It's it's our growth is really from gaming market share and and and improving our Marketplace.
And just to, to follow on around the question for the mobile app.
Are testing in the mobile app in July is focused on our partner in the supply experience. So uh very much linked to the first question. You asked we we see that the app enables our suppliers to interact more easily with the geometry platform where they can see 3D part 5, they can share work in progress, they can receive push notifications, give us updates. So we actually see the supplier engagement as the primary experienced driver from this first work center. Mobile app, uh, testing that's going on right now. So lots more to come.
Great. Appreciate it.
Thank you.
Our next question is from Greg Palm with Craig, Holland. Your line is open.
Yeah, good morning. Thanks, uh, in in, congrats on, on the results. Um, maybe just going back to the, the Q2 guidance that you put back out in May, um, the magnitude of upside was was, maybe most noteworthy. So I I'm just kind of curious what you sort of Saw specifically in May and June or just to be clear like are you seeing similar strength in in July any any difference? But I'd love to just sort of
Get a little bit feel for kind of the Cadence of the quarter.
1 moment, please.
1 moment while we work through some technical difficulties.
Greg, are you still there?
I'm here.
Okay, why did James go continue? It's not clear. We can still meet her but it changed over. Go ahead again. Yeah.
Were you able to have what I was saying? Greg.
No, no. I I I don't think anybody heard
your answer that.
Conference call attendant. Okay, sorry. Uh
So I was just coming back. Yeah, I mean, in terms of the guidance, we said of the 22 2022 range, you know, coming in at 26% obviously, very pleased with that. Uh, it's a driven by, you know, stronger than expected Marketplace revenue and strong gross profit performance and Enterprise, you know, continues to perform well, really pleased with the net app that we had in the quarter in the quarter International growth as well. Was very solid, really? You know, it comes back to our growth initiatives, but, as we look out, you know, we continue to be mindful of the environment that, you know, that we're in continues to be quite a bit of uncertainty out there. Uh, so, you know, we, we sort of embed that into our output as we look forward. Yeah, I mean, just to, to jump in Greg, we've been clear that Q3 is off to a strong start. We haven't been shy about that, but ashame said, we're going to continue to be mindful of the macro as we've been for a while here. And so that's going to you know, that's always going to Temporary expectations here.
Yep. Understood. And then, are there any specific end markets that stood out? I know you named a couple. Specifically, how big of an end market is Aerospace and Defense at this point?
You know, we the great thing about being a a a Nazi Marketplace is accessible across many different verticals and you know as you know there's even a slide in our in our earnings deck or in our investor deck that shows you know, all the different verticals we're in. So we're very Diversified and that's enabled us to have durable growth during, uh, for a long time and during different periods. So, um, you know, I see, we're we're, you're seeing strength across, almost all the different verticals that we're in. Um, and it's just a testament to adoption of our Marketplace model as the best operating model uh, in this segment of manufacturing.
Okay, all right, thanks for the caller.
Excellent.
Does conclude our question.
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