Q3 2025 Xometry Inc Earnings Call
And welcome to.
Zomfi earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session.
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Investor relations Sean Mill. Please go ahead.
Good morning, and thank you for joining us. On xometry, Q3 2025 earnings call joining me are Randy Al Schuler, our chief executive officer sanjie Singh. Sahni, our president and James mil our Chief Financial Officer. During today's call, we will review our financial results for the third quarter 2025 and discuss. Our guidance for the fourth quarter and full year 2025. During today's call, we will make 4 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 open today and in our filings with the US Securities and Exchange Commission, including our form, 10 Q for the quarter ended, September 30th 2025,
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 us. 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 on the investors section of our website at investors.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 Q3 2025 earnings call.
Our Q3 performance powerfully demonstrates. The success of our purposely built Marketplace model in this massive and highly fragmented Custom Manufacturing Market.
We are proving that a superior experience for both buyers and suppliers fuel by the power of marketplace Dynamics is delivering sustainable, growth and value.
Our Marketplace structure is a key differentiator powering our industry-leading growth and significant adoption amongst our customers and suppliers.
Our Marketplace sits at the intersection of manufacturing, Ai and technology. And we are excited about digitizing Custom Manufacturing as we accelerate platform innovation.
Q3 was a record quarter for xometry across many fronts, including Revenue growth profit, Marketplace gross, margin and adjusted ibida.
Q3 revenue growth accelerated, increasing 28% year-over-year to $181 million.
Marketplace growth accelerated increasing 31% year-over-year driven by a rapidly expanding networks of buyers and suppliers and deepening Enterprise engagement.
We are delivering this level of growth in an ongoing manufacturing contraction underscoring. Our significant market share gains
We're off to a strong start in Q4, and we're again raising our full year Marketplace growth Outlook, which James will discuss later in the call.
Powered by improving AI pricing and selection algorithms. We drove a 210 basis points increase in Marketplace gross, margin year-over-year, in Q3 driving, 40% growth in Marketplace, growth profit.
Expanding Marketplace, gross margin. Underscores the value. We're creating with our AI powered Marketplace.
Our efficacy and competitive moat continue to increase as we grow our networks of 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 35.7% in Q3 of this year.
Each quarter of growth and improvements in our technology helps to incrementally power. The quarters that follow
our results in Q3 and year to date Mark, Strong progress in our mission, to become the de facto digital rails in Custom Manufacturing,
Alongside strong financial results, we are making Investments that will pay off in years to come as we drive Innovation across our Global marketplaces and supplier Networks.
Across the organization.
We continue to win, especially with larger customers, as we improve price, speed, and selection on the marketplace.
In early Q4, we launched, auto quote, for injection, molding services in the United States, following a launched earlier this year in Europe.
Zome new auto quoting capability simplifies the injection molding manufacturing process, providing a seamless, digital experience to enable customers to move quickly from design to finished part. The platform enables a spectrum of injection molding options, from prototype and low-volume bridge tooling to high-volume multi-cavity production tooling, and offers over 35 different materials, colors, and finishes.
We Advanced our AI powered design for manufacturing capabilities.
Expanding our automated extraction engine that interprets, technical drawings and CAD files.
This enhancement improves the accuracy of our quotes and supplier matching further, reducing friction and improving the buyer experience.
For our customers, we're increasing supply chain, resilience and Agility by offering access to a diverse expanding Global. Manufacturing, network of over 45,500 active suppliers.
This allows buyers to instantly diversify their supplier base, reducing dependence, on a single Source, or region, and enhancing overall resilience.
In Q3, we continue to expand our Global Network and our global sourcing efforts. Our flexible asset-light model is resonating with customers, given the rapidly changing global trade environment.
We're delivering a scalable Enterprise offering through tools like team space and Erp Integrations to become more embedded in customer workflows reducing buyer, friction and expanding wallet, share in these larger accounts.
Our technology initiatives combined, with their Enterprise sales. Efforts are powering our land and expands strategy.
In 2 3, a US Aerospace company faced a major production challenge needing complex tight tolerance components on an aggressive timeline with limited supplier options. This company turned to the geometry Marketplace as a trusted partner capable of delivering precision speed and reliability.
Based on the success of this program xometry quickly, expanded to other divisions. Within the company, becoming a deferred manufacturing partner for Rapid production.
In Europe, a medical device. Manufacturer partnered with xometry to accelerate production of precision components for its next Generation surgical systems.
What began with CNC machined and 3D printed Parts evolved into multiple high volume production programs, including injection, molded assemblies for other Advanced Equipment.
By leveraging, the geometry Marketplace, the customer was able to innovate faster and drive scale and the competitive Medical Technology Market.
These are good examples of Enterprise customers. We Believe can generate 10 million plus in annual revenue.
For our suppliers, our Marketplace is driving increasing value. Enabling them to sell their capacity, digitally unlock access to global demand and increase asset utilization and profitability through our work center platform.
in early Q4, we launched the new work center, mobile app,
The work center platform is Z's proprietary all-in-1, quote to cash solution, enabling its Partners to source and consolidate work, manage operations, monitor performance and secure cash flow.
This powerful new tool is designed to help suppliers within the geometry partner Network. Manage job offers production, workflows and Shop Performance anytime anywhere.
By providing easier access to the job board and job management. We expect to drive increasing supplier engagement. Additionally, the new app provides for better, communication flow to ensure that partners are quickly informed of critical updates, and job opportunities.
The app also enables seamless data capture through photos certifications and status updates, to improve accuracy, and get information flowing, quickly, delivering greater quality, transparency, and responsiveness to customers.
We expect that the work Center app will deepen, supplier engagement, and enhance our data to further support, Marketplace gross, margin expansion, and improve the buyer and supplier experience.
For Thomas. In Q3, we launched our new Dynamic ad serving technology and began selling on the new platform for new customers. The new pay for performance, platform enables advertisers to set. Budgets better to find their target, audience maximize ad Effectiveness and improve Roi. Tracking while still early, we are pleased, how the platform is functioning and we're pleased with the initial sales efforts.
We expected, new technology will increase, advertising, penetration and engagement.
Search results are more relevant.
There's much more to come in the following months on the Innovation front as we focus on further, improving, buyer and supplier experience and expanding our platforms.
Our momentum remains strong in Q4. We're raising our 2025 revenue growth outlook, given robust demand in our marketplace and the strong execution of our teams.
We expect strong secular growth to continue in 2026 and in coming years as we rapidly scale to 1 billion dollars, plus
I will now turn the call over to James for a more detailed review of Q3 and our business Outlook.
Thanks, Randy and good morning, everyone.
2 3 was a great quarter for geometry, delivering accelerating Revenue growth. Robust expansion in Marketplace growth margin
And significant adjusted ebit, da Leverage.
As our Marketplace responds to customers needs in real time.
So much. We is becoming their digital rails in this massively, fragmented, and largely offline. Customer 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.
Tuesday, Revenue increased, 28% year-over-year to 181 million.
Driven by strong Marketplace growth.
Q3 Marketplace, Revenue was 167 million and Supply, a Services. Revenue was 14.1 million.
Q3 marketplace revenue increased 31% year-over-year, a 500 basis point acceleration from Q2.
Driven by strong execution, expansion of buyer and supplier networks and growth with larger accounts as we continue to capture significant market. Share. Marketplace growth was robust, many verticals including semiconductors and energy.
Aerospace, and defense and Automotive.
Choose reactive buyers increase, 21%. Year-over-year to 78,282.
With a net addition of 3,555, active buyers.
Choose 3, Marketplace revenue for active buyer, increased 9% year-over-year.
Due to strong Enterprise growth and corporate marketing initiatives in the US.
In Q3 the number of accounts with last 12 months, spend, about at least 50,000 on our platform increased 14% year-over-year.
To 1724.
We view accounts with at least 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 Q3 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 1% quarter over quarter. As we have largely stabilized, the core advertising business,
We are focused on improving engagement and monetization on the platform, which remains a leader in industrial. Sourcing supplier, selection and digital Marketing Solutions.
T3, gross profit was 72 million and increase of 29% year-over-year with gross margin of 39.9%.
Q3 gross margin for Marketplace was 35.7% and increase of 210 basis points year-over-year.
Q3 gross profit dollars. Increased a robust 40% year-over-year.
We are focused on driving Marketplace growth profit. Dollar growth to 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 supply and network.
Moving on to Q3 operating costs.
Q3 total non-gaap operating expenses increased 17% year-over-year to 66.1 million. Well below Revenue growth.
We are applying strong discipline and rigor to our capital and resource allocation across teams while investing in our growth initiatives.
In Q3 sales and marketing, decreased 140, basis points year-over-year to 15.9% of Revenue.
This reflects improving Enterprise sales execution and disciplined advertising spend.
Marketplace advertising spend was 5% of marketplace Revenue, which was down 130 basis points year-over-year. As we balanced growth and profitability.
In Q3 operations and support decreased 60 basis points, year-over-year to 8.2% of Revenue.
We are focused on driving increasing automation, with AI across operations and support.
Q3 adjusted ebit da was 6.1 million compared with a loss of 0.6 million in Q3 2024.
Q3 adjusted ebit da improved 6.8 million year-over-year driven by strong growth in Revenue, gross profit and operating efficiencies.
Year to date. We have delivered approximately 21%. Incremental adjusted ebit da margin, primarily driven by strong Marketplace gross margin expansion.
In Q3, our U.S. segment adjusted EBITDA was $10.3 million, or a 6.8% adjusted EBITDA margin, representing a $9 million improvement year-over-year. This growth was driven by expanding gross profit and strong operating expense leverage, particularly in sales and marketing.
Our International segment adjusted. Evida loss was 4.2 million in Q3 2025 compared with 2 million in Q3 2024 driven in part by our investments to drive further global scale.
We expect improved International segment. Operating leverage in Q4.
At the end of the third quarter cash and cash, equivalents and marketable, securities were 225 million, decreasing approximately 1 million from Q2 2025.
Driven by strong operating leverage and focus on working capital efficiency, we generated 5.8 million in operating cash flow in Q3.
We invested 7.4 million in capex, primarily software related 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 be approximately 8 to 9 million in Q4 2025.
Q3 demonstrates. The ability of our AI, powered Marketplace to deliver, strong, revenue, and gross profit growth and operating leverage as we remain disciplined in our execution.
As we scale towards 1 billion dollars of Revenue. We expect approximately 20% plus incremental adjusted ebit da leverage on an annual basis.
Given a 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 fourth quarter. We expect Revenue in a range of 182 to 184 million or 23 to 24% growth year-over-year.
We expect Q4 Marketplace growth to be approximately 25 to 27% year-over-year.
As Randy mentioned Trends, remain strong in Q4, even as we are mindful of the uncertain macro environment.
We expect Q4 supplier Services Revenue to decrease approximately 4% year-over-year as we work through the transition of the recently launched Thomas at serving platform.
In Q4, we expect adjusted ebit da of 6 to 7 million compared to $1 million in Q4 2024.
In Q4, we expect stock-based compensation expenses, including related payroll taxes to be approximately 11 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 23 to 24%, to 27 to 28% growth.
We continue to expect that supply of services to be down approximately 5% year-over-year.
In our Revenue, outlook for the full year rising to 676 to 678 million.
For the full year. 20125, we are raising our adjusted ebit, dog, guidance to 16 to 17 million,
As we look ahead, we believe that our growth initiatives can continue to drive at least 20%, total revenue growth in 2026, given the large fragmented Market opportunity, our initiatives to expand, while it share with strategic accounts and further International expansion. While we remain mindful of the macro environment.
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?
Yes, sir. As a reminder, to ask a question, you will need to press star 1, 1 on your telephone, to remove yourself from the queue. You may press star 1 1, again, please, stand by while we compile the Q&A roster,
Our first question comes from the line of Andrew Bunn of Citizens. Your line is open to Andrew. Thanks so much for taking the questions. Um, you guys just talked about the 20% growth for 2026. Can you help unpack that a little bit? Can you talk about kind of the assumptions that are underlying that? Whether there are any macro assumptions that are embedded within kind of the 20% growth overall or whether that's really, you know, idiosyncratic drivers that can power growth next year kind of regardless of the situation.
Andrew it's uh James. Thanks for the question. Uh, you know, we really obviously very happy with the performance that we're seeing this year Marketplace growth grow growth of 31% in the third quarter. Yeah, that's really being driven by, you know, the growth initiatives that we've been very consistently driving across Enterprise across skating, our network of buyers and suppliers, uh, and uh, you know, improving the technology of the platform as well. So we're seeing it, uh, broad-based at the moment across multiple processes, across our broad diversity categories. So as we're working on our plan,
Plans for 2026, we wanted to give some viewers the, uh, of our confidence in the consistency of that growth, um, at a 20% plus level. Uh, we'll clearly come back with the Q4 earnings with more details on guidance for 2026. So, we just wanted to give, uh, you know, you a bit of a framework of how to think about that. For, for next year.
Yeah, and Andrew it's Sean. And if you just think about the the underpinnings of your model heading into 2026, you know we can continue to drive strong active buyer growth and you see strong Revenue per buyer growth too. So those are some of the underpinnings of the model, uh, driving the 20% plus into 26. Yeah, and I think also just to jump in. It's it's Randy, you know, we we are always mindful of the of the macro. So we didn't assume any, you know, Improvement in that next year. This is really that isometry continuing to gain market, share, and, and control our own fate. And that's what's driving our, our assumptions here,
thanks and and then the, um,
The work center mobile app feels like a a large unlock because you guys simplify kind of the process um, for kind of your stakeholders that are that are clearly the underneath driver of operations to drive the platform. Can you just double click and terms of what the unlock is in terms of of creating that mobile experience and how
People are using it helping to unlock kind of more demand across the platform.
Thank you.
Thanks. Uh, this Anie. Let me start by talking about our, our AI efforts as you know, um, we've been in the AI native company from the beginning, AI has been, uh, part of our DNA, whether its data science machine learning or deep learning models. We've always had those as score to our uh way of working and and scaling the customer and partner experience. We launched the Google app in the US for a large and expanding partner base. We truly to drive that customer and Supply experience, because we really believe as partners adopt, uh, a more friendly way of uh, giving us data about their orders sharing updates on quality control, sharing updates, on dispatch sharing, updates on, you know, which job they like, which job they don't we get deeper into engagement with them and are able to help them manage their business. Help them manage timelines and quality for our customers. This is just the beginning of a series of AI enabled tools that we continue to Launch.
And scale, as you know, our Focus has been on on deploying that towards pricing speed and selection as a core team on where our efforts go and sew this side. This cycle, uh, this was our effort in driving speed, uh, and continuing to scale that with our
Uh, Without Partners.
Thank you.
Thank you. Uh our next question comes from the line uh Brian drab of William Blair please go ahead Brian.
Hi, thanks for taking my questions. Um first I was wondering if you could just talk a little bit more about some of the changes that you're making within the team, some of the additions sanjiv I know you uh
And how is that going to help you, you know, get to this billion revenue level and beyond?
Thank you for the question. Uh, again I think
We are seeing very strong success in attracting top talents from some of the best tech companies in the world. As part of our efforts, we want to make sure that we continue to deliver on the strong.
pipeline of, uh,
Tech outcomes for our customers and partners like Randy already mentioned. Uh,
This cycle will be launched Auto coding for injection molding offering that, we think will significantly expand our Marketplace menu, uh, injection molding as you know, is a very, very large category. And this is 1 where we've launched Auto quoting by building on uh our experience in the offline where we've now got a set of buyers suppliers. We've got models that have been refined and now driving technology behind those models. Helps us bring it to the customer in a online platform, which they can easily adopt and, and, you know, help us drive significantly, higher market, share. But again, going back to what I was saying before. Our AI efforts are truly around price selection speed. So if you think about price, we've been, you know, continuing to test Behavior based models. We've been trying to set test various sortation on our site which you can see when it comes to selection. I just mentioned injection molding and then speed the work center and mobile apps so across
Areas including Thomas net where we've launched Dynamic at serving technology.
This is becoming a truly product-led product-driven organization with our CTO vid and his team. Now in their 6 months in the organization,
Okay. Thanks. And then can I ask a much more near-term question and and uh,
You know, I'm looking at the the guidance and the step functioning increase that you had from second quarter to third quarter, and you're up almost 20 million in revenue from second quarter to third quarter, and then modeling, um, just a couple million, increased sequentially into the fourth quarter.
Uh, how are you thinking about that guidance? And what, what have you have? You seen anything in the first 5 weeks of the
Quarter. Is there anything beyond kind of typical holiday seasonality that you're thinking about?
Yeah, as Brian. Uh, so again, I think as, you know, really great performance in Q3 here, uh, you know, on, uh, you know, even despite an uneven manufacturing environment geometry is executing really well across Enterprise. We're seeing a lot of strength broad-based across the accounts. Uh, we're seeing, you know, we believe strong wallet share gains Revenue providing up 9%. We've seen strong growth across processes from CNC to sheet to additive. I think, you know, as we as we look into the guide, as as usual, we take into account. Those Trends we're seeing in the business which we're very pleased about uh, as well as the risks given.
And, you know, the uncertain manufacturing environment. Uh, and so, you know, you know, with overall Marketplace Revenue growth over the year now at 27 to 28%, um, plus, you know, on on the, on the basis of that strong active, uh, buyer growth as well, you know, really pleased with what we're seeing and, you know, just as I said, that all builds into the guidance that we give. Yeah. And, and Brian, it's rainy just had a couple things. We were very clear, uh, both my remarks and James remarks Q4, is off to a strong start. So, you know, as we talked about when we entered Q3, we had momentum. There we are seeing continued momentum here in Q4. Uh, and you know, we that's I think our strongest guy this year in terms of year-over-year growth, uh, is the guy that we're giving for this fourth quarter. So we just continue to be mindful of the macro, but we have a lot of momentum.
Yeah. Okay. That's helpful to know how you're thinking about it. Okay. Thanks very much.
Thank you.
Our next question comes from the line of Matt Swanson of RBC Capital markets. Please go ahead, Matt.
Swanson. Thanks for
A great quarter to start. Could you just double-click on the trends that you've been seeing in the enterprise and team space? And how we should think about that opportunity continuing to grow throughout 2026?
Happened first uh widespread adoption of Team Space by those Enterprise customers and we continue to enhance team space uh and that's getting giving us more attraction uh our punch out. So our integration with our Enterprise customers Erp systems that's also accelerating so accelerating, adoption of of Team, space of our Erp punch house. And then our Enterprise sales motion, you know, we've been talking about that. Uh, we've been investing in our Enterprise sales team. So when you bring that all in, that's resulting in Greater traction from those Enterprise customers, which is in part reflected by that 9% growth uh in in uh buy and buy or spend quarter over a quarter. You're you're over a year, sorry year over year.
Got it. Thanks and I need to add I was I was just add. I think you know we're really uh it's almost purpose built for sort of you know the industry trends that we're seeing. Now you know the move towards supply chain resiliency, the importance of getting, you know, agility and speed to Market and really being able to access technology and and supply chain. And I think that that, um, you know, that's what the team have built for many years and is behind our initiatives. And again, it's, you know, consistent in terms of how we'll be growing ahead, uh, you know, into 2026.
That makes sense, that's really helpful. Um and then with the new product launches, um, in the EU can you just remind us how you're thinking about International expansion and those Investments um, heading into next year.
Uh, this is James. I mean, I'll kick off. I think you know International we're very pleased with the performance that we've had there over the years, you know, continuing to see that grow and scale, uh, in the quarter, we're up 203% year-over-year. Um, and we really think that a lot of opportunity here given this, the, the large and highly fragmented markets that there are, you know, not interested in us. But but, uh, in Europe and in Asia, we had the recent launch of Team space, uh, that's been going. Well, we've also been expanding that Marketplace more materials. Uh, more processes, more coding possibilities, uh, we're very pleased to see the, you know, injection, molding order, quoting coming to the US after we were able to, uh, you know, first launched that in Europe. So, you know, this combination of the market opportunity again with the geometry solution and product roadmap. Uh, it gives us a lot of confidence in able to continue to see that grow. And as we said before,
We believe that could be 30 to 40% of xometry uh, over time. Yeah. And just just to remind everybody, you know, uh in 2020, our International Revenue was approximately a million dollars uh We've grown that now to you know 120 million dollar run rate. So just going back to James said we expect that to be eventually 30 to 40% of our Marketplace revenue and and all the trends are moving nicely in that direction.
Great. Thanks guys.
Thank you. Our next question.
Comes from the line of Greg palm of Craig Holland. Please go ahead Greg.
Yeah, good morning. Thanks for uh, taking the questions, just, you know, thinking back to to Q2 and and obviously more so that this quarter, but we're not really used to this sort of level of of, of upside, you know, on the revenue line. So I'm I'm just curious. Like, has your visibility changed at all? I'm just kind of curious as you think back to when you provided guidance last, you know, quarter, you know what, what change were your, you know, basically able to outperform by this magnitude?
We just continue to see our our customers leaning in more and more, um, and you know, adoption of Technology tools that we've been investing now for a while whether it's team space, uh, whether it's work center, it's the punch out in Integrations, you know, the those adoptions are are accelerating and, and, and here's the great news. Greg, you know, as we think about uh,
Fourth quarter, next year. The injection molding is. According launched this quarter, you know, just launched uh, the mobile app for for work center is, is recent so, and we've got a, a, a, uh, a product roadmap chock full of releases that are going to be coming. Uh, not only in Q4, but also, you know, throughout 2026. So, uh, I think you'll have seen us continue to gain momentum. Uh, and a lot of that is as we talked about the Investments we've made in Ai and Technology, uh, and that product adoption from our customers is accelerated.
I mean, any reason why we wouldn't see incremental, you know, sort of climbing back into the 20s and and early 26, or how are you sort of thinking about that Cadence of incremental margins, as we progress, uh, in the next year?
Yeah, thanks Greg. You know, as we said, you know, we're always about balancing the growth and the profitability I think when, you know, we think about the opportunity ahead for geometry. It's such a large Market that we need to make, you know, the right choices to invest in, uh, products and Technology to be able to scale the business. But we also recognize the importance of delivering profitability and Improvement on that along the way. And that's why, you know, overall we've given this framework of 20%, you know, at least incremental margins to the bottom line and the last couple of years, you've seen us do that, um, you know, year to date. We're at 21%, I I think you're right. If you, you know, put in our guides and we'd be around 20% for the full year, that is an increase in adjusted if it D dollars that we're delivering over what you know we had in the in the last uh um the last update. So we're really pleased with that progression. And they think that, you know, if you know that's what we're doing, I'm going to continue to balance growth and profit.
The other day so that we can grow into this huge opportunity ahead of us and and here's the great news, Greg. As as you know, revenue is accelerating and, and we've gotten, you know, more growth than we've expected. That gives us some optionality to make some Investments. Uh, we're obviously as James said very focused on profitability as well, but greater growth gives us some options and and we're going to make sure we're taking advantage of that and being smart on both sides of it.
Yep. Makes sense. All right, well, congrats again on the quarter and uh best of luck. Thanks.
Thank you.
Our next question comes from the line of Ron Josie of City. Please go ahead Ron.
You guys, this is Robert on for Ron. Thanks for taking the question. Great to see the active buyers growth up, 21% in the quarter. Um, question is, I guess how much this was driven by International expansion? Given all the improvements that you've made with new materials and pastoral lead times versus an expansion within existing client base?
Hey Robert, this is James. So, uh, really pleased with the active buyer growth. I think in particular, um, what we're seeing is uh, with a lot of the initiatives that we've been driving both with product and with our marketing teams. Uh, over the last year, we continue to see success in, you know, attracting new buyers to the platform is that us Enterprise actually has been very strong for us. You've seen that in, you know, we we've called that out. Uh,
In terms of driving the revenue, but it's also being on the active buyer side. Uh, and, you know, the proposition that we have, um, again with the macro Trends going on and looking for supply chain, resiliency and Agility, you know, isometry is purpose built for this. Uh, and I think, you know, we've been improving our messaging and improving the way that we've been, um, deploying our marketing. So, you've actually seen advertising only up modestly year-over-year and yet we've been continuing to grow, uh, our revenue and our active buyers, uh, robustly. So it's been strong in US Enterprise but we have a global opportunity as well.
Yeah, and just double click on what what James says? Randy. It's really broad base, so it's our existing, uh, accounts. You know, the Enterprise customers that are leaning in more and and, and activating more, but it's also attracting new buyers. Both, you know, here domestically and abroad.
Got it. That's helpful. Thank you. And then on on Marketplace, gross margins. They reached a record this quarter. I think they were at 35.7% and this is the second quarter that they're now well, within your your long term target range. So, should we consider this as the new sustainable Baseline for the marketplace for just giving benefits from AI? Etc.
Calling to service that we're bringing to them.
Great. Thank you.
Thank you that does conclude this Q&A session.
Uh, and our conference call for today. Thank you for participating. You may now disconnect