Xometry, Inc. Q1 FY2025 Earnings Call

Good day and thank you for standing by. Welcome to the Xometry Q1 2025 Earnings Call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today Shawn Milne, VP of IR.

Good morning and thank you for joining us on Xometry's Q1 2025 Earnings Call. Joining me are Randy Altschuler, our Chief Executive Officer; Sanjeev Sahni, our President; and James Miln, our Chief Financial Officer. During today's call, we will review our financial results for the first quarter of 2025 and discuss our guidance for the second quarter and full year of 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, 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 March 31, 2025. We caution you to not 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.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, Shawn. Good morning, everyone, and thank you for joining our Q1 2025 earnings call. In Q1, revenue increased 23% year-over-year to a record $151 million, a 700 basis point acceleration from 16% year-over-year revenue growth in Q4 2024. Marketplace growth accelerated to 27%, driven by continued enterprise adoption. We delivered better than expected operating leverage, generating positive adjusted EBITDA alongside investments to accelerate our global sourcing strategy. In Q2, demand continues to be robust, consistent with our forecast of higher revenue growth in 2025 versus 2024. The current volatile and complex international trade and supply chain environment further validates our marketplace model. In addition, there is renewed recognition of the importance of maintaining strong domestic manufacturing bases, which is consistent with our approach of building 18 localized marketplaces in the United States, Europe, and Asia. Xometry provides buyers real-time access to unprecedented manufacturing capacity whether here or abroad. Likewise, we're enabling our manufacturing partners to grow their businesses by tapping into that demand. We work directly with more than 71,000 buyers and over 4,375 manufacturers across the world, giving us real-time data and insights into changing trends such as domestic reshoring and shifts in preferred geographies. For our US customers, the vast majority of their demand was already fulfilled by our US manufacturing network. In Q2, we're seeing an incremental shift in our mix to domestic sourcing. Between our domestic network and our industrial sourcing platform, Thomas, we're well positioned to support the push for more US manufacturing. Low-cost offshore manufacturing does remain an important lever for some of our customers, and we're working with them to identify alternative geographies and solutions to help manage their supply chain costs. Xometry has navigated this kind of situation before. During COVID, not only did global supply chains get severed, local ones were upended as individual US states had different policies around business closures. With our marketplace versus an asset-based approach, we can respond to our customers' needs in real time. We continue to invest in the technology and network, which today spans 51 countries across four continents that meets customers' needs. In addition, here's what we're focused on in Q2 to further address the situation. First, utilizing our AI-driven marketplace to dynamically optimize sourcing strategies and help mitigate cost increases by identifying competitive pricing across our global supplier network. Our pricing algorithms account for changes in tariffs, consistent with how we manage changes in shipping costs. Two, working with our enterprise customers to secure ample domestic supply and when requested provide alternative offshore solutions to meet their specific needs, continuing a strategy that we initiated in Q1 which has proven to be an even more advantageous decision post the Liberation Day tariffs. And then three, delivering coordinated advertising and communication campaigns across Xometry and Thomas underscoring thought leadership and education for our customers and manufacturing partners. Alongside our global sourcing efforts, we continue to invest in technology to become the digital rails in this massively fragmented and largely offline custom manufacturing market. In Q1, we launched Instant Quoting for Injection Molding in the EU, UK, and Turkey as we further expand our marketplace platform and aim to be the one-stop shop for our customers. Improved our highly successful Teamspace software with enhanced collaboration for enterprise customers. Main improvements in our Workcenter supplier software including the launch of a new partner success score algorithm. On Thomasnet, we started testing a new search experience for buyers in April using natural language algorithms to infer intent and offer improved search results. In the next couple of months, we will complement the enhanced search with a new ad server technology platform that increases the inventory of advertising we can sell on Thomasnet. Since I co-founded Xometry in 2013, we've had durable growth in multiple macro environments including a US manufacturing contraction for the past two years. In 2025, we expect revenue growth to be faster than 2024. We remain confident in our long-term secular growth outlook given: first, the shift to digital sourcing and custom manufacturing is happening irrespective of the macro. Our growth demonstrates that we are a beneficiary of that trend and driving market share gains; two, the custom manufacturing market is extremely large. Even if that overall market were to shrink, our share is still so small that we can continue to have robust growth rates for many years to come; and then three, because we're a leading two-sided marketplace and a marketplace powered by AI, our efficacy and competitive moat continues to increase, as we grow our networks of buyers and suppliers and gain more data to continuously train our algorithms. Each quarter of growth and improvements in our technology helps to incrementally power the quarters that follow. We have a clear strategic path forward. For buyers, it's an unrelenting quest to provide a compelling triad of price, selection, and speed, backed by our expanding supplier network and AI-powered sourcing optimization. Our asset-light extensible technology platform and global scope can enable us to do just that. Adding additional features and capabilities as part of Teamspace will further deepen our enterprise relationships in particular. For suppliers, it's enabling them to effectively access buyer demand and providing them with the software, marketing tools, and financial products through Workcenter to grow their businesses. We expect for 2025 to be a year of accelerated growth and increasing adjusted EBITDA profitability. Thanks to my amazing talented and hardworking colleagues and our ever-increasing networks of buyers and suppliers, we continue to build an important and exciting AI-enabled marketplace in one of the world's largest and most critical sectors of the economy. I'll now turn the call over to James for a more detailed review of Q1 and our business outlook.

Thanks, Randy, and good morning, everyone. Q1 was a strong quarter for Xometry, delivering accelerated revenue growth and strong operating leverage as our marketplace responds to customers' needs in real time. Xometry is becoming their digital rails in this massively fragmented and largely offline custom manufacturing market. Q1 revenue increased 23% year-over-year to $151 million driven by strong marketplace growth. Q1 marketplace revenue was $136 million and supplier services revenue was $14.6 million. Q1 marketplace revenue increased 27% year-over-year, a 700 basis point acceleration from 20% in Q4 driven by strong execution and growth with larger accounts as we continue to capture significant market share. Q1 active buyers increased 22% year-over-year to 71,454 with a net addition of 3,187 active buyers. Q1 marketplace revenue per active buyer increased 4% year-over-year due to strong enterprise growth in the US. In Q1 2025, the US marketplace revenue growth accelerated to nearly 30% year-over-year, the strongest since Q4 2023. International revenue increased 20% year-over-year compared with 69% growth in Q1 of 2024. We expect strong international growth in 2025 and continue to expand our marketplace platforms including the recent launch of instant quote for injection molding in Europe. In Q1, the number of accounts with last 12-month spend of at least $50,000 on our platform increased 12% year-over-year to 1,545, an increase of 50 from Q4 2024. 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 Q1 for marketplace accounts with last 12-month 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 revenues declined 6% year-over-year in Q1 due to macro-related softness in advertising and the wind down of non-core services. Supplier services revenue increased 4% quarter-over-quarter driven primarily by our financial services products as we help our suppliers with their cash flow needs. We are focused on improving engagement and monetization on the platform, which remains a leader in industrial sourcing, supplier selection, and digital marketing solutions. In Q1, we made progress on enhancing the experience for both buyers and suppliers. And as Randy mentioned, we are testing new search on Thomas in Q2 and expect to deploy the new ad server in the coming months. Q1 gross profit was $56.3 million, an increase of 18% year-over-year with a gross margin of 37.3%. Q1 gross margin for marketplace was 31.8%, down 20 basis points year-over-year due to the investments made to accelerate our global sourcing strategy, which we discussed on our Q4 2024 earnings call and a mix shift to US marketplace revenue. Q1 marketplace gross profit dollars increased 26% year-over-year approximately in line with revenue growth. We are also focused on driving marketplace gross profit dollar growth through the combination of top-line growth and gross margin expansion. Q1 gross margin for supplier services remained strong at 89.1% driven by our increasing focus on the higher gross margin advertising and marketing services. Moving on to Q1 operating costs. Q1 non-GAAP operating expenses increased 2% year-over-year to $56.4 million well below revenue growth. We are applying strong discipline and rigor to our capital and resource allocation across teams. In Q1, sales and marketing expense was down 500 basis points year-over-year to 15.3%, underscoring improving enterprise sales execution and disciplined advertising spend. Marketplace advertising spend was 4.5% of marketplace revenue, which is down 280 basis points year-over-year as we balance growth and profitability. We are pleased with organic and viral growth of buyers in enterprise and Teamspace adoption. Q1 adjusted EBITDA was $0.1 million compared with a loss of $7.4 million in Q1 2024. Q1 adjusted EBITDA improved $7.5 million year-over-year, driven by growth in revenue, gross profit, and operating efficiencies. In Q1, we delivered an incremental adjusted EBITDA margin of 27%, higher than our long-term target of at least 20%. Q1 adjusted EBITDA excludes $1.5 million related to a restructuring charge. In March 2025, we initiated a restructuring action to help improve efficiency and align resources by reducing our workforce by approximately 5%. We are reinvesting these savings primarily into technology to drive further automation and scale. In Q1, US segment adjusted EBITDA was $3 million or 2.4% of revenue, an $8.5 million improvement year-over-year driven by expanding gross profit and strong operating expense leverage, particularly in sales and marketing. International segment adjusted EBITDA loss was $2.9 million in Q1 2025 compared to a loss of $2 million in Q1 2024 due to our continuing investments to drive further scale in EMEA and APAC. At the end of the first quarter, cash and cash equivalents and marketable securities were $231 million, decreasing approximately $8 million from Q4 2024. The decrease in cash was driven by CapEx, primarily software-related of $5.5 million and our annual bonus payouts. We are focused on improving working capital efficiency and cash flow conversion given our asset-light model and limited capital spending. Q1 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, even as we continue to invest in our growth initiatives. As we scale towards $1 billion of revenue, we expect continued 20% plus incremental adjusted EBITDA 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 second quarter, we expect revenue in the range of $155 million to $157 million or 17% to 18% growth year-over-year. We expect Q2 marketplace growth to be approximately 20% to 22% year-over-year. As Randy mentioned, trends remain strong in Q2, even as we are mindful of the uncertain macro environment. We have adjusted our pricing to reflect changing tariffs and our AI cost algorithms update regularly to reflect changes in our supplier network. We expect Q2 supplier services revenue to decrease approximately 5% to 7% year-over-year. We expect Q2 marketplace gross margin to improve significantly quarter-over-quarter to roughly the same range as Q2 of 2024 and continue to expect full year marketplace gross margin to increase year-over-year. In Q2, we expect adjusted EBITDA of $1 million to $2 million compared to a loss of $2.6 million in Q2 2024. In Q2, 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 20% to at least 22% growth, driven by our growth initiatives in our large fragmented market, even as we remain mindful of the macro environment. We continue to expect overall growth in 2025 to exceed 2024 growth. We expect supplier services to be down approximately 5% year-over-year. Lastly, we expect to be adjusted EBITDA positive for the full year 2025 and expect incremental adjusted EBITDA margins of approximately 20% on a full year basis for 2025. 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 digitizing manufacturing. With that, operator, can you please open up the call for questions?

Our first question today comes from Brian Drab with William Blair. Your line is open.

Hi. Good morning. Thanks for taking my question. I just wanted to start by asking if you could make any comments regarding what you've seen over the last five weeks. So since the April 2 tariff announcements, are you seeing new customers coming to Xometry and/or existing customers lean on you more? Just any comments on customer behavior given the disruption?

Good morning, Brian. As we mentioned in our prepared remarks, we are definitely experiencing strong growth in demand in the second quarter. We are also observing a slight shift towards more customers sourcing domestically. Our enterprise customers, in particular, are reaching out to discuss their sourcing strategies, whether that involves moving to more domestic sources or exploring alternative geographies.

Okay. Regarding incremental EBITDA margin, this might be a minor detail, but I know the long-term guidance is for over 20% incremental EBITDA margin. It seems like you're slightly below that based on your second quarter guidance. Is that correct? Is there anything we should consider in relation to that?

Thank you, Brian. It's James. That's correct. I think the midpoint would be a bit lower. If we examine the first half, the strong performance in Q1 would place it in the low 20s for that period. As we've discussed, we're managing this on an annual basis, striking the right balance between growth and profitability with our growth initiatives. We feel good about our progress in Q1, achieving 27% incremental margins, and we expect to remain in the low 20s for the entire first half.

So low 20s incremental is the expectation for the full year for incrementals?

Yeah, still the 20% level for the full year.

Yeah. Got it. Okay. I'll follow-up more later. Thanks very much.

Thank you, Brian.

Thank you. Our next question comes from Nick Johnson. Your line is open.

Hey, good morning, guys. It's Tim on for Nick. Thank you for taking our questions. Just first, I wonder if you could talk a little bit about the improvement that you've been seeing in supplier services. Is that more just a function of increased advertising? Or what's kind of driving the full year improvement in the outlook?

Hey, Tim, it's James. I'll kick that off and then hand it over to Randy in terms of some of the key initiatives. As I talked about on the call, really pleased with the performance in Q1 here. On a quarter-over-quarter basis, we saw some improvement. Part of that was driven by our offering on the financial services. We have an offering there where we're able to support our suppliers' cash flow needs. So it's good to see some strong adoption there. I think on the advertising side, it's still a challenging macro out there for advertising. And so we're working on the improvement of the product for search and the advertising model to set us up for growth in the future.

Yeah. And just to add to that, so as we talked about, we started in April testing new search on Thomas, enhanced search there. And then we talked about in a couple of months, we're going to be launching the new ad server technology that will enable us to sell more of the advertising inventory. So I think between both of those, we're optimistic here about how we're going to be doing on the advertising side for Thomas.

Great. And I just wanted to see if you could give us a little bit of detail on kind of Work Center. You kind of mentioned focus on enterprises, large accounts. Just any updates on how Work Center has been trending, any enhancements you've been making to the platform and just some of the trends you've been seeing there?

Yeah, Tim, this is James. If you're asking about enterprise, I believe you're referring to Teamspace, which is the platform we have for our suppliers. Is that correct?

Yes, sorry about that.

Yes. So Teamspace, we're making good progress. We've now grown to over 7,000 teams on Teamspace. And just to remind everyone or people who might be new to our story, Teamspace is our software that enables groups of buyers who are collaborating on either a project or an entire product to work together with Xometry. And that has been particularly effective with enterprises. And as we talked about last year, our largest customers grew 40% year-over-year. That's customers with excess of $500,000 of last 12-month spend. And those customers continue to lean in on Teamspace, and we've made enhancements to it with additional communication features and additional collaboration features that are being well received in the market.

All right. Thank you very much.

Thank you for your question. Our next question comes from Ron Josey with Citi. Your line is open.

Great. Thanks for taking the question. I wanted to ask maybe see if I can get away with three things. Just Randy on the tariffs, I know you just got a question on that and seeing incremental 2Q demand and the shift to domestic sourcing. But any other insights on where this could go, call it longer term? Are we seeing just a structural change? I guess is question number one. And then James, on gross profit, given a little bit light on the marketplace's business and wanted to dive into a little bit more on that. And then Sanjeev, I think it's your first quarter in. Would love to hear your thoughts as you join as President and sort of how you're seeing things relative to where we can go. Thank you, guys. Appreciate it.

Thank you, Ron. I'll address the question regarding the tariffs. As we mentioned, there's been a slight shift towards more domestic sourcing and consideration of alternative geographies, which is related to your question about gross margin. We have been investing in those areas in Q1. One enduring trend you might notice is multi-sourcing. Companies are realizing this is a dynamic environment that could evolve for years to come, which may lead them to stop sourcing from a single geography or even just one domestic source and instead opt for multiple sources. This aligns with the value we provide at Xometry; if you're aiming to establish a resilient supply chain, our marketplace gives you various options and protects you from these kinds of fluctuations. Our marketplace model is perfect for this, and that’s likely why we are experiencing strong demand right now.

Overall, the gross margin for the quarter was 37.3%, which was a decrease primarily due to the strong growth in our marketplace, which increased by 27%. This shift in mix between marketplace and supplier services was more pronounced this quarter. We anticipate that this will rebalance as we move forward towards our long-term target range of 38% to 40%. As Randy mentioned, our global sourcing strategy has accelerated, helping us to meet the strong demand we are experiencing as we expand our supplier network in various regions. Although the increased order volume temporarily lowered the gross margin in Q1, we expect the marketplace gross margin to significantly improve in Q2, aiming for a level similar to last year in the mid-30s, approximately 33.5%. We will also continue to expect year-over-year gross margin expansion. That’s the current situation, and I’ll now pass it on to Sanjeev to discuss his areas of focus.

Yes. And just before that, just to make it simple. So we invested a couple of million dollars into those markets in Q1 to create liquidity in the marketplace and to train our model. So there was an impact in Q1. But as James said, our guidance now for Q2 reflects the trends that we're seeing and that includes a strong bounce back and those investments are paying off.

Thank you, Randy, and thanks for the question, Ron. Since I started here, I've been engaging with our customers, partners, and teams. The advantage that Xometry has developed with AI quality and manufacturing speed is truly significant to me even at this early stage. I want to highlight a few key strengths: first, our proprietary AI technology clearly integrates into the supply chain from the beginning of the order process to the final product delivery. It assesses manufacturability, prices jobs accurately and instantly, and intelligently matches each order with the most suitable supplier based on quality, speed, and cost. It's impressive how integrated this is within the supply chain. Even more impressive to me is the strength of our supplier network. Many eCommerce companies rely on supply chains concentrated in just a couple of sourcing markets, which can delay their response to supply chain or tariff disruptions for years. In contrast, Xometry's supplier network does not depend on just two or three large international sourcing markets. This is a real advantage since it allows us to maintain a vast network of suppliers across the US, supplemented by a well-distributed international network in 50 additional countries. Consequently, our suppliers can engage with us effectively to achieve the best outcomes for their needs. Thank you.

That’s great. Thank you, guys.

Thank you. Our next question comes from Matt Swanson with RBC Capital Markets. Your line is open.

Hi. This is Simran on for Matt Swanson. Thanks for taking our question and congrats on the quarter. Just one for me. Would you be able to double-click on some of these customer conversations that you're having around domestic sourcing and how these conversations start and then ramp-up from there? And then just the general trajectory of the platform becoming a permanent piece of these customers' onshoring strategy? Thanks.

Thank you for the question. Our customers are currently seeking answers to a couple of key issues. I've been traveling and meeting with many of them across the country. They are particularly interested in identifying domestic suppliers if they plan to enhance manufacturing within the United States. One of the advantages Xometry offers is the ability to locate the most suitable supplier regardless of geography or state. Many of our discussions center on how to find additional domestic suppliers and build a reliable supply base. Customers come to us specifically for this capability, as it is fundamental to our model as a distributed marketplace. Additionally, there are conversations about risk mitigation and the importance of multi-sourcing in this context.

Thanks.

Thank you for your question. Our next question comes from Greg Palm with Craig-Hallum. Your line is open.

Yes, thanks. Good morning. I would like to discuss the Q2 guidance a bit more regarding revenue. You mentioned strong growth demand so far this quarter. Typically, there is a significant sequential increase from Q1 to Q2 due to seasonality. I am trying to reconcile the guidance and commentary with the usual seasonal trends and the apparent lack of substantial sequential growth in the revenue outlook. Perhaps we can explore this topic further. Thank you.

Thanks, Greg. Thanks for the question. It's James. Yeah. So I think as you say, we're expecting Q2 revenue growth of 17% to 18% versus the 23% in Q1. Q2 marketplace growth, we said is 20% to 22% versus the 27% in Q1. And we have seen a good strong start to the quarter. There's about, 100 basis point tougher comp in Q2 versus a year ago. But based on the strength of what we are seeing in Q1 and Q2, we did raise our view for the full year, so from at least 20% to at least 22% for the full year for the marketplace. So I think that reflects what we're seeing in the business and the strong performance that we saw in Q1. And consistent with prior guidance, we're taking into account those recent trends and the opportunities and risks that we're seeing ahead. It does remain an uncertain manufacturing environment. And the manufacturing indices continue to suggest that some buyers remain cautious. But I think as you've heard from us today, and Randy's prepared remarks, Xometry is very well placed for this environment for providing flexible and resilient sourcing. And so we're feeling good about where we are and that's reflected in our outlook.

To clarify, when looking at the 2024 revenue from March to June, it shows an overall increase of 8%, while the midpoint guidance is around 3%. I'm trying to align your observations with historical trends. It seems like we might be taking a more cautious approach due to the current uncertainty, but it feels overly cautious considering your comments.

Yeah. Hey, Greg, it's Shawn. Just keep in mind in 2024 we had talked about Q1 was a little bit of a slower start in January. So be careful with that quick analogy. But again, as James has been consistent in the way he's laid out his guidance over the last five quarters, we're mindful of the operating environment, but we're seeing robust demand so far in Q2.

Yeah. Okay. Well, hey congrats on the quarter. Thanks.

Thanks, Greg.

Thank you. Our next question comes from Troy Jensen with Cantor Fitzgerald. Your line is open.

Hey gentlemen. Thanks for taking my questions here. I guess I want to hit on production revenues versus prototyping revenues. For me, for you guys to really sustain growth for several years, you're going to have to be successful in production. And if I kind of compare you guys to your competitor in Minnesota here, they're getting about $8,000 kind of average order per customer and they claim about 35% of their business is production with you guys kind of below $2,000 kind of an average order from your marketplace customers. To me it just speaks that there's a very, very high-level of prototyping there. So I'm curious if you guys could touch on production if you guys could maybe start providing what your production numbers are on a quarterly basis?

Yeah. Hey Troy, it's Shawn. Thanks for the question. And I'll turn it over to Randy to give a little bit more qualitative on what we're seeing in terms of production and certainly enterprise growth. Just keep in mind the number that you're looking at is a quarterly number in terms of our revenue per buyer. So you'd look to annualize that if you're trying to compare numbers. The revenue per buyer for us this quarter was actually up 4% year-over-year. And we're seeing good strong growth from our enterprise customers. And certainly part of that is our production continues to grow, which we've talked about now for the last couple of years. And Randy, I don't know if you want to give a little more qualitative on that.

Yes, Troy. We included information in the presentation and are happy to discuss it. It’s available in the presentation, and we have numerous examples of our increased production. One of the advantages is that our platform is very adaptable, allowing us to utilize various technologies. Also, if you examine the development of Xometry over time and the addition of manufacturing processes, you'll notice we started with technologies focused on prototyping, such as 3D printing, and have gradually expanded into production-level technologies like injection molding, die casting, and stamping. We are increasingly incorporating these methods. As Shawn mentioned, we analyzed the quarterly figures, and when you annualize them, they present a different picture.

Is there any way you guys could take a guesstimate on how much of revenues is production?

Yes. What we've said historically is that, if you look at the mix of our business relative to US manufacturing, we mirror that type of mix and we've said repeatedly that 3D is a very small percentage of that mix. As you know Troy, I mean not all prototyping is additive. But if you use that as a proxy, you'll get a sense that prototype is a small piece of our mix.

There are other companies out there, and some that may rely more on prototyping have struggled with growth or even experienced a decline. I believe our growth rates speak for themselves, and this indicates our success on the production side as well.

Yes, right. If I could sneak in one more question. I'd just be curious to know, what percentage of your revenues are coming from marketplace partners that are overseas that will be impacted by tariffs and stuff then?

The majority of our US marketplace revenue, approximately 80%, is fulfilled domestically by US partners. We have also noticed a slight shift towards more domestic fulfillment, but the vast majority of our revenue still comes from US partners serving US customers.

Thank you so much for your questions. This does conclude the question-and-answer session. Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Have a good day.