Xometry Inc

Previous wording

On January 2, 2023, the Company acquired Tridi Teknoloj A.S. (“Tridi”) located in Istanbul, Türkiye pursuant to a Share Purchase Agreement. The acquisition of Tridi extends our marketplace capabilities in Europe and provides us access to the Turkish market.

Current wording

On January 2, 2023, we acquired Tridi Teknoloj A.S. (“Tridi”) located in Istanbul, Türkiye pursuant to a Share Purchase Agreement. The acquisition of Tridi extends our marketplace capabilities in Europe and provides us access to the Turkish market.

Previous wording

Active Buyers has consistently grown over time. The number of Active Buyers on our platform reached 61,530 as of June 30, 2024, up 27% from 48,340 as of June 30, 2023. The key drivers of Active Buyer growth are continued account and buyer engagement and the success of our strategy to attract new buyers.

Current wording

Active Buyers has consistently grown over time. The number of Active Buyers on our platform reached 64,851 as of September 30, 2024, up 24% from 52,382 as of September 30, 2023. The key drivers of Active Buyer growth are continued account and buyer engagement and the success of our strategy to attract new buyers.

Previous wording

For the quarter ended June 30, 2024, 96% of our revenue was generated from existing accounts. We believe the repeat purchase activity from existing accounts reflects the underlying strength of our business and provides us with substantial revenue visibility and predictability.

Current wording

For the quarter ended September 30, 2024, 97% of our revenue was generated from existing accounts. We believe the repeat purchase activity from existing accounts reflects the underlying strength of our business and provides us with substantial revenue visibility and predictability.

Previous wording

Accounts with Last Twelve-Month, or LTM, Spend of At Least $50,000 means an account that has spent at least $50,000 on our marketplace in the most recent twelve-month period. We view the acquisition of an account as a foundation for the addition of long-term buyers to our marketplace. Once an account joins our platform, we aim to expand the relationship and increase engagement and spending activities from that account over time. The number of accounts with LTM Spend of at least $50,000 on our platform reached 1,436 as of June 30, 2024, up 24% from 1,159 as of June 30, 2023.

Current wording

Accounts with Last Twelve-Month, or LTM, Spend of At Least $50,000 means an account that has spent at least $50,000 on our marketplace in the most recent twelve-month period. We view the acquisition of an account as a foundation for the addition of long-term buyers to our marketplace. Once an account joins our platform, we aim to expand the relationship and increase engagement and spending activities from that account over time. The number of accounts with LTM Spend of at least $50,000 on our platform reached 1,506 as of September 30, 2024, up 23% from 1,223 as of September 30, 2023.

Previous wording

Active Paying Suppliers has changed over time. The number of Active Paying Suppliers on our platform was 6,992 as of June 30, 2024, down 7% from 7,553 as of June 30, 2023. The decline during the quarter ended June 30, 2024 is primarily due to our exit from the tools and materials business and the wind down of Thomas non-core services.

Current wording

Active Paying Suppliers has changed over time. The number of Active Paying Suppliers on our platform was 6,762 as of September 30, 2024, down 9% from 7,415 as of September 30, 2023. The decline during the quarter ended September 30, 2024 is primarily due to our exit from the tools and materials business and the wind down of Thomas non-core services.

Previous wording

We define Adjusted EBITDA as net loss, adjusted for interest expense, interest and dividend income, other expenses, provision (benefit) for income taxes, and certain other non-cash or non-recurring items impacting net loss from time to time, principally comprised of depreciation and amortization, amortization of lease intangible, stock-based compensation, payroll tax expense related to stock-based compensation, lease abandonment, charitable contributions of common stock, income from an unconsolidated joint venture, impairment of assets, restructuring charges, costs to exit the tools and materials business and acquisition and other adjustments not reflective of our ongoing business, such as adjustments related to purchase accounting, the revaluation of contingent consideration, transaction costs and executive severance. Adjusted EBITDA is a performance measure that we use to assess our operating performance and the operating leverage in our business. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Current wording

We define Adjusted EBITDA as net loss, adjusted for interest expense, interest and dividend income, other expenses, provision for income taxes, and certain other non-cash or non-recurring items impacting net loss from time to time, principally comprised of depreciation and amortization, amortization of lease intangible, stock-based compensation, payroll tax expense related to stock-based compensation, lease abandonment, charitable contributions of common stock, income from an unconsolidated joint venture, impairment of assets, restructuring charges, costs to exit the tools and materials business and acquisition and other adjustments not reflective of our ongoing business, such as adjustments related to purchase accounting, the revaluation of contingent consideration, transaction costs and executive severance. Adjusted EBITDA is a performance measure that we use to assess our operating performance and the operating leverage in our business. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA for a period by revenue for the same period.

Previous wording

For the three months ended June 30, 2024, Adjusted EBITDA loss was $(2.6) million, as compared to Adjusted EBITDA loss of $(8.7) million for the same quarter in 2023. For the quarter ended June 30, 2024, Adjusted EBITDA Margin was (2.0)% of revenue, as compared to (7.8)% of revenue for the same quarter in 2023, driven primarily by increased operating efficiencies as we continue to grow our revenue and margins faster than our expenses.

Current wording

For the three months ended September 30, 2024, Adjusted EBITDA loss was $(0.6) million, as compared to Adjusted EBITDA loss of $(4.2) million for the same quarter in 2023. For the quarter ended September 30, 2024, Adjusted EBITDA Margin was (0.4)% of revenue, as compared to (3.5)% of revenue for the same quarter in 2023, driven primarily by increased operating efficiencies as we continue to grow our revenue and margins faster than our expenses.

Previous wording

For the six months ended June 30, 2024, Adjusted EBITDA loss was $(10.1) million, as compared to Adjusted EBITDA loss of $(20.4) million for the same period in 2023. For the six months ended June 30, 2024, Adjusted EBITDA Margin was (4.0)% of revenue, as compared to (9.4)% of revenue for the same period in 2023, driven primarily by increased operating efficiencies as we continue to grow our revenue and margins faster than our expenses.

Current wording

For the nine months ended September 30, 2024, Adjusted EBITDA loss was $(10.7) million, as compared to Adjusted EBITDA loss of $(24.6) million for the same period in 2023. For the nine months ended September 30, 2024, Adjusted EBITDA Margin was (2.7)% of revenue, as compared to (7.3)% of revenue for the same period in 2023, driven primarily by increased operating efficiencies as we continue to grow our revenue and margins faster than our expenses.

Previous wording

We define Non-GAAP net loss, as net loss adjusted for depreciation and amortization, stock-based compensation, payroll tax expense related to stock-based compensation, amortization of lease intangible, amortization of deferred costs on convertible notes, loss (gain) on sale of property and equipment, charitable contributions of common stock, lease abandonment and termination, impairment of assets, restructuring charges, costs to exit the tools and materials business and acquisition and other adjustments not reflective of our ongoing business, such as adjustments related to purchase accounting, the revaluation of contingent consideration, transaction costs and executive severance.

Current wording

We define Non-GAAP net income (loss), as net income (loss) adjusted for depreciation and amortization, stock-based compensation, payroll tax expense related to stock-based compensation, amortization of lease intangible, amortization of deferred costs on convertible notes, loss (gain) on sale of property and equipment, charitable contributions of common stock, lease abandonment and termination, impairment of assets, restructuring charges, costs to exit the tools and materials business and acquisition and other adjustments not reflective of our ongoing business, such as adjustments related to purchase accounting, the revaluation of contingent consideration, transaction costs and executive severance.

Previous wording

(1) In the second quarter of 2024, we changed the definition of Non-GAAP Net Loss to exclude payroll tax expense related to stock-based compensation. For prior periods, this amount was considered de minimis and, accordingly, we have not adjusted the Non-GAAP Net Loss amounts for such periods.

Current wording

(1) In the second quarter of 2024, we changed the definition of Non-GAAP Net Income (Loss) to exclude payroll tax expense related to stock-based compensation. For prior periods, this amount was considered de minimis and, accordingly, we have not adjusted the Non-GAAP Net Income (Loss) amounts for such periods.

Previous wording

For the three months ended June 30, 2024, Non-GAAP net loss was $(0.6) million, as compared to Non-GAAP net loss of $(6.6) million for the same quarter in 2023. For the quarter ended June 30, 2024, Non-GAAP net loss was (0.5)% of revenue, as compared to (6.0)% of revenue for the same quarter in 2023.

Current wording

For the three months ended September 30, 2024, Non-GAAP net income was $1.1 million, as compared to Non-GAAP net loss of $(2.6) million for the same quarter in 2023. For the quarter ended September 30, 2024, Non-GAAP net income (loss) was 0.8% of revenue, as compared to (2.2)% of revenue for the same quarter in 2023.

Previous wording

For the six months ended June 30, 2024, Non-GAAP net loss was $(6.3) million, as compared to Non-GAAP net loss of $(16.4) million for the same period in 2023. For the six months ended June 30, 2024, Non-GAAP net loss was (2.5)% of revenue, as compared to (7.6)% of revenue for the same period in 2023.

Current wording

For the nine months ended September 30, 2024, Non-GAAP net loss was $(5.2) million, as compared to Non-GAAP net loss of $(19.0) million for the same period in 2023. For the nine months ended September 30, 2024, Non-GAAP net loss was (1.3)% of revenue, as compared to (5.7)% of revenue for the same period in 2023.

Previous wording

Adjusted EBITDA and Non-GAAP net loss are non-GAAP financial measures that we use, in addition to our GAAP financial measures, to evaluate our business. We have included Adjusted EBITDA and Non-GAAP net loss in this filing because they are key measures used by our management to evaluate our operating performance. Accordingly, we believe that Adjusted EBITDA and Non-GAAP net loss provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. Our calculation of Adjusted EBITDA and Non-GAAP net loss may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Adjusted EBITDA and Non-GAAP net loss should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Current wording

Adjusted EBITDA and Non-GAAP net income (loss) are non-GAAP financial measures that we use, in addition to our GAAP financial measures, to evaluate our business. We have included Adjusted EBITDA and Non-GAAP net income (loss) in this filing because they are key measures used by our management to evaluate our operating performance. Accordingly, we believe that Adjusted EBITDA and Non-GAAP net income (loss) provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors. Our calculation of Adjusted EBITDA and Non-GAAP net income (loss) may differ from similarly titled non-GAAP measures, if any, reported by our peer companies and therefore may not serve as an accurate basis of comparison among companies. Adjusted EBITDA and Non-GAAP net income (loss) should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Previous wording

Our operating expenses consist of sales and marketing, operations and support, product development and general and administrative functions.

Current wording

Our operating expenses consist of sales and marketing, operations and support, product development, general and administrative functions and impairment of assets.

Previous wording

Product development costs that are not eligible for capitalization are expensed as incurred. This account also includes compensation expenses, including stock-based compensation expenses to our employees performing these functions and certain depreciation and amortization expense. We expect product development expense to increase in absolute dollars in the future, though in the near-term product development expenses may fluctuate from period-to-period based on total revenue levels and the timing of our investments in our product development functions as these investments may vary in scope and scale over future periods.

Current wording

Product development costs that are not eligible for capitalization are expensed as incurred. This account also includes compensation expenses, including stock-based compensation expenses to our employees performing routine improvements and maintenance on our platforms not related to a specific capitalizable project, software costs and certain depreciation and amortization expense. We expect product development expense to increase in absolute dollars in the future, though in the near-term product development expenses may fluctuate from period-to-period based on total revenue levels and the timing of our investments in our product development functions as these investments may vary in scope and scale over future periods.

Previous wording

General and administrative expenses primarily consist of compensation expenses, including stock-based compensation expenses, for executive, finance, legal and other administrative personnel, professional service fees and certain depreciation and amortization expense. We expect general and administrative expenses to fluctuate as a result of operating as a public company.

Current wording

General and administrative expenses primarily consist of compensation expenses, including stock-based compensation expenses, for executive, finance, legal and other administrative personnel, professional service fees and certain depreciation and amortization expense.

Previous wording

The following tables present our disaggregated revenue and cost of revenue. Revenue from our marketplace primarily reflects the sales of parts and assemblies on our platform. Revenue from supplier services primarily includes the sale of advertising and to a lesser extent financial service products, SaaS products and tools and materials.

Current wording

The following tables present our disaggregated revenue and cost of revenue. Revenue from our marketplace primarily reflects the sales of parts and assemblies on our platform. Revenue from supplier services primarily includes the sale of advertising and to a lesser extent financial service products and SaaS products.

Previous wording

Total revenue increased $21.6 million, or 19%, from $111.0 million for the three months ended June 30, 2023 to $132.6 million for the three months ended June 30, 2024. This growth was a result of an increase in marketplace revenue, partially offset by a decrease in supplier services revenue. Marketplace revenue increased $23.8 million, or 25%, from $93.5 million for the three months ended June 30, 2023 to $117.3 million for the three months ended June 30, 2024. The increase in marketplace revenue was primarily due to increased buyer activity on the platform for the three months ended June 30, 2024 as compared to the prior year period.

Current wording

Total revenue increased $22.8 million, or 19%, from $118.9 million for the three months ended September 30, 2023 to $141.7 million for the three months ended September 30, 2024. This growth was a result of an increase in marketplace revenue, partially offset by a decrease in supplier services revenue. Marketplace revenue increased $24.5 million, or 24%, from $102.5 million for the three months ended September 30, 2023 to $127.0 million for the three months ended September 30, 2024. The increase in marketplace revenue was primarily due to increased buyer activity on the platform for the three months ended September 30, 2024 as compared to the prior year period.

Previous wording

Supplier services revenue decreased $5.3 million, or 15%, from $36.1 million for the six months ended June 30, 2023 to $30.8 million for the six months ended June 30, 2024. The decrease in revenue was primarily due to our exit from the tools and materials business in the U.S. during the second quarter of 2023, a decrease in Thomas non-core services and to a lesser extent a decrease in Thomas advertising and marketing services.

Current wording

Supplier services revenue decreased $1.7 million, or 10% from $16.5 million for the three months ended September 30, 2023 to $14.7 million for the three months ended September 30, 2024. The decrease in revenue was due to reductions in Thomas non-core services and to a lesser extent decreases in Thomas advertising and marketing services.

Previous wording

Total revenue for the three months ended June 30, 2024 and 2023, was $112.2 million and $95.4 million, respectively, for the U.S. operating segment, and $20.4 million and $15.6 million, respectively, for the International operating segment.

Current wording

Total revenue for the three months ended September 30, 2024 and 2023 was $117.6 million and $103.4 million, respectively, for the U.S. operating segment and $24.1 million and $15.5 million, respectively, for the International operating segment.

Previous wording

Total cost of revenue increased $12.3 million, or 18%, from $67.5 million for the three months ended June 30, 2023 to $79.7 million for the three months ended June 30, 2024. This increase was the result of an increase in marketplace cost of revenue offset by a decrease in supplier services costs of revenue. Total cost of revenue from marketplace and supplier services for the three months ended June 30, 2024 was $78.0 million and $1.7 million, respectively, as compared to $63.9 million and $3.5 million, respectively for the three months ended June 30, 2023.

Current wording

Total cost of revenue increased $13.2 million, or 18%, from $72.7 million for the three months ended September 30, 2023 to $85.9 million for the three months ended September 30, 2024. This increase was the result of an increase in marketplace cost of revenue offset by a decrease in supplier services costs of revenue. Total cost of revenue from marketplace and supplier services for the three months ended September 30, 2024 was $84.3 million and $1.5 million, respectively, as compared to $70.6 million and $2.1 million, respectively, for the three months ended September 30, 2023.

Previous wording

Gross profit increased $9.3 million, or 21%, from $43.6 million for the three months ended June 30, 2023 to $52.9 million for the three months ended June 30, 2024. The increase in gross profit was primarily due to increases in revenue from marketplace and improved marketplace gross margins as compared to the prior year period.

Current wording

Gross profit increased $9.6 million, or 21%, from $46.2 million for the three months ended September 30, 2023 to $55.8 million for the three months ended September 30, 2024. The increase in gross profit was primarily due to increases in revenue from marketplace and improved marketplace gross margins as compared to the prior year period.

Previous wording

Gross margin for marketplace was 33.5% for the three months ended June 30, 2024, as compared to 31.7% for the three months ended June 30, 2023. The improvement over the prior year period was due largely to our AI-driven platform and expanding supplier network which optimizes pricing to buyers and suppliers. Gross margin for our supplier services was 88.9% for the three months ended June 30, 2024, as compared to 79.8% for the three months ended June 30, 2023. The increase in gross margin for supplier services is primarily due to a higher mix of marketing services revenue and the exit from the lower margin tools and materials business. As marketplace revenue continues to grow faster than supplier services, our aggregate gross margin will fluctuate.

Current wording

Gross margin for marketplace was 33.6% for the three months ended September 30, 2024, as compared to 31.1% for the three months ended September 30, 2023. The improvement over the prior year period was due largely to our AI-driven platform and expanding supplier network which optimizes pricing to buyers and suppliers. Gross margin for our supplier services was 89.6% for the three months ended September 30, 2024, as compared to 87.2% for the three months ended September 30, 2023. The increase in gross margin for supplier services is primarily due to a higher mix of advertising and marketing services revenue and the wind down of Thomas non-core services.

Previous wording

Sales and marketing expense increased $4.8 million, or 21%, from $22.7 million for the three months ended June 30, 2023 to $27.5 million for the three months ended June 30, 2024, primarily due to additional sales and marketing employees and their compensation costs, including stock-based compensation and marketing and advertising expense. As a percent of total revenue, sales and marketing expenses increased to 20.7% for the three months ended June 30, 2024 from 20.4% for the three months ended June 30, 2023.

Current wording

Sales and marketing expense increased $4.0 million, or 17%, from $23.2 million for the three months ended September 30, 2023 to $27.2 million for the three months ended September 30, 2024, primarily due to increased marketing and advertising expense and additional sales and marketing employees and their compensation costs, including stock-based compensation. As a percent of total revenue, sales and marketing expenses decreased to 19.2% for the three months ended September 30, 2024 from 19.5% for the three months ended September 30, 2023.

Previous wording

Advertising expense increased 17%, from $7.5 million for the three months ended June 30, 2023 to $8.8 million for the three months ended June 30, 2024 due to increased marketplace and supplier services advertising.

Current wording

Advertising expense increased 22%, from $7.7 million for the three months ended September 30, 2023 to $9.4 million for the three months ended September 30, 2024 due to increased marketplace and supplier services advertising.

Previous wording

Operations and support expense remained flat at $14.2 million for the three months ended June 30, 2023 and 2024. As a percent of total revenue, operations and support expenses decreased to 10.7% for the three months ended June 30, 2024 from 12.8% for the three months ended June 30, 2023.

Current wording

Operations and support expense increased $2.1 million, or 16%, from $12.6 million for the three months ended September 30, 2023 to $14.7 million for the three months ended September 30, 2024, primarily due to additional employees and their compensation cost, included stock based compensation. As a percent of total revenue, operations and support expenses decreased to 10.4% for the three months ended September 30, 2024 from 10.6% for the three months ended September 30, 2023.

Previous wording

Product development expense increased $1.1 million, or 12%, from $8.9 million for the three months ended June 30, 2023 to $10.0 million for the three months ended June 30, 2024, primarily as result of increases in amortization expense related to capitalized internal-use software development costs and increases in software costs. As a percent of total revenue, product development expenses decreased to 7.6% for the three months ended June 30, 2024 as compared to 8.0% for the three months ended June 30, 2023.

Current wording

Product development expense increased $0.8 million, or 10%, from $8.5 million for the three months ended September 30, 2023 to $9.3 million for the three months ended September 30, 2024, primarily as result of increases in amortization expense related to capitalized internal-use software development costs and increases in software costs. As a percent of total revenue, product development expenses decreased to 6.6% for the three months ended September 30, 2024 as compared to 7.2% for the three months ended September 30, 2023.

Previous wording

General and administrative expense decreased $9.1 million, or 36% from $25.6 million for the three months ended June 30, 2023 to $16.5 million for the three months ended June 30, 2024. The decrease is due to a lower facility cost due to the abandonment of leased offices in the second quarter of 2023 and decreases in depreciation and amortization expense offset by an increase in general and administrative employees and their compensation costs, including stock-based compensation, and non-cash charitable contributions. As a percent of total revenue, general and administrative expenses decreased to 12.4% for the for the three months ended June 30, 2024 from 23.0% for the three months ended June 30, 2023.

Current wording

General and administrative expense increased $1.1 million, or 7%, from $14.9 million for the three months ended September 30, 2023 to $16.1 million for the three months ended September 30, 2024. The increase was due to an increase in general and administrative employees and their compensation costs, including stock-based compensation. As a percent of total revenue, general and administrative expenses decreased to 11.3% for the for the three months ended September 30, 2024 from 12.6% for the three months ended September 30, 2023.

Previous wording

Interest and dividend income decreased $0.2 million, or 7% from $3.0 million for the three months ended June 30, 2023 to $2.8 million for the three months ended June 30, 204. Interest and dividend income is primarily due to dividend income from our marketable securities.

Current wording

Interest and dividend income decreased $0.2 million, or 7%, from $3.0 million for the three months ended September 30, 2023 to $2.8 million for the three months ended September 30, 2024. Interest and dividend income is primarily due to dividend income from our marketable securities.

Previous wording

Other expenses decreased by $0.3 million, primarily due to foreign exchange losses.

Current wording

Other expenses decreased by $0.2 million, primarily due to foreign exchange losses.

Previous wording

Total segment loss from our U.S. operating segment for the three months ended June 30, 2024 and 2023 was $7.1 million and $22.9 million, respectively. Total segment loss from our International operating segment for the three months ended June 30, 2024 and 2023 was $6.6 million and $3.6 million, respectively.

Current wording

Total segment loss from our U.S. operating segment for the three months ended September 30, 2024 and 2023 was $4.2 million and $7.9 million, respectively. Total segment loss from our International operating segment for the three months ended September 30, 2024 and 2023 was $6.0 million and $4.1 million, respectively.

Previous wording

Revenue and cost of revenue is presented in the following tables for the six months ended June 30, 2024 and 2023 (in thousands):

Current wording

Revenue and cost of revenue is presented in the following tables for the nine months ended September 30, 2024 and 2023 (in thousands):

Previous wording

Total revenue increased $39.0 million, or 18%, from $216.3 million for the six months ended June 30, 2023 to $255.3 million for the six months ended June 30, 2024. This growth was a result of an increase in marketplace revenue, partially offset by a decrease in supplier services revenue. Marketplace revenue increased $44.3 million, or 25%, from $180.2 million for the six months ended June 30, 2023 to $224.5 million for the six months ended June 30, 2024. The increase in marketplace revenue was primarily due to increased buyers activity on the platform for the six months ended June 30, 2024, as compared to the prior year period.

Current wording

Total revenue increased $61.7 million, or 18%, from $335.3 million for the nine months ended September 30, 2023 to $397.0 million for the nine months ended September 30, 2024. This growth was a result of an increase in marketplace revenue, partially offset by a decrease in supplier services revenue. Marketplace revenue increased $68.8 million, or 24%, from $282.7 million for the nine months ended September 30, 2023 to $351.4 million for the nine months ended September 30, 2024. The increase in marketplace revenue was primarily due to increased buyers activity on the platform for the nine months ended September 30, 2024, as compared to the prior year period.

Previous wording

Supplier services revenue decreased $2.2 million, or 13% from $17.5 million for the three months ended June 30, 2023 to $15.3 million for the three months ended June 30, 2024. The decrease in revenue was due to our exit from the tools and materials business in the U.S. during the second quarter of 2023, a decrease in Thomas non-core services and to a lesser extent a decrease in Thomas advertising and marketing services.

Current wording

Supplier services revenue decreased $7.1 million, or 13%, from $52.6 million for the nine months ended September 30, 2023 to $45.5 million for the nine months ended September 30, 2024. The decrease in revenue was primarily due to our exit from the tools and materials business in the U.S. during the second quarter of 2023, a decrease in Thomas non-core services and to a lesser extent a decrease in Thomas advertising and marketing service.

Previous wording

Total revenue for the six months ended June 30, 2024 and 2023, was $215.5 million and $189.3 million, respectively, for the U.S. operating segment, and $39.8 million and $27.0 million, respectively, for the International operating segment.

Current wording

Total revenue for the nine months ended September 30, 2024 and 2023 was $333.1 million and $292.7 million, respectively, for the U.S. operating segment, and $63.9 million and $42.5 million, respectively, for the International operating segment.

Previous wording

Total cost of revenue increased $21.1 million, or 16%, from $133.4 million for the six months ended June 30, 2023 to $154.5 million for the six months ended June 30, 2024. This increase was primarily the result of an increase in marketplace cost of revenue offset by a decrease in supplier services costs of revenue. Total cost of revenue from marketplace and supplier services for the six months ended June 30, 2024 was $150.9 million and $3.6 million, respectively, as compared to $125.7 million and $7.7 million, respectively, for the six months ended June 30, 2023.

Current wording

Total cost of revenue increased $34.3 million, or 17%, from $206.1 million for the nine months ended September 30, 2023 to $240.4 million for the nine months ended September 30, 2024. This increase was primarily the result of an increase in marketplace cost of revenue offset by a decrease in supplier services costs of revenue. Total cost of revenue from marketplace and supplier services for the nine months ended September 30, 2024 was $235.3 million and $5.1 million, respectively, as compared to $196.2 million and $9.8 million, respectively, for the nine months ended September 30, 2023.

Previous wording

Gross profit increased $17.9 million, or 22%, from $82.9 million for the six months ended June 30, 2023 to $100.8 million for the six months ended June 30, 2024. The increase in gross profit was primarily due to increases in revenue from marketplace and improved marketplace gross margins as compared to the prior year period.

Current wording

Gross profit increased $27.4 million, or 21%, from $129.2 million for the nine months ended September 30, 2023 to $156.6 million for the nine months ended September 30, 2024. The increase in gross profit was primarily due to increases in revenue from marketplace and improved marketplace gross margins as compared to the prior year period.

Previous wording

Gross margin for marketplace was 32.8% for the six months ended June 30, 2024, as compared to 30.3% for the six months ended June 30, 2023. The improvement over the prior year period was due largely to our AI-driven platform and expanding supplier network which optimizes pricing to buyers and suppliers. Gross margin for our supplier services increased to 88.4% for the six months ended June 30, 2024 from 78.6% for the six months ended June 30, 2023. The increase in gross margin for supplier services is primarily due to a higher mix of marketing services revenue and the exit from the lower margin tools and materials business. As marketplace revenue continues to grow, our aggregate gross margin will change.

Current wording

Gross margin for marketplace was 33.1% for the nine months ended September 30, 2024, as compared to 30.6% for the nine months ended September 30, 2023. The improvement over the prior year period was due largely to our AI-driven platform and expanding supplier network which optimizes pricing to buyers and suppliers. Gross margin for our supplier services increased to 88.8% for the nine months ended September 30, 2024 from 81.3% for the nine months ended September 30, 2023. The increase in gross margin for supplier services is primarily due to a higher mix of advertising and marketing services revenue and the exit from the lower margin tools and materials business.

Previous wording

Sales and marketing expense increased $9.6 million, or 21%, from $45.1 million for the six months ended June 30, 2023 to $54.7 million for the six months ended June 30, 2024, primarily due to additional sales and marketing employees and their compensation costs, including stock-based compensation, along with marketing and advertising expense. As a percent of total revenue, sales and marketing expenses increased to 21.4% for the six months ended June 30, 2024 from 20.8% for the six months ended June 30, 2023.

Current wording

Sales and marketing expense increased $13.6 million, or 20%, from $68.3 million for the nine months ended September 30, 2023 to $81.9 million for the nine months ended September 30, 2024, primarily due to additional sales and marketing employees and their compensation costs, including stock-based compensation and to a lesser extent advertising expense. As a percent of total revenue, sales and marketing expenses increased to 20.6% for the nine months ended September 30, 2024 from 20.4% for the nine months ended September 30, 2023.

Previous wording

Advertising expense increased 9%, from $15.7 million for the six months ended June 30, 2023 to $17.1 million for the six months ended June 30, 2024 due to increased marketplace and supplier services advertising.

Current wording

Advertising expense increased 13%, from $23.4 million for the nine months ended September 30, 2023 to $26.5 million for the nine months ended September 30, 2024 due to increased marketplace and supplier services advertising.