Xometry Inc

Previous wording

Xometry Inc. (“Xometry”, “Company”, “our” or “we”) was incorporated in the State of Delaware in May 2013. Xometry is a global artificial intelligence (“AI”) powered online marketplace connecting buyers with suppliers of manufacturing services, driving the digital transformation of one of the largest industries in the world. We use our proprietary AI, machine learning and cloud-based services, including our Thomasnet® platform, to help buyers efficiently source custom-manufactured parts and assemblies, and empower suppliers of manufacturing services to grow their businesses. Xometry’s corporate headquarters is located in North Bethesda, Maryland.

Current wording

Xometry Inc. (“Xometry”, “Company”, “our” or “we”) was incorporated in the State of Delaware in May 2013. Xometry operates a global artificial intelligence (“AI”) powered online manufacturing marketplace and a suite of cloud-based services including Workcenter and Teamspace that are rapidly digitizing the manufacturing industry. Xometry also operates Thomasnet®, a leading North American industrial sourcing platform. Together, these platforms provide manufacturers the critical resources they need to grow their business and makes it easy for buyers to create locally resilient supply chains. Xometry's marketplace uses proprietary AI to assist buyers to efficiently source custom-manufactured parts and assemblies and attain instant pricing and lead times. The AI helps our rapidly growing network of manufacturers by selecting optimal jobs to fill their capacity. Our Thomasnet industrial sourcing platform enables buyers to connect with over 500,000 North American manufacturers and industrial services providers. Our suite of cloud-based services empowers manufacturers and industrial service providers grow their businesses using our advertising, marketing and financial services. Xometry’s corporate headquarters is located in North Bethesda, Maryland.

Previous wording

Our AI-enabled technology platform is powered by proprietary machine learning algorithms and datasets, resulting in a sophisticated two-sided marketplace that is rapidly digitizing the manufacturing industry. As a result, buyers can procure the products they want on demand, and suppliers can source new manufacturing opportunities that match their specific capabilities and capacity, ultimately resulting in locally resilient supply chains so goods can get to market faster. Every interaction on our marketplace provides rich data insights that allow us to continuously improve our AI models and create new products and services, fueling powerful network effects as we scale.

Current wording

Xometry’s AI-enabled marketplace, which is available in 18 local languages, is powered by proprietary machine learning algorithms and datasets. Our two-sided marketplace is rapidly digitizing the manufacturing industry, helping customers strengthen their supply chains. Buyers can procure the products they want on demand, and suppliers can reach new customers throughout the world. Our rapidly growing active supplier base enables companies to accelerate their product development and go-to-market strategies. Each interaction on our marketplace provides rich data insights that allow us to continuously improve our AI models and create new products and services, fueling powerful network effects as we scale.

Previous wording

We define “buyers” as individuals who have placed an order to purchase custom-manufactured, on-demand parts or assemblies on our marketplace. Our buyers include engineers, product designers, procurement and supply chain personnel, inventors, entrepreneurs and business owners from businesses of a variety of sizes, ranging from self-funded start-ups to Fortune 100 companies. We define “accounts” as an individual entity, such as a sole proprietor with a single buyer or corporate entities with multiple buyers, having purchased at least one part on our marketplace. We define “suppliers” as individuals or businesses who have been approved by us to either manufacture a product on our platform for a buyer or have utilized our supplier services, including our financial services or the purchase of supplies.

Current wording

We define “buyers” as individuals who have placed an order to purchase custom-manufactured, on-demand parts or assemblies on our marketplace. Our buyers include engineers, product designers, procurement and supply chain personnel, entrepreneurs, technicians and business owners from small businesses to Fortune 500 companies. We define “accounts” as an individual entity, such as a sole proprietor with a single buyer or corporate entities with multiple buyers, having purchased at least one part on our marketplace. We define “suppliers” as individuals or businesses who have been approved by us to either manufacture a product on our marketplace for a buyer or have utilized our supplier services, including our financial services or the purchase of tools and materials.

Previous wording

The majority of our revenue is derived from the sale of part(s) and assemblies to our customers on our marketplace, which we refer to as marketplace revenue. The suppliers on our platform offer a diversified and expanding mix of manufacturing processes. These manufacturing processes include computer numerical control (“CNC”) manufacturing, sheet metal forming, sheet cutting, 3D printing (including fused deposition modeling, direct metal laser sintering, PolyJet, stereolithography, selective laser sintering, binder jetting, carbon digital light synthesis, multi jet fusion and lubricant sublayer photo-curing), die casting, stamping, injection molding, urethane casting, tube cutting, tube bending, as well as finishing services, rapid prototyping and high-volume production. Xometry's extensible technology platform allows the Company to add new technologies and processes to gain more wallet share with our buyers. We enable buyers to source these processes to meet complex and specific design and order needs across several industries, including Aerospace, Healthcare, Robotics, Industrial, Defense, Energy, Automotive, Government, Education and Consumer Goods.

Current wording

These manufacturing processes include computer numerical control (“CNC”) manufacturing, sheet metal forming, sheet cutting, 3D printing (including fused deposition modeling, direct metal laser sintering, PolyJet, stereolithography, selective laser sintering, binder jetting, carbon digital light synthesis, multi jet fusion and lubricant sublayer photo-curing), die casting, stamping, injection molding, urethane casting, tube cutting, tube bending, as well as finishing services, rapid prototyping and high-volume production. Xometry's extensible technology platform allows the Company to add new technologies and processes to gain more wallet share with our buyers. We enable buyers to source these processes to meet complex and specific design and order needs across several industries, including Aerospace, Industrial, Medical Devices, Automotive, Consumer Goods, Defense, Government, Energy, Education and Robotics.

Previous wording

We empower suppliers to grow their manufacturing businesses and improve machine uptime by providing access to an extensive, diverse base of buyers. We also offer suppliers supporting products and services to meet their unique needs. Through Thomasnet, a leading industrial sourcing platform in North America, we offer suppliers an array of digital advertising and marketing services and data solutions on Thomasnet. In addition, our suite of supplier services includes financial service products to stabilize and enhance cash flow and a cloud-based manufacturing execution system (“Workcenter”) to help suppliers optimize their productivity.

Current wording

We empower suppliers to grow their manufacturing businesses and improve machine utilization by providing access to an extensive, diverse base of buyers. We also offer suppliers supporting products and services to meet their unique needs. The Thomasnet product sourcing and supplier discovery platform provides access to in-depth profiles of 500,000 North American suppliers. Thomas’ suite of advertising services provides suppliers with tailored marketing campaigns to maximize their visibility and enhance engagement with potential buyers. Thomas’ in-house digital marketing agency, Thomas Marketing Services, offers a range of essential digital marketing services, including search engine optimization (“SEO”), to generate leads and boost the awareness and reach of suppliers. In addition, our supplier services include financial service products to facilitate faster payments and a cloud-based manufacturing execution system (“Workcenter”) to help suppliers optimize their productivity.

Previous wording

We must maintain and grow our Active Buyer base and grow our wallet share with existing buyers. We define Active Buyers as the number of buyers who have made at least one purchase on our marketplace during the last twelve months. An increase or decrease in the number of Active Buyers is a key indicator of our ability to attract, retain and engage buyers on our platform. We intend to continue investing in acquiring new buyers through traditional paid sales and marketing techniques as well as leveraging our organic referral network to drive awareness and build trust. The number of Active Buyers on our platform reached 55,458 as of December 31, 2023, up 36% from 40,664 as of December 31, 2022. Once we acquire a buyer, we seek to expand the breadth and scale of the services sold to that buyer and leverage the relationship to gain additional buyers within an account through a combination of product offerings, customer relationship marketing, sales and account management. We remain focused on increasing wallet share with our existing buyers through a number of deliberate strategies. With each positive experience and the expansion of our manufacturing processes by acquiring new supplier capabilities we will continue building our buyers’ spend and opportunities on our marketplace.

Current wording

We must maintain and grow our Active Buyer base and grow our wallet share with existing buyers. We define Active Buyers as the number of buyers who have made at least one purchase on our marketplace during the last twelve months. An increase or decrease in the number of Active Buyers is a key indicator of our ability to attract, retain and engage buyers on our platform. We intend to continue investing in acquiring new buyers through traditional paid sales and marketing techniques as well as leveraging our organic referral network to drive awareness and build trust. The number of Active Buyers on our platform reached 68,267 as of December 31, 2024, up 23% from 55,325 as of December 31, 2023. Once we acquire a buyer, we seek to expand the breadth and scale of the services sold to that buyer and leverage the relationship to gain additional buyers within an account through a combination of product offerings, customer relationship marketing, sales and account management. We remain focused on increasing wallet share with our existing buyers through a number of deliberate strategies. With each positive experience and the expansion of our manufacturing processes by acquiring new supplier capabilities we will continue building our buyers’ spend and opportunities on our marketplace.

Previous wording

We must maintain and grow our broad selection of suppliers and add to our diverse array of manufacturing processes in order to continue to grow our business and maximize the efficiency of our network. We rely on our network of suppliers to provide the sophisticated manufacturing processes that we offer to our buyers. We believe the value proposition for suppliers, in particular increasing utilization of their manufacturing operations, is compelling. If we fail to attract new suppliers to our platform and retain existing suppliers, the attractiveness of our platform to buyers would decrease and we would not be able to grow our revenue. In order to increase our efficiency, we intend to continue to expand our large and growing network of suppliers. The number of active suppliers, which we define as suppliers that have used our platform at least once during the last twelve months to manufacture a product or buy tools or supplies, has grown 36% from 2,5291 for the year ended December 31, 2022 to 3,429 for the year ended December 31, 2023. As we add to our supplier base, our AI-driven pricing becomes more competitive, and therefore more attractive to buyers, leading to higher revenue and improved margins. However, if we do not efficiently price the manufacturing opportunities on our platform, our revenue and margins could be adversely impacted.

Current wording

We must maintain and grow our broad selection of suppliers and add to our diverse array of manufacturing processes in order to continue to grow our business and maximize the efficiency of our network. We rely on our network of suppliers to provide the sophisticated manufacturing processes that we offer to our buyers. We believe the value proposition for suppliers, in particular increasing utilization of their manufacturing operations, is compelling. If we fail to attract new suppliers to our platform and retain existing suppliers, the attractiveness of our platform to buyers would decrease and we would not be able to grow our revenue. In order to increase our efficiency, we intend to continue to expand our large and growing network of suppliers. The number of active suppliers, which we define as suppliers that have used our platform at least once during the last twelve months to manufacture a product, has grown 28% from 3,429 for the year ended December 31, 2023 to 4,375 for the year ended December 31, 2024. As we add to our supplier base, our AI-driven pricing becomes more competitive, and therefore more attractive to buyers, leading to higher revenue and improved margins. However, if we do not efficiently price the manufacturing opportunities on our platform, our revenue and margins could be adversely impacted.

Previous wording

In 2019, we launched Xometry in Europe, followed by Xometry Asia in 2022 and Xometry United Kingdom in 2023. We believe there is significant opportunity in the global manufacturing ecosystem for our marketplace. With operations throughout the majority of the contiguous United States and customers in Europe and Asia, we have established footholds in major markets around the world. As we have expanded our physical presence, we have also added new language functionality to our platform to reach a wider customer base. As of December 31, 2023, customers can access our platform in 14 languages. We will continue to dedicate sales and marketing resources to develop our supplier networks and attract buyers to our marketplace in other regions. We may not recognize benefits from these investments, and we may not effectively manage additional risks relating to operating outside the United States, including increased operational and regulatory risks.

Current wording

In 2019, we launched Xometry in Europe, followed by Xometry Asia in 2022 and Xometry United Kingdom and Xometry Turkey in 2023. We believe there is significant opportunity in the global manufacturing ecosystem for our marketplace. With operations throughout the majority of the contiguous United States and customers in Europe and Asia, we have established footholds in major markets around the world. As we have expanded our physical presence, we have also added new language functionality to our platforms to reach a wider customer base. As of December 31, 2024, customers can access our platforms in 18 languages. We will continue to dedicate sales and marketing resources to develop our supplier networks and attract buyers to our marketplace in other regions. We may not recognize benefits from these investments, and we may not effectively manage additional risks relating to operating outside the United States, including increased operational and regulatory risks.

Previous wording

In 2020, we launched a suite of financial products and services to help our suppliers manage cash flow at all stages of job production. These services help suppliers manage their business more efficiently, even on jobs that they source outside of our platform. In December 2021, we acquired Thomas which significantly expanded our supplier services to include digital advertising, marketing services and data solutions for our suppliers. Our suite of marketing and data services provided by Thomas help suppliers grow and more efficiently run their business. We offer suppliers a full slate of marketing services, including website building, search-engine optimization ("SEO") and targeted advertising to buyers, which are resources that will help them further grow their business. In November 2021, we acquired FactoryFour a cloud-based manufacturing execution system. We provide this order management system to our supplier community which allows shops and shop owners to digitize and automate their operations so they can focus on growing their business. In addition to being able to manage existing orders, Workcenter is designed to integrate seamlessly with the AI-driven Xometry marketplace, giving suppliers a one-stop view into all of their orders.

Current wording

In 2020, we launched financial services to help our suppliers manage their cash flow. These services help suppliers manage their business more efficiently, even on jobs that they source outside of our platform. In December 2021, we acquired Thomas Publishing Company and its subsidiaries (collectively, “Thomas”), which significantly expanded our supplier services to include digital advertising, marketing services and data solutions for our suppliers. Our suite of marketing and data services provided by Thomas help suppliers grow and more efficiently run their business. We offer suppliers a full slate of marketing services, including website building, SEO and targeted advertising to buyers, which are resources that will help them further grow their business. In November 2021, we acquired Fusiform, Inc. (d/b/a FactoryFour), a cloud-based manufacturing execution system. We provide this order management system to our supplier community which allows shops and shop owners to digitize and automate their operations so they can focus on growing their business. In addition to being able to manage existing orders, Workcenter is designed to integrate seamlessly with the AI-driven Xometry marketplace, giving suppliers a one-stop view into all of their orders.

Previous wording

We define Active Paying Suppliers as individuals or businesses who have purchased one or more of our supplier services, including digital marketing services, data services, financial services or supplies on our platforms during the last twelve months. An increase or decrease in the number of Active Paying Suppliers is a key indicator of our ability to engage suppliers on our platform. Active Paying Suppliers has grown over time. The number of Active Paying Suppliers on our platform reached 7,271 as of December 31, 2023, down 6% from 7,715 as of December 31, 2022. The decline during the quarter ended December 31, 2023 is due to our exit from the supplies business. Excluding the supplies business, Active Paying Suppliers on our platform remained flat year-over-year.

Current wording

We define Active Paying Suppliers as individuals or businesses who have purchased one or more of our supplier services, including digital marketing services, data services, financial services or tools and materials on our platforms during the last twelve months. An increase or decrease in the number of Active Paying Suppliers is a key indicator of our ability to engage suppliers on our platform. The number of Active Paying Suppliers on our platform was 6,582 as of December 31, 2024, down 9% from 7,271 as of December 31, 2023. The decline during the year ended December 31, 2024 is primarily due to our exit from the tools and materials business and the wind down of Thomas non-core services.

Previous wording

In May 2023 and December 2022, we initiated restructuring actions to help manage our operating expenses by reducing our workforce by approximately 10%. The workforce reduction focused on realigning our staffing levels to help us meet the current and future objectives of our business. For the years ended December 31, 2023 and 2022, we incurred $0.7 million and $1.5 million, respectively for employee termination costs related to our restructuring. Refer to Note 12, Debt and Commitments and Contingencies—Restructuringto of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Current wording

In May 2023 and December 2022, we initiated restructuring actions to help manage our operating expenses by reducing our workforce by approximately 10% in the aggregate. The workforce reduction focused on realigning our staffing levels to help us meet the current and future objectives of our business. For the years ended December 31, 2023 and 2022, we incurred $0.7 million and $1.5 million, respectively for employee termination costs related to our restructuring. Refer to Note 11, Debt and Commitments and Contingencies—Restructuringto of our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Previous wording

Active Buyers has consistently grown over time. The number of Active Buyers on our platform reached 55,458 as of December 31, 2023, up 36% from 40,664 as of December 31, 2022. 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 68,267 as of December 31, 2024, up 23% from 55,325 as of December 31, 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

We define an existing account as an account where at least one buyer has made a purchase on our marketplace. We believe the efficiency and transparency of our business model leads to increasing account loyalty and spend over time. Buyers can utilize our marketplace for both one-off and recurring manufacturing opportunities. For example, a buyer may choose to utilize our marketplace’s CNC manufacturing processes to manufacture a discrete component for a prototype, and then may choose to later use our marketplace to mass produce that same component. A buyer may also recommend our marketplace to other engineers within their organizations who are designing other products and who may use an entirely different set of manufacturing processes, deepening our reach and loyalty with an account.

Current wording

We define an existing account as an account where at least one buyer has made a purchase on our marketplace. We believe the efficiency and transparency of our business model leads to increasing account stickiness and spend over time. Buyers can utilize our marketplace for both one-off and recurring manufacturing opportunities. For example, a buyer may choose to utilize our marketplace’s CNC manufacturing processes to manufacture a discrete component for a prototype, and then may choose to later use our marketplace to mass produce that same component. A buyer may also recommend our marketplace to other engineers within their organizations who are designing other products and who may use an entirely different set of manufacturing processes, deepening our reach and stickiness with an account.

Previous wording

For the quarter ended December 31, 2023, 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 December 31, 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 1,331 as of December 31, 2023, up 30% from 1,027 as of December 31, 2022.

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 1,495 as of December 31, 2024, up 12% from 1,331 as of December 31, 2023.

Previous wording

We define Active Paying Suppliers as individuals or businesses who have purchased one or more of our supplier services, including digital marketing services, data services, financial services or supplies on our platforms during the last twelve months. An increase or decrease in the number of Active Paying Suppliers is a key indicator of our ability to engage suppliers on our platform.

Current wording

We define Active Paying Suppliers as individuals or businesses who have purchased one or more of our supplier services, including digital marketing services, data services, financial services or tools and materials on our platforms during the last twelve months. An increase or decrease in the number of Active Paying Suppliers is a key indicator of our ability to engage suppliers on our platform.

Previous wording

Active Paying Suppliers has grown over time. The number of Active Paying Suppliers on our platform reached 7,271 as of December 31, 2023, down 6% from 7,715 as of December 31, 2022. The key drivers of Active Paying Suppliers are continued supplier engagement and the success of our strategy to attract new suppliers. The decline during the quarter ended December 31, 2023 is due to our exit from the supplies business. Excluding the supplies business, Active Paying Suppliers on our platform remained flat year-over-year.

Current wording

Active Paying Suppliers has changed over time. The number of Active Paying Suppliers on our platform was 6,582 as of December 31, 2024, down 9% from 7,271 as of December 31, 2023. The key drivers of Active Paying Suppliers are continued supplier engagement and the success of our strategy to attract new suppliers. The decline during the year ended December 31, 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 and other expenses, income tax provision (benefit), 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, charitable contributions of common stock, income from an unconsolidated joint venture, impairment of assets, lease abandonment, restructuring charges, costs to exit the supplies business and acquisition and other adjustments not reflective of our ongoing business, such as adjustments related to purchase accounting, the revaluation of contingent consideration and transaction costs. 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 and other expenses, 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.

Previous wording

For the year ended December 31, 2023, Adjusted EBITDA loss was $(27.5) million, compared to Adjusted EBITDA loss of $(44.8) million in 2022. For the year ended December 31, 2023, Adjusted EBITDA decreased to (5.9)% of revenue, as compared to (11.8)% of revenue in 2022, driven primarily by increased operating efficiencies as we continue to scale our business.

Current wording

For the year ended December 31, 2024, Adjusted EBITDA loss was $(9.7) million, compared to Adjusted EBITDA loss of $(27.5) million in 2023. For the year ended December 31, 2024, Adjusted EBITDA decreased to (1.8)% of revenue, as compared to (5.9)% of revenue in 2023, driven primarily by increased operating efficiencies as we continue to scale our business.

Previous wording

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

Current 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 on sale of property and equipment, charitable contributions of common stock, impairment of assets, lease abandonment and termination, 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

For the year ended December 31, 2023, Non-GAAP net loss was $(19.4) million, as compared to Non-GAAP net loss of $(43.1) million for the same period in 2022. For the year ended December 31, 2023, Non-GAAP net loss was (4.2)% of revenue, as compared to (11.3)% of revenue for the same period in 2022.

Current wording

For the year ended December 31, 2024, Non-GAAP net loss was $(2.1) million, as compared to Non-GAAP net loss of $(19.4) million for the same period in 2023. For the year ended December 31, 2024, Non-GAAP net loss was (0.4)% of revenue, as compared to (4.2)% of revenue for the same period in 2023.

Previous wording

Supplier services revenue includes the sale of marketing and advertising services, and to a lesser extent financial service products, SaaS-based solutions and the sale of supplies which was discontinued during the second quarter of 2023.

Current wording

Supplier services revenue includes the sale of marketing and advertising services, and to a lesser extent financial service products, SaaS-based solutions and the sale of tools and materials, which was discontinued during the second quarter of 2023.

Previous wording

Operations and support expenses are the costs we incur in support of the buyers and suppliers on our platform which are provided by phone, email and chat for purposes of resolving buyer and suppliers related matters. These costs primarily consist of compensation expenses of the support staff, including stock-based compensation, certain depreciation and amortization expense and software costs used in delivering buyer and suppliers services. We expect operations and support expense to increase in absolute dollars in the future, though in the near-term operations and support expenses may fluctuate from period-to-period based on total revenue levels and the timing of our investments in our operations and support functions as these investments may vary in scope and scale over future periods.

Current wording

Operations and support expenses are the costs we incur in support of the buyers and suppliers on our platform which are provided by phone, email and chat for purposes of resolving buyer and supplier-related matters. These costs primarily consist of compensation expenses of the support staff, including stock-based compensation, certain depreciation and amortization expense and software costs used in delivering buyer and suppliers services. We expect operations and support expense to increase in absolute dollars in the future, though in the near-term operations and support expenses may fluctuate from period-to-period based on total revenue levels and the timing of our investments in our operations and support functions as these investments may vary in scope and scale over future periods.

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

Other expenses consist primarily of realized and/or unrealized losses on marketable securities, losses on the extinguishment of debt and other expenses.

Current wording

Other expenses consist primarily of realized foreign exchange gains and/or losses, realized and/or unrealized losses on marketable securities, non-income based taxes, losses on the extinguishments of debt and other expenses.

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 supplies.

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, SaaS products and tools and materials.

Previous wording

Total revenue increased $82.5 million, or 22%, from $380.9 million for the year ended December 31, 2022 to $463.4 million for the year ended December 31, 2023. This growth was a result of an increase in marketplace revenue, partially offset by a decrease in supplier services revenue. Marketplace revenue increased $91.5 million, or 30% from $303.2 million for the year ended December 31, 2022 to $394.8 million for the year ended December 31, 2023. The increase in marketplace revenue was primarily due to increased buyers activity on the platform for the year ended December 31, 2023, as compared to the prior year period.

Current wording

Total revenue increased $82.1 million, or 18%, from $463.4 million for the year ended December 31, 2023 to $545.5 million for the year ended December 31, 2024. This growth was a result of an increase in marketplace revenue, partially offset by a decrease in supplier services revenue. Marketplace revenue increased $91.2 million, or 23%, from $394.8 million for the year ended December 31, 2023 to $485.9 million for the year ended December 31, 2024. The increase in marketplace revenue was primarily due to increased buyer activity on the platform for the year ended December 31, 2024, as compared to the prior year period.

Previous wording

Supplier services revenue decreased $9.0 million, or 12% from $77.7 million for the year ended December 31, 2022 to $68.7 million for the year ended December 31, 2023. The decrease in revenue was primarily due to our exit from the supplies business in the U.S. during the second quarter of 2023.

Current wording

Supplier services revenue decreased $9.1 million, or 13%, from $68.7 million for the year ended December 31, 2023 to $59.6 million for the year ended December 31, 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 year ended December 31, 2023 and 2022 was $403.3 million and $347.7 million, respectively, for the U.S. operating segment, and $60.1 million and $33.2 million, respectively, for the International operating segment.

Current wording

Total revenue for the year ended December 31, 2024 and 2023 was $456.7 million and $403.3 million, respectively, for the U.S. reportable segment, and $88.8 million and $60.1 million, respectively, for the International reportable segment.

Previous wording

Total cost of revenue increased $50.2 million, or 21%, from $234.9 million for the year ended December 31, 2022 to $285.1 million for the year ended December 31, 2023. 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 year ended December 31, 2023 was $273.3 million and $11.9 million, respectively, as compared to $217.8 million and $17.2 million, respectively for the year ended December 31, 2022.

Current wording

Total cost of revenue increased $44.8 million, or 16%, from $285.1 million for the year ended December 31, 2023 to $329.9 million for the year ended December 31, 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 year ended December 31, 2024 was $323.4 million and $6.5 million, respectively, as compared to $273.3 million and $11.9 million, respectively, for the year ended December 31, 2023.

Previous wording

Marketplace cost of revenue was driven by order growth and increased activity on our marketplace.

Current wording

Marketplace cost of revenue was driven by increased activity and growth on our marketplace which drove increased costs from our suppliers.

Previous wording

Gross profit increased $32.3 million, or 22%, from $146.0 million for the year ended December 31, 2022 to $178.3 million for the year ended December 31, 2023. 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 $37.4 million, or 21%, from $178.3 million for the year ended December 31, 2023 to $215.6 million for the year ended December 31, 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 30.8% for the year ended December 31, 2023, as compared to 28.2% for the year ended December 31, 2022. The improvement over the prior year period was due in part to our AI-driven models and increasing supplier selection. Pricing has become more efficient due to the increased number of orders over time, improving the data set and thus making our pricing decisions more accurate. Additionally, we continue to grow our active suppliers resulting in more competition for buyers’ orders and therefore a lower cost of revenue. Gross margin for our supplier services improved to 82.7% for the year ended December 31, 2023, as compared to 77.9% for the year ended December 31, 2022. 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 supplies business. As marketplace revenue continues to grow faster than supplier services, our aggregate gross margin will fluctuate.

Current wording

Gross margin for marketplace was 33.5% for the year ended December 31, 2024, as compared to 30.8% for the year ended December 31, 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 89.0% for the year ended December 31, 2024 from 82.7% for the year ended December 31, 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 $9.3 million, or 11%, from $84.4 million for year ended December 31, 2022 to $93.7 million for the year ended December 31, 2023, the increase was primarily due to increases in commissions expense and additional sales and marketing employees and compensation costs, including stock-based compensation. These increases were offset by a reduction to our advertising costs. As a percent of total revenue, sales and marketing expenses decreased to 20.2% for the year ended December 31, 2023 from 22.1% for the year ended December 31, 2022.

Current wording

Sales and marketing expense increased $14.7 million, or 16%, from $93.7 million for the year ended December 31, 2023 to $108.4 million for the year ended December 31, 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 decreased to 19.9% for the year ended December 31, 2024 from 20.2% for the year ended December 31, 2023.

Previous wording

Operations and support increased $3.7 million, or 8%, from $48.6 million for the year ended December 31, 2022 to $52.4 million for the year ended December 31, 2023, primarily due to hiring of additional operations and support employees and their compensation costs, including stock-based compensation, consulting costs and expenses incurred as part of the Company's restructuring and exit from the supplies business. As a percent of total revenue, operations and support expenses decreased to 11.3% for the year ended December 31, 2023 from 12.8% for the year ended December 31, 2022.

Current wording

Operations and support expense increased $6.6 million, or 13%, from $52.4 million for the year ended December 31, 2023 to $59.0 million for the year ended December 31, 2024, primarily due to hiring of additional operations and support employees and their compensation costs including stock-based compensation. As a percent of total revenue, operations and support expenses decreased to 10.8% for the year ended December 31, 2024 from 11.3% for the year ended December 31, 2023.

Previous wording

Product development expense increased $3.4 million, or 11%, from $31.0 million for the year ended December 31, 2022 to $34.5 million for the year ended December 31, 2023, primarily as result of increases in depreciation expense related to capitalized internal-use software development costs, hiring additional product development employees and their compensation, including stock-based compensation and additional software and maintenance costs. Offsetting these costs were decreases in consulting expenses. As a percent of total revenue, product development decreased to 7.4% for the year ended December 31, 2023 from 8.1% for the year ended December 31, 2022

Current wording

Product development expense increased $4.9 million, or 14%, from $34.5 million for the year ended December 31, 2023 to $39.3 million for the year ended December 31, 2024, primarily as a result of increases in amortization expense related to developed software assets and additional software costs. As a percent of total revenue, product development expenses decreased to 7.2% for the year ended December 31, 2024 from 7.4% for the year ended December 31, 2023.

Previous wording

General and administrative expense increased $12.7 million, or 22%, from $58.2 million for the year ended December 31, 2022 to $70.9 million for the year ended December 31, 2023. The increase was primarily due to the abandonment of multiple company leases resulting in a one-time $8.7 million increase in operating lease expense. In addition, there were higher consulting expenses, software and maintenance costs, professional fees related to accounting and legal services, reserves for bad debt and compensation cost. These increases were partially offset by a reduction in non-cash charitable contributions of Class A common stock and insurance costs. As a percent of total revenue, general and administrative expenses remained flat at 15.3% for the year ended December 31, 2023 and 2022.

Current wording

General and administrative expense decreased $6.0 million, or 8%, from $70.9 million for the year ended December 31, 2023 to $65.0 million for the year ended December 31, 2024. The primary driver of the decrease was due to the abandonment of multiple company leases resulting in a one-time $8.7 million charge in operating lease expense in 2023 and a decrease in the facilities cost for the abandoned locations. These decreases were offset by increases in compensation cost for general and administrative employees including stock-based compensation. As a percent of total revenue, general and administrative expenses decreased to 11.9% for the year ended December 31, 2024 from 15.3% for the year ended December 31, 2023.

Previous wording

Interest expense increased by $0.4 million, or 8%, from $4.4 million for the year ended December 31, 2022 to $4.8 million for the year ended December 31, 2023, primarily as a result of the interest on the 2027 convertible notes issued in February 2022.

Current wording

Interest expense remained flat at $4.8 million for the year ended December 31, 2024 and 2023. Interest expense is primarily due to the interest on the 2027 Notes issued in February 2022.

Previous wording

Interest and dividend income increased by $7.5 million, or 182%, from $4.1 million for the year ended December 31, 2022 to $11.6 million for the year ended December 31, 2023, primarily due to dividend income from our marketable securities.

Current wording

Interest and dividend income decreased by $0.8 million, or 7%, from $11.6 million for the year ended December 31, 2023 to $10.8 million for the year ended December 31, 2024. Interest and dividend income is primarily due to dividend income from our marketable securities.