Financial Data and Key Metrics Changes - Q2 revenue increased 23% year over year to $163 million, driven by significant market share gains in the custom manufacturing market [7][21] - Marketplace gross margin reached a record 35.4%, up 190 basis points year over year, contributing to an overall company gross margin of 40.1% [8][24] - Adjusted EBITDA improved to $3.9 million, a $6.6 million increase year over year [9][27] - Cash and cash equivalents decreased to $226 million, down approximately $5 million from Q1 2025, primarily due to capital expenditures [28][29] Business Line Data and Key Metrics Changes - Q2 marketplace revenue was $148 million, a 26% year-over-year increase, while supplier services revenue was $14.3 million, down approximately 2% quarter over quarter [22][24] - Active buyers increased 22% year over year to 74,777, with a net addition of 3,323 active buyers [22] - Marketplace revenue per active buyer increased 4% year over year, primarily due to strong enterprise growth in the U.S. [22] Market Data and Key Metrics Changes - U.S. marketplace revenue increased 25% year over year, while international revenue growth accelerated to 31% year over year [22][23] - The number of accounts with at least $50,000 in last twelve months spend increased 15% year over year to 1,653 [23] Company Strategy and Development Direction - The company is focusing on embedding technology and AI across its operations to enhance its position in the custom manufacturing market [11][15] - The strategy includes expanding enterprise sales and marketing efforts, with a focus on large accounts that can generate significant annual revenue [15][20] - The company is raising its 2025 revenue growth outlook to at least 20%, driven by robust demand and strong execution [20][32] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about the macro environment but is optimistic about the company's growth trajectory due to strong marketplace performance [41][52] - The company expects Q3 revenue in the range of $167 to $169 million, representing 18% to 19% growth year over year [30][32] - For the full year 2025, the company expects incremental adjusted EBITDA margin of approximately 21% [33] Other Important Information - The company completed a convertible debt refinancing, raising $250 million in new convertible notes, which improves its balance sheet and financial flexibility [29] - The company is focused on improving working capital efficiency and cash flow conversion given its asset-light model [28] Q&A Session Summary Question: Impact of product initiatives on the business - Management highlighted the acceleration of technology and AI deployment to improve buyer and supplier experiences, with several product rollouts planned for the second half of the year [39] Question: Insights on manufacturing trends and guidance - Management acknowledged strong trends in Q2 but remained cautious about the macro environment, indicating that guidance reflects current market conditions [41][52] Question: Gross margin dynamics and future expectations - Management confirmed that Q2 gross margin was a record 35.4%, driven by AI improvements, and expects continued year-over-year improvements in Q3 [46][48] Question: Potential for growth in a better macro environment - Management indicated that while they are gaining market share, a macro turnaround could provide additional growth opportunities [51] Question: Pricing environment and adjustments - Management explained that pricing adjustments are made in response to changes in tariffs and costs, ensuring flexibility in sourcing options for customers [64] Question: Sales and marketing efficiency - Management noted a normalization in marketing spend and continued leverage in sales and marketing investments, contributing to strong account growth [71][73]

Financial Data and Key Metrics Changes - In Q4 2024, revenue increased 16% year-over-year to a record $149 million, with marketplace revenue growing 20% year-over-year to $135 million [10][32] - Adjusted EBITDA was $1 million, a $3.9 million improvement year-over-year, marking a significant milestone towards profitability [16][40] - Q4 gross profit increased 20% year-over-year to $59 million, with a gross margin of 39.7% [36][40] - Marketplace gross margin expanded 320 basis points year-over-year to a record 34.5% [15][36] Business Line Data and Key Metrics Changes - Marketplace revenue was driven by a 23% increase in active buyers, reaching over 68,000, with net additions of over 3,400 in Q4 [11][33] - Supplier services revenue declined 13% year-over-year in Q4, primarily due to the wind down of non-core services [36] - The number of accounts with last 12 months spend of at least $50,000 increased 12% year-over-year to 1,495 [34] Market Data and Key Metrics Changes - International revenue grew 42% year-over-year in Q4, reaching a $100 million run rate, representing 18% of total marketplace revenue [12][25] - The company expects international revenue to represent 30% to 40% of marketplace revenue in the long term [25] Company Strategy and Development Direction - The company aims to be the global marketplace for the $2 trillion custom manufacturing market, focusing on expanding buyer and supplier networks and enhancing customer segmentation through AI [17][18] - Key growth initiatives include deeper enterprise engagement, expanding the marketplace menu, and enhancing supplier services [22][27] - The company plans to invest in next-generation AI models to improve cost and lead time optimization [23][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong growth and scale in 2025, despite a challenging manufacturing environment [10][28] - The company is focused on improving working capital efficiency and cash flow conversion, with expectations for continued revenue growth in 2025 exceeding 2024 growth [48][49] - Management highlighted the importance of their technology platform in providing solutions to customers amid volatile global trade policies [100][102] Other Important Information - The company is investing in a new ad server technology platform to enhance supplier engagement and improve monetization of Thomas [27] - Cash and cash equivalents increased to $240 million, driven by positive adjusted EBITDA and improved working capital [42][43] Q&A Session Summary Question: How should we think about the pathway to international revenue growth? - Management expects international revenue to reach 30% to 40% of marketplace revenue, with strong growth in EMEA and anticipated growth in Asia Pacific [55][56] Question: Can you elaborate on multimodal AI and its impact on the buyer process? - The transition to a multimodal model will allow customers to upload various file types for instant quotes, reducing friction and improving customer experience [57][58] Question: What is the current state of the manufacturing environment and its impact on your business? - Management noted increasing success in the enterprise segment, with a focus on technology and safety appealing to customers in a fragmented market [61][62] Question: How is the global sourcing strategy impacting Q1 guidance? - The acceleration of global sourcing is expected to dampen gross margin temporarily in Q1, but management is confident in long-term improvements [66][67] Question: Can you provide insights on order growth in Q4 and 2024? - Management reported a record number of active buyers and strong growth in orders, indicating a positive trend moving into 2025 [74][75] Question: What is the relationship between Thomas and the legacy business? - Management emphasized the focus on technology integration and increasing advertiser penetration on the Thomas platform, which is seen as a high-margin opportunity [82] Question: How have changes in the tariff landscape affected buyer behavior? - Customers are increasingly aware of risk mitigation strategies, leading to a preference for flexible sourcing options across different geographies [100][109]