Session. I have with me Mr. Jim Rallo, CFO of the company. He will be presenting us with some slides and a brief overview of the company, and then we can kick off with the Q&A session. Over to you, Jim, now.
Thank you. Appreciate it. Thank you for the time this afternoon. Yes. I just want to do a quick presentation, just kind of a quick overview of the company. You know, first and foremost, I want to talk to you about our culture. Xometry is a founder-led company. We're extremely high paced. We're extremely customer service oriented. We, you know, we live and die every single day for basically all of our customers. Our customers are our buyers and our suppliers. We are a network company. I'll get into the details of that in a minute, but we have a two-sided marketplace.
We're in the manufacturing space, and if you think about manufacturing, it's one of the last big industries to be digitized, and that's what we're doing. We're taking and making manufacturing accessible to everyone globally. We've got operations in Europe, obviously, United States, and we just launched in Asia. If you went to xometry.asia, you'll see one of our first foray into Asia. When you think about how historically manufacturing has happened, there's been a procurement team. Some company will have something they need to build. They will put out an RFQ. Manufacturers will respond to that. There'll be bidding back and forth. This takes a lot of time. If you're a buyer, you know, there's a lot of pain points involved. You've got to be able to vet that supplier.
You've got to make sure they've got the quality. You got to make sure they're going to be able to deliver on time and so forth. If you're a supplier, you know, you've got to spend time really on sales and marketing because, you know, you've got to make sure you're on folks' list. You've got to get the word out and your capabilities out. We took all of that pain out of the marketplace. If you look at this, slide right here, what you see is this sort of depicts how much friction exists in the manufacturing process. What we do is we remove all this friction. Let me explain how we do that. We are an AI-powered marketplace.
When somebody comes to our marketplace, and typically that would be an engineer, they're gonna upload a CAD file. That CAD file will be instantly priced by our artificial intelligence. Now that sounds like, wow, what's the big deal about that? Right. I can go on any website and get an instant price. But this is a unique item. No one's ever seen it before. It's a specific design. Our artificial intelligence reads the geometry of that part and then goes into our database and finds similar things to it and what that costs. Then that's how we determine the price. The AI will instantly give that price to the person that uploaded that CAD file.
If they accept that price, then what the artificial intelligence does is it looks for suppliers that are in our marketplace that have the capabilities to build that part, because not everyone is qualified to build that part. I just want to be clear, this is a managed marketplace. What I mean by managed marketplace is if you want to be a supplier in our marketplace, you are vetted by us. Well, first off, we'll have an interview with you, with an onboarding team. We're gonna get information on your capabilities, how many people you have working for you, how many machines you have in your shop, and so forth, and what those capabilities are. Then we will send you a test part.
You will build that test part, you'll send it to our quality control team, and you'll get rated. Once you do, assuming you pass, you're in our marketplace. The AI, because we score everything in our marketplace, the AI will start showing you jobs, but you'll get easy jobs to start with. The more and more you do without any issues, then the higher score you get and the bigger jobs you get and probably the more profits you're going to make. Again, back to artificial intelligence. It's matching the supplier with the product that was uploaded. Meaning who's got the capability in our supplier side of our marketplace.
Somebody may ask for something that's so unique, we may only have 20 or 30 suppliers who can actually build that part. Those 20-30 will actually get to see it. Maybe the part is a little more common, and we may have 1,000 people that can build that part, or so forth. What's important for us is to build that supplier base as well as build the buyer side. It's a two-sided marketplace, so we spend a lot of time providing services to both sides, and I'll get into more details of that in a second. One thing I want to make clear is, like many marketplaces you guys are probably familiar with, they're fee based. We are not fee based. We have a spread model.
What I mean by that is our artificial intelligence gives the buyer a price, what they're gonna pay, and then we give the supplier basically a cost, right, of what we're gonna pay them. We make the difference. We're not bounded by a certain fee range. It's not like it's 10% and that's it. We are basically, again, solving for the friction that's in the marketplace. Our gross profit margins last quarter in the marketplace of business were 27.4%. Those were up significantly over last year from 22%, year before that, 19%. The reason for that is the more transactions we do and the more suppliers we bring in our marketplace, the higher our gross profit gets.
The reason for that is because we have more data, so the AI gets smarter and smarter, and thus we don't price things wrong. The second reason is because if the more suppliers you have, the faster they're taking the jobs. The faster they take the jobs, because again, the first price we put out there is always the lowest price. Someone picks up that lowest price, that's going to be our highest gross profit margin then. If somebody, you know, if no one takes that, then we have to up the price until we get someone to take it, because we're on the line to build it. Excuse me. When we look at the industries that we're in, we frankly cover just about everything. You know, automobile, healthcare, space, government.
When I mean space, I mean actual, you know, NASA's a client. Why that's important is because our suppliers have certifications. If you need flight certification, we've got suppliers that have that certification. If you need space certification, we've got suppliers that have that certification. If it's heavy ITAR, we have suppliers that have that certification. Again, the buyer specs all of that when they come into our marketplace. You know, basically it's we make it the way they make it. They want it made by the company that has those qualifications. You know, the thing about our marketplace is a lot of people just think we're a prototype company. Not true at all. We actually do production runs.
We have some examples right here of some larger production runs where we're building, you know, hundreds of thousands, millions, or millions of parts for our buyers. You know, typically when you do these larger orders like this, you are, you know, slipping those over a schedule. You're not usually typically doing them all at once. They could be over a year. It could be over, you know, two quarters or something like that. Depends just on the size. We go, you know, we make anywhere from one part, which may be a prototype to, you know, 50,000 to 100,000 or, you know, millions of parts. It just depends on what the buyer needs. When we look at our highlights, financial highlights, we're extremely fast-growing. The company is growing at 50% +.
You know, we've improved the gross profit margin, as I said earlier. The other thing is we give a lot of metrics. How you can judge the marketplace. When you talk about, like, the number of buyers, you know, a lot of marketplace companies give the number of buyers. Of course, we do that. We also tell you, though, the number of accounts that are spending more than $50,000 with us. That's important because what's happened over time is our marketplace has gotten stickier and people trust us more and more and more than their prior networks that they were using. They're giving us more work.
The number of accounts we have, or big customers, if you want to call them that, keep growing and the size, and you can measure that again by the $50,000 over the last 12 months. We always give that out. I think the other thing is this is a very predictable business. As a CFO, that was one of the things that really attracted me to the company, when I started about two and a half years ago, which is that 94%-96% of our orders every single month and every quarter are coming from existing customers. Again, very predictable business. Just give you a couple case studies here.
You know, for our larger clients, our accounts, as I called them earlier, so we have what's called a land and expand strategy. Typically our marketing is digital marketing is top of funnel for us. We typically somehow an engineer will find us at some organization. They'll put an order in, and they'll have a very good experience. Then someone on our sales team will reach out to that person and leverage that person and their relationships inside that organization, to basically get more and more business from them. You can see here, you know, how successful we've been with this. Some of these companies, you guys, you guys know. You know, global e-commerce leader. I'm sure you guys can figure out who that is. An electric vehicle manufacturer, same thing.
Aerospace and defense, I said, you know, before we've got the ability to do space flight, regular flight, ITAR, whatever our customers need. Pharmaceuticals, I would, you know, pause on that just for a second and say we were a part of Project Warp Speed. Several of the pharmaceutical companies who are making the vaccines for COVID, we manufactured a lot of the parts that went into the manufacturing lines. We were, as I said earlier, we run the gamut across a lot of different industries. You know, when we talk about product innovation, we, you know, we're never, ever satisfied with what we're doing. We're continually improving the marketplace for both buyers and sellers.
We just acquired a company called Thomas. I'll spend a second on this, but Thomas was a 130-year-old company that was basically a manufacturing listing service. Of course, it went digital about 25 years ago. It's basically the Google of manufacturing, and they have over 1 million buyers, and they have over 500,000 suppliers in their marketplace, and they provide services to those suppliers. That's how they make their money. They have marketing services. Like I said, you can submit to be seen as like a buyer would come on and search for a certain need they have. If you want to show up, you know, first in the top five or something, you're going to pay for that. Very similar model to Google.
Why that's important for us is because when you look at the number of suppliers we have, the number of buyers we have, if we can just get single-digit percentages of those to convert to our marketplace, it's a home run for us. One of the things we're launching at the end of this quarter, beginning of the third, is we're going to put our marketplace capability embedded in the Thomas platform. Which today, Thomas is not an active marketplace. If you're a buyer, you go there to discover suppliers, and then you'll reach out to that supplier directly. You have to take the extra step. Now, if you want, you'll be able to transact directly on the Thomas marketplace.
Yeah, I talked to, you know, I talked about some of these earlier, so I'm probably not going to go over these again. Thomas, I already talked about that too. Right here's our roadmap over the next couple quarters. Like I said before, we're continually upgrading the marketplace for services to suppliers and buyers. One of those things is the Xometry Everywhere. We just launched Xometry Everywhere, where we've embedded Xometry and the ability to get an instant quote to certain partners in the manufacturing area. Supplier base. One of the big pushes we're gonna make to upgrade our supplier base services is we're gonna give them, we're gonna call it a freedom of mobility to our operating system.
A lot of the small manufacturers we have in our supplier base, you know, they're using Excel. Some of them are using whiteboards to track really how their business operates. In some cases, they're using QuickBooks for their accounting. Our system connects directly with QuickBooks, so it makes it super easy for them if they're already using that. When you think about manufacturers, especially in the U.S., most of them are fairly small shops, less than 20 people. There's hundreds of thousands of small manufacturers in the U.S., and again, they're mostly tiny, mostly family businesses.
We actually have, if you go back, we went public about a year ago from now, and we've got some really good case studies and stories in our S-1, if you guys would want to take a look at that, of some of our suppliers. What we're gonna basically deliver this system. The advantage for us with that is it's gonna be real easy for them to manage their work and really easy for us to understand what they want. Right? Today we think we know what they want based on their capabilities. We don't know. Now we'll be able to know exactly what they're looking for and feed them the jobs that they want, where they're best suited. I think I talked about this earlier, significant growth of scale.
You know, again, you know, we've guided to $392 million-$400 million of revenue this year, expanding gross profit margins, and lower spend. Last quarter was probably our, what I would say is, largest EBITDA loss. We are now scaling down from that. We have told the Street that we will be profitable by the end of next year. What I mean by that, and that's on a full year basis. We'll have some small losses the rest of this year. We'll have some small losses in Q1, Q2 of next year.
Q3 and Q4, we expect to make money on an Adjusted EBITDA basis, and that should allow us to be profitable for the full year. How we're gonna get there is the continued strong revenue growth and the continued strong gross profit growth. We break that out for you guys every quarter, and of course in our 10-K for the two different lines of business we have, which are supplier services and marketplace. I, you know, I pretty much already hit this slide. Let's see. Yeah, long-term growth, you know, we continue to evolve. That's sort of the overview. Happy to take any questions.
I think, you know, Vivek's got a couple questions too, so happy to sit down and answer those.
Thank you, Jim. That was a great overview. If anybody in the audience has any questions, you can start with those.
20,000 MAUs and then, something like 700 or 800 customers that hit 50,000 a year. I can do the math quickly though.
Yeah.
What's your mix of kind of $50,000 and up customers versus not in your revenue? Yeah. If you look at. Let me get those metrics going. We have 798 accounts. This is Q1 data. We put this out every quarter that spent more than $50,000 with us on an LTM basis. And then when you look at the actual number of active buyers, right? There's 30,000 buyers. This is a good question, because I should have defined that when I was going over the slide. A buyer for us is an individual. It could be a single engineer in a very large company. That person's a buyer. An account is the company.
A company may have hundreds of buyers that are using our platform or even more. That's the difference there. That's the delineation.
How concentrated is your customers? Is it on, you know, Fortune 1000 companies mainly that make up 80% of your revenue?
We certainly do have a lot of the Fortune 1000. We have no customer concentration. I would tell you that our largest customer is low single digits. Low single digits is our largest customer.
Just thinking about your gross margins and the marketplace in general, how are you ensuring quality of product? I'd just love to hear your thoughts on that and how the AI works around that.
Sure. Again, we source everything on our marketplace. Like I said, when you're a supplier, this is a managed marketplace. You can't just join our marketplace. You will basically type your information in saying you want to join the marketplace. Our marketplace onboarding team will reach out to you, like I said, and we'll understand your business. Again, how many people you have, what kind of equipment you have, you know, what are you interested in and so forth. Then based on that, we will send you a test part. That test part will come back. They will build that test part. They'll send it back to us directly. Our quality control team will look at that test part, and if they pass, they're in the marketplace.
It's not a free-for-all. Now you start getting easy jobs when you come on the marketplace. The way we work is we ship directly from the supplier to the buyer. The buyer has so many days to inspect that part. If they have a problem, you come to us. We take care of everything, and we will deal with that supplier to get the part fixed or rebuilt or whatever it needs to make sure that the customer ultimately gets what they need.
What percent of the industry are those networks?
Again, low single digits. Because all of these suppliers are vetted and, like, the complicated stuff is gonna go to a supplier that's been with us for years. It's got the capability to do that. You're not gonna be building a, you know, something's gonna get launched in space, which can just join our marketplace.
Thanks for taking my question. I see a little bit about your breadth of coverage in terms of you know end markets for manufacturing. Are there areas that in terms of either partners you have now that you're not covering? How should we think about you know I guess new market expansion and what's most exciting? Are there areas you can't go into for whatever reasons in terms of partner scale or whatever it might be?
Yeah. You know, when I was talking about this slide, we're dealing with a huge amount of industries, right? When you look at the TAM, again our TAM is about $2.4 trillion with the capabilities we have today. Like I said, we're striving for $400 million this year of revenue. We've got a long way to go. The only area really where we, you know, we're not involved with right now is anything that's electronic. We don't do any kind of computer boards. We're not doing chips or anything like that. Our marketplace today is what I would say is mechanical parts. You know, they may be movable parts, but they're mechanical in nature. They're not powered by something.
That's frankly the only thing we're not doing.
Just focusing on the supply side for a second. I don't recall seeing anything in the slides that characterized your suppliers, you know, whether they're startups, foreign or domestic. You know, is it sort of like, you know, sophisticated organizations or, you know, guys in a trailer sort of thing? Can you kind of give us a sense of who these people are that create these products?
Good question, and frankly, it runs the gamut. We've got some pretty large suppliers that do a lot of work with us and they're fairly sophisticated. We've got, you know, one of my customer service you know, people call them the Fred in the shed. You know, somebody's got like a single maybe CNC machine or something like that, and they build simple stuff for us, and so forth. It really runs the gamut. Because, again, that's part of that onboarding. What are your capabilities? How much work do you know, do you think you want from us? You know, then you have to earn your badge, if you would, as you move through, you know, building stuff for us, each time.
Do you have any sense of, you know, the concentration of kind of entrepreneurial companies that are maybe using you as their sole source of demand or their startup source of demand?
The answer is right now, no. I think we will know more about that once we launch this operating system because we'll have visibility into all of their work. Because, you know, we'll just be able to see that data. That's really important for us. Not only will we know what they want, but we'll obviously understand what they're doing off platform and so how much of their business we have with them. I think, you know, if you look at the manufacturing data for the United States, I think it's something like there's 600,000 small manufacturers in the U.S., something like that. The vast majority of them have sub 20 employees. Most of these shops are, you know, smaller.
Your manufacturers there are mainly U.S.-based, I take it?
No, I would say we certainly have a lot that's U.S.-based because we started here. We've launched in Europe, so our headquarters in Europe are in Munich. That business has been growing actually faster than the rest of the company. You know, we're growing at 70%-80%, you know, last year we grew 500% in Europe. Again, all those numbers are publicly available information. You know, we've also improved our margins in Europe too. As I said earlier, we just launched in Asia. If you go to xometry.asia, you can take a look there. It's all in Mandarin. That is a network in Asia, specifically China right now.
We've always had suppliers from China, to be clear. But we haven't had a lot of buyers from China. The idea is we leverage our supplier network in China and introduce them to a buyer network in which, you know, we're starting to build.
What do you think is the most misunderstood by the investors about your company, about your growth opportunity, and what you do today?
To just be frank, you know, I used to work on Wall Street years ago, and I think my experience with Wall Street is if you don't use it, sometimes it's difficult for you to understand the business, right? I mean, everyone knows Uber, right? I mean, it's easy, right? Everyone knows Amazon. It's easy. You know, but when you think about manufacturing, there's not a lot of people that are doing manufacturing in their day-to-day lives. I think, you know, for us, getting the story out, and the simple, like I said, how simple it is to use our marketplace, has really been, you know, one of the, you know, one of our tougher things to, you know, get that messaging out.
You know, from the business model standpoint, I think the other thing we're misunderstood a little bit is, again, that's why I spent a lot of time talking about the spread model, right? Our gross profit is not bound. We're not bound. So also our TAM is not bound. Right now, our TAM is $2.4 trillion, but, you know, the global TAM for manufacturing is, I don't know, it's like $37 trillion or something. I mean, but we just don't have, like I said, we're missing electronics, for example. We don't do any of that. There are things that we don't have in our portfolio today that, you know, I'm confident over the years we will build out. You know, right now we've got a huge opportunity. We've barely scratched the surface.
One over here. Sorry. Far. Yeah. One person over here.
I think just going back to one of the slides, you had a diagram of the five-year TAM or four or five-year TAM. It was kind of the case when you were talking about government and government services. Sometimes investors are sort of trained to think about government contracts as sort of like a backstop, and they're pretty sticky. Do you view that actually the same way, or do you think that we should sort of view it as an actual tremendous growth channel over time, perhaps even expanding beyond just the U.S. government services?
Well, I mean, I think our marketplace is definitely very sticky for both sides. We typically don't lose buyers. We typically don't lose suppliers. I won't say ever, obviously. We make it so easy for them to transact. We're in the middle of that transaction, so everyone has faith. The suppliers, they know they're gonna get paid, and they're gonna get paid on time. We've actually rolled out financial products for them. If they want, they can get instantly paid. There's a fee for that. They can also, you know, wait a few days, and take a lesser fee, another few days and take a lesser fee if they wanna get paid upfront. Our typical payment terms are 30 days after they ship. The ability to get that money right away when they ship is very helpful.
We also have rolled out a debit card program for them, where we put 30% of the job, up to $7,500 on a debit card, which is no charge to them, all right, to buy supplies. They can buy those supplies right through our network. We've got a network of, I'm gonna call them, you know, drop shippers of whatever it may be, steel, aluminum, special tools, whatever they need to do that. They can use that money that we've given them upfront on that debit card to buy those things. We've got, you know, we really try to, again, make it a sticky marketplace for both sides.
You talked a little bit about, you know, higher repeatability of stickiness, as you said, to your questioner. But in terms of your jobs, I guess what percentage are recurring, you know, versus kind of one and done or one-off? How has it changed over time?
You know, I would say, you know, a couple of things I talked about. Let's see if I can do this here. When you look at these are some examples of, you know, much bigger jobs where, again, the parts could be hundreds of thousands over million, something like that. You typically are shipping that, like, over a period of time. Okay. But that being said, right, I also talked about the number of accounts, right, that do over $50,000. You know, if you look at how that's grown, right, over, really since the first quarter of 2021, it's tremendous.
You know, what that tells you is back to the predictability of the business. Remember I said 94%-96% of our orders every single month or quarter are coming from existing customers. We still have every cohort that we've started the company with in 2013. We haven't lost one. We track all that. It's the value that we're adding. It's the ease of the marketplace, and you know, the stickiness. I think, you know, we have a sales team. That sales team is mostly focused on growing the accounts, meaning the large companies. You know, we've got top of funnel for us is, again, digital marketing.
We do a fair amount of spend online, that drives a lot of new buyers to our marketplace. That, you know, will drive new accounts as well.
Any more questions from the audience? Perhaps I can start with one. Jim, in Q1 you launched Xometry Everywhere platform. Can you talk a little bit more about the product and how does it contribute to your ecosystem?
Right. For example, Xometry Everywhere means that we basically put the code out there, and we've got it embedded in what I would say is different engineering platforms as well as some other sites which are, you know, a lot of engineers will be involved in. They can basically quote anything they want. That will drive, you know, just to see how much it would cost to build it, to build something. Then if they want, they can obviously hit the price and have that part built. The idea was, you know, before, if you wanted to get a quote, you had to come to the Xometry website. Now you do not.
You know, we work with a lot of the CAD companies, and you know, we've embedded Xometry Everywhere in those platforms themselves.
Jim , the question that's on everybody's mind right now is the macro environment. Coming off from a strong Q1 and a strong outlook for Q2, could you talk about the demand environment given the macro risk and how does it affect your platform?
Yeah. I think, look, you know, I talked about our TAM a lot today, so we've got a huge opportunity. We're just so small compared to the opportunity we have. You know, the same thing is we've got some experience, right? With what I would say is a downturn. You know, we grew dramatically during the COVID time, and our gross profit grew, our number of buyers grew, our number of suppliers grew. Mostly because we have a very resilient marketplace and a very resilient supply network.
You know, we've got the ability to flex if there's a shortage somewhere, you know, making stuff out of Europe or out of China or in the U.S. or, you know, the COVID example, you know, the U.S. shut down, some states were shut down, others were open, and we just moved that manufacturing to the states where they were open. We've got, like I said, a very, very resilient platform.
Great. In the last few months, the investor focus has shifted from growth to profitability. How are you reacting to this change, and how do you plan to balance growth with profitability going forward?
Yeah. I thought I had a slide for that. Yeah. You know, look, we certainly understand as a management team that the, you know, market has changed dramatically. When we went public, it was, you know, frankly acceptable that we had a loss. We told people we'd go public in three years, and we realized that that's not adequate. We've moved that timetable up a full year, and that puts us, as I said earlier in my remarks, that, you know, we will be Adjusted EBITDA profitable, next year for the full year.
Okay. Active buyers are critical to growing the network. Can you talk to us about the strength that you're seeing there and how you think about how active buyers serve as a leading indicator of the strength of your business?
Yeah. You know, again, when you look at those buyer metrics. Sorry, let me get back to those real quick here. When you look at the buyer metrics, I mean, they have been consistent for a while. We're talking 44% year-over-year growth, right? Which is pretty darn close to our also our revenue growth of over 50%. You know, it goes back to before, like why we're so bullish on the fact that we'll continue to grow buyers and suppliers is because of this, because we just make it easy, right? Think about all the things you do in your own lives that just make it easy. I never even go on another website for anything retail than Amazon, right? It's just easy.
You know, same thing with Uber, right? I never worried about if I gotta get a ride somewhere. I just click the app, and I get it. That's what we've done for manufacturing. We're really the first to digitize manufacturing and come up with this artificial intelligence packed, you know, process. You know, it's frankly the easy button for manufacturing.
Great. Can you talk about the buyer and seller churn on the platform? Like what are some of the major factors that you see that contribute to the churn and, what's your strategy there?
We really don't see a lot of buyer or seller churn. I mean, I think that comes through in the KPIs that we give. Again, mostly because we keep rolling out more and more products that are helpful, and more and more, you know, on the supplier side, we roll out more and more products that are helpful for them to run their business because again, they're mostly small businesses, as I said before. On the buyer side, we continue to roll out new capabilities. You know, think about manufacturing. Everyone just sort of thinks about, "Hey, we need, we just need this part manufactured or this product manufactured." In some cases, there's finishes that have to go on top of that and so forth. We're constantly adding capabilities into our marketplace by adding new suppliers.
You know, frankly, it goes back to if you wanna build something, you have it your way. We will build it exactly the way you want it, which we're really the only two-sided marketplace out there that can do that today. There's no one else doing what we're doing. There are people that, you know, will give you a quote for a product, and they'll manufacture that themselves. But they're not using a network. Their capabilities are bounded, if you would, by the fact that they only have those machines in their shop, and they can't, you know, they just can't expand and meet the growth that we have because, again, the more suppliers we add, the more capabilities we add, the more growth we can have.
Jim , one of your major competitive moats is your AI pricing, AI-driven model, AI pricing model. Can you talk a little bit more about, like, why is it difficult for your competitors to replicate the same?
Yeah. You know, the thing about the AI model is that, you know, we've got a lot of data. It really is a moat that we have compared to, again, anybody else that would wanna start this business. You know, Rick, I'll give you some examples. I mean, when we launched AI, we had plenty of parts where we were losing money on, because, you know, we didn't have the data. Until you get the data, it's hard to actually be able to get the AI trained and really have it work efficiently. That's why we get better every single year and why our gross profit continues to climb, because we're getting smarter and smarter.
The machine learning or, as my team calls it, deep learning, AI, you know, the more data it gets, the less, what I would say is, mispricing happens. Mispricing can be, by the way, to the supplier and/or the buyer. It's not, you know, it's not just that we overcharge somebody or undercharge somebody or something like that. You know, it could go, it could go both ways. Again, the number of times that's happening now is de minimis compared to what it was, you know, four years ago, five years ago.
Got it. After acquiring Thomas, you raised your long-term gross margins targets to 40%-45%. Can you tell us what are the path to those long-term gross margins, and what are some of the key drivers there?
Sure. As I talked about the Thomas business before, and again, all this is public information, when we did the transaction, let me get to Thomas real quick. Hold on. Thomas was, again, more of a marketing company. There was no active manufacturing going on. If you were a buyer, you'd come to Thomas to discover suppliers. Again, they have a lot more suppliers in their network than we do. They have a lot more buyers in their network than we do. We found that to be extremely attractive. They've got, you know, somewhere between 75% and 80% gross profit margin. It's a very accretive business to us to our gross profit.
We are breaking that out separately. For shareholders, I mentioned that earlier. What we break out our marketplace business, which is basically the legacy Xometry. There are some financial services in there. I mentioned those that earlier, that we had, but we moved that over to Thomas. Thomas is our basically our supplier side of the business and the services that we give to the suppliers. You'll be able to see the revenue from the supplier side, and you'll be able to see COGS and thus the gross profit we're generating from the supplier side. You know, the same on the marketplace side, which again is the legacy Xometry business. Yes, when we bought that business, we obviously updated our gross profit projections.
We put our path to profitability, as I said earlier, a full year forward, you know.
Great. We are almost on time here. Just one last question. Jim, concluding, what is a single behavior or item that excites you the most about the future of Xometry and gives you confidence that it will become a reality?
I think that, well, first off, I think we've become a reality.
Mm-hmm.
We've got a who's who of client base, you know, we're very proud of that. At the end of the day, you know, we need our buyers and we need our suppliers, and those numbers continue to grow. That really is fulfilling for us on the team. Like I said, I started this out by talking about our culture. We are relentless inside of Xometry to continue to improve the marketplace for our buyers and suppliers. That's what's really driving the business. It's a good group of people in the organization. Everyone rallies around, again, the buyers and suppliers. They are, you know, they're driving the marketplace. I feel confident that we can continue the rapid growth that we've had historically in the future.
Again, we've got a massive TAM, and we've barely tapped into that.
Thank you very much, Jim.