Xometry (XMTR) FY Conference Summary Company Overview - **Company**: Xometry - **Industry**: Custom Manufacturing Marketplace - **Founded**: 2013 - **IPO**: 2021 - **CEO**: Randy Altshuler - **CFO**: James Milne Key Points Industry Dynamics - Custom manufacturing is a significant subsegment of the overall manufacturing market, estimated to exceed $2 trillion [9][10] - The market is highly fragmented, consisting of millions of small and medium-sized manufacturers globally [6][10] Company Growth and Performance - Xometry has tripled its customer base and doubled its manufacturing partner base since its IPO [3][14] - The marketplace revenue has tripled, with gross margins increasing from the mid-twenties to the mid-thirties percentage range [3][14] - In Q1, Xometry reported a 23% year-over-year revenue growth, with marketplace revenue growing 27% year-over-year [14][37] - Active buyers reached over 71,000, marking a 22% year-over-year increase [30][14] - Active suppliers numbered approximately 4,375, with a significant focus on enterprise accounts [30][31] Technology and Innovation - Xometry utilizes machine learning and AI to optimize the manufacturing process, providing instant pricing and lead time options [6][7][15] - The AI analyzes CAD models and matches them with suitable suppliers, enhancing efficiency and profitability for both buyers and suppliers [7][8][15] - The company has integrated with major ERP systems to streamline purchasing processes for large enterprises [53] Market Opportunity and Strategy - Xometry's market penetration is currently less than 1%, indicating substantial growth potential [18] - The company aims to deepen relationships with enterprise customers, with over 100 accounts generating more than $500,000 in revenue [24][31] - International revenue has grown from 2% to 18% of total marketplace revenue from 2020 to 2024, with expansion efforts in Europe and Asia [34] Financial Metrics - Total revenue for the last twelve months (LTM) reached $600 million, with a gross profit of $224 million [14][37] - Gross margins improved from 23.5% in 2020 to 33.5% in 2024, with a long-term target of 35% to 40% [41][42] - The company maintains a strong balance sheet with $231 million in cash and cash equivalents [46] Challenges and Resilience - Xometry has demonstrated durable growth across various economic conditions, including during COVID-19 and periods of supply chain disruptions [57] - The company is positioned to benefit from market uncertainties, as customers seek reliable manufacturing solutions [58] Future Outlook - Xometry plans to continue expanding its technology offerings and marketplace capabilities, aiming for sustained growth and profitability [45][48] - The focus will remain on organic growth, enhancing buyer and supplier networks, and exploring potential acquisitions to accelerate growth [48] Additional Insights - The company has a clear strategy for growth, emphasizing the importance of technology and customer engagement [22][24] - Xometry's approach to supplier engagement and customer satisfaction is designed to optimize profitability and operational efficiency [8][15][40]

Core Insights - NSF has become the preferred certification body for Xometry's Thomasnet, enabling suppliers to earn certifications from NSF's extensive portfolio [1][9] - The collaboration aims to enhance supply chain resilience and flexibility for manufacturers amid ongoing supply chain pressures [2][9] - Thomasnet connects over 500,000 suppliers across the US and Canada, serving diverse industrial sectors and facilitating connections between buyers and suppliers [4][6] Industry Impact - The agreement highlights the increasing importance of supplier certifications in manufacturing, industrial, and B2B sectors, particularly in the context of supply chain disruptions [2][3] - NSF's certifications cover a wide range of globally recognized standards, including ISO 9001, IATF 16949, AS9100, and others, which are critical for maintaining quality and safety in various industries [2][5] - The partnership will promote NSF certifications as essential tools for American manufacturers to grow their businesses and strengthen domestic sourcing strategies [2][9] Company Overview - NSF has over 40,000 clients in 110 countries and has been dedicated to improving public health and safety for more than 80 years [5] - Xometry's AI-powered marketplace and Thomasnet platform are digitizing the manufacturing industry, providing resources for manufacturers to grow and enabling buyers to access instant pricing and lead times [6][4] - The collaboration will also focus on promoting certifications like Cybersecurity Maturity Model Certification (CMMC), which is increasingly required for U.S. Department of Defense contracts [9]

Group 1 - The article discusses the evolving macroeconomic landscape, highlighting a temporary agreement between the US and another entity as of May 12th [1] - Bert Hochfeld, a seasoned analyst with a background in economics and an MBA from Harvard, has a notable career in the tech sector, having worked for major companies like IBM and Raytheon [1] - Hochfeld founded his own research company, Hochfeld Independent Research Group, which provided services to significant institutions and hedge funds, and his hedge fund was recognized as the best performing small-cap fund for five years ending in 2011 [1] Group 2 - Hochfeld has published over 500 articles on Seeking Alpha, focusing on information technology companies, and is highly regarded for his investment insights [1] - The article does not provide any specific financial data or performance metrics related to Hochfeld's research or the companies he covers [1]

Summary of Xometry Conference Call Company Overview - **Company**: Xometry - **Industry**: Custom Manufacturing - **Market Size**: Estimated at over $2 trillion, heavily fragmented with hundreds of thousands of small to medium-sized manufacturers [5][6] Core Business Model - **Marketplace**: AI-powered platform for custom manufacturing, providing instant pricing and optimal manufacturer matching [6][9] - **Global Presence**: Operates 18 localized marketplaces across the U.S., Europe, and Asia [6][12] Key Market Insights - **Addressable Market**: Custom manufacturing is complex, making it difficult for customers to find suitable manufacturers [8][9] - **Buyer Profiles**: Includes engineers and procurement professionals, with a shift towards larger projects and assemblies [13][14] - **Supplier Profiles**: Suppliers are attracted to Xometry due to its ability to fill capacity with high-value jobs [15][17] Growth Metrics - **Buyer and Supplier Base**: Over 71,000 buyers and nearly 4,500 suppliers [13] - **Cohort Growth**: Over 1,500 accounts spending more than $50,000 annually, with 100 accounts exceeding $500,000 [20][21] - **Marketplace Growth**: 27% year-over-year growth in Q1, with a focus on increasing production work [22][24] Strategic Initiatives - **TeamSpace**: Software for organizing and buying entire products or assemblies, gaining traction with over 7,000 teams created [21][35] - **WorkCenter**: A manufacturing execution system for suppliers, enhancing visibility and operational efficiency [36][39] - **Instant Quoting**: Expansion of instant quoting capabilities expected to drive order volume and margin growth [40][42] Market Dynamics - **Tariffs and Supply Chain**: Increased awareness of supply chain resilience due to tariffs, with Xometry positioned to help companies diversify sourcing [24][27] - **Macro Environment**: Despite macroeconomic challenges, Xometry has maintained positive momentum and market share growth [31][32] International Expansion - **Current Footprint**: International business accounts for about 15% of revenue, with plans to grow this to over 30% [50] - **Geographic Focus**: Strong presence in Europe and expanding into Asia, particularly China [52][53] Financial Performance - **Revenue Outlook**: Raised revenue outlook based on consistent growth and strong execution [56][58] - **Marketplace Gross Margin**: Aiming for 35-40% long-term gross margin, with recent investments temporarily impacting margins [63][64] - **EBITDA**: Positive adjusted EBITDA achieved, with a target of 20-30% long-term margins [66][67] Competitive Landscape - **Main Competitor**: Traditional manufacturing methods and local suppliers [48][49] - **Differentiation**: Xometry's digital platform offers a more efficient and reliable solution for custom manufacturing [49][75] Future Outlook - **Transformative Initiatives**: Continued execution on AI-driven quoting, global marketplace expansion, and enhanced tools for buyers and suppliers [76][77]

Company Performance - Xometry's Q1 results were strong, with solid forward guidance despite the uncertain macro environment [1] - The full impact of tariffs on Xometry is yet to be determined [1] Investment Strategy - Narweena, an asset manager led by Richard Durant, focuses on identifying market dislocations due to poor understanding of long-term business prospects [1] - The firm aims for excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets with barriers to entry [1] - Narweena's research emphasizes company and industry fundamentals to uncover unique insights [1] Market Trends - An aging population with low growth and stagnating productivity is expected to create new investment opportunities [1] - Many industries may face stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - The economy is increasingly dominated by asset-light businesses, leading to a declining need for infrastructure investments [1] - A large pool of capital is pursuing a limited set of investment opportunities, resulting in rising asset prices and compressed risk premia over time [1] Leadership Background - Richard Durant holds undergraduate degrees in engineering and finance from the University of Adelaide and an MBA from Nanyang Technological University [1] - Durant has passed the CFA exams, indicating a strong foundation in finance [1]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) This section presents the unaudited condensed consolidated financial statements for Xometry, Inc. for the quarter ended March 31, 2025, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with accompanying notes, showing a 23% year-over-year revenue increase to $151.0 million, a net loss of $15.1 million (an improvement from a $16.6 million loss in the prior year), and a cash and marketable securities balance of $231.4 million [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $690.1 million, a slight increase from $680.1 million at year-end 2024, with cash and cash equivalents decreasing to $15.5 million from $22.2 million, while marketable securities stood at $215.9 million, and total liabilities increased to $379.1 million, primarily due to a rise in accounts payable and accrued cost of revenue Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Current Assets** | | | | Cash and cash equivalents | $15,507 | $22,232 | | Marketable securities | $215,874 | $217,603 | | Accounts receivable, net | $85,529 | $73,962 | | Total current assets | $334,618 | $327,540 | | **Total Assets** | **$690,110** | **$680,129** | | **Current Liabilities** | | | | Accounts payable and accrued cost of revenue | $50,218 | $35,023 | | Total current liabilities | $89,428 | $74,787 | | **Total Liabilities** | **$379,077** | **$364,533** | | **Total Equity** | **$311,033** | **$315,596** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2025, revenue grew 23% year-over-year to $151.0 million, gross profit increased to $56.3 million from $47.9 million, and the company reported a net loss of $15.1 million, or ($0.30) per share, an improvement from the $16.6 million net loss, or ($0.34) per share, in the same period of 2024 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $150,971 | $122,690 | | Gross Profit | $56,331 | $47,902 | | Loss from operations | ($15,391) | ($17,857) | | Net loss attributable to common stockholders | ($15,078) | ($16,616) | | Net loss per share, basic and diluted | ($0.30) | ($0.34) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities significantly improved to $3.7 million in Q1 2025 from $11.7 million in Q1 2024, while net cash used in investing activities was $3.7 million, a shift from $2.9 million provided in the prior-year period, mainly due to higher purchases of property and equipment, with cash and cash equivalents ending the period at $15.5 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,691) | ($11,734) | | Net cash (used in) provided by investing activities | ($3,686) | $2,927 | | Net cash provided by financing activities | $510 | $1,233 | | **Net decrease in cash and cash equivalents** | **($6,725)** | **($7,723)** | | **Cash and cash equivalents at end of period** | **$15,507** | **$45,701** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) The notes detail the company's accounting policies and provide further information on financial statement items, including the disaggregation of revenue into Marketplace and Supplier Services, segment reporting for U.S. and International operations, details on the $287.5 million convertible notes, and a Q1 2025 restructuring action that incurred $1.5 million in costs - The company operates a global AI-powered online manufacturing marketplace (Xometry) and an industrial sourcing platform (Thomasnet®), connecting buyers with a network of manufacturers[27](index=27&type=chunk) Disaggregated Revenue and Gross Profit (Q1 2025, in thousands) | Line of Business | Revenue | Cost of Revenue | Gross Profit | | :--- | :--- | :--- | :--- | | Marketplace | $136,353 | $93,046 | $43,307 | | Supplier Services | $14,618 | $1,594 | $13,024 | Segment Revenue (Q1 2025 vs Q1 2024, in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | | :--- | :--- | :--- | | U.S. | $127,820 | $103,363 | | International | $23,151 | $19,327 | - In Q1 2025, the company initiated a restructuring, incurring **$1.5 million** for employee termination costs related to reducing its workforce[112](index=112&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q1 2025, highlighting a 23% revenue growth driven by a 27% increase in Marketplace revenue, achieving positive Adjusted EBITDA of $0.1 million, a significant improvement from a loss of $7.5 million in Q1 2024, attributed to operating efficiencies, with key operational metrics like Active Buyers and high-value accounts continuing to grow, and covering components of operating results, liquidity, and capital resources, including the status of the 2027 convertible notes [Key Marketplace Operational and Business Metrics](index=37&type=section&id=Key%20Marketplace%20Operational%20and%20Business%20Metrics) The company's marketplace showed strong growth in user engagement and value, with Active Buyers increasing 22% year-over-year to 71,454, high-value accounts growing 12% to 1,545, and existing accounts contributing 98% of revenue in the quarter - Active Buyers reached **71,454** as of March 31, 2025, a **22% increase** from 58,504 a year prior[136](index=136&type=chunk) - Accounts with LTM spend of at least **$50,000** grew **12%** to **1,545** as of March 31, 2025, from 1,381 a year ago[141](index=141&type=chunk) - For the quarter ended March 31, 2025, **98% of revenue** was generated from existing accounts, indicating strong customer retention and repeat business[139](index=139&type=chunk) [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) Xometry achieved positive Adjusted EBITDA of $0.1 million in Q1 2025, a significant turnaround from a $(7.5) million loss in Q1 2024, and Non-GAAP Net Income was $0.8 million, compared to a Non-GAAP Net Loss of $(5.7) million in the prior-year quarter, reflecting improved operating efficiency and margin expansion Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(15,076) | $(16,604) | | Adjustments | $15,154 | $9,145 | | **Adjusted EBITDA** | **$78** | **$(7,459)** | Non-GAAP Net Income (Loss) Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(15,076) | $(16,604) | | Adjustments | $15,904 | $10,862 | | **Non-GAAP Net Income (Loss)** | **$828** | **$(5,742)** | [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Total revenue for Q1 2025 increased by 23% to $151.0 million, driven by a 27% growth in Marketplace revenue, while Supplier Services revenue saw a 6% decline, with gross profit rising 18% to $56.3 million, though gross margin slightly decreased to 37.3% from 39.0% due to revenue mix shift, and operating expenses as a percentage of revenue decreased from 53.6% to 47.5%, demonstrating improved operating leverage Revenue by Line of Business (in thousands) | Line of Business | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Marketplace | $136,353 | $107,186 | +27% | | Supplier services | $14,618 | $15,504 | -6% | | **Total Revenue** | **$150,971** | **$122,690** | **+23%** | - Gross margin for Marketplace was relatively stable at **31.8%** in Q1 2025 vs **32.0%** in Q1 2024, while Supplier Services gross margin improved to **89.1%** from **87.9%**[180](index=180&type=chunk)[181](index=181&type=chunk) - Sales and marketing expense decreased by **3%** to **$26.4 million**, primarily due to lower commissions and advertising spend[182](index=182&type=chunk) - Operations and support, product development, and general and administrative expenses all increased in absolute dollars but decreased as a percentage of revenue, indicating scaling efficiency[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held $231.4 million in cash, cash equivalents, and marketable securities, which management believes is sufficient for at least the next twelve months, with the primary source of financing being equity sales and the $287.5 million in 1% convertible senior notes due 2027, and net cash used in operations significantly improving to $3.7 million for the quarter - The company has **$231.4 million** in cash, cash equivalents, and marketable securities as of March 31, 2025[194](index=194&type=chunk) - The company has **$287.5 million** in aggregate principal amount of **1% convertible senior notes** due in 2027, with a carrying value of **$284.1 million** as of March 31, 2025[196](index=196&type=chunk)[203](index=203&type=chunk) Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,691) | $(11,734) | | Net cash (used in) provided by investing activities | $(3,686) | $2,927 | | Net cash provided by financing activities | $510 | $1,233 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign currency exchange risk and inflation risk, with international operations, mainly in Euros, accounting for about 15% of revenue in Q1 2025, where a hypothetical 10% unfavorable change in the Euro exchange rate would have decreased revenue by 1.2%, and the company does not believe inflation has had a material effect on its business to date - International operations generate approximately **15% of revenues**, with a majority in Euros. A **10% unfavorable change** in the Euro exchange rate would have decreased Q1 2025 revenues by **1.2%**[217](index=217&type=chunk) - Management does not believe that inflation has had a material effect on the business, but notes that an inability to pass on significant inflationary pressures could harm future results[218](index=218&type=chunk) [Item 4. Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of March 31, 2025, with no material changes to the internal control over financial reporting identified during the quarter - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[220](index=220&type=chunk) - There were no changes to internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[221](index=221&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=57&type=section&id=Item%201.%20Legal%20Proceedings) The company states that it is not a party to any legal proceedings that are reasonably expected to have a material adverse effect on its financial condition or operations, and there were no material legal proceedings or developments in Q1 2025 - As of March 31, 2025, the company is not party to any material legal proceedings[225](index=225&type=chunk)[226](index=226&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) The company notes that there have been no material changes to its risk factors as disclosed in its 2024 Annual Report on Form 10-K, except for an expanded discussion on the risks associated with changes in U.S. and international trade policies, highlighting potential impacts from tariffs and other restrictive measures on raw material costs, supply chain stability, and customer demand - The company highlights the risk that changes in U.S. and international trade policies, such as new tariffs, could adversely impact the business by increasing costs, disrupting supply chains, and reducing customer demand[229](index=229&type=chunk) - Trade disputes and political tensions may exacerbate unfavorable macroeconomic conditions, including inflation and market instability, which could negatively impact customer demand and the company's stock price[230](index=230&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In January 2025, the company issued 16,716 shares of Class A common stock, valued at $0.6 million, as contingent consideration related to the 2023 acquisition of Tridi, with the issuance exempt from registration under Section 4(a)(2) of the Securities Act - In January 2025, the company issued **16,716 shares** of Class A common stock (**$0.6 million** value) as contingent consideration for the acquisition of Tridi[234](index=234&type=chunk) [Other Items (3, 4, 5, 6)](index=59&type=section&id=Other%20Items) This section confirms there were no defaults upon senior securities (Item 3) and no mine safety disclosures (Item 4), and under Item 5, it is noted that no directors or officers adopted or terminated securities trading plans during the last fiscal quarter, with Item 6 listing the exhibits filed with the report - Item 3 (Defaults Upon Senior Securities) and Item 4 (Mine Safety Disclosures) are not applicable[235](index=235&type=chunk)[236](index=236&type=chunk) - No directors or executive officers adopted or terminated any securities trading plans during the last fiscal quarter[237](index=237&type=chunk)

Financial Data and Key Metrics Changes - In Q1 2025, revenue increased by 23% year over year to $151 million, marking a 700 basis point acceleration from 16% year over year revenue growth in Q4 2024 [7][18] - Adjusted EBITDA was $100,000 compared to a loss of $7.4 million in Q1 2024, reflecting a significant improvement driven by revenue growth and operating efficiencies [24] - Q1 gross profit was $56.3 million, an increase of 18% year over year, with a gross margin of 37.3% [21][22] Business Line Data and Key Metrics Changes - Marketplace revenue was $136 million in Q1, up 27% year over year, while supplier services revenue was $14.6 million, down 6% year over year [18][20] - Q1 active buyers increased by 22% year over year to 71,454, with a net addition of 3,187 active buyers [19] - Marketplace revenue per active buyer increased by 4% year over year, driven by strong enterprise growth in the US [19] Market Data and Key Metrics Changes - US marketplace revenue growth accelerated to nearly 30% year over year, the strongest since Q4 2023, while international revenue increased by 20% year over year [19] - The number of accounts with at least $50,000 in spend increased by 12% year over year to 1,545 [20] - Supplier services revenue increased by 4% quarter over quarter, primarily driven by financial services products [21] Company Strategy and Development Direction - The company is focused on building 18 localized marketplaces in the US, Europe, and Asia to support domestic manufacturing [9] - Investments are being made in technology to enhance the digital marketplace experience and improve sourcing strategies [12][13] - The company aims to provide a compelling triad of price, selection, and speed for buyers while enabling suppliers to access demand effectively [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving faster revenue growth in 2025 compared to 2024, driven by strong demand and a shift towards domestic sourcing [9][14] - The current volatile international trade environment validates the company's marketplace model, which allows for real-time responses to customer needs [9] - Management expects continued growth in adjusted EBITDA profitability and a focus on balancing growth with operating leverage [27][30] Other Important Information - The company initiated a restructuring action in March 2025, reducing its workforce by approximately 5% to improve efficiency [25] - Cash and cash equivalents at the end of Q1 were $231 million, a decrease of approximately $8 million from Q4 2024, primarily due to capital expenditures [26] Q&A Session Summary Question: Comments on customer behavior since the April 2 tariff announcements - Management noted robust growth and an increase in enterprise customers discussing sourcing strategies, with a slight shift towards domestic sourcing [33] Question: Incremental EBITDA margin expectations - Management indicated that the midpoint for Q2 guidance would be slightly under the long-term target of 20% but expects low 20s for the first half of the year [34][36] Question: Improvement in supplier services - The improvement was attributed to financial services offerings supporting suppliers' cash flow needs, alongside enhancements in advertising and search capabilities [40][41] Question: Insights on tariffs and long-term structural changes - Management highlighted a potential trend towards multi-sourcing as companies seek to build resilient supply chains, which aligns with the company's marketplace model [51] Question: Gross profit and gross margin concerns - Management explained that the gross margin was impacted by a mix shift and investments in global sourcing, with expectations for improvement in Q2 [52][53] Question: Updates on TeamSpace and enterprise focus - TeamSpace has grown to over 7,000 teams, with enhancements in collaboration features well-received by enterprise customers [45][46] Question: Production versus prototyping revenues - Management emphasized ongoing growth in production capabilities and the extensibility of the platform to support various manufacturing processes [78][82] Question: Percentage of revenues from overseas marketplace partners - The majority of US marketplace revenue is fulfilled domestically, with approximately 80% sourced from US partners [85]

Financial Data and Key Metrics Changes - In Q1 2025, revenue increased by 23% year over year to a record $151 million, marking a 700 basis point acceleration from 16% year over year revenue growth in Q4 2024 [7][17] - Adjusted EBITDA was $100,000 compared to a loss of $7.4 million in Q1 2024, reflecting an improvement of $7.5 million year over year [23] - Q1 gross profit was $56.3 million, an increase of 18% year over year, with a gross margin of 37.3% [20] Business Line Data and Key Metrics Changes - Marketplace revenue was $136 million, up 27% year over year, while supplier services revenue was $14.6 million, down 6% year over year [17][19] - Marketplace revenue per active buyer increased by 4% year over year due to strong enterprise growth in the US [18] - Supplier services revenue increased by 4% quarter over quarter, driven primarily by financial services products [20] Market Data and Key Metrics Changes - US marketplace revenue growth accelerated to nearly 30% year over year, the strongest since Q4 2023 [18] - International revenue increased by 20% year over year, compared to 69% growth in Q1 2024 [18] - The number of active buyers increased by 22% year over year to 71,454 [18] Company Strategy and Development Direction - The company is focused on building 18 localized marketplaces in the US, Europe, and Asia to support domestic manufacturing [8] - Investments are being made in technology to enhance the digital marketplace and improve sourcing strategies [12][13] - The company aims to provide a compelling triad of price, selection, and speed for buyers while enabling suppliers to access demand effectively [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in revenue growth for 2025, expecting it to exceed 2024 growth [14][28] - The current volatile international trade environment validates the company's marketplace model, with a shift towards domestic sourcing being observed [8][31] - Management noted that the custom manufacturing market is large, and even if it shrinks, the company's market share is small enough to sustain robust growth rates [14] Other Important Information - The company initiated a restructuring action in March 2025, reducing its workforce by approximately 5% to improve efficiency [23] - Cash and cash equivalents at the end of Q1 were $231 million, a decrease of approximately $8 million from Q4 2024 [24] Q&A Session Summary Question: Comments on customer behavior since the April 2 tariff announcements - Management noted robust growth and an increase in domestic sourcing discussions among enterprise customers [31] Question: Incremental EBITDA margin expectations - Management indicated that the midpoint for Q2 guidance would be slightly below the long-term target of 20% [32][34] Question: Improvement in supplier services - The improvement was attributed to financial services offerings and enhancements in advertising and search capabilities [38][39] Question: Insights on tariffs and long-term sourcing strategies - Management highlighted a potential shift towards multi-sourcing as companies seek to build resilient supply chains [50] Question: Trends in production versus prototyping revenues - Management emphasized ongoing growth in production capabilities and the extensibility of their platform to support various manufacturing processes [76][80]

Financial Performance - Xometry's LTM revenue reached $574 million [10] - LTM gross profit was $224 million [10] - Q1 2025 revenue increased by 23% YoY [14], reaching $151 million [16] - Q1 2025 marketplace revenue grew by 27% YoY [14] - Q1 2025 gross profit increased by 18% YoY [14], reaching $56.3 million [16] - Q1 2025 marketplace gross profit grew by 26% YoY [14] - Q1 2025 adjusted EBITDA was $0.1 million, an increase of $7.5 million YoY [14, 17] User Growth - Active buyers in Q1 2025 exceeded 71,000 [12], representing a 22% YoY increase [15] - Active suppliers reached 4,375 in Q4 2024 [12], showing a 28% YoY increase [15] International Expansion - International revenue grew by 20% YoY in Q1 2025 and accounted for 17% of marketplace revenue [39]

Financial Performance - Q1 2025 revenue increased 23% year-over-year to a record $151 million, driven by robust marketplace growth[5] - Q1 marketplace revenue increased 27% year-over-year to $136 million, with a 700 basis point acceleration from Q4 2024[6] - Revenue for Q1 2025 was $150.971 million, a 22.9% increase from $122.690 million in Q1 2024[38] - U.S. segment revenue increased to $127.820 million in Q1 2025, up from $103.363 million in Q1 2024, representing a 23.7% growth[48] - International segment revenue rose to $23.151 million in Q1 2025, compared to $19.327 million in Q1 2024, marking a 19.5% increase[48] Profitability Metrics - Q1 Adjusted EBITDA improved by $7.5 million year-over-year, reaching $0.1 million[5] - Adjusted EBITDA for Q1 2025 was $78 thousand, compared to a loss of $7.459 million in Q1 2024[48] - Non-GAAP net income for Q1 2025 was $0.8 million, compared to a Non-GAAP net loss of $5.7 million in Q1 2024[6] - Non-GAAP net income for Q1 2025 was $828 thousand, an improvement from a loss of $5.742 million in Q1 2024[46] - Basic and diluted GAAP EPS for Q1 2025 was $(0.30), an improvement from $(0.34) in Q1 2024[46] - Non-GAAP EPS for Q1 2025 was $0.02, compared to $(0.12) in Q1 2024[46] Expenses and Losses - Operating expenses for Q1 2025 totaled $71.722 million, an increase from $65.759 million in Q1 2024[38] - Net loss attributable to common stockholders for Q1 2025 was $15.078 million, an improvement from a net loss of $16.616 million in Q1 2024[38] - The company reported a comprehensive loss of $13.545 million for Q1 2025, compared to a comprehensive loss of $17.090 million in Q1 2024[38] - Total stock-based compensation expense and payroll taxes related to stock-based compensation amounted to $8.815 million in Q1 2025, up from $6.036 million in Q1 2024[50] - Restructuring charges for Q1 2025 totaled $1.461 million, with no charges reported in Q1 2024[50] Balance Sheet Highlights - Cash, cash equivalents, and marketable securities totaled $231 million as of March 31, 2025[6] - Total current assets increased to $334.618 million as of March 31, 2025, up from $327.540 million as of December 31, 2024[35] - Total liabilities rose to $379.077 million as of March 31, 2025, compared to $364.533 million as of December 31, 2024[35] - Cash and cash equivalents decreased to $15.507 million at the end of Q1 2025, down from $22.232 million at the end of Q4 2024[40] Future Outlook - For Q2 2025, revenue is expected to be between $155 million and $157 million, representing 17-18% growth year-over-year[17] - The company raised its marketplace growth outlook for FY 2025 from at least 20% to at least 22%[17] - The company plans to provide guidance for Q2 2025 and the full year 2025 during the upcoming conference call[32] Marketplace Activity - Marketplace Active Buyers increased 22% from 58,504 to 71,454 year-over-year[11] - Supplier services revenue for Q1 2025 was $14.6 million, a decrease of 6% year-over-year[6] Certifications and Achievements - The company achieved Cybersecurity Maturity Model Certification (CMMC Level 2), enhancing its position in the aerospace and defense industries[10]