Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Summary: Xometry (XMTR) - Xometry currently holds a Momentum Style Score of B, indicating a favorable momentum characteristic [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] - Over the past week, XMTR shares have increased by 34.02%, significantly outperforming the Zacks Manufacturing - General Industrial industry, which rose by only 0.73% [5] - In the last quarter, XMTR shares have surged by 41.26%, and over the past year, they have gained 167.01%, while the S&P 500 only increased by 10.12% and 19.99%, respectively [6] - The average 20-day trading volume for XMTR is 1,025,730 shares, indicating a bullish trend as the stock is rising with above-average volume [7] Earnings Outlook - In the past two months, three earnings estimates for XMTR have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $0.30 to $0.35 [9] - For the next fiscal year, four estimates have moved higher, with no downward revisions, indicating positive sentiment regarding future earnings [9] Conclusion - Considering the positive momentum indicators and earnings outlook, XMTR is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Core Viewpoint - XMTR's MSCI ESG rating has been downgraded from BB to B as of August 14, 2025, indicating a decline in the company's environmental, social, and governance performance [1] Summary by Relevant Categories ESG Rating - XMTR's MSCI ESG rating is now B, down from BB, reflecting a significant change in its ESG performance [1]

Company Performance - Xometry (XMTR) shares have increased by 36.9% over the past month, reaching a new 52-week high of $48.6 [1] - Year-to-date, Xometry has gained 11.3%, outperforming the Zacks Industrial Products sector (6.9%) and the Zacks Manufacturing - General Industrial industry (7.2%) [1] Earnings and Revenue Expectations - Xometry has consistently exceeded earnings estimates, reporting EPS of $0.09 against a consensus estimate of $0.05 in its last earnings report [2] - For the current fiscal year, Xometry is projected to achieve earnings of $0.35 per share on revenues of $657.33 million, reflecting a 975% increase in EPS and a 20.49% increase in revenues [3] - For the next fiscal year, expected earnings are $0.82 per share on revenues of $778.59 million, indicating a year-over-year change of 134.29% in EPS and 18.45% in revenues [3] Valuation Metrics - Xometry's current valuation shows a Price-to-Earnings (P/E) ratio of 135.6X for the current fiscal year, significantly higher than the peer industry average of 23.3X [6] - The stock has a Value Score of F, while its Growth and Momentum Scores are both A, resulting in a VGM Score of B [6] Zacks Rank and Investment Potential - Xometry holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts [7] - The combination of a Zacks Rank of 2 and Style Scores of A or B suggests that Xometry shares may have further upside potential [7] Industry Comparison - The Manufacturing - General Industrial industry is performing well, ranking in the top 14% of all industries, providing a favorable environment for both Xometry and its peer, Gorman-Rupp Company (GRC) [10] - Gorman-Rupp Company has a Zacks Rank of 2 (Buy) and is expected to post earnings of $2.04 per share on revenues of $680.77 million for the current fiscal year [9]

Core Viewpoint - Xometry (XMTR) is experiencing solid improvement in earnings estimates, which is likely to positively impact its stock price in the near term [1][2]. Earnings Estimates - Analysts are increasingly optimistic about Xometry's earnings prospects, leading to higher estimates that should reflect in the stock price [2]. - The consensus earnings estimate for the current quarter is $0.11 per share, indicating a year-over-year increase of +450.0% [5]. - For the full year, the earnings estimate has risen to $0.35 per share, representing a change of +975.0% from the previous year [6]. Estimate Revisions - Over the past 30 days, the Zacks Consensus Estimate for Xometry has increased by 5%, with one estimate moving higher and no negative revisions [5]. - The consensus estimate for the current year has increased by 18.63%, with three estimates moving higher and no negative revisions [6][7]. Zacks Rank - Xometry has earned a Zacks Rank 2 (Buy) due to promising estimate revisions, which indicates a favorable investment opportunity [8]. - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [8]. Stock Performance - Xometry's stock has increased by 29.5% over the past four weeks, driven by strong estimate revisions and investor interest [9].

Company Overview - Xometry, Inc. (NASDAQ: XMTR) experienced a significant increase in share price following the release of its second quarter earnings, attributed more to low investor expectations than exceptionally strong results [1] - The company's growth is slowing down, yet remains relatively solid in the context of the current macroeconomic environment [1] Investment Strategy - Narweena, an asset management firm led by Richard Durant, focuses on identifying market dislocations caused by misunderstandings of long-term business prospects [1] - The firm aims to achieve excess risk-adjusted returns by targeting businesses with secular growth opportunities in markets characterized by high barriers to entry [1] - Narweena's investment approach emphasizes company and industry fundamentals to uncover unique insights, with a preference for smaller cap stocks and markets lacking obvious competitive advantages [1] Economic Insights - The aging population, low population growth, and stagnating productivity growth are expected to create new investment opportunities distinct from historical trends [1] - Certain industries may experience stagnation or secular decline, which could paradoxically enhance business performance due to reduced competition [1] - Conversely, some businesses may face increasing costs and diseconomies of scale, while the economy shifts towards asset-light business models, leading to a declining need for infrastructure investments [1] - A growing pool of capital is competing for a limited number of investment opportunities, resulting in rising asset prices and compressed risk premia over time [1]

Core Insights - Xometry reported Q2 2025 GAAP revenue of $162.5 million, exceeding the consensus estimate of $156.5 million, with non-GAAP diluted EPS of $0.09, surpassing the expected $0.04, indicating strong marketplace growth and improved operational efficiency despite a wider GAAP net loss due to a non-recurring charge [1][2][9] Financial Performance - Q2 2025 revenue increased by 23% year-over-year from $132.6 million in Q2 2024, with marketplace revenue growing 26% year-over-year [2][5] - Active buyers in the marketplace rose by 22% to 74,777, with accounts spending at least $50,000 increasing by 15% to 1,653, reflecting strong customer loyalty [5] - Adjusted EBITDA turned positive at $3.9 million, an improvement of $6.6 million from a loss in the previous year, driven by the U.S. segment [7] - Supplier services revenue declined by 6.4% year-over-year to $14.3 million, with management projecting a continued decline of around 5% for the year [2][6] Operational Highlights - Xometry's platform utilizes AI for instant pricing and design feedback, enhancing efficiency in custom manufacturing across various industries [3] - The company is focusing on technology expansion, AI integration, and growing its buyer and supplier networks, with notable innovations in AI capabilities and international expansion efforts [4] - New platform features launched include an AI-driven instant drawing quote tool and Teamspace for improved collaboration among buyer purchasing teams [8] Future Guidance - For Q3 2025, management projects revenue between $167 million and $169 million, representing 18-19% year-over-year growth, with adjusted EBITDA expected in the range of $4.0 million to $5.0 million [10] - For FY2025, Xometry raised its marketplace revenue growth outlook to 23-24%, while supplier services revenue is expected to remain down around 5% [10]

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 Performance - Q2 2025 revenue reached a record of $163 million, driven by a 26% year-over-year increase in Marketplace revenue[16] - Gross profit for Q2 2025 was a record $65.2 million, a 23% year-over-year increase, fueled by a 34% year-over-year growth in Marketplace gross profit[16] - The Marketplace gross margin for Q2 2025 was 35.4%, a 190 basis point increase year-over-year, attributed to AI pricing and selection[16] - Adjusted EBITDA for Q2 2025 was $3.9 million, an increase of $6.6 million year-over-year[14, 16] - FY24 Total Revenue was $546 million, a 18% year-over-year increase[27] Growth Initiatives - Active Buyers increased by 22% year-over-year in Q2 2025, driven by increased enterprise penetration and Teamspace adoption[15, 17] - Active Suppliers increased by 28% year-over-year in 2024[15, 17] - International revenue grew by 31% year-over-year, representing 18% of Marketplace revenue in Q2[18, 37] Future Outlook - The company is targeting 20% incremental Adjusted EBITDA margins as it scales to $1 billion[19] - For Q3 2025, the company expects revenue of $167-169 million, representing 18-19% growth year-over-year[70] - For FY 2025, the company expects total revenue growth of at least 20%[70]

[Q2 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Xometry reported record Q2 2025 revenue of $163 million, a 23% increase, with Adjusted EBITDA reaching $3.9 million, despite a wider GAAP net loss Q2 2025 Key Financial Metrics (YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $163 | - | +23% | | **Marketplace Revenue** | $148 | - | +26% | | **Gross Profit** | $65.2 | - | +23% | | **Adjusted EBITDA** | $3.9 | ($2.6) | +$6.6 | | **Net Loss** | ($26.4) | ($13.7) | +93% | | **Non-GAAP Net Income** | $4.7 | ($0.6) | +$5.3 | - Growth was driven by consistent execution across key initiatives: expanding buyer and supplier networks, deepening enterprise engagement, enhancing the marketplace platform, growing internationally, and improving supplier services[5](index=5&type=chunk) Key Operating Metrics (as of June 30, 2025) | Metric | As of June 30, 2025 | As of June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | **Active Buyers** | 74,777 | 61,530 | +22% | | **Accounts with >$50k LTM Spend** | 1,653 | 1,436 | +15% | [Business Highlights](index=2&type=section&id=Business%20highlights) Xometry refinanced debt with $250 million in new convertible notes, expanded platform features globally, introduced AI quoting in North America, and partnered for supplier certifications - Completed a convertible debt refinancing, issuing **$250 million** of new 0.75% convertible notes due 2030, addressing over **$200 million** of notes with 2027 maturities[7](index=7&type=chunk) - Expanded platform features internationally, launching 'Teamspace' in Europe, the UK, and Turkey, and introducing procurement integration capabilities for European enterprise customers[7](index=7&type=chunk) - Introduced a new AI feature in North America to automate information extraction from technical drawings, aiming to improve quoting accuracy and supplier selection[7](index=7&type=chunk) - Thomasnet partnered with NSF, a global certification leader, to offer certifications to suppliers on its platform[7](index=7&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Summary) Marketplace revenue grew 26% to $148.2 million with margin expansion, while Supplier Services declined 6% to $14.3 million, contributing to 23% consolidated revenue growth for H1 2025 Q2 2025 Consolidated Financials (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $162,547 | $132,595 | 23% | | **Gross Profit** | $65,176 | $52,877 | 23% | | **Net Loss** | ($26,434) | ($13,697) | (93)% | | **Adjusted EBITDA** | $3,926 | ($2,634) | 249% | | **Non-GAAP Net Income** | $4,681 | ($606) | 872% | Q2 2025 Segment Performance (in thousands) | Segment | Revenue (in thousands) | YoY Change | Gross Margin | | :--- | :--- | :--- | :--- | | **Marketplace** | $148,223 | +26% | 35.4% | | **Supplier Services** | $14,324 | -6% | 88.7% | [Financial Guidance and Outlook](index=3&type=section&id=Financial%20Guidance%20and%20Outlook) Xometry forecasts Q3 2025 revenue of $167-$169 million and Adjusted EBITDA of $4.0-$5.0 million, raising full-year marketplace growth outlook to 23-24% while expecting supplier services decline Q3 2025 Guidance | Metric | Low ($M) | High ($M) | | :--- | :--- | :--- | | **Revenue** | $167 | $169 | | **Adjusted EBITDA** | $4.0 | $5.0 | - Raised full-year 2025 marketplace growth outlook from at least **22%** to a new range of **23-24%**[16](index=16&type=chunk) - Expects full-year 2025 supplier services revenue to be down approximately **5%** year-over-year[16](index=16&type=chunk) [Detailed Financial Statements](index=7&type=section&id=Detailed%20Financial%20Statements) Detailed financials show $687.0 million in total assets, $225.8 million in cash, a narrowing operating loss, and improved cash flow from operations for H1 2025 Balance Sheet Summary (in thousands) | Account | June 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Cash & Marketable Securities** | $225,792 | $239,835 | | **Total Assets** | $687,041 | $680,129 | | **Total Liabilities** | $415,520 | $364,533 | | **Total Equity** | $271,521 | $315,596 | Statement of Operations Summary - Six Months Ended June 30 (in thousands) | Account | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Revenue** | $313,518 | $255,285 | | **Gross Profit** | $121,507 | $100,779 | | **Loss from Operations** | ($25,681) | ($33,146) | | **Net Loss Attributable to Common Stockholders** | ($41,512) | ($30,313) | Statement of Cash Flows Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | ($4,118) | ($20,835) | | **Net Cash Used in Investing Activities** | ($3,834) | ($12,140) | | **Net Cash Provided by Financing Activities** | $2,046 | $1,795 | [Reconciliations and Supplemental Information](index=10&type=section&id=Reconciliations%20and%20Supplemental%20Information) Reconciliation details Q2 2025 GAAP net loss adjustments to Adjusted EBITDA, highlighting the U.S. segment as the primary profit driver and ongoing international investment - Key adjustments to reconcile Q2 2025 Net Loss to Adjusted EBITDA include: Interest/other expenses (**$16.4M**), stock-based compensation (**$7.9M**), and depreciation & amortization (**$4.5M**)[37](index=37&type=chunk) Geographic Segment Adjusted EBITDA - Q2 (in thousands) | Segment | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | **U.S.** | $6,875 | $246 | | **International** | ($2,949) | ($2,880) | | **Total Adjusted EBITDA** | $3,926 | ($2,634) | - For the six months ended June 30, 2025, total stock-based compensation expense was **$17.0 million** and total restructuring charges were **$1.6 million**[44](index=44&type=chunk)

Core Insights - Xometry, Inc. reported strong financial performance for Q2 2025, achieving record revenue and significant marketplace gross margin expansion, indicating sustainable long-term growth potential [2][5][6] Financial Highlights - Q2 2025 revenue increased by 23% year-over-year to $163 million, driven by robust marketplace growth [5][7] - Marketplace revenue for Q2 2025 was $148 million, a 26% increase year-over-year [6][7] - Gross profit for Q2 2025 rose 23% year-over-year to $65.2 million, representing a gross margin of 40.1% [5][7] - Adjusted EBITDA improved by $6.6 million year-over-year to $3.9 million, reflecting strong operating leverage [5][6] - The net loss attributable to common stockholders for Q2 2025 was $26.4 million, which included a $16.4 million non-recurring loss on debt extinguishment [6][7] Business Developments - Active Buyers increased by 22% year-over-year, reaching 74,777 as of June 30, 2025 [6][11] - The number of Accounts with Last Twelve-Months Spend of at least $50,000 grew by 15% to 1,653 [6][11] - Xometry EU launched Teamspace, a cloud-based solution to enhance collaboration on projects and custom part orders [6][9] - New AI features were introduced to streamline quoting processes for technical drawings in North America [9] Financial Guidance - For Q3 2025, Xometry expects revenue between $167 million and $169 million, representing 18-19% year-over-year growth [12][16] - Adjusted EBITDA for Q3 2025 is projected to be approximately $4.0 to $5.0 million, an improvement from a loss of $0.6 million in Q3 2024 [12][16] - The full year 2025 marketplace growth outlook has been raised to 23-24% [16]