Summary of Xometry Conference Call - September 10, 2025 Company Overview - **Company**: Xometry (NasdaqGS: XMTR) - **Industry**: Custom manufacturing and digital marketplace Key Points and Arguments Growth and Market Penetration - **Strong Year**: 2025 has been a strong year for Xometry with accelerated growth attributed to deeper penetration within enterprise customers [5][6] - **Enterprise Focus**: Transitioning from small companies to larger enterprise customers, leveraging technology tools and a specialized sales team [5][6] - **Software Development**: Increased output from software development enhances user experience and marketplace functionality [6] Technology and AI Integration - **AI Utilization**: AI is central to Xometry's operations, improving pricing accuracy and supplier matching, which enhances gross margins [7][30][48] - **Marketplace Efficiency**: The platform allows for instant quoting and sourcing flexibility, addressing supply chain resilience and digitization trends [6][14] Executive Team Expansion - **New Leadership**: Recent appointments include a new President, CTO, and CMO from larger companies to guide Xometry's growth towards a billion-dollar revenue mark [10][11] Marketplace Dynamics - **Strong Marketplace Growth**: Over 100 accounts spent more than $500,000 last year, with a 40% growth rate among these customers [14][22] - **Technology-Driven Sales**: Integration with enterprise procurement software reduces friction and enhances customer experience [14][15] International Expansion - **International Revenue Growth**: From $2 million in 2020 to over $100 million run rate, with a 31% growth last quarter [24][25] - **Global Market Resonance**: The business model is effective in Europe and Asia-Pacific, with expectations for international revenue to reach 30%-40% of total [25][26] Financial Performance - **Gross Margin Improvement**: Achieved an all-time high gross margin of 35.4% in Q2, with expectations to maintain a long-term range of 35%-40% [30][31] - **Adjusted EBITDA**: Positive adjusted EBITDA margins expected as the company scales towards a billion-dollar revenue target [52] Supplier Services and Thomasnet - **Advertising Strategy**: Thomasnet, with nearly 500,000 suppliers, is being enhanced with updated technology to improve advertiser engagement and ROI [36][37] - **Self-Service Improvements**: Transitioning to a self-service model for advertisers to increase ease of use and engagement [38][39] Strategic Priorities - **Long-Term Vision**: Aim to be the default choice for custom manufacturing, providing a seamless experience for buyers and suppliers [56][57] - **Supplier Support**: Offering free software to suppliers to streamline their operations and enhance profitability [58] Conclusion - **Market Positioning**: Xometry is positioned to capitalize on the growing demand for custom manufacturing solutions through technology, AI integration, and a strong marketplace strategy [56][58]

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]

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]