Xometry(US:XMTR)2023-08-09 17:47Financial Data and Key Metrics Changes - In Q2 2023, revenue increased by 16% year-over-year to $111 million, with marketplace revenue growing by 24% year-over-year to $93.5 million [19][49] - Gross profit also rose by 16% year-over-year to $43.6 million, with total gross profit margin at 39.2% [56] - Adjusted EBITDA loss was reduced by 26% from Q1 to $8.7 million, reflecting improved operating leverage [14][61] Business Line Data and Key Metrics Changes - Marketplace gross profit increased by 34% year-over-year, with gross margins reaching an all-time high of 31.7%, up 290 basis points from Q1 [12][56] - Supplier services revenue declined by 13% year-over-year to $17.5 million, impacted by the exit from the supplies business [21][50] - Active buyers grew by 44% year-over-year to 48,294, with 96% of revenue coming from existing accounts [10][51] Market Data and Key Metrics Changes - International revenue surged by 96% year-over-year, primarily driven by growth in Europe [26] - The company is seeing strong demand across various verticals, including general manufacturing, energy, aerospace, and robotics [19] Company Strategy and Development Direction - The company is executing a five-point strategic plan focused on expanding its marketplace offerings and improving operational efficiency [27][28] - Investments in AI and machine learning are enhancing the platform's capabilities, allowing for better matching of buyers and suppliers [15][23] - The company aims to become the leading digital platform for custom manufacturing, with a total addressable market of $2 trillion [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, citing strong momentum in Q3 and continued growth in marketplace revenue [47][48] - The company does not anticipate macroeconomic improvements impacting its numbers but is seeing strong performance across industries [72][73] Other Important Information - The company has made significant workforce reductions and office space consolidations to improve operating leverage [14][58] - The exit from the supplies business is expected to enhance supplier services gross margins and improve profitability [50][68] Q&A Session Summary Question: Broader macro environment and growth initiatives - Management noted strong momentum in Q3 and across various industries, with no assumptions made regarding macroeconomic improvements [72][73] Question: Active buyer trends and new active buyers - Management confirmed strong growth in new active buyers, with marketing becoming more efficient despite a decrease in advertising spend [81][82] Question: Impact of increasing breadth of offerings on spend - Management highlighted that expanding offerings helps consolidate procurement spend, making the platform more attractive to buyers [86][88] Question: Speed of order acceptance and macro impacts - Management indicated that order growth is strong, and they are focused on executing their plan regardless of macro conditions [93] Question: Profitability in the US vs. international business - Management clarified that the US is not yet adjusted EBITDA profitable but expects to achieve this by Q4 2023 [95][97] Question: Alibaba partnership and revenue expectations - Management stated that while the Alibaba relationship has potential, current international growth is primarily driven by Europe [100][101] Question: Large customer commitments and pipeline - Management confirmed the largest multiyear commitment in company history, indicating a strong pipeline for larger orders [103] Question: Impact of new Senior VP of Enterprise Sales - Management expressed confidence that the new hire will enhance enterprise sales efforts and help manage committed spend across multiple categories [106]