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Xometry(XMTR) - 2024 Q4 - Earnings Call Transcript
XMTRXometry(XMTR)2025-02-26 00:47
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Financial Data and Key Metrics Changes - In Q4 2024, revenue increased 16% year-over-year to a record 149million,withmarketplacerevenuegrowing20149 million, with marketplace revenue growing 20% year-over-year to 135 million [11][32] - Adjusted EBITDA was 1million,a1 million, a 3.9 million improvement year-over-year, marking a significant milestone towards profitability [16][40] - Q4 gross profit increased 20% year-over-year to 59million,withagrossmarginof39.759 million, with a gross margin of 39.7% [36] Business Line Data and Key Metrics Changes - Marketplace revenue per active buyer decreased 3% year-over-year but increased 1% quarter-over-quarter [33] - Supplier services revenue declined 13% year-over-year, primarily due to the wind down of non-core services [36] - Active buyers increased 23% year-over-year to 68,267, with net additions of 3,416 in Q4, the highest for 2024 [11][33] Market Data and Key Metrics Changes - International revenue grew 42% year-over-year, reaching a 100 million run rate, representing 18% of total marketplace revenue [12][25] - The number of active suppliers increased by 28% year-over-year to 4,375 manufacturers [15] Company Strategy and Development Direction - The company aims to be the global marketplace for the 2trillioncustommanufacturingmarket,focusingonexpandingbuyerandsuppliernetworksandenhancingcustomersegmentationthroughAI[17][18]−Plansfor2025includedeeperenterpriseengagement,expandingthemarketplacemenu,andgrowinginternationally,particularlyinAPAC[24][25][48]−Thecompanyisinvestingintechnologytoimprovesupplierservicesandenhancetheadvertisingplatformforbettermonetization[27]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinstronggrowthandscalein2025,despiteachallengingmanufacturingenvironment[10][28]−Thecompanyanticipatestotalrevenuegrowthyear−over−yeartoaccelerateto202 trillion custom manufacturing market, focusing on expanding buyer and supplier networks and enhancing customer segmentation through AI [17][18] - Plans for 2025 include deeper enterprise engagement, expanding the marketplace menu, and growing internationally, particularly in APAC [24][25][48] - The company is investing in technology to improve supplier services and enhance the advertising platform for better monetization [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong growth and scale in 2025, despite a challenging manufacturing environment [10][28] - The company anticipates total revenue growth year-over-year to accelerate to 20% to 21% in Q1 2025 [45] - Management highlighted the importance of their AI-driven model in optimizing pricing and improving gross margins [15][29] Other Important Information - The company expects supplier services revenue to decline by approximately 5% to 10% year-over-year in 2025 [49] - Cash and cash equivalents increased to 240 million, driven by positive adjusted EBITDA and improved working capital efficiency [42] Q&A Session Summary Question: How should we think about the pathway to international revenue growth? - Management expects international revenue to represent 30% to 40% of marketplace revenue, with strong growth in EMEA and early-stage growth in APAC [55][56] Question: Can you elaborate on multimodal AI and its impact on the buyer process? - The transition to a multimodal model will allow customers to upload various file types for instant quotes, enhancing customer experience and profitability [57][58] Question: What is the current state of the manufacturing environment and its impact on your business? - Management noted increasing success in the enterprise segment and a push for safety among customers in a volatile environment [61][62] Question: How is the global sourcing strategy impacting Q1 guidance? - The acceleration of global sourcing is expected to dampen gross margins temporarily in Q1, but management is confident in long-term improvements [66][67] Question: Can you provide insights on order growth in Q4 and 2024? - Management reported a record number of active buyers and strong growth in orders, particularly in the enterprise segment [74][76] Question: What is the relationship between Thomas and the legacy business? - Management indicated a focus on integrating the new ad server technology for Thomas, with plans for future synergies with Xometry's platform [82] Question: How are buyers adapting to the changing tariff landscape? - Customers are increasingly looking to mitigate risk by diversifying sourcing geographies, which aligns well with Xometry's flexible marketplace model [100][109]