Xometry(US:XMTR)2025-08-05 13:30Financial 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]