Xometry's Q1 2025: Navigating Contradictions in Tariffs, Growth Strategies, and Margin Expansion

Tariff impact and customer behavior, international growth strategy, gross margin expansion, supplier services growth, and tariffs and domestic sourcing are the key contradictions discussed in Xometry's latest 2025Q1 earnings call.



Revenue Growth and Marketplace Expansion:
- Xometry reported revenue of $151 million for Q1 2025, marking a 23% increase year-over-year.
- Marketplace revenue accelerated to 27% growth, driven by increased enterprise adoption and strategic investments in global sourcing.

Operating Leverage and EBITDA Improvement:
- The company generated positive adjusted EBITDA for Q1, driven by strong operating leverage and investments to support global sourcing initiatives.
- Q1 adjusted EBITDA improved by $7.5 million year-over-year, reflecting efficient resource allocation and cost management.

Increased Domestic Sourcing and Tariff Adaptation:
- Xometry observed an incremental shift in demand mix towards domestic sourcing in Q2, with most US demand fulfilled by US partners.
- This shift is attributed to the current complex international trade and supply chain environment, which validates the company's marketplace model.

International Growth and Platform Expansion:
- International revenue increased 20% year-over-year in Q1 2025, with significant growth opportunities in EMEA and APAC regions.
- The expansion is supported by the launch of new marketplace platforms and services, such as instant quotes for injection molding in Europe.