Xometry Breaks Through: First Positive EBITDA and Strategic Momentum in Q1 2025

Xometry, Inc. (NASDAQ: XMTR) has achieved a pivotal milestone in its evolution, reporting its first-ever positive Adjusted EBITDA of $0.1 million for Q1 2025 amid robust revenue growth. This marks a critical turning point for the digital manufacturing marketplace, signaling enhanced operational discipline and the early fruits of its long-term strategic initiatives. Let’s dissect the results and their implications for investors.

Revenue Surge and Profitability Milestone

Xometry’s Q1 2025 revenue reached $151 million, a 23% year-over-year (YoY) increase, driven by a 27% surge in marketplace revenue. This outpaces the previous quarter’s growth rate, indicating accelerating momentum. The company’s Adjusted EBITDA flipped to positive territory, improving by $7.5 million from a $7.4 million loss in Q1 2024. This shift underscores progress toward its 2025 goal of full-year Adjusted EBITDA positivity—a stark contrast to a $27.5 million loss in 2024.

Operational Efficiency Gains

Cost discipline is central to Xometry’s turnaround. Advertising spend as a percentage of marketplace revenue dropped 280 basis points to 4.5%, while non-GAAP operating expenses fell to 37.3% of revenue, down from 41.5% in Q1 2024. These improvements reflect streamlined operations and better resource allocation.

Gross profit for the quarter rose 18% YoY to $56.3 million, though marketplace gross margin dipped slightly to 31.8% due to investments in global sourcing. Management anticipates margin recovery in Q2 2025 as these initiatives mature.

Strategic Initiatives Driving Growth

1. Enterprise Customer Expansion:
   Accounts with 12-month (LTM) spend exceeding $50,000 rose 12% YoY to 1,545, while high-value accounts ($500,000+) grew over 40% YoY. Enterprise buyers increasingly rely on Xometry’s AI-powered platform to source parts globally, mitigating supply chain risks.

2. International Penetration:
   International revenue now accounts for 17% of marketplace revenue, up from 15% in 2024, with a long-term target of 30–40%. Xometry’s presence in 18 languages and 6 currencies, plus regional hubs in Munich and Shanghai, positions it to capitalize on underpenetrated markets.

3. AI-Driven Supply Chain Resilience:
   The company’s AI platform dynamically optimizes global sourcing strategies, adjusting pricing algorithms weekly to reflect tariff and cost fluctuations. This innovation reduces buyer costs and strengthens supplier networks.

Long-Term Outlook and Market Potential

Xometry raised its FY 2025 marketplace revenue growth guidance to at least 22% (from 20%) and aims for full-year Adjusted EBITDA positivity. Management projects Q2 2025 revenue of $155–157 million (17–18% growth) and Adjusted EBITDA of $1–2 million.

Long-term targets include:
- Gross margins of 40–45% (up from 31.8% in Q1 2025).
- Operating expenses at 15–20% of revenue (vs. 37.3% in Q1 2025).
- Adjusted EBITDA margins of 20–30%.

With less than 1% market penetration in a $1.2 trillion global manufacturing services market, Xometry’s asset-light model—a digital platform connecting buyers and suppliers—offers scalability. The company aims to hit $1 billion in revenue by leveraging its AI edge and expanding enterprise and international markets.

Conclusion: A Turning Point with Sustained Upside

Xometry’s Q1 results are a watershed moment, validating its shift from rapid scaling to disciplined profitability. The company’s first positive Adjusted EBITDA, coupled with accelerating revenue growth and margin stabilization, signals execution excellence. Strategic levers like enterprise expansion, international scaling, and AI-driven cost optimization are well-positioned to drive sustained growth.

Crucially, Xometry’s addressable market remains vast, with minimal competition in its AI-enabled, global marketplace model. At $28.81 per share post-earnings—a 4.76% jump—the stock reflects investor optimism. If the company meets its FY 2025 targets, it could unlock significant value as it transitions from loss-making to profitable growth.

Investors should monitor execution against Q2 guidance, gross margin recovery, and progress in international markets. With a scalable platform, a growing enterprise customer base, and a clear path to profitability, Xometry is poised to capitalize on its first-quarter breakthrough. This is a company to watch as it redefines manufacturing’s digital future.