Xometry Inc - Ordinary Shares (XMTR) 8 Aug 24 2024 Q2 Earnings call transcript
AInvestSaturday, Aug 10, 2024 3:12 pm ET
2min read
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In a recent earnings call, Xometry, a leading AI-powered on-demand manufacturing marketplace, highlighted its robust performance and promising growth prospects for the future. With record revenue, gross profit, and gross margins, Xometry is demonstrating a strong foothold in the market and a clear strategy for continued expansion.

Market Share and Growth Opportunities

Xometry's marketplace, powered by AI, is gaining significant market share, enabling buyers and suppliers to strengthen their supply chains globally. With key growth initiatives underway, the company is poised for continued penetration in the manufacturing industry, which is highly fragmented and ripe for digitization. The company's revenue for Q2 increased by 19% year-over-year, reaching $133 million, with marketplace revenue growing by 25% year-over-year and a robust 9% quarter-over-quarter.

Investments in Technology and Growth

Xometry's focus on technology and innovation is a key driver of its success. In Q2, the company made significant investments in its marketplace technology, including key hires in machine learning and data science. This investment is expected to expand marketplace gross margin and drive strong gross profit growth in the second half of 2024. The company's goal is to increase marketplace gross margin to 35% by the end of the year, showcasing its commitment to maximizing efficiency and profitability.

Global Expansion and Enterprise Engagement

Xometry's global footprint is expanding, with international revenue increasing by 31% year-over-year. The company's success in Europe, where it has expanded into new English-speaking countries and launched enhanced customer service capabilities on its WeChat mini app, is a testament to its ability to adapt and thrive in diverse markets. Additionally, Xometry's enterprise strategy is gaining traction, with a U.K.-based aerospace equipment manufacturer choosing Xometry for high-volume manufacturing, underscoring the company's ability to meet the needs of large enterprise customers.

Challenges and Opportunities

Despite the challenging macroeconomic environment, Xometry remains optimistic about its future prospects. The company's strong execution and strategic investments are paying off, with a 70% improvement in adjusted EBITDA loss in Q2. Xometry's focus on expanding its network of active buyers and suppliers, enhancing its marketplace menu, and driving deeper enterprise engagement are all key initiatives that are expected to fuel continued growth.

Analysts' Perspective

Analysts on the call were impressed by Xometry's strong performance and strategic initiatives, with many expressing confidence in the company's ability to navigate the current macroeconomic challenges and capitalize on growth opportunities. The company's focus on technology, innovation, and global expansion is seen as a key differentiator in the market, setting Xometry apart from its competitors.

Looking Ahead

With a strong foundation in place and a clear path forward, Xometry is well-positioned for continued growth and success. The company's strategic investments in technology, global expansion, and enterprise engagement are expected to drive market share gains and profitability in the years ahead. As Xometry continues to digitize supply chains and provide flexible, resilient solutions for both buyers and suppliers, it is poised to redefine the manufacturing industry and unlock new opportunities for innovation and efficiency.

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