Xometry's Q2 2025 Earnings Call: Unpacking Contradictions in Growth, Pricing, and Margins

Macroeconomic impact on growth, pricing strategy and adjustments, impact of tariffs on sourcing strategies, international revenue penetration and market growth, and gross margin expansion and improvement are the key contradictions discussed in Xometry's latest 2025Q2 earnings call.



Record Revenue and Marketplace Growth:
- Xometry Inc. reported record revenue of $163 million for Q2 2025, a 23% year-over-year increase.
- Marketplace revenue grew by 26% year-over-year, driven by strong execution and large enterprise accounts.
- The growth was attributed to significant market share gains in the large and fragmented custom manufacturing market.

Improved Gross Margin Expansion:
- Xometry achieved a record overall gross margin of 40.1%, with a marketplace gross margin of 35.4%, up 190 basis points year-over-year.
- This expansion was primarily driven by AI-powered pricing and selection algorithms, which enhance marketplace value.

Adjusted EBITDA and Operating Leverage:
- Adjusted EBITDA improved to $3.9 million, a $6.6 million year-over-year increase, with an incremental adjusted EBITDA margin of 22%.
- The improvement was due to strong marketplace performance and operating efficiencies, demonstrating the scalability of the platform.

International Growth and Market Expansion:
- International revenue growth accelerated to 31% year-over-year, with strong growth in Europe.
- Expansion is driven by global marketplace capabilities, including the launch of Teamspace in Europe, enhancing enterprise engagement.