Xometry (XMTR) 5 Nov 24 2024 Q3 Earnings call transcript
2min read Xometry, a leading AI-powered manufacturing marketplace, held its Q3 2024 earnings call, highlighting the company's remarkable performance and future growth prospects. The call, led by Shawn Milne, VP of Investor Relations, featured updates on financial results, strategic initiatives, and future outlook.
Financial Highlights and Marketplace Growth
Xometry reported record revenue of $142 million in Q3 2024, marking a 19% year-over-year increase. Marketplace revenue grew by 24% and reached $127 million, with a robust 8% quarter-over-quarter increase. The company's marketplace business showed strong growth across various end markets, including engineering, aerospace, consumer, and robotics.
Marketplace gross profit increased by 21% year-over-year to a record $55.8 million, driven by the company's AI-powered marketplace and expanding network of active suppliers. Marketplace gross margin expanded to a record 33.6%, a 250-basis-point improvement from the previous year. These achievements signal Xometry's ability to leverage its technology and network to drive strong revenue and gross profit growth.
Strategic Initiatives and Growth Drivers
Xometry is focused on several key growth initiatives, including expanding its network of active buyers and suppliers, enhancing its marketplace menu, driving deeper enterprise engagement, growing internationally, and enhancing supplier services solutions. These initiatives are expected to fuel marketplace growth and expand the company's competitive moat.
The company's network of active buyers grew by 24% year-over-year, with net additions of over 3,300. Xometry aims to further penetrate the massive market by expanding its supplier base, especially in the U.S., and launching new instant quoting categories like tube cutting, tube bending, and other tooling-based processes.
Xometry's international revenue grew by 55% year-over-year, driven by strong growth in Europe, which is now approaching a $100 million annual run rate. The company is expanding its marketplace in Europe and Asia, leveraging localized marketplaces to cater to global demand. Xometry's goal is to capture a significant portion of the market, potentially representing 30% to 40% of marketplace revenue, as many other global online marketplaces have demonstrated.
Future Outlook and Guidance
Looking ahead, Xometry expects to deliver marketplace growth in the range of 22% to 23% for the full year 2024, exceeding its prior outlook of at least 20%. The company projects marketplace gross profit to grow faster than revenue and overall revenue growth to exceed that of 2024. It also expects to achieve adjusted EBITDA profitability in 2025.
Investor and Analyst Questions
During the Q&A session, analysts asked about the key drivers of growth, international expansion, and the impact of policy changes on tariffs and trade policies. Xometry's executives provided insightful responses, emphasizing the company's resilience and strategic initiatives, as well as the potential benefits of a stronger focus on manufacturing and supply chain efficiency.
Conclusion
Xometry's Q3 2024 earnings call underscored the company's robust performance and strategic positioning for future growth. With a focus on leveraging AI, expanding its network, and exploring new opportunities in international markets, Xometry is poised for continued success in the digitization of custom manufacturing and supply chain solutions.