Xometry Reports Record Q2 Revenues of $133 Million

Have you ever wondered how a company can achieve record-breaking revenue in a competitive industry? Xometry, Inc. (NASDAQ: XMTR), a global AI-powered marketplace connecting enterprise buyers with manufacturing suppliers, has managed not only to survive but thrive, even during challenging economic times. In their recent Q2 2024 financial report, Xometry announced record revenues of $133 million, marking a significant milestone for the company. Let’s take a closer look at the details and implications of this impressive performance.

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Overview of Xometry’s Q2 2024 Financial Performance

Xometry’s second-quarter financial results for the period ending June 30, 2024, paint a picture of robust growth and strategic advancements. By leveraging AI technology, Xometry has not only expanded its marketplace revenue but also improved gross profit margins and adjusted EBITDA.

Key Financial Metrics

To get a clearer view, let’s break down some of the key financial metrics reported by Xometry in Q2 2024:

Metric	Q2 2024	Year-Over-Year Change
Total Revenue	$133 million	+19%
Marketplace Revenue	$117 million	+25%
Gross Profit	$52.9 million	+21%
Marketplace Gross Margin	33.5%	–
Adjusted EBITDA	-$2.6 million	+70% improvement
Net Loss	$13.7 million	–

These figures reveal a company on an upward trajectory. Despite strategic exits from lower-margin businesses, Xometry’s marketplace revenue saw a 25% year-over-year increase, attributed to the growing demand for their innovative AI-powered solutions.

CEO Insights

CEO Randy Altschuler attributes the company’s success to Xometry’s AI-powered marketplace, which has been gaining significant market share. This marketplace allows for streamlined interactions between buyers and suppliers, ensuring that supply chain solutions are both efficient and effective. Altschuler highlights that continued investments in AI technology and an expanded supplier network will further sustain growth and improve profit margins moving forward.

Analyzing Revenue Growth

One of the standout highlights from Xometry’s financial report is the remarkably consistent revenue growth across its various business segments.

Marketplace Revenue

The marketplace revenue alone surged to $117 million, a 25% rise from the previous year. This significant growth underscores the importance of Xometry’s robust platform, where enterprise buyers can efficiently connect with a wide range of suppliers for their manufacturing needs.

Supplier Services Revenue

While there was a decrease in supplier services revenue to $15.3 million due to a strategic exit from lower-margin businesses, this decline was anticipated and accounted for in Xometry’s broader financial strategy. The company’s focus remains on its high-margin marketplace revenue, which is expected to continue driving overall growth.

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Growth in Marketplace Active Buyers

A critical measure of Xometry’s success is the increase in Marketplace Active Buyers. This metric grew by 27%, rising from 48,340 in June 2023 to 61,530 in June 2024. Such growth illustrates the expanding reach and appeal of Xometry’s platform, attracting an increasing number of enterprise buyers who value efficient supply chain solutions.

High-Value Clients

Additionally, the number of Marketplace Accounts with at least $50,000 spend in the last twelve months saw a 24% increase, rising from 1,159 to 1,436. This growth highlights the platform’s growing importance to high-value clients, showcasing Xometry’s ability to meet the demands of substantial enterprise buyers.

Active Paying Suppliers

While there was a slight decrease of 7% in the number of Active Paying Suppliers, from 7,553 to 6,992, this minor setback does not overshadow the overall positive trajectory of the company’s performance. Continuous efforts to streamline and optimize the supplier network are expected to mitigate this decrease moving forward.

Improved Financial Health

In terms of financial health, Xometry reported a substantial reduction in its net loss. The net loss attributable to common stockholders was $13.7 million, a significant reduction of $12.9 million year-over-year. This reduction is a clear indicator of Xometry’s ongoing efforts to streamline operations and improve financial performance.

Adjusted EBITDA

Adjusted EBITDA showed a remarkable improvement with a year-over-year increase of $6.0 million, resulting in a negative $2.6 million. This metric is essential as it reflects the company’s ability to manage and improve its earnings before interest, taxes, depreciation, and amortization in relation to its revenue.

Business Highlights and Strategic Developments

Aside from impressive financial figures, Xometry made substantial strides in technological and geographical expansion, further cementing its leadership in the AI-powered manufacturing marketplace.

Advancements in Auto-Quote Categories

Xometry has been beta-testing new auto-quote categories, including tube-bending and tube-cutting processes. These new categories are expected to be fully released in Q3, further enhancing Xometry’s instant-quoting capabilities and bolstering its technological edge.

Geographical Expansion

On the geographical front, Xometry expanded its offerings in the Asia Pacific region, launching new services in Australia, Singapore, and New Zealand. In China, they enhanced customer service capabilities through the WeChat mini-app, aiming to provide seamless support for local clients.

In Europe, the company added 11 new materials for CNC and expanded finishing options for 3D printing, now offering localized marketplaces in 15 languages. These expansions are part of Xometry’s broader strategy to penetrate and grow in international markets.

Outlook for Q3 2024 and Beyond

Looking ahead to Q3 2024, Xometry anticipates continued revenue growth of 14% to 16% year-over-year, expecting to reach between $136 million and $138 million. The company also remains focused on achieving Adjusted EBITDA profitability, predicting a loss of $1.5 million to $3.5 million due to ongoing investments in growth.

Fiscal 2024 Expectations

For the entire fiscal year 2024, Xometry reaffirms its expectation of at least 20% year-over-year growth in marketplace revenue. This projection aligns with the company’s strategic emphasis on high-margin marketplace business, despite a projected 10% decrease in supplier services revenue.

The outlook also includes anticipated improved operating leverage compared to fiscal 2023, although this will be partially offset by investments in international and enterprise growth.

Assumptions and Risks

Xometry’s financial outlook is based on several assumptions, including market demand, competitive landscape, and internal operational efficiency. It’s important to note that actual results may vary due to these factors, and there is no assurance that the company will achieve these projected outcomes.

Complexity of Adjusted EBITDA

One complexity is the reconciliation of Adjusted EBITDA to net loss due to the variability and complexity of charges excluded from this measure. Investors and stakeholders should consider this when evaluating the company’s performance and future prospects.

Conclusion

Xometry’s Q2 2024 results underscore the company’s robust growth trajectory and strategic advancements in the AI-powered manufacturing marketplace. With record revenues of $133 million, a significant increase in marketplace revenue, and strides in technological and geographical expansion, Xometry continues to solidify its leadership position.

The enthusiastic reception of their innovative solutions and the expanding base of high-value clients bode well for Xometry’s ongoing success. As the company looks forward to Q3 2024 and beyond, the focus remains on leveraging AI technology, expanding its global footprint, and achieving sustained financial growth and profitability.

If you are keen on the future of AI-powered marketplaces and the next phase of growth for industry leaders like Xometry, keeping an eye on their strategic developments and financial performance will be essential.

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