Xometry, Inc. Q3 FY2024 earnings call

Q3 was a strong quarter with record revenue, gross profit, and marketplace gross margin. Key highlights include: expanding the network of active buyers and suppliers, with active buyers up 24% year-over-year and active suppliers surpassing 4,200; expanding the marketplace menu with new instant quoting capabilities like laser tube cutting and tube bending; achieving deeper enterprise engagement with a 23% year-over-year increase in accounts with last 12-month spend of at least $50,000 to 1,506; international revenue growing 55% year-over-year, approaching a $100 million annual run rate; and modernizing the Thomas advertising platform to drive advertiser penetration.

In Q3 2024, Xometry's revenue reached $142 million. Marketplace revenue was $127 million, accounting for approximately 89.4% of total revenue, and grew 24% year-over-year. Gross profit was $55.8 million, with marketplace gross margin reaching a record 33.6%. Supplier services revenue was $14.7 million, declining 10% year-over-year, with a gross margin of 89.6%.

For the fourth quarter, revenue is expected to be in the range of $145 million to $147 million, with marketplace growth projected at 16%-18% year-over-year and supplier services expected to decline ~10% year-over-year. Q4 is expected to be slightly adjusted EBITDA profitable. For full year 2024, marketplace growth is expected to be 22%-23%, ahead of the prior outlook. Xometry expects at least 20% marketplace growth in 2025, with overall revenue growth in 2025 exceeding that of 2024 and full-year 2025 expected to be adjusted EBITDA positive.

Uncertainty in the operating environment, potential impact of trade policies/tariffs, and the need to sustain growth and profitability while balancing investments.

Q: Can you speak more to or elaborate more on one of the key inputs to driving growth higher in 2025 versus 2024?

A: James Miln stated that growth in 2025 will be driven by continuing initiatives like growing the buyer and supplier network, developing the marketplace menu, making progress in international and enterprise. Randy Altschuler added that investments in key initiatives are paying dividends and will continue to drive growth in 2025.

Q: Can you just talk a little bit more about the international business? And I'm curious, is – do you have visibility toward when that business can reach profitability...

A: James Miln said international business is growing well with 55% growth, and Randy Altschuler added that technology investments in Europe are paying off, and growth in AsiaPac is also seen, with expectations to get international business to profitability sooner rather than later.

Q: The operating environment, I think by everyone's account is not great and hasn't been for a long time but you're still putting up these great growth numbers. And the one that, I'm looking at the moment is the number of buyers that you added in the quarter. I keep on thinking that maybe large numbers is going to catch up with you at some point and that you're that that number of buyers added in the quarter is going to start to tick down a little bit...

A: Randy Altschuler said there are millions of buyers out there, with opportunities from larger customers, broadening the menu, and international growth to continue driving buyer count. Shawn Milne added that advertising spend is well controlled while balancing growth and profitability.