Xometry, Inc. Q4 FY2024 earnings call

Randy Altschuler highlighted that Q4 was a record quarter for Xometry with record revenue, gross profit, and marketplace gross margin. The AI-powered marketplace delivered strong growth, with revenue increasing 16% year-over-year to $149 million. Marketplace revenue grew 20% year-over-year, driven by 23% growth in active buyers reaching over 68,000. International growth was robust at 42%, with Xometry Europe introducing new materials and finishes. The company saw strong enterprise adoption, with revenue from large accounts with annual spend of at least $500,000 growing 40% in 2024. Investments in AI and expanding the marketplace menu were emphasized, with plans to continue growing internationally and enhance supplier services.

In Q4 2024, Xometry's total revenue reached $149 million, a 16% year-over-year increase. Marketplace revenue was $135 million, accounting for approximately 90.6% of the total revenue, and grew 20% year-over-year. Supplier services revenue was $14 million, a 13% year-over-year decline. Q4 gross profit was $59 million, with a gross margin of 39.7%. The marketplace gross margin was a record 34.5%, up 320 basis points year-over-year. International revenue saw robust growth of 42% year-over-year in Q4, reaching a $100 million run rate.

For the first quarter of 2025, revenue is expected to be in the range of $147 million to $149 million, representing a 20%-21% year-over-year growth, with marketplace growth projected to be 24%-26% year-over-year. Adjusted EBITDA is expected to be a loss of approximately $1.5 million in Q1. For 2025, overall revenue growth is expected to exceed that of 2024, with marketplace growth of at least 20% each quarter, supplier services expected to decline 5%-10% year-over-year, and the company aiming to be adjusted EBITDA positive for the full year with incremental adjusted EBITDA margins of approximately 20%.

Risks include the stronger U.S. dollar potentially impacting revenue, volatile global trade policies that could temporarily affect gross margin, and the challenge of integrating and monetizing the Thomas platform while maintaining profitability.

Q: How should we think about the pathway to international penetration and the building blocks of multimodal AI helping the buyer process?

A: Randy Altschuler stated international could account for 30%-40% of marketplace revenue, with growth in EMEA and APAC. Multimodal AI would allow uploading non-3D CAD files for instant quotes, reducing friction and expanding the customer base.

Q: How is the changing tariff landscape impacting conversations with buyers and suppliers?

A: Randy Altschuler mentioned customers are seeking risk mitigation, and Xometry's asset-light model is appealing as it provides flexibility in sourcing across geographies.

Q: Can you talk about the relationship between Thomas and Xometry and where we stand now?

A: Randy Altschuler said the focus is on integrating the new ad server for Thomas to increase advertiser penetration, with plans to explore synergies with the broader Xometry ecosystem in the future.

Q: How do changes in the sales function and marketplace menu drive enterprise penetration?

A: Randy Altschuler explained that segmentation of the sales team and investments in technology tools like Teamspace and ERP integrations are driving deeper enterprise adoption.

Q: What gives confidence in gross margin improvement despite Q1 headwinds?

A: James Miln noted the track record of year-over-year gross margin growth and confidence in improvement from Q2 onward as the company's algorithms and supplier network continue to mature.

Q: Are you seeing changes in buyer behavior due to tariff rhetoric?

A: Randy Altschuler said buyers are more aware of risk mitigation and are leveraging Xometry's flexible platform to source across different geographies.

Q: What went right with marketing initiatives to add 3,400 active buyers?

A: Randy Altschuler attributed the success to product-led growth, investments in technology, and improved marketing efficiency, which led to increased customer acquisition.