Xometry at William Blair Conference: Growth Amidst Challenges

On Tuesday, 03 June 2025, Xometry (NASDAQ:XMTR) shared its strategic vision at the 45th Annual William Blair Growth Stock Conference. The company highlighted its robust growth strategy and financial performance, while acknowledging challenges like supply chain disruptions and tariff uncertainties. Xometry is positioning itself as a leader in the custom manufacturing marketplace, leveraging AI-driven solutions to enhance efficiency.

Key Takeaways

• Xometry reported a 23% year-over-year revenue growth in Q1, with marketplace revenue up 27%.
• Gross margin increased from 23.5% in 2020 to 33.5% in 2024.
• The company aims for full-year profitability by 2026.
• International marketplace revenue grew to 18% in 2024 from 2% in 2020.
• Xometry plans to expand its network and deepen engagement with enterprise customers.

Financial Results

• Q1 revenue reached $151 million, marking a 23% increase from the previous year.
• Marketplace revenue saw a 27% year-over-year growth.
• Last twelve months (LTM) revenue totaled $574 million.
• Gross profit outpaced revenue growth, with margins climbing to 33.5% in 2024.
• Xometry holds $231 million in cash and cash equivalents, focusing on organic growth and potential acquisitions.

Operational Updates

• Active buyers increased by 22% year-over-year in Q1, surpassing 71,000.
• The company has over 4,375 active suppliers.
• Enterprise accounts with over $50,000 in LTM revenue grew at a 28% CAGR.
• Xometry added tube cutting and bending to its core processes and operates 18 localized marketplaces.
• ThomasNet, with 5,000 premium suppliers, supports Xometry’s monetization efforts.

Future Outlook

• Xometry anticipates accelerated growth in 2025, aiming for profitability by 2026.
• Plans include expanding buyer and supplier networks and enhancing marketplace offerings.
• The company targets 30% to 40% of revenue from international markets.
• Xometry is open to technology and talent acquisitions to support growth.

Q&A Highlights

• Xometry’s growth with $500,000+ LTM revenue customers is supported by TeamSpace and CAD integrations.
• Tariff uncertainties highlight the need for resilient supply chains, benefiting Xometry.
• Critical parts are more likely to be sourced through Xometry’s platform.

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Brian Draub, Industrial Technology Analyst, William Blair: Right. Good morning, and welcome to the William Blair conference. I’m kind of shocked that this is my twenty first William Blair Growth Stock Conference, including my internship in 02/2005. I’m Brian Draub, the Industrial Technology Analyst at Blair covering Xometry. I first, of course, have to remind everyone that you can find a full list of research disclosures on our website, williamblair.com.

And, today, we’re very happy to have with us Xometry. We have Randy Altshuler, the CEO, James Milne, c CFO, and, Sean Milne, here’s the head of investor relations. Thank you all for being here. And I think most people in the room are probably familiar with Xometry. Since the company’s IPO in 2021, know, it’s been a very choppy economic backdrop for a number of reasons.

I think we’ve had the ISM index above 50 maybe for a handful of months during that time. In meantime, Xometry has grown its customer base. It’s basically tripled its customer base. It’s doubled its manufacturing partner base. The the marketplace that they run has seen revenue triple, and the gross margin in that marketplace has gone from the mid twenties to the mid thirties, despite a lot of people wondering how they’re going to sustain mid twenties.

So to tell you how they did that and how they’re going to perform going forward, I’m gonna turn it over to Randy. So thanks very much for being here.

Randy Altschuler, Cofounder and CEO, Xometry: Thank you, Brian. We’re gonna just start with a a short video here.

Unidentified speaker: In order to build the products that surround us every day, product designers develop unique parts and assemblies and seek the best way to manufacture them. Most manufacturing is done by a fragmented global market of millions of small and medium sized manufacturers. Finding the right one can be a time intensive process, taking days or weeks with prices and lead times varying greatly. Manufacturing suppliers also struggle to find the most profitable work for their capacity as their resources and geography often limit them. Xometry’s machine learning AI solves this problem by unlocking instant access to a global marketplace of thousands of manufacturers.

Simply upload your CAD models to the platform and specify your manufacturing needs. This prompts Xometry’s proprietary AI to analyze the geometries and features of each part file based on millions of data inputs. Within seconds, Xometry’s design for manufacturability AI computes and produces pricing, lead time options, and manufacturing process recommendations. Xometry’s AI utilizes machine learning, which trains on thousands of features and analyzes similar types of previously completed parts and orders. Xometry’s matching AI agent pairs the work to an optimal supplier, ensuring that high quality parts are produced cost effectively and on time.

It scans thousands of vetted suppliers in Xometry’s global network using its knowledge of each supplier’s unique capabilities. With each transaction, Xometry’s AI learns more about each supplier’s expertise and how to pair them with right customer projects and optimize for repeat work and profitability. This increases supplier success rates and customer satisfaction. Through this innovative AI driven approach, along with the strength of an expanding global supplier network, Xometry provides its customers with access to a resilient supply chain that can handle unexpected disruptions. This groundbreaking

Randy Altschuler, Cofounder and CEO, Xometry: anyway, I am Randy Altschuler. I am the, cofounder and CEO of Xometry. And let me just take a zoom out for a second for those of you who are not familiar with Xometry. So we are focused on the market for custom manufacturing. Obviously, manufacturing is a huge market.

And custom manufacturing, we estimate could be over a $2,000,000,000,000 subsegment of that market. So that’s not when a customer is buying things specific for their prototyping or end use. And today, that’s a highly fragmented market with hundreds of thousands of small manufacturers spread out across The United States and across the world providing these this manufacturing and millions of buyers from smaller companies to the largest companies in the world. So in order to create efficiencies and to do what’s happened in so many other industries, we created a marketplace for custom manufacturing. So we provide value for both the buyers and the suppliers in this giant market.

So for the buyers, it’s giving them instant access to custom manufacturing capacity and capabilities. And we’re doing that with AI, we’re providing instant pricing. So that’s so remarkable because this is custom manufacturing. It’s not an off the shelf part. It’s not like retail where you’re buying SKUs, you know exactly how much it should cost.

In this case, it’s custom, so the price itself is unknown and that’s why before Xometry, it was very difficult for there to be an online marketplace experience, but with Xometry now, you can get that instant pricing and that gives the customer the ability to find the ideal manufacturer instantly and get what we believe is the best price and best lead time that’s available. And they can do that both domestically, internationally, they have a wide range of different options, including different time periods in which they can receive the parts in different manufacturing technologies. And this is being utilized by some of the largest companies in the world. And the other side are the suppliers. So again, there are hundreds of thousands of small manufacturers spread out across The United States and across the world, and the long tail of the Internet had never touched these suppliers.

So they had this open capacity, but they were effectively landlocked with their local customers. So if you were in, outside of Detroit or in Detroit, your customer base was gonna be predominantly auto. Even if there was a aerospace company that could use your services in California, before Xometry, we’re you weren’t able to get access to that customer. So with our marketplace, you’re able to get jobs from all across the country, and we’re using AI to give you the jobs that meet your needs. So instead of just giving you any job, we look at your capabilities, we see your history, what you’ve liked, how you’ve performed well, and then we feed you more work.

So it’s more profitable, and there’s no cost for the supplier to join us. So as Brian mentioned, we’ve tripled our active buyer base since we went public in 2021. In Q1, we had over 71,000 active buyers. We provide an annual statistic on active suppliers, so we had a little less than 4,400 of those. On an LTM basis, we had $574,000,000 and we had a gross profit of $224,000,000 As you can see in Q1, our revenue grew 23% year over year and our marketplace revenue, so we have a different segment of our business, but our marketplace revenue grew 27% year over year.

And just to double down on what I was talking about, Xometry AI, everybody’s talking about AII. Since our founding in 2013, we’ve been using AI to create liquidity and power our marketplace. We use it in a couple of ways. First, we use it to figure out what price is appropriate for the customer when they order. Again, it’s a bespoke part.

So we’re looking at we built models, we’re using algorithms, machine learning to say, hey, we’ve never made this part before, but it’s similar in different ways to other parts, and then we extrapolate out what we think is the right price. We’re constantly refreshing that, we’re getting more and more data, and we’re updating those algorithms regularly. Then, once the customer orders, we’re using those algorithms to figure out who are the ideal suppliers to manufacture these parts, whether it’s the quality, the on time delivery, the price point, and not only what’s good for the customer, but again, what’s good for the supplier. And the more often the suppliers are in our marketplace and the more data we get on them, the smarter we are about what they’re looking for. So I always like to use analogy of TikTok videos for those of you who watch TikTok or or have children who watch TikTok.

You know, after just a few videos, TikTok shockingly knows what you wanna watch next, and they feed you that. We’re trying to do the same thing for our suppliers because ultimately, we wanna help our suppliers not only get business but improve their profitability. So if we can go now to the next slide. Okay. Great.

One thing I just wanna double down on is the huge market opportunity in front of us. So we are the leading marketplace. You know, we’re the leader, but we’re still relatively small versus the entire market. And so this just, illustrates for you that right now our penetration rate is less than 1% when you look at different different slices of the market. So we’re not only proud of the growth that we’ve had this year, and we’ve actually indicated accelerated growth in ’25 versus ’24, and we did that last year when we we we saw this year was going be a stronger year for us.

So not only do we see accelerated growth, but we see the opportunity to grow for a very long time because this is such a gigantic market. Can we get to the next slide, please? And this again, just to what, you know, this gives you some idea of our CAGR. Since 2019, these are the things that we publicly disclose, and you can see everything from active buyers and suppliers growing rapidly over the 2019 to 2024 period. Our revenue grew very rapidly, but, and Brian alluded to this, our gross profit even grew faster.

So a lot of companies hack their way to growth by lowering their margins. We were actually able to not only grow very quickly, but we were able to grow our gross profit even faster, and we expect that gross margin expansion to continue. And one of the great things is we are a technology company. We’re an asset light company. We’re not a manufacturer ourselves, so our technology is extensible across many end markets.

And here’s just a scan of it. So we’re not long or we’re particularly vulnerable to any one customer or any one market. And that’s one of the reasons why our growth has been so durable, whether it’s been the COVID times, whether it’s been, you know, concerns about tariffs, whether it’s been normal times, Xometry has consistently grown. That’s because with our technology platform, it’s relevant for so many different industries, and sometimes industries are gonna spike, sometimes they’re gonna be going lower. We’re not only gaining market share, but we’re crossing across all these different industries.

Next slide. We also have a clear strategy for growth. Again, we’re a marketplace here. You’ve seen this happen in other marketplaces, and we’re the leading one. So here’s you know, we can expand our networks of buyers and suppliers.

There are millions of buyers out there. There are hundreds of thousands of suppliers out there. So we’re very proud of how many we have today, but there’s a lot more room we can go. We can deep drive deeper with our enterprise customers. So one of the things that we disclosed in our Q1 earnings was that we have over 100 customers that in 2024 did more than 500,000 of LTM revenue with us.

We believe that those customers could each do $10,000,000 of annual business with us. So these are the largest companies in the world. They’re using Xometry. Between our technology, we have specific technology tools we’re using to grow deeper into those enterprise customers through our sales efforts. We’re expanding within them.

They’ve seen very rapid growth, but there’s a huge runway to continue. So we’re gonna push for more and more enterprise engagement. We’re further expanding what we can offer in our marketplace. What are the different things we can instantly price? So today, we instantly price a number of manufacturing technologies, a number of materials and finishes, but there are so many more that we can add.

And the good news is with our AI powered algorithms, we’re able to do that rapidly, and you should expect to see the Xometry offering to continue to expand for a long time moving forward. And again, that just enabled us to grow our share of wallet with the customers. So instead of the customer only using us for one or two things, they’re able to do all their shopping with Xometry. We’ve also been growing very rapidly internationally. So our international growth, and our CFO James Mill will talk about that later, has been terrific.

It’s been primarily been in Europe. We’re beginning to see some really nice traction in Asia. So we have 18 localized marketplaces. We expect so if you’re in different countries, if you’re in you’ve got a local marketplace for the French market. You can buy from French manufacturers, you can buy from overseas manufacturers, and then we customize the experience for the French customer.

We’re using the same tech platform in all these different marketplaces, but we’re able to expand relatively rapidly and with little CapEx investment in these different places. And then we have supplier services. So Xometry bought a company called ThomasNet. That’s basically one of the largest or it’s the largest directory for industrial manufacturing. Over 500,000 manufacturers are listed in that.

So customers have the ability to find things beyond what they can find in our instant quoting engine. And then this is just a preview. So with this, I’m gonna hand it over to our CFO, James Mellon. Are you up now?

Brian Draub, Industrial Technology Analyst, William Blair: Yeah. Okay.

James Milne, CFO, Xometry: Randy, and thanks, everybody. So just to dig a little deeper into each of those growth initiatives and the numbers behind them, this large and growing marketplace of buyers and suppliers. So you can see the ramp in buyers here. In Q1, we were able to grow buyers another 22% year over year in Q1 to over 71,000 buyers. At the same time, we’ve been growing that and expanding our global supplier network.

So you see in 2024, we ended the year with over 4,375 active suppliers on the network. When we look at the when we think about enterprise, we give a stat around the accounts that we have with last twelve months of more than $50,000 and that’s been growing really well as well over the last few years at a CAGR of around 28%. We finished last year with nearly 1,500. Now we really think of those as a really great indicator of the enterprise funnel. And so what we talked about in our Q4 call and our Q1 call was the potential that we see to grow this enterprise segment.

It’s been an area of investment that we’re starting to see some leverage from in the first quarter of this year. And as Randy mentioned, we’ve got more than 100 of those accounts with more than $05,000,000 in LTM revenue in 2024. We have some case study detail in our presentation on our investor site and you’ll see that we have large customers who have grown in recent years from hundreds of thousands of dollars to millions, 5 million, 6 7 8 million. So we’re on our way to having these accounts with more than $10,000,000 in annual LTM. And we believe that over time that many of these can get to a more than $10,000,000 annual opportunity.

Again, building on what Randy was saying in terms of the strategy of adding more functionality, more processes, more certifications, more finishes to our platform. Last year, we were able to add tube cutting and tube bending to the core processes that we already have in place. There are others that we’re investing in and we’ve done work to help apply new data models to areas where we’re launching new processes, new finishes or certifications to help those ramp up with liquidity faster on the platform and add more to meet the needs of our increasing number of buyers and enterprise customers. And then to build on the growing of the international footprint, you’ll see here that just in 2020, international was 2% of our marketplace revenue. And in 2024, it got up to 18% of that revenue.

It’s been growing really well. We’ve been growing particularly out of Europe and our operations there are headquartered out of Munich, Germany, but we’ve been building out the networks and the marketplaces across EMEA, including countries like Turkey and then out of Asia as well, send it out of Shanghai. So to double down on what Randy was saying, we’ve got 18 languages. We can take six different currencies continue. And what we’ve seen really importantly is that the needs of buyers and the needs of suppliers are very consistent globally.

As we look at building out the marketplace, we’re seeing very similar opportunities with the value proposition that Xometry provides. And I think that this shows how we believe this can continue to grow really well and like many other global marketplaces get us to 30% to 40% of our revenue from where we are today and we’re well on that path. And then on the Thomas side, a big focus here of enhancing our monetization of this leading industrial sourcing advertising platform. We have about 5,000 premium paying suppliers today. We’ve got over 1,000,001,400,000 of registered users.

The platform is very rich and deep and broad in terms of all the different categorization of suppliers and manufacturers on the platform. We also offer a suite of marketing services to many of those companies who are looking to get more users and more leads to their sites. So, we’re working on continuing to improve the search and improve the advertising platform to grow this very profitable piece of our business. So, just to recap a few of those underlying trends, the annual revenue, you can see here we’ve continued to see significant growth at scale in the first quarter. Just to bring it back to the most recent, we grew marketplace 27% year over year.

We saw some great strength in The U. S. As we continue to grow internationally as well. And our overall revenue has now broken the £600,000,000 LTM mark delivering £151,000,000 in Q1 and growing 23% year over year.

Brian Draub, Industrial Technology Analyst, William Blair: Sorry, James. Sam, do you mind closing that door? Yes. Yes.

James Milne, CFO, Xometry: We’re seeing increasing value in our continuing in all the cohorts that we’ve brought on over this last several years. And so you can see indicated by this chart as we continue to be successful in the accounts that we bring into Xometry, they grow with Xometry over time as we are able to add more to the marketplace menu and get deeper into our relationships driven both by enterprise and also then by broader selection, more efficiency of marketing to bring customers back again to the platform. And importantly, in terms of the economic engine of Xometry, the strong gross profit growth. And we’ve seen that continue to grow year over year. In the first quarter, we continue to see nice gross profit growth year over year.

And we’re also able to make some investment in driving liquidity in our marketplace across multiple markets, so that we’re well positioned in an environment of more unilateral trade and tariffs to be able to source from different regions and give our buyers the best options on the Xometry platform. So we continue to see really nice gross profit growth and we expect our gross margins to continue to rise this year, which is a factor of both more orders, more buyers, more data for AI and the machine learning algorithms to work with and also our expanding supplier network, so we have more options to match that order with the optimal supplier. And so this and the impacts of that you can see over the long term here as we put in more buyers and more orders matching with more suppliers, we’ve been able to grow our gross margin 10 points since 2020. So from 23.5% to 33.5% in 2024. And our long term target on this and view is that this marketplace gross margin can be in the 35% to 40% range.

And we exited last year very close to that level and we’ll continue to see improvements this year. The strong buyer growth is also coming through improving advertising efficiency as we’ve continued to add a consistent number of new buyers to the platform each quarter. That’s coming with increased efficiency as we’ve also built out and matured both our sales and our marketing functions. We expect this to continue to show efficiency over time as part of our path to improving here from our adjusted EBITDA profitability. So we’ve been really pleased with what those efficiencies that the platform has been able to demonstrate over these periods.

And beyond sales and beyond marketing, we’ve also seen in general great efficiency, strong leverage across our expense areas as we continue to scale the platform. We’ve seen this steadily over the last few years and that continued into in the first quarter. We saw a really nice increase on the sales marketing side in leverage and efficiency. This followed about a year ago where we were making we were leaning into building out the enterprise team and continuing to grow in international. So really, it’s been really nice to see that come with 27% marketplace growth in the first quarter, but also being able to show the leverage in the model as we move forward.

And I think the big there are a lot of good initiatives with the team and with our leadership team in place, a lot of focus on how to drive more automation and scale as we move forward to see continued leverage in areas like operations and support. And that’s really driving great progress that we’ve been making in profitability and our adjusted EBITDA margin. We’ve seen over 20% incremental margins come through in the last few years, about 20% in 2023 and twenty two percent last year in 2024. And we expect to continue to see and we’ve communicated 20% incremental adjusted EBITDA margins as we scale from here the $600,000,000 run rate to $1,000,000,000 As Randy outlined, we’ve got a large really massive opportunity ahead of us. And so scaling this business is and the growth of the business is a fantastic opportunity for us.

We want to do that with discipline and with profitability as well. We think that this is the right balance of growth and profitability as we grow from here to 1,000,000,000 and we’re an asset light model. We’re relevant across all of these different categories and all of these different regions. The models can apply to all of these, which differentiates us in terms of that asset light approach and the ability for that to over time generate strong cash flow. And so as we get adjusted EBITDA into full year profitability here and continue on that into 2026, we’ll be able to then show that converting into free cash flow as well.

And just I think this is probably towards the end. So to finalize in terms of then as we think about our capital allocation strategy, the primary focus is investing in that organic growth in the buyer and supplier networks, the huge opportunity that’s ahead of us, expanding the platform, the technology, the international expansion that can help us drive scale and with that comes profitability. We want to maintain our strong balance sheet. We have $231,000,000 in cash and cash equivalents today. And as we make that, we’re getting close to free cash flow positive as well.

And so we’ll continue to be asset light, minimize the CapEx and drive our incremental adjusted EBITDA of 20%. And I think that it’s an exciting space. There’s a lot of innovation in the space. There’s technology. There are ways that perhaps we can identify tuck in acquisitions that could help accelerate that organic growth strategy.

And so that will be part of our consideration for technology and talent as we move forward. So really about accelerating our core marketplace growth and leaning into this huge opportunity that’s ahead of us.

Unidentified speaker: Great. Okay.

James Milne, CFO, Xometry: We’ll leave it on this slide at the end, but yes, back to you, Brian.

Brian Draub, Industrial Technology Analyst, William Blair: I’m going ask a question. I had a choice between either sharing Randy’s lapel or

Randy Altschuler, Cofounder and CEO, Xometry: Okay.

Brian Draub, Industrial Technology Analyst, William Blair: Step here for a second. We have four minutes for Q and A and then we’ll be in the Jenny B room if anyone wants to continue the discussion with us there. But can you double click on the growing with the 500,000 plus customers, the customer spending $500,000 LTM revenue? How are you doing that? And can you talk about team space and how impactful that’s been?

Randy Altschuler, Cofounder and CEO, Xometry: Yes. When you look at those customers that have spent over $500,000 with us on an LTM basis, and again, we’ve identified them all to be candidates of $10,000,000 plus, these are large, massive companies. In order to grow organically within them, we’ve done it both through technology and through our sales efforts. In technology, we launched something called TeamSpace. That’s the ability for multiple buyers at a customer to collaborate together in the Xometry marketplace to buy assemblies or entire products.

When you think about enterprises, there’s a lot of coordination that’s going on about what parts are arriving, how they’re being put together, so this is very, very helpful particularly for large companies that have large orders, so that’s helped us with that. Also, we’ve integrated with their purchasing system, so we have what’s called punch outs. They can do it directly from Ariba. They could just buy right from us. They don’t even need to come to our site and upload a PO, so we’ve been doing those integrations with ERP systems to reduce any friction for the purchasing organization.

Then finally, we have add ins for the largest CAD programs. So, if you’re a designer, an engineer, and you’re creating your parts, you can actually access Xometry’s instant pricing and then buy from Xometry with add ins that we have created for the native applications. That helps us to grow organically within these large companies. Then we also have our dedicated sales force, and about a year ago, we brought on a new head of our sales team, Sabir Dutt, and we’re able to deploy that sales force using these software tools and grow very rapidly in these large companies.

Brian Draub, Industrial Technology Analyst, William Blair: Thank you. One of the most common questions that I I get is we’re in a world where there’s so much disruption of supply chains right now and tariffs are causing such a headache for so many different companies. Is Xometry thriving in an environment like that? And what happens if things some you know, somehow, some someday go back to normal. Sure.

Can you talk about that?

Randy Altschuler, Cofounder and CEO, Xometry: So, yeah, it’s a double edged sword. You don’t want it so we’ve been great. We’ve been had durable growth in all sorts of environments. As I said earlier, in COVID, we grew rapidly. After COVID, we grew rapidly.

Our Q1 performance, we had 27% marketplace growth, was not a pull forward because of tariffs. I want to be very clear about that. That was our normal pace of business. Even last year before the election, before Liberation Day, we had insight that this year was going to be a year of accelerated growth for us. I will say though, the more uncertainty there is in the market, that does play to our strengths because customers need to get their end products delivered to their customers.

That’s also true for production. So when you think about the spectrum for customers ordering just prototype parts and production parts, the more important the part is, and end use parts are obviously more important to the customer than prototypes, the more they’re going to lean in to use Zometry. We’re a public company, we’ve got the governance, the visibility of a public company, we have the resilience, so the ability for them to to diversify where they’re manufacturing across the geographies or even across different manufacturers. So the more important it is to them, the more likely they’re gonna lean into Xometry, and that’s why you’ve got some of the largest companies in the world growing rapidly with us.

Brian Draub, Industrial Technology Analyst, William Blair: Okay. With with that, we’re gonna wrap up. Xometry is all about efficiency, and we’re gonna be right on time. And thank you very much, Randy and James, for being with us today. Sorry for the little quirks in the IT.

Is one of the downfalls of being the first one to present at the conference. But I’m sure we’ll replace that battery in that remote, and it’ll be great going forward. Thank you everyone. Sorry for the little glitches that we Thanks, Brian. Thanks, everyone.

Thanks.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.