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    Xometry (XMTR)

    XMTR Q3 2024: Marketplace Gross Margin Reaches Record 33.6%

    Reported on Aug 5, 2025 (Before Market Open)
    Pre-Earnings Price$22.06Last close (Nov 4, 2024)
    Post-Earnings Price$23.12Open (Nov 5, 2024)
    Price Change
    $1.06(+4.81%)
    • AI and Technology Advancements: The company’s continued investment in its AI for smarter price prediction and supplier matching has driven record marketplace gross margins of 33.6% and positions it to target long‐term margins in the 35–40% range.
    • Robust Marketplace and Network Expansion: The strong performance in Q3—evidenced by 3,300 net new active buyers (totaling 64,851 buyers) and a significantly expanding supplier network exceeding 4,200 suppliers—underscores durable demand and scalability.
    • Product Innovation and International Growth: The continued adoption of Teamspace by large customers and successful geographic expansion (e.g., a 7-figure order in APAC and 55% YoY international revenue growth) create additional growth avenues for the company.
    • Supplier Services Weakness: Management expects supplier services revenue to remain down approximately 10% YoY in Q4, indicating ongoing challenges in turning around this lower-margin segment and dependency on non-core services that could impair overall profitability.
    • International Expansion Uncertainty: While international revenue grew 55% YoY, management highlighted that the international segment is still in an early, investment-heavy phase, with profitability targets unconfirmed, which poses risks if cost escalations persist.
    • Macroeconomic and Trade Policy Risks: Concerns were raised regarding potential tariff and trade policy changes post-elections. Although management is confident about U.S. manufacturing, continued global uncertainties may adversely affect order volumes and cost structures.
    1. Growth Drivers
      Q: What will drive 2025’s growth?
      A: Management emphasized that enhanced buyer and supplier network expansion, deeper customer wallet share, and ongoing AI investments set the stage for at least 20% growth in 2025.

    2. AI & Margins
      Q: How is AI affecting margins?
      A: Leaders highlighted that persistent AI investments have boosted marketplace gross margins from 23.5% to 33.6% and aim for a long-term target in the 35%-40% range.

    3. Buyer Sustainability
      Q: Are buyer additions sustainable long-term?
      A: The team noted record performance with 3,300+ net new buyers and 64,851 active buyers, underscoring a large, addressable market of millions ready for further growth.

    4. International Profitability
      Q: When will international operations turn profitable?
      A: Management stressed that international revenue, up 55% YoY and nearing a $100M annual run rate, is poised to move to profitability as investments in Europe and Asia-Pac continue.

    5. Supplier Services Outlook
      Q: Will supplier services rebound in 2025?
      A: Executives explained that despite a recent YoY decline, strategic initiatives are underway to stabilize and eventually drive supplier services into growth with high gross margin returns.

    6. Instant Quoting Impact
      Q: How is instant quoting improving conversion?
      A: By expanding processes like tube bending and cutting, the platform is boosting conversion rates and increasing high-value accounts, as evidenced by the highest quarterly additions of 70 accounts with over $50K spend.

    7. Policy & Q4 Guidance
      Q: Impact from tariffs and Q4 expectations?
      A: Management noted that trade policy changes won’t materially affect operations and provided cautious Q4 revenue guidance of $145M–$147M amid uncertain macro conditions.

    8. Supplier Network Capabilities
      Q: What’s new in supplier network growth?
      A: They pointed to an expansion in the supplier base from 3,500 to over 4,200 active suppliers, alongside adding new capabilities like tube bending through enhanced certifications and Thomasnet support.

    9. Teamspace Adoption
      Q: How is Teamspace adoption progressing?
      A: There is strong uptake of Teamspace with over 4,000 teams created, signaling its success with large customers managing complex assemblies.

    10. Generative AI Use
      Q: Any generative AI for design creation?
      A: Management was reserved on details regarding generative AI for buyer design, simply reaffirming ongoing investments in AI across the platform.

    Research analysts covering Xometry.