Xometry, Inc.

Good day, and thank you for standing by. Welcome to the Xometry Q1 2025 earnings call. At this time, all participants are in a listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You'll then hear an automated message advising that your hand is raised. Please limit yourself to one question per person. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Sean Milne, VP of IR.

Good morning, and thank you for joining us on Xometry's Q1 2025 earnings call. Joining me are Randy Altshuler, our Chief Executive Officer, Sanjeev Sani, our President, and James Milne, our Chief Financial Officer. During today's call, we will review our financial results for the first quarter 2025 and discuss our guidance for the second quarter and full year 2025. During today's call, we will make forward-looking statements, including statements related to the expected performance of our business, future financial results, strategy, long-term growth, and overall future prospects. Such statements may be identified by terms such as believe, expect, intend, and may. These statements are subject to risks and uncertainties, which could cause them to differ materially from actual results. Information concerning those risks is available in our earnings press release distributed before the market opened today and in our filings with the U.S. Securities and Exchange Commission, including our Form 10-Q for the quarter ended March 31, 2025. We caution you not to place undue reliance on forward-looking statements and undertake no duty or obligation to update any forward-looking statements as a result of new information, future events, or changes in our expectations. We'd also like to point out that on today's call we will report GAAP and non-GAAP results. We use these non-GAAP financial measures internally for financial and operating decision-making purposes and as a means to evaluate period-to-period comparisons. Non-GAAP financial measures are presented in addition to and not as a substitute or superior to measures of financial performance prepared in accordance with U.S. GAAP. To see the reconciliation of these non-GAAP measures, please refer to our earnings press release distributed today and our investor presentation, both of which are available in the investors section of our website at investors.zometry.com. A replay of today's call will also be posted on our website. With that, I'd like to turn the call over to Randy.

Thanks, Sean. Good morning, everyone, and thank you for joining our Q1 2025 earnings call. In Q1, revenue increased 23% year-over-year to a record $151 million, a 700 basis point acceleration from 16% year-over-year revenue growth in Q4 2024. Marketplace growth accelerated to 27%, driven by continued enterprise adoption. We delivered better-than-expected operating leverage, generating positive adjusted EBITDA alongside investments to accelerate our global sourcing strategy. In Q2, demand continues to be robust, consistent with our forecast of higher revenue growth in 2025 versus 2024. The current volatile and complex international trade and supply chain environment further validates our marketplace model. In addition, there is renewed recognition of the importance of maintaining strong domestic manufacturing bases, which is consistent with our approach of building 18 localized marketplaces in the United States, Europe, and Asia. Xometry provides buyers real-time access to unprecedented manufacturing capacity, whether here or abroad. Likewise, we're enabling our manufacturing partners to grow their businesses by tapping into that demand. We work directly with more than 71,000 buyers and over 4,375 manufacturers across the world, giving us real-time data and insights into changing trends such as domestic reshoring and shifts in preferred geographies. For our U.S. customers, the vast majority of their demand was already fulfilled by our U.S. manufacturing network. In Q2, we're seeing an incremental shift in our mix to domestic sourcing. Between our domestic network and our industrial sourcing platform, Thomas, were well-positioned to support the push for more U.S. manufacturing. Low-cost offshore manufacturing does remain an important lever for some of our customers, and we're working with them to identify alternative geographies and solutions to help manage their supply chain costs. Xometry has navigated this kind of situation before. During COVID, not only did global supply chains get severed, Local ones were upended as individual U.S. states had different policies around business closures. With our marketplace versus an asset-based approach, we can respond to our customers' needs in real time. We continue to invest in the technology and network, which today spans 51 countries across four continents, that meets customers' needs. In addition, here's what we're focused on in Q2 to further address this situation. First, utilizing our AI-driven marketplace to dynamically optimize sourcing strategies and help mitigate cost increases by identifying competitive pricing across our global supplier network. Our pricing algorithms account for changes in tariffs consistent with how we manage changes in shipping costs. Two, working with our enterprise customers to secure ample domestic supply and, when requested, provide alternative offshore solutions to meet their specific needs, continuing a strategy that we initiated in Q1, which has proven to be an even more advantageous decision post the Liberation Day tariffs. And then three, delivering coordinated advertising and communication campaigns across Xometry and Thomas, underscoring thought leadership and education for our customers and manufacturing partners. Alongside our global sourcing efforts, we continue to invest in technology to become the digital rails in this massively fragmented and largely offline custom manufacturing market. In Q1, we launched instant quoting for injection molding in the EU, UK, and Turkey as we further expand our marketplace platform and aim to be the one-stop shop for our customers. Improved our highly successful Teams-based software, with enhanced collaboration for enterprise customers. Main improvements in our work center supplier software, including the launch of a new partner success score algorithm. On ThomasNet, started testing a new search experience for buyers in April using natural language algorithms to infer intent and offer improved search results. In the next couple of months, we will complement the enhanced search with a new ad server technology platform that increases the inventory of advertising we can sell on ThomasNet. Since I co-founded Xometry in 2013, we've had durable growth in multiple macro environments, including a U.S. manufacturing contraction for the past two years. In 2025, we expect revenue growth to be faster than 2024. We remain confident in our long-term secular growth outlook given, first, the shift to digital sourcing and custom manufacturing is happening irrespective of the macro. Our growth demonstrates that we are a beneficiary of that trend and driving market share gains. Two, the custom manufacturing market is extremely large. Even if that overall market were to shrink, our share is still so small that we can continue to have robust growth rates for many years to come. And then three, because we're a leading two-sided marketplace and a marketplace powered by AI... Our efficacy and competitive mode continues to increase as we grow our networks of buyers and suppliers and gain more data to continuously train our algorithms. Each quarter of growth and improvements in our technology helps to incrementally power the quarters that follow. We have a clear strategic path forward. For buyers, it's an unrelenting quest to provide a compelling triad of price, selection, and speed. Backed by our expanding supplier network, and AI-powered sourcing optimization. Our asset-light, extensible technology platform and global scope can enable us to do just that. Adding additional features and capabilities as part of TeamSpace will further deepen our enterprise relationships in particular. For suppliers, it's enabling them to effectively access buyer demand and provide them with the software, marketing tools, and financial products through WorkCenter to grow their businesses. We expect for 2025 to be a year of accelerated growth and increasing adjusted EBITDA profitability. Thanks to my amazing, talented, and hardworking colleagues and our ever-increasing networks of buyers and suppliers, we continue to build an important and exciting AI-enabled marketplace in one of the world's largest and most critical sectors of the economy. I'll now turn the call over to James for a more detailed review of Q1 in our business outlook.