In the dynamic world of digital manufacturing, Xometry Inc. stands out as a remarkable success story, recently reporting record quarterly revenue driven by its innovative AI-powered marketplace. The company’s robust performance can be attributed to its ability to connect buyers with suppliers while optimizing costs and delivery times through machine learning technologies.
CEO Randy Altschuler highlighted on the company’s Q3 earnings call, “Q3 2024 represented another record-setting quarter for our company.” This statement encapsulates the achievements seen across numerous metrics: Xometry’s marketplace revenue surged 24% year-over-year to reach $127 million, while total revenue grew 19% to $142 million. Altschuler attributed this growth to strengths in various sectors, including engineering, aerospace, consumer goods, and robotics.
One of the key components behind Xometry’s success is its AI-driven Xometry Instant Quoting Engine. This tool has revolutionized the quoting process for manufacturing services by processing over 8 million job offers through its extensive network. The platform currently hosts around 64,000 registered buyers and connects them with approximately 7,000 manufacturers, offering a diverse range of services like 3D printing and CNC manufacturing.
The AI capability of the quoting engine analyzes product design files uploaded by buyers, expertly matching them with the manufacturers’ available skills. Not only does this technology improve the efficiency of service delivery, but it also ‘learns’ over time, enhancing lead times and pricing structures. As Altschuler points out, “As we scale our data, our machine learning AI model gets better at pricing and matching.” This continuous improvement ultimately leads to increased gross profit margins, contributing to a 34% increase in marketplace gross profit in Q3, bringing it to $42.62 million.
Collaboration with tech giants is part of Xometry’s growth strategy. The company recently initiated a partnership with Google Cloud to leverage its Vertex AI platform, which focuses on accelerating new auto-quote methods. Altschuler explains the strategic advantage here: “In this very inefficient, opaque market, we have the ability with our AI to find the best supplier both from a delivery and quality perspective, but also the one that has the optimal cost structure for a particular order from a customer.”
This approach not only benefits supplier relationships but also ensures a more profitable business model for Xometry, reinforcing its position as a leader in the digital manufacturing services sector.
Expanding its offerings in Europe, Xometry has introduced a suite of tools aimed at simplifying the ordering process for high-volume manufacturing projects. The European marketplace enhancements are designed specifically for engineers, designers, procurement professionals, and project managers, facilitating the coordination and management of complex orders. Following this, Xometry Europe has made strides in accessibility by incorporating the Hungarian language into its marketplace, alongside the existing 16 languages available globally.
Xometry’s initiatives in the Asia-Pacific region also show promising results. The launch of an English-language site in APAC has already shown its value, evidenced by a seven-figure order from a consumer product company in Australia transitioning from prototype to production using Xometry’s services. Such strides in international expansion highlight Xometry’s commitment to capturing market share in various regions, further solidifying its growth.
Analyzing the financial outcomes of Q3, Xometry reported a noteworthy year-over-year increase in revenue of 19%, reaching $141.698 million, while gross profit also climbed by 21% to $55.825 million. Importantly, they narrowed their net loss attributable to common stockholders by 15%, reflecting an upward trajectory for profitability despite previous losses. Adjusted EBITDA showed significant improvement, narrowing to a loss of $632,000, suggesting a positive turnaround as the company continues to innovate and optimize.
The data from the nine months ending September 30 illustrates further growth, with revenue up 18% to $396.98 million and a narrowing of net losses by 29%, totaling $40.51 million. Marketplace revenue during this period saw a promising 24% increase, landing at $351.44 million, with marketplace gross profit climbing by an impressive 34% to $116.16 million.
In summary, Xometry’s Q3 2024 results underscore a thriving enterprise leveraging AI technology to redefine manufacturing services. With continuous advancements in data-driven solutions and international market expansions, Xometry remains a formidable player in the digital manufacturing landscape, poised for sustained growth and innovation.
