Xometry's Q2 2025 Earnings: AI-Driven Growth and Improved Profitability in On-Demand Manufacturing

Xometry (XMTR) Q2 Revenue Jumps 23% | The Motley Fool

Xometry (XMTR 42.98%), the online marketplace for on-demand manufacturing, reported its second-quarter 2025 earnings on August 5, 2025. GAAP revenue was $162.5 million in Q2 2025, ahead of the consensus GAAP estimate of $156.5 million. Non-GAAP diluted earnings per share (EPS) was $0.09, well above the $0.04 (non-GAAP) expected by analysts. The results highlight robust marketplace growth and improving operating leverage, despite ongoing declines in supplier services revenue and a wider GAAP net loss, mainly due to a non-recurring charge. Overall, the quarter showed accelerating engagement from buyers and enterprises, with notable improvements in key financial metrics and operational efficiency. Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report. Xometry runs a digital marketplace that connects buyers of custom manufactured parts with a global network of manufacturing suppliers. Its platform uses artificial intelligence (AI) to provide instant pricing, lead time estimates, and design feedback. This technology streamlines the process for both buyers and suppliers, enabling efficient, transparent transactions in industries that require custom, on-demand manufacturing such as aerospace, automotive, and healthcare. In recent quarters, Xometry has been focusing on expanding its technology, driving AI integration, and growing both its buyer and supplier networks. Key factors to its success include continual innovation in its AI capabilities, network effects that increase the value of the platform as more users join, and targeted international expansion. It also offers services such as Workcenter, a cloud-based tool for suppliers, and runs Thomasnet, an industrial supplier directory in North America, as part of its supplier engagement efforts. The quarter's GAAP revenue exceeded guidance, fueled primarily by rapid growth in the core marketplace business. Marketplace revenue grew 26% year-over-year in Q2 2025, jump-started by stronger enterprise demand and network expansion. Notably, the number of marketplace active buyers increased by 22% to 74,777 compared to the prior year, and Accounts with last twelve-months spend of at least $50,000 increased 15% to 1,653. These gains reflected strong customer loyalty -- 98% of revenue was from existing accounts. While total revenue rose, the supplier services segment, which includes advertising, marketing, and financial tools for manufacturers, registered a 6% year-over-year decline. Management projects supplier services revenue will remain down around 5% for the year. Despite the decline, the gross margin for supplier services stayed high at 88.7%, meaning these services remain a profitable part of the overall business even as revenues fall. Another standout was the sustained improvement in operating profitability, as reflected by Adjusted EBITDA (non-GAAP) of $3.9 million. Adjusted EBITDA turned positive at $3.9 million -- an improvement of $6.6 million from a loss last year. The U.S. segment drove gains, with its contribution rising from $0.25 million to $6.88 million in Adjusted EBITDA, while international operations are still in investment mode and posted narrow losses. Gross margin for the marketplace segment rose by 1.9 percentage points (GAAP). Cash and investments totaled $226 million as of June 30, 2025, after the company completed a major convertible debt refinancing, which extended maturities and provided financial flexibility for continued investment in growth. During the period, Xometry launched new platform features, including an AI-driven instant drawing quote tool for the North American marketplace. This upgrade made it easier for buyers to receive rapid, automated quotes for technical part drawings, aiming to improve speed and accuracy. In Europe, Teamspace, a software platform that enables buyer purchasing teams to collaborate more effectively, expanded into new geographies, and new procurement integrations were rolled out. On the Thomasnet platform, a partnership was introduced with NSF to expand supplier certification options, and new ad and search features were added to support monetization. One notable item impacting the bottom line was a $16.4 million non-recurring charge related to debt refinancing. This significantly increased the GAAP net loss to $26.4 million, up from $13.7 million in Q2 2024. Excluding this item, the underlying financial performance reflected growth and improved efficiency. Management continues to view gross profit growth and operating leverage -- achieving more profit per revenue dollar -- as priorities for scaling the overall business. Management provided financial guidance for Q3 2025, projecting revenue between $167 million and $169 million, representing 18-19% year-over-year growth. Adjusted EBITDA is expected in the $4.0 million to $5.0 million range, up from an Adjusted EBITDA loss of $0.6 million in Q3 2024. For FY2025, Xometry raised its marketplace revenue growth outlook to 23-24%, and expects incremental adjusted EBITDA margin for FY2025 to land near 21%. Supplier services revenue is projected to remain down around 5% for FY2025. Investors and observers should track progress in several areas next quarter and beyond. First, the pace of new enterprise wins and growth among large buyers, as these are strong leading indicators of future revenue. Second, ongoing improvements in marketplace gross margin and operating expense management, as evidenced by marketplace gross margin of 35.4% in Q2 2025 and 31.8% in Q1 2025. Third, any signs of stabilization or turnaround in supplier services revenue, and continued execution on international expansion, which still operates at a loss. Working capital changes, particularly in accounts receivable, should also be watched, as rapid growth can strain cash even when headline profitability is improving.

Xometry : Q2 2025 Earnings Call Presentation

© 2025 Xometry and/or its affiliates. All rights reserved. Proprietary. 1. Active Buyers defined as the number of Buyers who have made at leastone purchase on Xometry's marketplace during the last twelve months. Record Marketplace gross margin of 35.4% +190 bps YoY powered by AI pricing & selection. Expanding Adj. EBITDA margin, strong YoY operating leverage Q2 Adj EBITDA of $3.9M +$6.6M YoY. Progress on Key Growth Initiatives Expanding networks of Buyers and Suppliers Active Buyers +22% in Q2 driven by increasing enterprise penetration and Teamspace adoption. Active Suppliers +28% YoY in 2024. Driving enterprise engagement as Accounts with LTM spend >$500K exceeded 100 in FY24 and grew revenue by >40% YoY. Expanding marketplace platform EU launch of Teamspace. New marketplace and Workcenter features coming in 2H FY25. International growth 31% YoY, driven by Europe and expanding Asia Pacific. Modernizing Thomas advertising model to improve monetization and advertiser penetration. Financial Highlights Strong durable growth outlook given significant global TAM/low penetration rates. Improving cash flow conversion with asset light marketplace model, low CAPEX and limited working capital requirements. Large and Growing Marketplace of Buyers and Suppliers Marketplace growth has been driven by efficiently matching Supplier capacity with Buyer demand 1. Active Buyers defined as the number of Buyers who have made at least one purchase on Xometry's marketplace during the last twelve months.