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01/11 03:37
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture. Positive elements include a 23% revenue increase, improvement in adjusted EBITDA, and strong marketplace growth. However, concerns arise from a 5% workforce reduction, declining supplier services revenue, and competitive pressures. The Q&A section reveals robust demand and domestic sourcing trends but lacks clarity on tariffs' long-term impact. No share repurchase program is noted. Given these factors, the stock price is likely to remain stable, resulting in a neutral prediction.
Revenue $151 million, a 23% increase year-over-year, driven by strong marketplace growth and enterprise adoption.
Marketplace Revenue $136 million, a 27% increase year-over-year, attributed to strong execution and growth with larger accounts.
Supplier Services Revenue $14.6 million, a 6% decrease year-over-year, due to macro-related softness in advertising and the wind down of non-core services.
Gross Profit $56.3 million, an 18% increase year-over-year, with a gross margin of 37.3%.
Marketplace Gross Margin 31.8%, down 20 basis points year-over-year, due to investments in global sourcing strategy and a mix shift to US marketplace revenue.
Adjusted EBITDA $0.1 million, compared to a loss of $7.4 million in Q1 2024, driven by revenue growth, gross profit, and operating efficiencies.
Cash and Cash Equivalents $231 million, a decrease of approximately $8 million from Q4 2024, primarily due to CapEx and annual bonus payouts.
Active Buyers 71,454, a 22% increase year-over-year, with a net addition of 3,187 active buyers.
Marketplace Revenue per Active Buyer Increased 4% year-over-year, driven by strong enterprise growth in the US.
US Marketplace Revenue Growth Nearly 30% year-over-year, the strongest since Q4 2023.
International Revenue Growth 20% year-over-year, compared to 69% growth in Q1 2024.
Accounts with $50,000 Spend Increased 12% year-over-year to 1,545, indicating growth in enterprise accounts.
US Segment Adjusted EBITDA $3 million, or 2.4% of revenue, an $8.5 million improvement year-over-year.
International Segment Adjusted EBITDA Loss $2.9 million, compared to a loss of $2 million in Q1 2024, due to ongoing investments in EMEA and APAC.
Instant Quoting for Injection Molding: Launched in the EU, UK, and Turkey to expand the marketplace platform.
Teamspace Software Improvements: Enhanced collaboration features for enterprise customers.
Workcenter Supplier Software Updates: Launched a new partner success score algorithm.
New Search Experience on Thomasnet: Testing a new search experience using natural language algorithms.
Marketplace Growth: Accelerated to 27% year-over-year, driven by enterprise adoption.
US Marketplace Revenue Growth: Accelerated to nearly 30% year-over-year, the strongest since Q4 2023.
International Revenue Growth: Increased 20% year-over-year.
Adjusted EBITDA: Improved to $0.1 million from a loss of $7.4 million year-over-year.
Operating Costs: Non-GAAP operating expenses increased 2% year-over-year, well below revenue growth.
Sales and Marketing Expense: Decreased to 15.3% of revenue, down 500 basis points year-over-year.
Global Sourcing Strategy: Investments made to accelerate sourcing capabilities.
Restructuring Action: Initiated to improve efficiency, reducing workforce by approximately 5%.
Focus on Domestic Sourcing: Incremental shift towards domestic sourcing to support US manufacturing.
Supply Chain Challenges: The current volatile and complex international trade and supply chain environment poses risks to Xometry's operations. The company acknowledges the need to manage supply chain costs and identify alternative geographies for offshore manufacturing.
Regulatory Issues: Changes in tariffs and regulations, such as the Liberation Day tariffs, impact pricing strategies and sourcing decisions, necessitating continuous adjustments to their pricing algorithms.
Economic Factors: The company is mindful of the uncertain macro environment, which could affect demand and growth rates. Despite this, they expect revenue growth to exceed 2024 levels.
Competitive Pressures: Xometry faces competition in the custom manufacturing market, which is large but fragmented. The need to maintain a competitive edge through technology and marketplace optimization is critical.
Workforce Reduction: A restructuring action was initiated to improve efficiency, resulting in a workforce reduction of approximately 5%, which may impact employee morale and operational capacity.
Marketplace Growth: Marketplace growth accelerated to 27%, driven by continued enterprise adoption.
Global Sourcing Strategy: Investments to accelerate our global sourcing strategy.
AI-Driven Marketplace: Utilizing our AI-driven marketplace to dynamically optimize sourcing strategies.
Technology Investments: Continuing to invest in technology to become the digital rails in the custom manufacturing market.
Instant Quoting Launch: Launched Instant Quoting for Injection Molding in the EU, UK, and Turkey.
Teamspace Enhancements: Improved Teamspace software with enhanced collaboration for enterprise customers.
New Search Experience: Testing a new search experience for buyers using natural language algorithms.
Q2 Revenue Guidance: Expect revenue in the range of $155 million to $157 million, or 17% to 18% growth year-over-year.
Q2 Marketplace Growth: Expect Q2 marketplace growth to be approximately 20% to 22% year-over-year.
Full Year 2025 Marketplace Growth: Raising marketplace growth outlook to at least 22%.
Q2 Adjusted EBITDA: Expect adjusted EBITDA of $1 million to $2 million.
Full Year 2025 Adjusted EBITDA: Expect to be adjusted EBITDA positive for the full year 2025.
Incremental Adjusted EBITDA Margins: Expect incremental adjusted EBITDA margins of approximately 20% on a full year basis for 2025.
Share Repurchase Program: None
The earnings call indicates strong financial performance with improved EBITDA and cash flow, despite increased international losses due to expansion. Raised full-year growth guidance and positive Q&A insights, including AI-driven product advancements and increased buyer growth, suggest a positive outlook. However, the lack of specific future growth details tempers enthusiasm slightly. Overall, the company's strategic initiatives and market expansion efforts are well-received, leading to a positive stock price prediction.
The earnings call summary indicates strong financial performance with record gross margins and increased revenue growth, particularly internationally. The Q&A section highlights positive sentiment from analysts, with management providing optimistic guidance and addressing concerns about macroeconomic conditions. The company's focus on AI and technology improvements, along with successful enterprise growth and strategic initiatives like instant quoting, further support a positive outlook. Despite some concerns about supply chain resiliency and unclear responses on reshoring trends, the overall sentiment remains positive, suggesting a likely stock price increase of 2% to 8%.
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