Despite a challenging manufacturing landscape, Xometry (Nasdaq: XMTR) keeps gaining traction. Xometry’s third-quarter 2024 earnings report reveals standout growth, a clear example of the importance of its diversified manufacturing model. As others in the industry face challenges, Xometry’s adaptability and range of services, including 3D printing, keep it thriving with record results.

According to Xometry, its AI-powered marketplace delivered record revenue, gross profit, and marketplace gross margin. The company reported $142 million in revenue for the quarter, a 19% increase year-over-year. Gross profit also climbed 21%, reaching a record $55.8 million. Xometry’s marketplace gross margin rose by 250 basis points to 33.6%, showing the impact of its AI-driven pricing- and supplier-matching algorithms and increasing network of active suppliers.

A significant contributor to Xometry’s success is its AI-powered marketplace. This tech backbone allows the company to efficiently connect buyers with the right suppliers while boosting pricing—a win-win for both parties. In fact, marketplace revenue alone grew 24% year-over-year to $127 million, driven largely by strong demand across end markets like engineering, aerospace, consumer, and robotics. Plus, Xometry’s network of active buyers surged by 24% to nearly 65,000.

“As we scale our data, our machine learning AI model gets better at pricing and matching, which in turn fuels gross profit dollar growth,” CEO Randy Altschuler told investors during an earnings call.

Xometry’s marketplace model is built on continuous improvements in machine learning, allowing it to scale its data and supplier network effectively. Altschuler pointed out that the larger and more comprehensive the data, the better Xometry’s algorithms become at identifying the best suppliers for specific jobs, increasing efficiencies and reducing costs across the board.

Xometry Integrates Teamspace Collaboration Tool Into Its AI-Powered Marketplace. Image courtesy of GlobeNewsWire.

Although Xometry’s 3D printing capabilities remain a central feature, its diversification has set it apart in a challenging market. From CNC machining and injection molding to the newly introduced tube bending and cutting processes, Xometry’s ability to offer various manufacturing services makes it appealing to even more industries. Its offering list is a unique selling point for big clients that want flexibility and reliability.

In the third quarter, Xometry’s international revenue also grew by 55%, largely driven by solid expansion in Europe and Asia-Pacific (APAC). This international growth now accounts for nearly 19% of Xometry’s marketplace revenue. These results show that Xometry’s global strategy is effective, adding certified suppliers to serve different industries. Its network, spanning all 50 states in the U.S. and extending across three continents, allows Xometry to provide consistent, resilient supply chains, even in unpredictable market conditions.

Altschuler pointed out that Xometry Asia continues to expand, including the recent launch of an English site in the Asia Pacific region (APAC): “This is already bearing fruit with a small consumer product company in Australia choosing Xometry’s marketplace to move from prototype to production for an entire assembly including CNC and 3D processes. This production order is our first seven-figure order in APAC and will deliver over a number of quarters.”

Xometry celebrates going public on the Nasdaq on June 29, 2021. Image courtesy of Xometry.

Xometry reported a net loss of $10.2 million for the period, although its adjusted EBITDA loss improved by 85% year-over-year to a much smaller $0.6 million. This substantial progress indicates that Xometry is getting closer to profitability, a goal it aims to achieve on an adjusted EBITDA basis by the fourth quarter of 2024.

For the full year, the company expects marketplace growth of 22% and 23%, surpassing initial forecasts. Its plans include further expansion in Europe and APAC, along with new offerings on its marketplace menu, positioning Xometry to capture a larger share of the global custom manufacturing industry.

The potential for growth in international markets is big. In the third quarter, Xometry introduced a suite of tools on its European platform that streamlines high-volume manufacturing orders, making it easier for engineers, designers, and project managers to coordinate complex projects. By adding more automation to its operations in Europe and launching in new regions, like APAC, Xometry is scaling its capabilities and becoming an essential partner for international customers. According to CFO James Miln, the company anticipates that international markets could soon account for between 30% and 40% of total marketplace revenue, in line with other global online marketplaces.

With cash reserves of $234 million, the company can invest in growth without sacrificing profitability. Xometry’s path to profitability relies on its AI and machine learning, which boost efficiency and help the platform scale.

For the last quarter of the year, Xometry expects between 16% and 18% growth in marketplace revenue, with supplier services leveling out. What’s more, Xometry’s data-centric, AI-powered model supports flexible pricing and stronger ties with key accounts. This growth-focused approach, backed by AI, is what Xometry believes will drive it past $1 billion in revenue and into sustained profitability.

In a sector where many companies have faded or been absorbed, Xometry’s diversified model has kept it on solid ground. With its combination of manufacturing options and staying ahead of the curve with AI-driven innovation, Xometry has a powerful advantage. The company’s robust ecosystem of buyers and suppliers, boosted by the Thomas platform, positions Xometry to keep evolving with market demands and growing its market share.