Conference Transcript - XMTR 2026-06-04

Speaker 4

I was telling Kristen, I'm just going to tell, for anyone who's interested, I realized this morning as I was driving in, I have had quite a week. I celebrated 25 years with my wife on Friday. I got to play in a full field soccer game with my 17-year-old and 18-year-old on Sunday. We won 7-1, and between the three of us, we scored four goals. I got an email on Monday morning that I've been with William Blair for 20 years, and if you include my internship in 2005, this is my 22nd conference. Last night I was at graduation for my twin girls who are 13 from junior high, and I'm going to my 20th business school reunion tomorrow. And on top of that, Xometry did a stock offering this week, and they're switching CEOs, so there's a lot going on here. Welcome to the Xometry presentation. I'm Brian Draub, the Industrial Technology Analyst at William Blair. I, of course, have to remind you that you can find a full list of disclosures on our website, WilliamBlair.com. I've covered Xometry actually since a few years before the IPO. It's a very special company. For those of you that are not familiar, just give you, you know, 10 seconds. But it's a marketplace, manufacturing marketplace, that connects product developers and manufacturers with a network of about 5,000 manufacturing partners. And it's really the only company doing what they do in the way they do it in the world. And they've been growing their user base at about 25% or greater for years. Very interesting company. It has been one of my top picks for a long time. Actually, also another exciting thing that I was thinking about this morning is that from your presentation in 2024 at this event, the stock is up about 500%. So congratulations. We have with us today CEO Randy Altshuler, President Sanjeev Singhsani, who is taking over the CEO role on July 1st, and Sean Milne, who's Vice President of Investor Relations. So thank you all for being here. I'll turn it over to Randy.

Speaker 1

It's great to meet everybody, and it's great to be here today. William Blair has been a great ally of Xamu Tree from the very beginning. We actually were at this conference even before we went public, so we're very grateful. for their support and brian drops in particular who knows our company i think better than anybody so with that we're going to start with a quick video and then we'll jump into our presentation

Speaker 3

in order to build the products that surround us every day product designers develop unique parts and assemblies and seek the best way to manufacture them most manufacturing is done by a fragmented global market of millions of small and medium-sized manufacturers finding the right one can be a time-intensive process, taking days or weeks, with prices and lead times varying greatly. Manufacturing suppliers also struggle to find the most profitable work for their capacity, as their resources and geography often limit them. Xometry's machine learning AI solves this problem by unlocking instant access to a global marketplace of thousands of manufacturers. Simply upload your CAD models to the platform and specify your manufacturing needs. This prompts Xometry's proprietary AI to analyze the geometries and features of each part file based on millions of data inputs. Within seconds, Xometry's design for manufacturability AI computes and produces pricing, lead time options, and manufacturing process recommendations. Xometry's AI utilizes machine learning, which trains on thousands of features and analyzes similar types of previously completed parts and orders. Xometry's matching AI agent pairs the work to an optimal supplier, ensuring that high-quality parts are produced cost-effectively and on time. It scans thousands of vetted suppliers in Xometry's global network using its knowledge of each supplier's unique capabilities. With each transaction, Xometry's AI learns more about each supplier's expertise and how to pair them with the right customer projects and optimize for repeat work and profitability. This increases supplier success rates and customer satisfaction. Through this innovative AI-driven approach, along with the strength of an expanding global supplier network, Xometry provides its customers with access to a resilient supply chain that can handle unexpected disruptions. This groundbreaking platform lays the foundation for the future of streamlined manufacturing. Optimized and powered by Zometry's AI. Zometry, where big ideas are built.

Speaker 1

Great, thank you. As Brian mentioned earlier, Zometry is the leading marketplace for custom manufacturing. And as you can imagine, that's a humongous market when you think about manufacturing overall, $17 trillion TAM. And within that, you've got $275 billion that's focused on custom parts. So these are not commodity parts. These are not off-the-shelf parts. These are parts that are very specific for a specific customer use. And even though we're very excited about the growth, and we'll show some statistics that we've had at Xometry, there's still lots and lots of growth to come. Today, we've only penetrated less than 1% of this massive market that today remains largely offline. And these statistics say it all. You know, we went public in 2021. As you can see, our marketplace revenue has grown almost 40 percent year over year. Gross profit has grown even faster. And we'll talk a little bit about that as we're an AI powered marketplace and we're training our models. And because of that, we're becoming increasingly profitable from that. And you'll see that each year since we went public, you've seen a step up of 100 plus basis points in our gross margins. The number of buyers in our marketplace, Brian also alludes to this, that's also been growing rapidly. So more and more people are coming and using our marketplace. And we've also been growing the amount that they're spending with us. So share of wall is growing at the same time as the number of active buyers are. And then the number of active suppliers. So the manufacturers who are joining us from across the United States and across the world. And we have a very unique platform. So we're very fortunate that a lot of that growth, particularly on the supplier side, just happens organically. Word of mouth, people come to us. We are the leader and they want to be part of this thriving marketplace. The last quarter, Q1 was a record quarter for Xometry across virtually every metric, $205 million of revenue. That was 40% marketplace growth. we've now had three quarters of accelerating growth record gross profit that gross profit marketplace growth profit actually grew 53 percent year over year so just again a reflection that we're getting smarter and smarter with their algorithms how we should price to our customer what prices we should give our suppliers and what those matches should be record ebitda again we're getting more and more profitable record number of active buyers and the most number of net ads new active buyers that we've had for almost nine quarters. So acceleration of people coming to marketplace and then continuing to grow our active supplier base. One other thing that we announced that was very exciting on our Q1 earnings was our partnership with Siemens. So Siemens is obviously a huge conglomerate based in Germany, but also one of the world's largest providers of industrial software. And they have a huge install base. So again, we're very proud. We've got 85,000 active buyers but Siemens has millions of users and we've built a partnership with them where Siemens is going to integrate the Xometry marketplace within Siemens software so it's going to be native to Siemens CAD software we're going to be embedded in their PLM software and this just gives us access in the United States and across the world to a huge user base that we don't have today alongside of that announcement of that partnership to signal that you know they're serious about it and show their commitment siemens actually bought 50 million dollars of zometry common stock class a common stock so we're welcome glad to have him as a shareholder uh we were just there me and sanjeev at their uh huge user conference in detroit uh earlier this week and i'm going to transition and and let uh sanjeev come up here and this is a good point because you know since sanjeev joined us in january of last year we've been focused on product-led growth in zometry letting our technology win over buyers allow us to grow our share of wallet the proof is in the pudding Siemens wanted to integrate with us because we have that leading software because they want to provide extra value for their users and our metrics across the board have been accelerating as Sanjeev's influence has continued to build within our company so within that I'm going to hand it over to Sanjeev Singhsani our incoming CEO thank you Randy

Speaker 2

maybe given I haven't met most of you before a quick intro about myself I I I joined early last year, as Randy mentioned, I came in from Wayfair where I was here just before Xometry. At Wayfair I led their B2B business and that's been the thread all along my career. I led the foundation of their freight forwarding and B2B capability for their suppliers before that and prior to coming to Wayfair, I spent 10 years in consulting at McKinsey & Company where I served clients all around the world on growth and adjacency topics. So when I came to Xometry and I was having the initial conversations with Randy, to me it became very obvious very, very early that this was a company where data science, machine learning was not a way to go faster. It was the way we create value, period. the company has been changing the way custom manufacturing is done in the world by actually applying data science machine learning for over a decade to files that customers have been providing to us so the amount of proprietary data that the company has had based on all of the millions of parts that that have been quoted on the platform is just humongous. Take that leverage and apply that to a massively underpenetrated TAM, the opportunity seems fairly obvious. I mean I was at Wayfair where furniture, selling furniture online used to be a big challenge and we used to track numbers and saying, oh look at books and electronics, 60% of them are bought online today. Furniture is really lagging behind. It's at 19%. Custom parts is at 1%. 1% of custom parts are bought online today. Majority of them are still bought within 30 to 50 mile radius of every factory, where a small offline 2 to 10 people manufacturing machining shop is actually making that we are bringing all of that online not to just a platform but a platform that has been built for over a decade on AI as the core of it so to me this is beyond exciting every time I think about this I think this is the opportunity that we can actually continue to grow into for years and years to come how have we done this though I mean if you think about the the AI native capabilities as geometry we take a file that somebody uploads the CAD file the 2d file we convert that into geometric representations which we then weigh and give somebody an instant price that's model number one unlike the offline place where you send it and you wait and wait and you saw the email in the video pops up in a few days you get an instant price. But then, like Uber and DoorDash, we take the same price that we gave to the buyer and turn it around with a new model to our suppliers to say, hey, would you like to do this work for this many dollars? And that second model is focused on the dynamics in the market and the pricing that we're seeing in the market. And then we have a third model that underlies all of this, which is the manufacturability model, which makes sure that the file that somebody uploaded, a part that has never ever been produced before can actually be made so that the marketplace works and that ensures that the part can be produced but the manufacturer has the details of why we think that part can be produced. So I think all of this AI being applied to all of these parts for years is really the distinctive advantage that Xometry works in and to me that's what really creates the compounding flow that we have. Take the pricing model, ensure that this can be manufactured, work through a marketplace on the other side with suppliers to make sure the best partner gets it with the right certifications. I mean we work in aerospace and defense and medical devices, I mean all of those have very strict regulations. So we certify every single partner, you can't just walk up and get signed up. So make sure the best partner gets it but at the best price for us, so optimize the margin so to say, take that data of what they did and how they performed in that job and put it back in the marketplace and that's really the flow that you're seeing here, that's really the flywheel that we drive. To me that was the reason to come but the reason to grow the company was even more personal to me. For a while, I have felt that for a long time as individuals, we got used to better user interfaces, better apps. When we go to our favorite e-commerce app, Amazon, Walmart, Alibaba, Wayfair, whichever. Not many people buy it. Take Alibaba for personal use, I hope. But you're used to a seamless experience, right? You know where the buttons are. They are in intuitive, where the price shows up, the basket's intuitive. However, at work, most procurement professionals and even as employees, we were used to clunkier software that required five steps to get anything done, then needed approval, and then you had to wait for something to come back after three, four days. And that's how you do your procurement flows and procurement approval in a tool that your company bought. But really, that is changing. I mean, since COVID, nobody wants terrible, clunky software at their workplace either. So what we have started on since last year is actually completely changing the way people use our platform. We want their B2B buying experience to be the best in e-commerce, not the best in B2B, not the best in B2B software. just purely as intuitive as Amazon, Walmart, whoever else you like, right? We want our e-commerce to be as intuitive, as easy. So if you're buying a custom part, it should feel like buying something on Amazon, as easy. And that's where we are headed. So we've been spending a lot of time in transforming those journeys for the buyers and suppliers. We launched an app for our suppliers in the middle of last year, something that nobody else actually has even thought about. and now we are actually continuing to see the value of that come around. If you went to our website a year ago or 18 months ago, the kind of experiences you had, the kind of uptimes you had, the kind of responses you had were different from what we have today and will be better tomorrow and we'll get better even in three years, right? Till we get to the best in class. But I think that's the other part that really, really focusing on those journeys, really, really focusing on creating the e-commerce environment in the platform that actually makes them come back, right? This is so easy. I mean, I'd love to be the verb. So how do you create a custom part? Usometry it, right? If I can get there, that will be when we'll have the majority of the share in the market. But I think to me that's exciting. That's why we're all here. You've seen a bit of the focus we've had as well. One of the other things is, like I said, we work with aerospace, defense, med devices, industrials. Most of these companies are the biggest of the big in their world. and when does it get easier to work in an enterprise? When you're integrated into the enterprise flows. When to get an approval you don't have to go outside of your flow, right? When actually your procurement team, your technology team has already approved that you can buy from so and so, right? The travel company that we all use probably to get here likely used the one that was approved by procurement and was part of your enterprise software already, right? We've been driving that in parallel. We've been doing integrations, ERP integrations, punch-out integrations with our enterprise customers, and you've seen the number of enterprise customers we now have. I mean, that number is truly inspirational because all of these companies can now actually accelerate manufacturing by coming to Xometry and getting their parts very quickly, and these are not mom-and-pop shops. These are billion-dollar enterprises that probably rank in the fastest growing and the biggest companies in the world out there. So very exciting to actually continue to keep diving on the enterprise growth. And then international. So we have a marketplace in the U.S., but we also have a marketplace in Europe and one locally in China. So these are the only three places we sell locally. But we started in the U.S. Our U.S. marketplace is the biggest. we report domestic and international numbers as you can see on the chart you've seen in the last few years the number for internationals substantially grown i do think that's going to be another opportunity that's very very early stages for us with all of the the manufacturing action coming back in europe i think it's very early days for that international business for us but we stay focused on continuing to drive that we have a very large partner base to complement it so if you if If you look at our partner base, you'll see that majority of the manufacturing that we do for each marketplace is within that geography. So for US and the US, for Europe and Europe, and similarly for Asia and Asia. But we also use the network thoughtfully across the geographies too. And to that, I alluded to this a little bit. Unlike a traditional marketplace where you can actually sign up if you have a legal entity and you have five SKUs, we actually vet every supplier that gets on the platform and we actively manage their quality because end of the day to the customer, we are the manufacturer of record, we are the one whose reputation and name is on the line, it is not the supplier. And so we make sure our suppliers are vetted for certification, their quality management system is up to date, but our standards and the tools and the experiences that they're having at the best so that they can keep coming back but truly we want them to actually be the most distinctive manufacturing network around the world with all of the needs that our customers has for certification. Again this is fairly clear happy to have Randy jump in as well or Sean but our focus has been very very clear continuing to grow across all of the areas here we've published long-term numbers I mean some of these long-term numbers maybe up for a revision in a couple of years, I hope, upwards, so we can keep driving our long-term aspirations even more. But thank you for having us here. Yeah, I have one so I can...

Speaker 4

Yeah, thanks, Randy and Sanjeev. I'll just ask the questions from here. I don't need another microphone. So we have almost 10 minutes in this room to further the discussion, and then we'll go upstairs for the breakout session in the Jenny B room. Maybe you can just start by elaborating on the Accelerator partnership, the Siemens Accelerator platform. Maybe also, I don't think that it's obvious to everyone what that Siemens Accelerator platform is. Maybe start there and then what role Xometry would play within the platform.

Speaker 2

I can start and then you jump in. So if you are a designer designing a new part or a product to be manufactured, you start typically in four CAD softwares that you can use. One of those four softwares is owned by Siemens called Design Center. And so when we get files produced by any company in the world, they likely come from only these four CAD softwares. And so the way these CAD softwares are used, most of them are today still offline installed on a desktop or behind a firewall in a large company. You know, if you're a tier one defense manufacturer, you're not likely letting anybody upload their files on a cloud version of software, so you have it installed within your firewalls and such. So when you have to place an order or get even an estimate for something a quote you have to complete your work in the CAD software save your file and then email it to the likely manufacturer or upload it to our platform as you can imagine this is adding a bunch of steps to your flow you have options so we actually partnered very early on with a couple of those CAD providers to create add-ons that could be installed post facto where we could push and share our price within that CAD software however I mean if you're if you're not a Grumman or your SpaceX or your Tesla or your any of the big industrials and you individual dear engineer want to go and actually do an add-on just for yourself which didn't come shipped with the Siemens Design Center software that you're using I mean it's an act of Congress I do probably need three levels of IT approval five levels of management approval to go get that add-on installed and the users will be five so now coming to what is Siemens in us the partnership that we have done with Siemens is to completely change how those designers work we are going to take our AI engine and natively integrate that with the Siemens software which means when in the future the Siemens design center software is installed by any company in the world Xometry would already be included in that software so as you're designing your product or your part you can say hey Xometry tell me the price without ever downloading your file without ever emailing it to anybody without even sending it to Xometry on the platform. Literally in that approved software that your company installed called Design Center through Siemens you will get instant geometry pricing. What we think that we'll do is actually change the pace of innovation in the economy in the world because now designers will be able to design not just for performance but for manufacturability and at a price they like. Doing that today is a multi-step, multi-month process for any little thing. So we will ship with the native Siemens software, Siemens Design Center software, at step one. Step two, once somebody places the order, so let's say you finished it, you like the part, you like the price, you say okay, purchase from Xometry. In the back end that file would be transmitted to us, we would confirm with an email saying, yes, your order has been placed, then all the future updates to those orders would be pushed by us into the Siemens PLM software. It's called Team Center. So all of the tracking for that, that you had to then send 15 emails to procurement, three emails to your team, five emails to your program managers, will already be integrated in the software they are using. Hopefully it's Siemens, but that's the thought process. and then when you reorder in your PLM it will state where that was actually ordered from the first time in your bill of materials it will state where it was ordered from last time which would be called geometry and so therefore the reorder would come to us so for us this is truly unique transformational partnership, where Siemens also understands that this could be truly a distinct, distinctive advantage for their software, that they actually not only have no revenue share or no profit share agreement, they actually have invested in us to get this out there sooner. So their view is actually that we are actually having that distinctive models and the AI our native historicals that we are actually working off of. So to me, it is truly transformational. There's also another work that we are doing with them on the bill of material side. They have a smaller unit called supply frame, which today is focused on electronics components. And those electronic components come with standard mechanical and some custom parts. As you know, we own another services business called Thomas. Thomas is a directory that lists most standard part providers that are out there and so we will integrate with them to create an advantage for them where not only will they be able to push back electronic part providers but also names of standard part providers with that as well so I think truly truly distinctive

Speaker 4

yeah that's very exciting I have a few follow-up questions on that I'll save it for the for the breakout session um right now i was wondering if you could just uh discuss the stock offering from this week and and the idea behind that and what the motivation is sure and

Speaker 1

just some back wrap here since we've gone we went public in june of 21 we had not done any other equity raises uh and of course we've come off a record quarter we also raised our guidance uh for the rest of the year and indicated in that quarter that the fundamentals of our business are very strong so uh we're doing this from a position of strength we are prudently managing our our balance sheet so there's some uh management of balance sheet here and then finally you know we're going to look at selective tuck-in acquisitions so as we've grown you know rapidly since going public we're a bigger company now and this amount of cash made sense relative to our size and just being smart about it and and you know just as we talk about our growth i mean this is clearly a unique time right now in manufacturing you know the trends towards reshoring we're seeing an explosion in new innovation in the hardware side so we want to make sure across all metrics xometry is as strong as possible and and this is truly our time great thank thank you very much um

Speaker 4

we have two minutes here i'm just going to ask one more question then we'll go to the breakout session but in my intro i failed to uh list among your you know titles co-founder and i was wondering if you can just give us one minute of reflection on you know thinking from the day when you thought of this idea to now listening to sanjeev explain you know to us where we're going sure well first

Speaker 1

of all i'm moving to executive chairman so i'm not going anywhere and i'm remaining you know one of xometry's largest shareholders so my family is very dependent on sanjeev uh and executing here You know, I think Lauren Zerf and I co-founded the company, and we saw there was this massive opportunity to really digitize this huge industry, and it's an important industry. I mean, for me, it's very exciting now, particularly when there is a light shined on manufacturing. People care about domestic manufacturing. People understand that there's almost a national security reason why we have to own it. So it's exciting for me to see that. But I also know, and I'm very proud of what we've accomplished, and we've had three quarters of accelerating growth accelerating profitability all these great things but i know we can do a lot better and when i met sanjeev and he when he joined us as president last year i knew if our product continued to improve if we leaned into product-led growth if we made those investments we had to make make changes to teams so sanjeev didn't come alone he brought i love the followership you know a lot of folks came with him i think we can be even greater we can we have the potential to grow faster and to be a really important company. And so I'm just, I'm thrilled, I'm excited. And even though I'm proud of what I've done, I think our best days are right around the corner and in the future.

Speaker 4

Great. Okay. Thanks, Randy. Thanks, Sanjeev. Thanks, Sean. We'll wrap it up there and we'll continue in the breakout session.