Okay, we should go ahead and get started. Thank you all for coming. I'm Brian Drab, the William Blair Industrial Technology Analyst covering Xometry. Before we get started, I need to remind you that you can find a full list of research disclosures on our website, williamblair.com. Today, we are happy to have with us CEO of Xometry, Randy Altschuler, also CFO, James Milne, and in the first row here, Shawn Milne, no relation, Head of Investor Relations. I'm sure a lot of you are familiar with Xometry, and I'll just say a couple words because Randy will go through all of it. Xometry is a marketplace that matches up predominantly product developers or anyone who's making anything, engineers, you know, for production work. Anyone who's making anything that could be CNC machined, injection molded, 3D printed, made with any process, they match them with someone who, you know, an operation that can perform that process. They have 3,500, roughly, manufacturing partners, and there's enormous value that they're creating for the users, and also enormous value that they create for the manufacturing partners, who operate in a, you know, highly inefficient manner historically. I'm gonna turn it over to you. I promised Randy that I wouldn't speak very much. So- Okay. Randy, thanks a lot for being here. Thank you for having me, Brian. Thank you. Thank you. Yeah, it's great to be here. Thank you, William Blair, and thank you, Brian, for hosting us. So I'm gonna go through a presentation here, and then we will open it up for questions and answers. Okay, well, just to give you, you know, a brief overview of what problem we're trying to solve at Xometry. So when you think about manufacturing, obviously one of the largest verticals in the world, and there's a segment of that, a $2 trillion segment is what we estimate, that is for custom parts. So these are parts where the customer can't go to a contract manufacturer. They're not making these in parts of millions, but instead, they're making them maybe in hundreds of thousands or thousands or smaller quantities to that, and so the customer has to go to a smaller manufacturer. That's a heavily fragmented market. There are hundreds of thousands of small manufacturers spread out across the United States and across the world, and the historically, purchasing these parts has been a very manual, inefficient process. So when a customer goes to different suppliers to look to get something made, the prices could be different by 100%. The lead time can be off by 100%. It's done in a very offline, manual way. They're sending faxes, they're going to physically visit people, they're using phone calls. Customers are waiting days or weeks sometimes to get prices, and rarely do they get the best value proposition. On the other side, the supplier in this market, and again, there are hundreds of thousands of small suppliers, there's no place for them to go before Xometry for them to sell their open capacity. The long tail of the internet had never touched them. So if you're a machine shop in Houston, Texas, you live and die with the oil and gas industry, and so when the oil and gas industry isn't doing well, you've got lots of open capacity. There really wasn't anywhere for you to sell that open capacity, and there might be a great aerospace customer in California, they wouldn't know you exist, and you wouldn't know that they exist. So we thought, "Hey, here's a terrific opportunity in a very inefficient market to find value for both the buyer and the supplier," and that's the heritage of Xometry. So we've got a video here to explain the AI that we're using that powers our marketplace. 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 compares 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 Xometry's AI. Xometry, where big ideas are built. Well, great. Just to underscore what was told in that video, and I'm one of the co-founders of the company. We opened for operations in 2014, and AI has been at the heart of what we've been doing. It's part of the heritage of Xometry. And as the video described, we use that AI to provide instant pricing for our customers and to then optimize the match between the buyer and the supplier. And we're using machine learning, a technique of machine learning, so as we get more data, we get smarter and smarter about what is the right price to charge the customer, and what are the right prices to pay the suppliers. One thing you'll see if you get to know our company better, alongside our very strong revenue growth, has been even stronger growth in our gross profit as we've got more and more profitable with each transaction using and leveraging our AI. This just gives you a sense of that. As you can see, if you go from Q1 2019 to Q1 of this year, our active buyer account, number of people buying, has grown 47%. Our revenue has grown 48%, and as I said before, our gross profit has grown 64%. It's very unusual when you see a company growing so quickly on an annual basis and actually getting more profitable. We haven't had to sacrifice profitability for growth. In fact, our profitability has increased. In addition to Xometry, our marketplace, we also have our supplier services, and at the heart of that is our Thomas platform. That's an advertising platform for suppliers to publicize the different skills that they've got. It's the largest one. It's in North America. It's sort of the outstanding one, with over 500,000 listed North American suppliers. Very broad in the categories that customers can go to. Thomas is a 100-year-old company. We purchased it 3 years ago, and as we think about being a one-stop shop for our customers to come and fulfill all of their manufacturing needs, Thomas is a great portion of that. At the same time, it also creates a wonderful ecosystem for suppliers in the manufacturing world to be connected to Xometry. Just to give you some financials here, on a last twelve months basis, we've had $481 million of revenue. This includes in Q1 growth of 16% year-over-year and marketplace growth of 24%. We had 58,000 active buyers in the first quarter, so that's growth year-over-year of, I think, about 32% of active buyers. $187 million of long-term last twelve months gross profit, and the number of paying suppliers was 7,000. So lots of strong metrics that have been growing rapidly over the years. So when we think about some of the highlights from our first quarter, first of all, you know, we'd come in with higher than expected growth. We had forecasted growth of 20% in the first quarter. We ended up actually with 24% marketplace revenue growth and overall growth, as I said, about 16%. Gross profit growth, overall, 22%, which includes strong 37% growth in gross profit in the marketplace, quarter-over-quarter, and we got improved operating leverage. So our operating loss declined significantly year-over-year, and we're well on our path to profitability. We have different initiatives to continue our growth. Again, we grew marketplace 24% last quarter. We're trying to not only continue, but accelerate that growth. So we're looking at going deeper inside our enterprise customers. Xometry, some of the largest customers or companies in the world are Xometry customers today, and we've grown rapidly within those customers, but there's still a lot of runway within them. We could easily grow that business 10x in many of those customers and further accelerate our growth. So we've been launching technology initiatives, new products like Teamspace, which has reduced friction for customers, enabling them to collaborate in our platform. And we've also been expanding our enterprise sales team to continue to go deeper and deeper within our customer base. We're continuing to modernize the Thomas platform. So the advertising platform on Thomasnet, which is a high margin, gross margin business for us. We're making changes for better self-service, better results for the searchers on Thomasnet, and more of a performance per pay model for the advertisers, which is very popular. And we're also growing very rapidly internationally. So when you think about international footprint, that grew very rapidly year-over-year. It's been growing ever since we launched in Europe in the first quarter of 2020, and that continues to accelerate at a rapid pace, so. This again underscores the rapid growth that we've seen. You look at last year, we grew 22% year-over-year. That includes 30% growth in marketplace. And then again, if you look at, you know, quarterly revenue growth in the segments. We're also growing the number of active not only buyers, but suppliers. Buyers are people who bought within 12 months at Xometry. As I said, that grew 32% year-over-year in the first quarter, and then the number of suppliers that are active in our platform, fulfilling the orders from those buyers, that's also been growing rapidly. So as we increase our supplier pool, that enables us to give buyers more options to our customers. It also is one of the reasons why our gross margins continue to expand between the data and the increasing supplier network, our margins are expanding, too. We have a large and sticky customer base. A couple of the metrics we report out are the number of accounts with more than $50,000 of annual spend. That's been growing very nicely. As you can see, that grew 25% quarter-over-quarter for our largest number ever. And then the amount of revenue every quarter that we're getting from existing Xometry accounts is very reliable, so that creates a very nice recurring model for revenue. And then again, just doubling down on international growth, as you can see, has really exploded since we launched internationally. That's primarily in Europe. We're also in Asia-Pac, and that's beginning to grow nicely as well, but right now, a lot of that growth is coming from Europe. We offer the Xometry platform. If you go to Xometry EU or Xometry.Asia, we're in 15 different languages. We take six different currencies. So we're taking successfully the tech stack and the model that we've built here in the United States, and we're moving those to different geographies. So we're leveraging that technology, we're building data sets there, and this enables us to serve truly a global audience. And then one other thing is we're showing our cohort analysis here. So, each year, these are the accounts that join us and how they've grown nicely. So a couple of trends. One, as you can see, each year, the growth has been impressive with those cohorts. Those longer they're here with us, the more that they're spending. But something else I'd like to point out is that the year one growth has been very impressive as well. In other words, year one are new companies that are coming to use Xometry, and as you can see, that number has been growing nicely each year. So there's lots of companies that even though we serve many companies, there are many more that we don't serve. So we have two paths for growth. One is growing within our existing customer base, which we're doing nicely, and the second is attracting new logos to Xometry. As we talked about, our gross margins have really, you know, grown very nicely over 200 basis points year-over-year for the last couple of years, and we continue to see those gross margins expand. Our marketplace gross margin expanded to a record 32% in the first quarter. And then just you look at the underlying metrics, the marketplace continue to be strong. A number of active buyers. We're adding lots of buyers, and we're getting nice leverage from our advertising spend. And then again, we're trying to, you know, as we're getting further along, we're scaling our expenses, leveraging that and on our path to profitability. Then finally, you can hear, see here our results, you know, year-over-year, how we've significantly dropped or decreased our loss in the first quarter versus last quarter. We've also guided to a smaller loss in the second quarter as well. And then it's just a quick snapshot of our long-term margin outlook. And then this is our guidance in the first quarter and the second quarter. So with that, I'd be happy to open up the questions. Is this microphone on? Thanks. Well, I have to say, two things struck me about your presentation, that you covered a lot really quickly and left a lot of time for Q&A. Yeah. There's a lot of presentations that don't have that many metrics and numbers. Sure. You know, just so you—I feel like you could get up and make a presentation about, like, onshoring and mega trends, but thanks for all the data. Yeah, absolutely. A lot of impressive metrics that are moving up and to the right. So can you talk first a little bit about gross margin? And you mentioned the improving gross margin, but what are you doing to drive that gross margin improvement? You talked a little bit about the AI and improving the quoting, but- Sure. There are other factors as well. Yeah, just to put it in the context, when we went public in 2021, in the second quarter, I think our gross margin was- Twenty-four. -was 24%. And, you know, as I mentioned, we just ended Q1 at a 32% gross margin. This is for Marketplace. So, and as you saw, our revenue growth has been very impressive on a compound annual basis since 2021. So it really does improve for a couple of reasons. One is we're using machine learning to power a lot of that pricing, and as we get more data, it just gets smarter and smarter, so we're better able to identify. It's custom parts, so this is tough. People are not buying commodity parts from us. So this isn't like where you're going to two different customers, and it's a 5% difference in things, and there's a list price for it. We're actually creating instantly a price for something that's never been created before. By using machine learning, we're getting smarter and smarter about what should be that price. Likewise, we're also figuring out who is the supplier, because one supplier has a better cost structure than another supplier, and if a customer tried to find that supplier on their own, even big, sophisticated companies, it would take them forever, and, and they rarely are able to do that. They don't know what... If you're in that aerospace company in California, you have no clue about somebody who may be great outside Detroit, but primarily does automotive. We're able to offer that with our, our platform, with our marketplace, and as those suppliers work more and more within our marketplace, as they, as we give them more and more work, as they interact more with us, we get smarter about what is their sweet spot. So it's the price is not our margins are not only going up because we're better at figuring out what's the right price for the customer, but we're also able to find what's that unicorn price from the supplier, the best cost from the supplier, and that just gets better and better with it. And then also, just as we continue to reduce friction for customers, as we become easier to use, as we become more reliable, then they're just defaulting more and more to using us, and that also will naturally help you with your profitability. So, on the first point, when you talk about, you know, the getting better at pricing- Yes. Early on in the company, you had, you know, like, drastic mispricing, right? Yeah. If you think back to 2015 or something- Sure. You'd think that you could. I mean, you correct me if I'm wrong, but I think there were some instances even where you'd think that you could get the job done for $1,000, and it would cost $3,000 or $4,000. Or even $10,000. Or 10,000. So, you know, I imagine that the opportunity you're saying the opportunity is still there to improve pricing, but, like, can you, can you help us kinda understand how, how big that opportunity? Because now it's just in these, in the long tails, I guess, that you're, you know, finding that you have errors like this. Are there errors still that big that are happening? ... They're less and less, but there's still huge opportunity to improve the pricing. I mean, and, and, you know, we've indicated that we're gonna be exiting the year at a 35, excuse me, our plan is to still be at a 35% gross margin, so you're still gonna see nice 32% last quarter, still see a nice uptick this year as well. And, and we've certainly reduced the tail, but there's also-- So I think over time, we're gonna get smarter and smarter about that, and we can move, we can move that center of gravity, you know, from, let's say, 32% today, continue moving it up, up, up it. That, that has a couple of knock-on effects. So one is, when you misprice, it can turn off the customer, right? Sometimes you have too high a margin, like you've priced it at 60%. Now, the customer may, you know, may take that off in the first time, but you may have shot yourself in the foot, and in fact, you've actually overcharged them, and you want them to rely on you for having good everyday prices. It also will burn you with the suppliers as well. Maybe, you know, a supplier will find out that they were charging you too little. So getting the right price ultimately is the best thing for both retaining your buyers and your suppliers. Of course, from our gross margin perspective, getting rid of that awful tail on the back end, just makes sure that you don't have those big escapes that can just drag down your margins. Right. And another question that I get related to margins from investors all the time is, why do you have a take rate, you know, if we call it take rate of in the 30% range? You know, can you talk a little bit about the value that you're providing? You know, you talked a little bit about it- Yeah but for these manufacturers. This is custom. It's not a commodity. So it's not like everybody knows... You go to the supermarket, you buy a quart of milk. Everybody knows what a quart of milk should cost. You go to three supermarkets, maybe it's off by a couple cents because somebody somehow shaved it off or something like that. In this case, it's custom manufacturing, and it turns out, in custom manufacturing, there's lots of ways to make something. So you can go to five machine shops, the same job, and they're all gonna make it differently, and everybody's gonna have a different cost structure. One person may be able to get the material for a lot less than the other person. One person may have set up their machine with an auto feeder, so they can produce the parts twice as fast. The other person may have an experienced operator who can program the machine much faster. So with all of that, the price differential is huge. And so we're not talking about, so the customer is gonna go in, and they may overpay by 100%. If we can save them, you know, 70%, that's a big win for them, and we can still get a high margin. It's the same thing on the supplier side as well. A supplier has 10 hours of machine time. One job may give them a 5% margin. Another job may give them a 30% margin. It's often a win-win. If we can get them that job at 30%, they're gonna love us, but the reason that why it's 30% is they're much more efficient. That usually translates into a better price for the customer. It's just, at any given time, there's no other place for the customer to go. It's not like there are no other sites. There's not Care.com, there's not big retail sites, there's not Amazon. They. There's not this place where they can price out that capacity because it's bespoke for their particular part. Right. And that all rings true. And one point that I was trying to get you to speak about- Yeah. but I'll just share- Yeah ... because I've interviewed some of these manufacturing partners. For those of you that aren't familiar with the company, the comments that I get are: If I work with Xometry and I take the job off the job board, I don't have to hire that salesperson, I don't have to hire some... You know, I don't have to spend money on marketing, and I don't have to spend a bunch of time quoting and, you know, working up a quote, which can take hours or days to get, work up the quote. And I, you know, I've talked to - heard those comments specifically. It's not just something in your presentation deck, but I've talked to, you know, individuals who said, "I literally have fewer people working for me- Yeah. because, you know, you're working with this marketplace. You know, it's not surprising that the same way the customer wants an instant price, and before they had to wait, you know, days or weeks or et cetera, the supplier wants certainty as well. And just as you're talking about, the fact that we give them a price, and if they press the button, and by the way, they can do it from their phone, and we estimate 30% plus of our suppliers actually do it from their phone. Imagine taking a manufacturing job from your phone. The fact that they press that button and they get the job and immediately get emailed the purchase order, that is worth a lot. And then we've also, Brian, just on top of that, we've got this software called Workcenter, which is our proprietary manufacturing execution system. So we give all of our manufacturers the same software to actually produce the job, to track it, to manage the job. That enables us much more efficiently to find out what's going on, but it also makes it easier for the supplier. Because ultimately, our goal is not only, I don't need the sales and marketing department, but it's also easier to deliver with Xometry. Why wouldn't I do everything through them? Great, thanks. And, I'll—well, we can open it up to Q&A from the audience as well, but I, I'll just ask maybe a couple more questions first. But, you've talked about getting to profitability- Yeah ... and it's been pushed out a little. I don't know when the—what was the original expectation to hit profitability? Like a year ago, I think. And can you talk a little bit about why that's been challenging to get to profitability? These aren't all gonna be softball questions today. Right. Okay, so, you know, so I think you lately said- I'm gonna hand it to our CFO for that one. Yeah. $150 million- Sure per quarter, I think, was the target. Yeah to hit profitability. You know, what's changed? I know the operating environment isn't ideal. Well, Brian, yeah, so Xometry's been making as you saw on the slides, like fantastic progress, both in scaling the business, in driving gross profit dollars, seeing that gross margin grow over time, and then, I think, controlling our OpEx spend. And so we've seen leverage over time. So I think it's an exciting, you know, period we've got coming up here, like we're getting close to this important milestone for the company.... So, you know, I joined three months ago, and working with Randy and the team, as we looked at where OpEx had come in for the beginning of the year and looked at then, you know, the environment that we're in, while we're really excited about the opportunities we've got that we're investing in for the long term, you know, we did have to adjust our revenue, you know, outlook for the year as we came in. So as we work through all of that and look at those initiatives, expanding buyers and suppliers, expanding the marketplace menu, the enterprise sales, they give us confidence in this, you know, continuing to scale and grow the business and improve margin over time as well. We think that $600 million annual run rate or $150 a quarter is an important milestone for us, and one we wanted to share in terms of where we can then cross into adjusted EBITDA profitability. And from there, I think then plan out how to scale from there. We're also very focused on then getting to cash flow positive after that, too. So we're excited about, you know, putting together these plans, and we just wanted to be realistic about the operating environment we're in, and help be clear on our expectations. You just said that there'd be a difference in terms of the timing of getting to profitability, in terms of EBITDA and cash flow. Yeah. How big of a discrepancy or difference would that be? So when we, you know, we look at cash flow, so we've got our, you know, our CapEx that we've got in. It's about, you know, running $4 million-$5 million a quarter, and then some working capital sort of movements underneath that. So when we look at that, I think that what we're looking to is then, you know, get scale on profitability, get to a sort of, you know, mid-single digits type of margin, maybe a bit higher, would be then where we could get to cash flow, you know. That CapEx is really, it's capitalized software, so we're obviously an asset-light business. Absolutely. So it's primarily capitalized software. Yeah. Can I ask, is this, is this something that we're talking about a couple of quarters, you know, beyond, you know, delay on getting to cash flow versus EBITDA, or is it a year or? Yeah, I'm not gonna put- Do you have a sense for that? Again, I'm not gonna put a specific timing on that- Sure ... in terms of, because within, you know, based on the pace of our own initiatives, which we can control, which we're really focused on and see, you know, we're excited about those opportunities. But within the environment that we're in, then I think as we get, you know, forward, that'll be something we can update on our progress. And then on this topic, can I just ask, is there a difference that you can talk about between the US business and the profitability there versus the international business? I mean, I'm thinking back to, you know, I don't know, this isn't something that you're talking about every quarter, so, but, you know, at one point, you did reveal that, you know, the profitability of the US business, because of the scale, largely- Sure ... is different from international. Yeah. International is growing so quickly. Is it the international business that needs to catch up to help you get to profitability, or, or is it- I think, you know, I think there's two levels, right? I think at the gross profit, gross margin level, I don't... I think over time, there's no difference structurally between, you know, those businesses. They can both operate at a similar level there. We have been investing in international to drive, like, the increased growth that you've seen there. So I think it's, you know, we give some segment profitability information, so, you know, that gives an indication. And I think as we look forward, yeah, I mean, both between our investments in enterprise sales, in the marketplace menu, which are global, you know, out of the U.S. team, as well as the international team. Those are all investment areas, and so I think those are all areas we wanna see return on, leverage from. I mean, the one thing is, we burn the U.S. with all the corporate costs, so that is a bit of a drag on the U.S., as you can imagine. Yeah. Anyone have a burning question, or I'll ask one more? Yeah, please. The financial aspect of supplier and how does it work? Are you taking a risk on the financial side? So yeah, we— Can you repeat the question? Yeah, can you repeat the q- Oh, can you repeat the- Oh, you repeat the question. Oh, yeah, that's right. It's on your webcast. Yeah. So the question was on, are we taking any risk financially between the customer and the supplier? So we do, you know, our revenue is... we're recognizing revenue of the full product shipped, and then we're paying the customer with our COGS. So yeah, that's all in our P&L. I think we should wrap up. Well, okay, we'll squeeze in one more. Can you talk a little bit about how specialized distributors tie into your kind of model? Because you sort the order from them rather than maybe from your side, or is it not possible because it's all very customized? When you say distributor, somebody who's selling off-the-shelf parts, or when you... What do you mean? You have, like, electrical components and other sort of specialized distributors that there are thousands of products available on the shelf, where- Yeah, so we really focus on custom parts, so it's not off-the-shelf parts. So you wouldn't go to a Grainger, or we wouldn't compete with a Grainger or McMaster-Carr or Fastenal, and we don't do electronics. So we wouldn't be competing that. Sometimes we'll do, we're doing more and more assemblies, you know, entire BOMs, bill of materials, and so we will, in those instances, or our suppliers will buy off-the-shelf parts to integrate those into the build, bill of material and the assembly. But the customer will be buying the assembly from Xometry and the custom parts, but those would be sourced from, you know, dealers if they were off-the-shelf parts. Okay. We're gonna- No, we- Let's answer that one on the way out. Yeah, we can do. Because everyone is- Okay ... starting to get up- Okay ... and get to their next meeting. Okay, great. We have a breakout session. Also, if we'd like to continue the Q&A in the Richardson Room. Thank you very much, Randy. Okay, thank you so much.