While everybody gets organized, let me get started here. My pleasure to have the team from Xometry here to finish out day three at the conference. We got Randy Altschuler, co-founder, CEO, James Miln, CFO. Randy, James, thanks so much for being part of the conference. Eric, thanks for having us. Yeah. Great to be here. Great to be Great to be here. To set the table for those in the room who might not be as familiar with the story, I do like to start these with talking a little bit about what Xometry does, what the friction points are that Xometry is trying to solve for within the manufacturing industry, and basically taking a step back, Randy, and talk a little bit about the vision. Sure Behind founding the company. Yeah. So I had founded two other B2B companies before Xometry, sold them to public companies. But what really attracted me to our space was that it hadn't been touched yet by AI and the application of it and a marketplace approach to it. So when you think about manufacturing, there's a $2 trillion segment, which is custom manufacturing. This is customers going out and buying bespoke products, customers ranging in all industries across the board, from aerospace to medical, to auto, to consumer, and the supply base is very fragmented. Hundreds of thousands of small manufacturers spread out across the United States and across the world. And historically, the procurement of those parts was analog. It was offline, it was inefficient, pricing was opaque, wild variances between what prices you get, what lead times you could get. And for suppliers, they were dependent on their local customers. So if you're a small machine shop in Houston, Texas, you lived and died with oil and gas, or if you're outside Detroit, with automotive. So we came with Xometry and said, "We're gonna create a two-sided marketplace. We're gonna use machine learning to create pricing for both the buyers and the suppliers, and we're gonna create value for both sides of it, make it more efficient, make a better value proposition for buyers, better pricing, better lead times, better solutions, and enable these manufacturers to fill their capacity with profitable work. Okay. Very clear. Maybe let's keep it. That was big picture. Let's keep it more short term. You just had earnings- Yes a couple of weeks ago. Yes. Why don't you talk a little bit about the key highlights coming out of earnings season? What were the messages you wanted to leave investors with, key themes around the business right now? Yeah. So there's a lot of talk about bad macro data in manufacturing, and we've defied all that. Yeah. So we had a record quarter with record revenue. We grew our marketplace segment 25% year over year, highest revenue we've ever had. We grew our gross margin, our gross profit margin, and our gross profits by 33% in the marketplace segment, again, for record gross profit margins for-- on the marketplace side, for in Xometry's history. We also had our smallest loss since we've been a public company, of $2.6 million of Adjusted EBITDA. So we had big beats on both the revenue and on the bottom line, and we saw a lot of momentum coming here into the third quarter. So, we grew our active buyers, number of customers, 27% year over year in the second quarter as well. All sorts of metrics up to the right, and a lot of the theme was Xometry's marketplace approach is gaining market share. Even in a tough environment, we're gaining market share, and it's great trends. Okay, understood. I wanna go a little bit deeper into the business model and some of the long-term dynamics around the marketplace. So key to the business, at least the way we framed it, is that you have a proprietary AI machine learning pricing model. Talk a little bit about how the model works, how it's evolved over the last couple of years, and what are the key drivers of your ability to see marketplace gross margin expansion by the model? Yeah, and this is what's so distinct and unique about it, and this is where we have proprietary IP here, and we've got patents and all that good stuff. So when you think about it, in typical e-commerce company, customer is buying SKUs. They're coming to a retail site or even a business site, and they're buying off-the-shelf, already-made products. In this case, our customer is coming up with something that's unique for them. So you're launching a rocket. You've got unique rocket parts or a brand-new medical device, and it's a brand-new medical device, and there are many different ways that could be made. There's many different permutations in terms of quantity and what are called post-processing and the material, et cetera. And again, historically, that's taken you days or even weeks to get prices for. With our proprietary algorithms, you can immediately get a price and a lead time, and you have the ability, in real time, to toggle between different manufacturing technologies, different quantities, different materials, and see what the price ramifications are for making those choices, as well as the lead time ramifications. So we use that with machine learning, which... Everybody talks about AI today. AI has been at the heart of Xometry since we started the company. And we've been, over time, investing in those algorithms, making them, refining them, and we've been gathering more and more data. And because we've been getting more and more data, the accuracy of our pricings has increased, and that's enabled us, for example, to grow our gross profit margin in our marketplace segment. Three years ago, when public, our gross profit was 23.5% that quarter. This past quarter, it was 33.5%. So we grew that 10% over that period of time, or 1,000, I guess, basis points- Yeah ... over that period of time, because we've been training those models. We use that AI also to optimize the match between the customer who's buying the parts and the supplier who's providing the parts. So there's lots of different suppliers out there. We're using the AI to find who's the best one at this price for the customer. And again, we're continually getting more data. We're expanding the size of our network, and that's enabling us to also be better about choosing the right supplier and making a better value proposition. Understood on pricing, understood on matching. Maybe just taking a step back and being a little more big picture, talk a little about who the core buyer on the Xometry marketplace is, and what sort of progress has been made in terms of the company growing wallet share of buyers on the platform and/or buyer growth on the platform? Yeah, so and I'll let James hop in here with some numbers, but you could look at our customer base sort of segment in a couple different places. We've got our SMB market, you know, customers, small, medium-sized businesses, but our biggest customers are actually the biggest companies. And that's because if you're a large Fortune 10 company, and you're spending hundreds of millions of dollars a year on manufacturing, maybe even billions of dollars, you're trying to, in some instances, shrink your supply chain. You don't wanna have a thousand suppliers. You wanna start shrinking that. The Xometry marketplace is very attractive for them to take a portion of that spend, and instead of dealing with lots of small and medium-sized manufacturers, they can deal with our marketplace, public companies running that, the transparency, the reliable delivery, the ease of use, and they funnel that through. So we've been growing the number of accounts that we've got. One of the metrics, KPIs we report are accounts of more than $50,000 spend. On a LTM basis, that grew- 24% in Q2. 24% in Q2, so that's a good proxy for as we're going deeper and deeper in our enterprise customers. And this is an extensible tech platform. So another great thing is that we're strong in many different verticals. We're not long any one particular one, because our technology is very applicable in lots of different use cases. So maybe just building on that with one last finer point, and one question we get from investors is how to think about scaling and building that large enterprise base over time. How do you think about the opportunity set? How do you think about sort of tackling that opportunity? We lead with our technology. We've got within Xometry, we released last year, something called Teamspace. That's the ability for groups of engineers and procurement people or customers to work together to collaborate on either projects or entire products on Xometry. This is bringing in entire teams of folks, many of whom have never heard of Xometry before. And they're collaborating, and so they're using our software within Xometry's marketplace, in Teamspace, to make those products. That's very popular. That's helping us gain traction within our customers. We also integrate into our customers' ERP systems. We can do that very simply. If you've got Coupa or Ariba, and you want to buy directly from your ERP system into our marketplace, you can do that with a click of a button. That sort of technology makes it very simple, and then we're also building an enterprise sales team that are great at that land-and-expand motion. Okay, understood. So we talked about buyers, talked about pricing. Let's move to suppliers. Can you talk a little bit about the runway you see for onboarding on the manufacturing side of the marketplace? And what are some of the main reasons that manufacturers engage with Xometry? We're the leader, and it's not an instance. We don't have an Uber and a Lyft circumstance where we're fighting for drivers. So really, for manufacturers, if you wanna get... There's no fee to join, and it doesn't cost you any sales and marketing dollars. So it's a very attractive value proposition, and suppliers come to us. Like, that is supply is bountiful for us because we have such a compelling value proposition for them. First of all, because they don't have to worry about the sales and marketing element of it. Second of all, we're using our machine learning to give them work that's most profitable for them. So if you're a manufacturer, you have a finite amount of capacity. So you have two priorities. One is, I wanna fill that capacity, and the second thing is, I wanna fill that capacity with work that's as profitable as I can find. And for each manufacturer, that means something different. If you're a small manufacturer, you really don't have a choice about what work you can take because you're constricted by your local customer base. Again, you don't have a lot of sales and marketing dollars. What your local customer gives you is what you have to take. But with Xometry, suddenly the world has opened up, and I can find exactly what I want from lots of different customers. So the manufacturers love that. On top of that, we have our proprietary system called Workcenter. This is a manufacturing execution system we give to our suppliers for free, in which they receive work from Xometry. We have a financial transaction element to it as well, and they can actually manage that work in this digital platform that we've given them. Many of our suppliers don't have that software at all. We offer it to them for free. So we're making them more efficient, we're giving them work that's right up their alley, and there's no sales and marketing costs. They love it. Okay, so- And if I can add, I mean- Yeah, go for it, James. We've got three thousand five hundred active suppliers, manufacturing suppliers globally with very little marketing spend to get that. They come to the platform, and they wanna be part of the platform because of this access to global demand. And then linking it back to the gross margin and gross profit growth, the more suppliers we have, the more buyers, the more transactions on the site is growing, and so we grew gross profit 33% in the second quarter. And as Randy was saying, the margin at 33.5, 10 points over the last three and a half years, that's to do with this growth of the supplier base, as well as the growth of the data that we have on the platform. Understood. Okay. Randy, you talked a little bit about it in the last answer, but I really wanna go deeper on product innovation. You know, if you think about the last 12-24 months alone, we've seen a lot of product innovation on the platform. You talked a little bit about some of it. Why don't you put a high-level maybe just a bit of a more upfront point on things like, you know, auto quote categories, your work with Google Cloud, like Vertex AI. You talked a little bit about Workcenter or Teamspace. Where is... What should we be thinking about in terms of the innovation you've put in place, what it does for the marketplace, and how to think about maybe some of this continued work you're gonna be doing with partners like Google Cloud and Vertex AI going forward? Yeah. So we believe there are millions of potential buyers out there, and one of the ways to attract those buyers is to make sure that we can offer lots of different manufacturing capabilities. And so we released these auto quoted models. We've been partnering with Google's Vertex AI team since roughly a year now. That's their AI team, which are very good at machine learning, to our data, to our algorithms, but they're giving us some techniques to speed up our release of new auto quoting models. So we just announced, and we've released now auto quoting, for example, for tube bending and tube cutting, two huge manufacturing spaces, very relevant to our current customer base as well. You can expect now to see us release more and more auto quoting models faster, leveraging some of the techniques that we've learned from Google and our own investment. That enables us not only to attract new buyers from lots of different companies and new industries, but also within our existing customer base, going back to your question about enterprise being that one-stop shop. So if you're a procurement person at a Fortune 10 or a Fortune 500 company, you're probably buying lots of different kinds of custom manufacturing. If we can be the place that you can do all your shopping, that's gonna generate a lot of loyalty, and it's gonna save them a lot of time and reduce friction. And particularly when you get to enterprise buyers, reliable delivery and ease of use are critical. Price and lead time are always important, but reliable delivery and ease of use are right up there, and things like our investment in our AI, things like Teamspace, et cetera, make that a lot easier for them. Okay, understood. And then add as a technology platform, you know, driving both buyer growth and revenue per buyer, like, our growth initiatives can drive both of those, and as Randy's pointing out. Okay, perfect. You've always talked about international, but I know in the last couple of earnings calls, we've talked a little bit more about focus around international, international expansion. Talk a little bit about the cohorts you have now in Asia, Europe, how the behavior of those cohorts compares to the US, and how should investors think about the ramp investment required to scale in some of those key international markets? Yeah, so we're very excited. You go back to 2020, and we did, I think, about $3 million that year in international. On a run rate basis, now we're at about $80 million. So, that's ramped up pretty dramatically in a relatively short period of time. It's primarily been in Europe, so we offer in Europe, I think, about a dozen localized marketplaces, in the local languages within the European-- we're in the European Union plus the U.K. And the value proposition is resonating there, too. Similar to the United States, customers don't know the best place to find the best price, best lead time, best solution for their needs, and you've got a very fragmented supplier base. So that's gone very well. We launched later in Asia, and we're based there in Shanghai, so China is our sort of leading place for Asia- Pac. That's been growing nicely as well, and we're continuing to expand there. We started launching in Australia and New Zealand as part of our Asia- Pac as well. We expect that in, you know, in other marketplaces, you could see international being anywhere from thirty- Yeah, 30%-40%. 30%-40%. We expect at some point that we would reach a similar number at Xometry. Okay. In the last quarter, international grew... In the 30-31%. Yeah. And the other thing we've mentioned as well, like, the gross margin profile is relatively similar between the U.S. and international. There's more investment going into international. It's at a $80 million run rate versus, you know, the U.S. at $420. So as you can imagine, like, the investment there makes a lot of sense, and sales and marketing, as we're growing the opportunity there. Okay, understood. I wanna pivot to supplier services. So obviously, you did the acquisition with Thomas, I guess now a couple of years ago. Yeah, right ... now, at this point. What do you see as the opportunity in supplier services? I think second question would be, describe the opportunity related to that Thomas acquisition that comes back to supplier services and how to think about the general increase for penetration of those over time. Yeah. So I think from a financial perspective, you know, you're talking about we're up to almost 90% gross margins, so that's, you know, very profitable revenue for us. So Thomas and as we continue to mature, we're investing in updating and upgrading the advertising model in Thomas, so that'll help us attract newer advertisers and accelerate, you know, grow that revenue, which will be powerful for us from a, just an overall profitability perspective. But Thomas also enables us when you think about Xometry, and this goes back to our comments about being a one-stop shop and attracting those millions of buyers out there, some of that is about the breadth of what you can offer. Thomas is actually much wider than Xometry. As we add these new categories, like tube bending and tube cutting, we're able to get. There's almost five hundred thousand suppliers listed on Thomas, and many more categories than we have in Xometry. We've got a built-in supplier base there right off the bat to service that. And then we've also got lots of data. There's, I think, one point two million registered users on Thomas as well, many of whom have never heard of Xometry. Right. Even though we've owned them for a couple of years, Thomas is a business that's been around for over a hundred years versus Xometry, about eleven or twelve years. So just the awareness factor is very strong there. That brand now being able to show those Thomas customers, "Hey, not only are we upgrading Thomas, you know, advancing some of the technology there, but there's this great opportunity on the Xometry side as well." So there's lots of synergies, both from a buyer and a supplier side for the two companies, so. And as we look to modernize the platform, both from a user experience and an advertiser experience, we're at about 1% penetration today in terms of paying suppliers and advertisers. So we do feel strongly in terms of the opportunity that is ahead as we improve the technology here and improve the value that we demonstrate to our suppliers on the platform, that there's a, you know, good opportunity for growth ahead of us, and very profitable growth, which can be really complementary to the core marketplace. Okay, understood. One of the main questions we get is the competitive landscape. You know, you always talk as a company in terms of the big market opportunity in front of you and disrupting the old way of doing things. But how do you view the competitive landscape? Like, who do you think you're competing with for incremental dollars of growth and changed industry practices? Yeah, so I'm very close to the market. Yeah. You know, I'm one of those CEOs like to lead from the front. I'm visiting customers all the time, both here and internationally. So I'm seeing it firsthand, not only from my salespeople. Our biggest competition is the way that people always do business. When we lose, when a customer doesn't go with us, it's almost always because they've gone with the person they've always known versus. And the good news is, look, that there is a secular change, and it's happened in so many other industries for these buyers, that more and more of them are accepting now, of that I don't need to be right next door to that manufacturer or have known that manufacturer to buy. And also, frankly, the macro environment is encouraging that as well. There's more uncertainty, there's more concern about supply chain resilience. Customers are more concerned about delivering to their end customers. Xometry is a safe space, right? We're a public company. We offer the opportunity that if redundancy in different regions, either domestically or a mix of domestic and/or abroad, these sorts of things you just don't have when you're going to a small or medium-sized manufacturer. So the ability to tap into the capabilities and capacity of a huge network, but also have the safety and the reliability of our marketplace and of our platform, that's very attractive for these customers, and they're embracing that. And that's really the shift that we're pushing for folks. And just the easier we make it, the more categories we can quote, the more the easier we'll make it for them to take that next step. I know we've talked a lot about it with respect to the technology at the heart of the platform, but if, if pushed, what would you say is the core competitive moat that you see around this company when you think about the competitive landscape and continuing to scale it in the years ahead? It's all the data we constructed, plus the networks of buyers and suppliers. Got it. I guess I couldn't say the one thing. It's like, which of my three kids do I love the most? All three. We love a good flywheel effect- Yeah. in internet. And the international, you know, scope of it. I mean, we, you know, we can offer the customer what they're looking for in many different ways, and that's just... They can't get that the old way. It's not even- Yeah. Put all that other side in, and it is just making these, reducing the friction on every element of that quoting and procurement and ordering process. Understood. Okay, I wanna talk a little bit about profitability. You talked about it early on as, as sort of the progress you made. You framed a target as a company to reach Adjusted EBITDA profitability at a $600 million revenue run rate. Can you walk through the drivers of achieving that goal? And how should investors think about the long-term structural margin and free cash flow profile of this business? Yeah. Thanks, Eric. So for Randy and I, getting to profitability is the top priority. And what we wanna do is make sure we're doing that in a healthy way that balances the long-term opportunity that we all see here, to scale this company, to be, you know, for the very large opportunity ahead, but to do that in a smart way that's, you know, demonstrating that profitability. So as we look to that, and, you know, in the first quarter or two, as I've been here, we've looked closely at the whole structure, at our teams, and at the gross margin profile, as well as OpEx, refining where we wanna invest and where we wanna see leverage. Xometry has demonstrated nice leverage in the last couple of years. In 2023, 20% incremental Adjusted EBITDA margin. In the first half of this year, we continued to demonstrate that. And so as we've guided to that $600 million, you know, level that's seeing us be able to surpass the to profitability, we actually expect that we can continue at that similar sort of margin leverage as we walk through that and driving to cash flow positive soon after that. So we're excited about that opportunity. I think Q2 was a great demonstration in terms of you know, making the right step there, as Randy mentioned at the beginning. And we look forward to continuing to update you on our progress. Okay, so that's the progress on profitability. Yeah. Let's zoom out and talk more broadly about capital allocation. So, you know, Randy, you've talked a lot about product and platform and where you wanna go over the longer term. Talk to us a little bit, one or both of you, about the capital allocation priorities of the company. You know, investing in the core business, driving increased levels of profitability, maybe M&A, maybe returning capital to shareholders. How do you rank order those priorities today, and what's your sort of worldview around that? Yeah, I mean, I think, again, like, the path to profitability for us is, and that organic growth is, like, the first focus of business. I think as we think about the scale and the opportunity ahead, we're, you know, M&A could be part of that. I think smart M&A to continue to accelerate our opportunity here, makes sense. We've got a... You know, we're in a good position, cashflow, cash-wise, at the moment. We wanna march towards cash flow positive, as we get past profitability here, and we know that that's gonna give us more options in terms of the levels of growth that we have ahead. Maybe just, one more to add on to that. When you think about leverage in the business, is there a way you think about leverage against the business or, or elements of striking a balance of the balance sheet versus some of the investments you wanna make longer term? I think we wanna focus on, you know, the opportunities we have here for our growth initiatives- Okay. You know, extending the buyer and supplier network. Product investment is important to us as well. We're a technology company creating a global platform here. That's gonna demonstrate a lot of leverage as we grow scale. Yeah. And so I think that as we can drive into the opportunity ahead of us, then that's gonna, again, give us opportunities with more cash flow, as we grow scale. Yeah, and just to double down, like, again, we're an asset-light business. When we decide to launch tube bending and tube cutting, we didn't have to go out and buy a bunch of tube bending and tube cutting machinery. Yeah. And those investments, as James talked about, in technology, and that's where when you look at our, sort of our CapEx, it's, you know, most of it is capitalized software, are paying off. So when you think about our efficiency, our marketing efficiency, you know, to drive our top of funnel, we've been gaining lots of efficiency through that by just, you know, pumping or building out our software, making it more attractive, reducing the friction, getting more organic traffic, people coming back to us, and that's just allowing us as we get to that profitability, that's a nice part of it that's been happening. And even the leverage we're seeing across lots of other expense categories is we're investing in that technology platform. Okay. We've got a few minutes left, Randy. Just, you know, we've talked about a lot with respect to the business today. If you think back to the themes you highlighted coming out of Q2, the dynamics for the business long term, we've talked about today, what key messages do you wanna leave investors with in terms of your priorities of where the company's going in the path ahead? It's a huge opportunity, and we can stay in our lane. You know, a lot of companies, to realize their vision, have to suddenly enter five different markets and start doing lots of things. We've got a huge addressable market right in front of us. That's number one. Number two is, going back to your question, we have a huge competitive moat. We've built this huge these algorithms, we've built the data with those algorithms, and we've built these networks of buyers and suppliers, and literally every day, as we gain more data, as we gain more buyers and suppliers, that competitive moat continues to grow. And a lot of investors invest in marketplaces, particularly in B2C. There's a zillion guys doing this B2C thing. In this case, we have a real market-leading position that we're continuing to capitalize on. and we have a clear path forward. We've been very clear each quarter about what our initiatives are. We're gonna stick to those, we're investing in those, and we're confident you'll continue. You know, we saw that 25% growth in Q2. You know, we had strong growth in Q1 as well in our marketplace segment. I think if we continue to execute and follow that plan, you'll see growth and profitability, and you'll see that for a long time to come. There's a long runway here, of growth for Xometry. Okay. Super clear. Randy, James, thanks so much for the opportunity to have the conversation. Please join me in thanking Xometry for being part of the conference this year.