Xometry (XMTR) Q1 2026: Marketplace Revenue Jumps 40% as Siemens Partnership Expands Platform Reach
Xometry delivered its third straight quarter of accelerating revenue growth and expanding margins, underpinned by a landmark Siemens partnership embedding its AI marketplace into global engineering workflows. The company’s AI-native platform continues to drive share gains across a fragmented custom manufacturing sector, while disciplined cost management and product-led initiatives fuel operating leverage. With Siemens’ $50 million investment and native software integration, Xometry’s install base and international exposure are poised for a step-change, setting the stage for sustained growth and improved profitability through 2026.
Summary
- Siemens Integration Extends Platform: Embedded AI capabilities will connect Xometry to millions of global engineers.
- AI-Driven Marketplace Gains: Proprietary models and improved buyer journeys boost share and margins.
- Profitability Trajectory Strengthens: Operating leverage and cash flow conversion improve as scale accelerates.
Business Overview
Xometry operates an AI-native digital marketplace for custom manufacturing, connecting buyers with a global network of over 5,000 suppliers across 50 countries. The company’s two primary segments are Marketplace revenue, which comes from facilitating custom part orders, and Services revenue, which includes digital advertising and industrial sourcing solutions. Xometry monetizes by matching demand with manufacturing capacity, leveraging proprietary AI to optimize pricing, lead times, and supplier selection, while maintaining an asset-light model that prioritizes technology and data-driven growth.
Performance Analysis
Xometry’s Q1 results highlight a business in acceleration mode, as marketplace revenue surged 40% year over year, outpacing total company growth and reflecting robust execution across buyer and supplier networks. Active buyers increased 20% to over 85,000, with net additions at a nine-quarter high, signaling both broadening adoption and deeper penetration into enterprise accounts. Marketplace revenue per active buyer also climbed 17%, underscoring growing wallet share and validating the company’s product-led growth thesis.
Gross profit expansion was even more pronounced, with marketplace gross profit dollars up 53% and gross margin improving by 290 basis points. Operating leverage was evident as non-GAAP operating expenses rose only 21%—well below revenue growth—enabling adjusted EBITDA to reach $10.5 million, a dramatic improvement from breakeven levels a year ago. The U.S. segment drove profitability, while international losses narrowed, reflecting improving scale and efficiency overseas. Cash flow trends were positive, with $14.6 million in operating cash flow and $4.8 million in free cash flow, supporting ongoing technology investments.
- Marketplace Revenue Outpaces Total Growth: 40% YoY increase, driven by both net new buyers and increased spend per account.
- Gross Margin Leverage: Marketplace gross profit dollars rose 53% YoY, with margins up 290 bps, reflecting AI-driven pricing and operational optimization.
- Operating Discipline: Sales and marketing spend as a percentage of revenue hit record lows, supporting margin expansion even as growth accelerates.
The combination of top-line momentum, margin expansion, and cash discipline positions Xometry for sustained profitability as it scales toward a $1 billion run rate.
Executive Commentary
"This partnership puts Xometry's manufacturability, pricing, and sourcing intelligence in front of Siemens' global customer base at the moment design decisions are made... The result is a continuous digital thread from design decision to delivered part."
Randy Altschuler, Chief Executive Officer
"Our proprietary intelligence is crucial for creating value across the entire marketplace... The ability to translate a decade plus of proprietary data into immediate operating leverage and long-term marketplace growth is what underpins our confidence in accelerating the move to the next S-curve of growth."
Sanjeev Singh Sani, President and Incoming CEO
Strategic Positioning
1. Siemens Partnership as Platform Multiplier
The native integration of Xometry’s AI marketplace into Siemens’ Accelerator ecosystem exposes the platform to millions of global engineers, embedding manufacturability and pricing intelligence directly into design workflows. This move dramatically expands Xometry’s reach, lowers customer acquisition costs, and sets the foundation for future large-scale enterprise partnerships. The $50 million Siemens equity investment is both a validation and a catalyst for international growth.
2. AI-Driven Product-Led Growth
Xometry’s core AI models are the engine behind its competitive moat, with recent upgrades quadrupling the training dataset and enhancing prediction accuracy for lead times, material selection, and pricing. The launch of new features like “Name Your Part” and expanded instant quoting for injection molding are reducing friction, boosting buyer retention, and driving higher conversion and margin outcomes.
3. Marketplace Network Effects and Supplier Scale
The supplier network, now at 5,000 partners across 50 countries, is a key strategic asset, enabling buyers to access certified, resilient capacity and offering Xometry sourcing flexibility. Supplier-facing tech enhancements, such as centralized communications, are deepening engagement and data capture, further strengthening the AI flywheel and margin structure.
4. Operating Leverage and International Expansion
Disciplined cost management and automation are translating growth into profitability, particularly in the U.S. where segment EBITDA margins have expanded sharply. International losses are narrowing, with management signaling further leverage as scale builds, especially as the Siemens partnership accelerates global adoption.
Key Considerations
This quarter marks an inflection point for Xometry, with the Siemens partnership and AI-driven execution accelerating both platform adoption and financial leverage. The strategic context is defined by:
Key Considerations:
- Embedded Enterprise Access: Siemens’ global install base offers a step-function increase in buyer exposure, with direct workflow integration likely to boost active buyer counts and lower marketing costs.
- AI Model Differentiation: Proprietary data and closed-loop learning underpin a defensible advantage in pricing, lead time, and supplier matching—key drivers of both growth and margin.
- Supplier Network Resilience: Expansion into certified and specialized suppliers supports growth in regulated end markets and enhances platform stickiness.
- Services Stabilization: While marketplace growth leads, services revenue remains flat, with management focused on stabilizing and eventually reaccelerating digital advertising and sourcing solutions.
Risks
Execution on large-scale integrations, such as the Siemens partnership, introduces operational complexity and timing risk, especially as global rollout ramps. International margin improvement remains unproven at scale, and services revenue is still flat, reflecting challenges in digital advertising amid broader industrial cycles. Competitive threats from legacy procurement platforms and emerging digital players persist, while macro volatility and supply chain disruptions could impact both buyer demand and supplier reliability. Guidance does not yet include Siemens upside, reflecting prudent conservatism but also leaving room for potential upward revisions—or disappointment if integration lags.
Forward Outlook
For Q2 2026, Xometry guided to:
- Revenue of $214 to $216 million (32% to 33% YoY growth)
- Marketplace revenue growth of approximately 35% to 36% YoY
- Adjusted EBITDA of $11 to $12 million
For full-year 2026, management raised guidance:
- Revenue growth of at least 27% to 28%, up from 21% previously
- Marketplace growth of ~30%
- Marketplace gross margins higher than 2025
- Incremental adjusted EBITDA margins of at least 20%
Management emphasized that current guidance excludes any contribution from the Siemens partnership, and noted a strong start to Q2, with continued momentum across enterprise and product-led initiatives.
- Siemens integration is expected to drive future upside, but is not yet in the forecast.
- Services revenue expected to remain flat in the first half, with modest growth in the back half of the year.
Takeaways
Xometry’s Q1 performance cements its position as a leading AI-native manufacturing marketplace, with accelerating growth, margin expansion, and a landmark enterprise partnership that sets the stage for global scale.
- Marketplace Flywheel Accelerates: Proprietary AI models and a growing supplier network are driving both top-line and margin gains, with broad-based industry adoption.
- Siemens Partnership Is a Strategic Leap: Native integration into global engineering workflows and a $50 million equity investment position Xometry for step-change growth and operating leverage.
- Investors Should Watch for Siemens Ramp and International Margin Inflection: The pace of integration milestones and the ability to translate international scale into profitability are key for sustained upside.
Conclusion
Xometry’s Q1 2026 results reflect a business moving beyond product-market fit, leveraging AI and enterprise partnerships to capture share in a massive, fragmented market. The Siemens integration is a structural catalyst that, if executed well, could unlock the next S-curve of growth and profitability. Investors should watch for evidence of accelerated buyer adoption, international margin improvement, and incremental guidance updates as the year unfolds.
Industry Read-Through
Xometry’s native embedding into Siemens’ design software signals a broader shift toward vertical integration of digital manufacturing marketplaces within enterprise engineering workflows. This model—combining AI-driven quoting, supplier matching, and direct workflow integration—raises the bar for B2B procurement across industrial sectors. Competitors in industrial software, digital marketplaces, and even legacy procurement platforms will face pressure to accelerate their own AI capabilities and workflow integrations, or risk losing relevance as digital adoption in manufacturing accelerates. The move also highlights the growing strategic value of proprietary transactional data and closed-loop AI learning systems, not only for manufacturing but for any sector where supply chain resilience, speed, and customization are critical. Expect other industrial software giants and digital platforms to pursue similar native integrations and data-driven partnerships as the industry digitizes at scale.