Xometry, Inc. (NASDAQ:XMTR) Q4 2022 Earnings Call Transcript

Jim Rallo: Yes. So I think when you look at Europe is actually both it’s both of things you mentioned. So we are adding sales folks in different countries. We’re also expanding our capabilities in Europe. When you look at the recent tuck in acquisition, we did what that did give us really a low cost network in Europe so think about similar cost model to what you have in like a China or Asia network and the beauty of that is we can ship in 24 hours from Turkey to really anywhere in Europe. So you’re lowering your lead times and still giving our European customers an economy option if you would. So both, again, growth in — both growth into sales force and continued growth in different countries in Europe is what’s driving that.

Randy Altschuler: Yes. So if we’re going deeper into markets there’s huge markets that we’re in Europe already, when you look at the German speaking countries, when you look at France, in Italy, and Spain, but we’re also adding new markets, as we talked about. We are now having a physical presence in the UK. We are transacting in pounds. That’s the third largest market in Europe. So it’s still early days there, but lots of room to grow. And then just double down on what Jim said about Turkey. A lot of European manufacturing is done there. It’s very familiar ground with Europe. So it just offers us a great opportunity. And there’s growth opportunity in Turkey itself. But so sort of, we get two different things for that.

Unidentified Analyst: Got it. Thanks.

Operator: One moment for next question. Our next question comes line of Greg from Craig Halen. Your line is open.

Unidentified Analyst: Yes, good morning. Thanks for taking the questions. I know you’d been testing this price elasticity in Q4. I know we focused a lot on the behavior on behalf of your suppliers. But I’m curious if what you were doing change the behavior at all in terms of your buyers, whether maybe they decided to order less parts per order, any change in kind of lead times? I think you’ll need to do something like that to reduce cost and maybe a little bit more color on buyer behavior.

Randy Altschuler: Yes. Great question. So we did see buyers trade off the time for price, we did see some reduction in quantity to the things that you’re talking about are absolutely spot on. And that also obviously impacted the average order values that we saw as we exited Q4 and in the beginning of Q1. Again, we said we’ve seen that trend change in February. We’ve also, we’re reaping the benefits of our of our price optimization. So we expect that that AOV to start rebounding and it has rebounded in February, and we expended executive to have a good trend that we’re trying to be conservative for this year. And so not get ahead of our skis on it, but it certainly hasn’t improved from where it went in the late Q4 and in the beginning of Q1.

Unidentified Analyst: And then in terms of pinpointing that improvement, I’ll sort of tie that back to my initial question. How much of that is driven by the suppliers versus the buyers? Maybe they’re adding more parts to the order. Maybe they are, maybe do an expedited or standards in lieu of economy, but can you just dig into a little bit in terms of the specifics around the improvements?

Randy Altschuler: Yes. I mean, we are seeing buyers. We’re seeing less buyers. There is more urgency from the buyers, as we’re sort of getting further into this quarter. So they are trading off less on the lead time than they had been doing as we saw in at the end of Q4 and beginning of this year. So there is some change in the buyer behavior. And then part of it is also some of our price optimization.