Xometry Reports First Quarter 2023 Results
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Xometry Reports First Quarter 2023 Results

NORTH BETHESDA, Md., May 10, 2023 (GLOBE NEWSWIRE) -- Xometry, Inc. (NASDAQ:XMTR), the global online marketplace connecting enterprise buyers with suppliers of manufacturing services, today reported financial results for the first quarter ended March 31, 2023.

“In Q1 2023, Xometry delivered stronger-than-expected 35% marketplace growth year-over-year, improved marketplace gross margin by 170 basis points quarter-over-quarter and improved operating leverage driven by our steadfast focus on our 5-point strategic plan,” said Randy Altschuler, Xometry’s CEO. “We continue to rapidly expand our network of buyers and suppliers and enhance our products and services. We expect to continue to rapidly gain market share fueling robust marketplace revenue growth while further tightening operating expenses to achieve Adjusted EBITDA profitability in Q4 2023.”                                                                         

First Quarter 2023 Financial Highlights

First Quarter 2023 Business Highlights

Financial Summary
(In thousands, except per share amounts)

  For the Three Months
Ended March 31,		    
  2023  2022  % Change 
  (unaudited)    
Consolidated         
Revenue $105,326  $83,671  26%
Gross profit  39,369   32,939  20%
Net loss attributable to common stockholders  (18,344)  (20,012) 8%
EPS, basic and diluted  (0.38)  (0.43) 12%
Adjusted EBITDA(1)  (11,767)  (12,726) 8%
Non-GAAP net loss(1)  (9,766)  (12,598) 22%
Non-GAAP EPS, basic and diluted(1)  (0.20)  (0.27) 26%
          
Marketplace         
Revenue $86,680  $64,415  35%
Cost of revenue  61,747   46,741  (32)%
Gross Profit $24,933  $17,674  41%
          
Supplier services         
Revenue $18,646  $19,256  (3)%
Cost of revenue  4,210   3,991  (5)%
Gross Profit $14,436  $15,265  (5)%
            

(1)   These non-GAAP financial measures, and the reasons why we believe these non-GAAP financial measures are useful, are described below and reconciled to their most directly comparable GAAP measures in the accompanying tables.

Key Operating Metrics(2):

  As of March 31, 
  2023  2022  %
Change		 
          
Active Buyers(3)  44,716   30,683  46%
Percentage of Revenue from Existing Accounts(3)  96%  94%   
Accounts with Last Twelve-Months Spend of at Least $50,000(3)  1,109   790  40%
Active Paying Suppliers(3)  7,621   6,872  11%
            

(2) These key operating metrics are for Marketplace and Supplier Services. See “Key Terms for our Key Metrics and Non-GAAP Financial Measures” below for definitions of these metrics.
(3) Amounts shown for Active Buyers, Accounts with Last Twelve-Months Spend of at Least $50,000, and Active Paying Suppliers are as of March 31, 2023 and 2022, and Percentage of Revenue from Existing Accounts is presented for the quarters ended March 31, 2023 and 2022.

Financial Guidance and Outlook:

  Q2 2023  FY 2023 
  (in millions) 
  Low  High  Low  High 
Revenue $109.0  $111.0  $470.0  $480.0 
Adjusted EBITDA $(9.5) $(8.5) $(26.0) $(24.0)
                 

Xometry’s second quarter and full year 2023 financial outlook is based on a number of assumptions that are subject to change and many of which are outside of its control. If actual results vary from these assumptions, Xometry’s expectations may change. There can be no assurance that Xometry will achieve these results.

Reconciliation of Adjusted EBITDA on a forward-looking basis to net loss, the most directly comparable GAAP measure, is not available without unreasonable efforts due to the high variability and complexity and low visibility with respect to the charges excluded from this non-GAAP measure; in particular, the effects of stock-based compensation expense specific to equity compensation awards that are directly impacted by unpredictable fluctuations in Xometry’s stock price. Xometry expects the variability of the above charges to have a significant, and potentially unpredictable, impact on its future GAAP financial results.

Use of Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States of America (“GAAP”), Xometry, Inc. (“Xometry”, the “Company”, “we” or “our”) uses Adjusted EBITDA, non-GAAP net loss and non-GAAP Earnings Per Share, which are considered non-GAAP financial measures, as described below. These non-GAAP financial measures are presented to enhance the user’s overall understanding of Xometry’s financial performance and should not be considered a substitute for, nor superior to, the financial information prepared and presented in accordance with GAAP. The non-GAAP financial measures presented in this release, together with the GAAP financial results, are the primary measures used by the Company’s management and board of directors to understand and evaluate the Company’s financial performance and operating trends, including period-to-period comparisons, because they exclude certain expenses and gains that management believes are not indicative of the Company’s core operating results. Management also uses these measures to prepare and update the Company’s short and long term financial and operational plans, to evaluate investment decisions, and in its discussions with investors, commercial bankers, equity research analysts and other users of the Company’s financial statements. Accordingly, the Company believes that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as the Company’s management and in comparing operating results across periods and to those of Xometry’s peer companies. In addition, from time to time we may present adjusted information (for example, revenue growth) to exclude the impact of certain gains, losses or other changes that affect period-to-period comparability of our operating performance.

The use of non-GAAP financial measures has certain limitations because they do not reflect all items of income and expense, or cash flows, that affect the Company’s financial performance and operations. Additionally, non-GAAP financial measures do not have standardized meanings, and therefore other companies, including peer companies, may use the same or similarly named measures but exclude or include different items or use different computations. Management compensates for these limitations by reconciling these non-GAAP financial measures to their most comparable GAAP financial measures in the tables captioned “Reconciliations of Non-GAAP Financial Measures” included at the end of this release. Investors and others are encouraged to review the Company’s financial information in its entirety and not rely on a single financial measure.

Key Terms for our Key Metrics and Non-GAAP Financial Measures

Marketplace revenue: includes the sale of parts and assemblies.

Supplier service revenue: includes the sales of advertising on Thomasnet, marketing services, supplies, financial service products and other fintech products.

Active Buyers: The Company defines “buyers” as individuals who have placed an order to purchase on-demand parts or assemblies on our marketplace. The Company defines Active Buyers as the number of buyers who have made at least one purchase on our marketplace during the last twelve months.

Active Suppliers: The Company defines “suppliers” as individuals or businesses that have been approved by us to either manufacture a product on our platform for a buyer or have utilized our supplier services, including our digital marketing services, data services, financial services or supplies. The Company defines Active Suppliers as suppliers that have used our platform at least once during the last twelve months to manufacture a product or buy tools or supplies.      

Percentage of Revenue from Existing Accounts: The Company defines an “account” as an individual entity, such as a sole proprietor with a single buyer or corporate entities with multiple buyers, having purchased at least one part on our marketplace. The Company defines an existing account as an account where at least one buyer has made a purchase on our marketplace.

Accounts with Last Twelve-Month Spend of At Least $50,000: The Company defines Accounts with Last Twelve-Month Spend of At Least $50,000 as an account that has spent at least $50,000 on our marketplace in the most recent twelve-month period.

Active Paying Suppliers: The Company defines Active Paying Suppliers as individuals or businesses who have purchased one or more of our supplier services, including digital marketing services, data services, financial services or supplies on our platforms during the last twelve months.

Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA): The Company defines Adjusted EBITDA as net loss, adjusted for interest expense, interest and dividend income and other expenses, income tax provision (benefit), and certain other non-cash or non-recurring items impacting net loss from time to time, principally comprised of depreciation and amortization, amortization of lease intangible, stock-based compensation, charitable contributions of common stock, income from unconsolidated joint venture, impairment of assets, restructuring charges and acquisition and other adjustments not reflective of the Company’s ongoing business, such as adjustments related to purchase accounting, the revaluation of contingent consideration and transaction costs.

Non-GAAP net loss: The Company defines non-GAAP net loss as net loss adjusted for depreciation and amortization, stock-based compensation expense, amortization of lease intangible, amortization of deferred costs on convertible notes, loss on marketable securities, loss on sale of property and equipment, charitable contributions of common stock, impairment of assets, restructuring charges and acquisition and other adjustments not reflective of the Company’s ongoing business, such as adjustments related to purchase accounting, the revaluation of contingent consideration and transaction costs.

Non-GAAP Earnings Per Share, basic and diluted (Non-GAAP EPS, basic and diluted): The Company calculates non-GAAP earnings per share, basic and diluted as non-GAAP net loss divided by weighted average number of common stock outstanding.

Management believes that the exclusion of certain expenses and gains in calculating Adjusted EBITDA, non-GAAP net loss and non-GAAP EPS, basic and diluted provides a useful measure for period-to-period comparisons of the Company’s underlying core revenue and operating costs that is focused more closely on the current costs necessary to operate the Company’s businesses and reflects its ongoing business in a manner that allows for meaningful analysis of trends. Management also believes that excluding certain non-cash charges can be useful because the amount of such expenses is the result of long-term investment decisions made in previous periods rather than day-to-day operating decisions.

About Xometry

Xometry (XMTR) powers the industries of today and tomorrow by connecting the people with big ideas to the manufacturers who can bring them to life. Xometry’s digital marketplace gives manufacturers the critical resources they need to grow their business while also making it easy for buyers at Fortune 1000 companies to tap into global manufacturing capacity and create locally resilient supply chains. Learn more at www.xometry.com or follow @xometry.

Conference Call and Webcast Information

The Company will host a conference call and webcast to discuss the results at 8:30 a.m. ET (5:30 a.m. PT) on May 10, 2023. In addition to issuing a press release, the Company will post an earnings presentation to its investor website at investors.xometry.com.

Xometry, Inc. First Quarter 2023 Earnings Presentation and Conference Call

Cautionary Information Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “would,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements in this press release include, but are not limited to, our beliefs regarding our financial position and operating performance, including our outlook and guidance for the second quarter and full year 2023, our expectation regarding our operating leverage and 2023 operating expenses, our potential for growth, and demand for our marketplaces in general. Our expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including risks and uncertainties related to: competition, managing our growth, financial performance, the impact of the health crises such as COVID-19 on our business and operations, our ability to forecast our performance due to our limited operating history, investments in new products or offerings, our ability to attract buyers and sellers to our marketplace, legal proceedings and regulatory matters and developments, any future changes to our business or our financial or operating model, our brand and reputation, and the impact of fluctuations in general macroeconomic conditions, such as the current inflationary environment and rising interest rates. The forward-looking statements contained in this press release are also subject to other risks and uncertainties that could cause actual results to differ from the results predicted, including those more fully described in our filings with the SEC, including our Annual Report on Form 10-K for the period ended December 31, 2022. All forward-looking statements in this press release are based on information available to Xometry and assumptions and beliefs as of the date hereof, and we disclaim any obligation to update any forward-looking statements, except as required by law.

Investor Contact: Media Contact:
  
Shawn Milne
VP Investor Relations
240-335-8132
shawn.milne@xometry.com		Matthew Hutchison
Corporate Communications for Xometry
415-583-2119
matthew.hutchison@xometry.com


Xometry, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
 
  March 31,  December 31, 
  2023  2022 
    
Assets      
Current assets:      
Cash and cash equivalents $39,705  $65,662 
Marketable securities  256,458   253,770 
Accounts receivable, less allowance for credit losses of $1.9 million and $2.0 million as of March 31, 2023 and December 31, 2022  52,217   49,188 
Inventory  1,444   1,571 
Prepaid expenses  7,055   7,591 
Other current assets  15,897   12,273 
Total current assets  372,776   390,055 
Property and equipment, net  21,597   19,079 
Operating lease right-of-use assets  24,303   25,923 
Investment in unconsolidated joint venture  4,134   4,068 
Intangible assets, net  39,041   39,351 
Goodwill  262,441   258,036 
Other assets  385   413 
Total assets $724,677  $736,925 
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $12,320  $12,437 
Accrued expenses  32,121   33,430 
Contract liabilities  9,974   8,509 
Income taxes payable  4,113   3,956 
Operating lease liabilities, current portion  6,256   5,471 
Total current liabilities  64,784   63,803 
Convertible notes  280,375   279,909 
Operating lease liabilities, net of current portion  15,500   16,940 
Deferred income taxes  406   429 
Other liabilities  1,260   1,011 
Total liabilities  362,325   362,092 
Commitments and contingencies      
Stockholders’ equity      
Preferred stock, $0.000001 par value. Authorized; 50,000,000 shares; zero shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively  —   — 
Class A Common stock, $0.000001 par value. Authorized; 750,000,000 shares; 45,098,314 shares and 44,822,264 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively  —   — 
Class B Common stock, $0.000001 par value. Authorized; 5,000,000 shares; 2,676,154 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively  —   — 
Additional paid-in capital  628,808   623,081 
Accumulated other comprehensive income  159   28 
Accumulated deficit  (267,710)  (249,366)
Total stockholders’ equity  361,257   373,743 
Noncontrolling interest  1,095   1,090 
Total equity  362,352   374,833 
Total liabilities and stockholders’ equity $724,677  $736,925 
       


Xometry, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
 
 
  Three Months Ended
March 31,		 
  2023  2022 
  (unaudited) 
Revenue $105,326  $83,671 
Cost of revenue  65,957   50,732 
Gross profit  39,369   32,939 
Sales and marketing  22,439   19,285 
Operations and support  12,608   12,358 
Product development  8,125   7,290 
General and administrative  15,957   12,959 
Impairment of assets  27   - 
Total operating expenses  59,156   51,892 
Loss from operations  (19,787)  (18,953)
Other (expenses) income      
Interest expense  (1,198)  (769)
Interest and dividend income  2,695   96 
Other income (expenses)  17   (962)
Income from unconsolidated joint venture  66   34 
Total other income (expenses)  1,580   (1,601)
Loss before income taxes  (18,207)  (20,554)
Provision (benefit) for income taxes  (136)  559 
Net loss  (18,343)  (19,995)
Net income attributable to noncontrolling interest  1   17 
Net loss attributable to common stockholders $(18,344) $(20,012)
Net loss per share, basic and diluted $(0.38) $(0.43)
Weighted-average number of shares outstanding used to compute
net loss per share, basic and diluted		  47,699,561   46,789,585 
       
Comprehensive loss:      
Foreign currency translation $135  $(28)
Total other comprehensive income (loss)  135   (28)
Net loss  (18,343)  (19,995)
Comprehensive loss  (18,208)  (20,023)
Comprehensive income attributable to noncontrolling interest  5   34 
Total comprehensive loss attributable to common stockholders $(18,213) $(20,057)
         



Xometry, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
 
 Three Months Ended March 31, 
 2023  2022 
Cash flows from operating activities:(unaudited) 
Net loss$(18,343) $(19,995)
Adjustments to reconcile net loss to net cash used in operating activities:     
Depreciation and amortization 2,566   1,799 
Impairment of assets 27   — 
Reduction in carrying amount of right-of-use asset 1,935   1,765 
Stock based compensation 4,694   3,456 
Revaluation of contingent consideration —   434 
Income from unconsolidated joint venture (66)  (34)
Donation of common stock 370   — 
Unrealized loss on marketable securities —   858 
Non-cash income tax benefit —   (559)
Loss on sale of property and equipment 91   71 
Amortization of deferred costs on convertible notes 466   312 
Deferred taxes benefit (23)  (2)
Changes in other assets and liabilities:     
Accounts receivable, net (2,804)  (6,145)
Inventory 133   (180)
Prepaid expenses 185   567 
Other assets (3,687)  (1,787)
Accounts payable (503)  (2,752)
Accrued expenses (2,119)  (2,843)
Contract liabilities 1,436   2,145 
Lease liabilities (970)  (1,369)
Income taxes payable 157   — 
Net cash used in operating activities (16,455)  (24,259)
Cash flows from investing activities:     
Purchase of marketable securities (2,688)  (280,091)
Proceeds from sale of marketable securities —   4 
Purchases of property and equipment (4,186)  (2,543)
Proceeds from sale of property and equipment 223   165 
Cash paid for business combination, net of cash acquired (3,349)  — 
Net cash used in investing activities (10,000)  (282,465)
Cash flows from financing activities:     
Proceeds from stock options exercised 483   1,263 
Proceeds from issuance of convertible notes —   287,500 
Costs incurred in connection with issuance of convertible notes —   (9,301)
Payments on finance lease obligations —   (2)
Net cash provided by financing activities 483   279,460 
Effect of foreign currency translation on cash and cash equivalents 15   (29)
Net decrease in cash and cash equivalents (25,957)   (27,293)
Cash and cash equivalents at beginning of the year 65,662   86,262 
Cash and cash equivalents at end of the period$39,705  $58,969 
Supplemental cash flow information:     
Cash paid for interest$1,438  $— 
Non-cash investing and financing activities:     
Non-cash purchase of property and equipment 78   — 
Non-cash consideration in connection with business combination 1,593   — 
        


Xometry, Inc. and Subsidiaries
Unaudited Reconciliations of Non-GAAP Financial Measures
(In thousands)
 
  For the Three Months
Ended March 31,		 
  2023  2022 
Adjusted EBITDA:      
Net loss $(18,343) $(19,995)
Add (deduct):      
Interest expense, interest and dividend income and other expenses  (1,514)  1,635 
Depreciation and amortization(1)  2,566   1,799 
Income tax provision (benefit)  136   (559)
Amortization of lease intangible  333   333 
Stock-based compensation(2)  4,694   3,456 
Charitable contribution of common stock  370   — 
Income from unconsolidated joint venture  (66)  (34)
Acquisition and other(3)  30   639 
Impairment of assets  27   — 
Adjusted EBITDA $(11,767) $(12,726)
         


  For the Three Months
Ended March 31,		 
  2023  2022 
Non-GAAP Net Loss:      
Net loss $(18,343) $(19,995)
Add (deduct):      
Depreciation and amortization(1)  2,566   1,799 
Stock-based compensation(2)  4,694   3,456 
Amortization of lease intangible  333   333 
Amortization of deferred costs on convertible notes  466   312 
Loss on marketable securities  —   858 
Acquisition and other(3)  30   639 
Loss on sale of property and equipment  91   — 
Charitable contribution of common stock  370   — 
Impairment of assets  27   — 
Non-GAAP Net Loss $(9,766) $(12,598)
       
Weighted-average number of shares outstanding used to compute Non-GAAP Net Loss per share, basic and diluted  47,699,561   46,789,585 
       
Non-GAAP EPS, basic and diluted $(0.20) $(0.27)
         

(1)   Represents depreciation expense of the Company’s long-lived tangible assets and amortization expense of its finite-lived intangible assets, as included in the Company’s GAAP results of operations.
(2)   Represents the non-cash expense related to stock-based awards granted to employees, as included in the Company’s GAAP results of operations.
(3)   Includes adjustments related to purchase accounting, the revaluation of contingent consideration and transaction costs.

Xometry, Inc. and Subsidiaries
Unaudited Segment Results
(In thousands)
 
  For the Three Months Ended March 31, 
  2023  2022 
Segment Revenue: (unaudited) 
U.S. $93,903  $77,209 
International  11,423   6,462 
Total revenue $105,326  $83,671 
       
Segment Net Loss:      
U.S. $(12,937) $(16,296)
International  (5,407)  (3,716)
Total net loss attributable to common stockholders $(18,344) $(20,012)
         

 

Xometry, Inc. and Subsidiaries
Unaudited Supplemental Information
(In thousands)
  For the Three Months
Ended March 31,		 
  2023  2022 
Summary of Stock-based Compensation Expense (unaudited) 
Sales and marketing $1,052  $636 
Operations and support  1,697   1,423 
Product development  1,076   894 
General and administrative  869   503 
Total stock-based compensation expense $4,694  $3,456 
       
Summary of Depreciation and Amortization Expense      
Cost of revenue $44  $34 
Sales and marketing  791   774 
Operations and support  12   11 
Product development  1,311   793 
General and administrative  408   187 
Total depreciation and amortization expense $2,566  $1,799 
         

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