Xometry Reports Fourth Quarter and Full Year 2023 Results

NORTH BETHESDA, Md., Feb. 29, 2024 (GLOBE NEWSWIRE) —  Xometry, Inc. (NASDAQ:XMTR), the global AI-powered marketplace connecting enterprise buyers with suppliers of manufacturing services, today reported financial results for the fourth quarter and full year ended December 31, 2023.

“In Q4 2023, we delivered record financial results including our highest revenue and gross profit in Xometry history,“ said Randy Altschuler, Xometry’s CEO. ”Xometry’s strong 31% revenue growth was driven by accelerated 42% marketplace growth. We improved operating leverage, reducing Q4 Adjusted EBITDA loss by 32% quarter-over-quarter. Powered by AI, our marketplace continues to gain significant market share as buyers and suppliers realize the value, convenience and resiliency of our platform. While we have seen a softer start to the year as reflected in our outlook, we remain confident in our initiatives to drive long term profitable growth.”

Fourth Quarter 2023 Financial Highlights

  • Total revenue for the fourth quarter 2023 was $128 million, an increase of 31% year-over-year.
  • Marketplace revenue for the fourth quarter of 2023 was $112 million, an increase of 42% year-over-year.
  • Supplier services revenue for the fourth quarter of 2023 was $16.1 million, a decrease of 15% year-over-year driven primarily by the exit of the tools and materials business, which reduced revenue by approximately $2 million year-over-year.
  • Total gross profit for the fourth quarter 2023 was $49.1 million, an increase of 39% year-over-year.
  • Marketplace Active Buyers increased 36% from 40,664 as of December 31, 2022 to 55,458 as of December 31, 2023.
  • Marketplace Accounts with Last Twelve-Months Spend of at least $50,000 increased 30% from 1,027 as of December 31, 2022 to 1,331 as of December 31, 2023.
  • Marketplace Percentage of Revenue from Existing Accounts was 96%.
  • Active Paying Suppliers decreased 6% from 7,715 as of December 31, 2022 to 7,271 as of December 31, 2023. Excluding the exited tools and materials business, Active Paying Suppliers was flat year-over-year.
  • Net loss attributable to common stockholders was $10.6 million for the quarter, a decrease of $15.3 million year-over-year. Net loss for Q4 2023 included $5.9 million of stock-based compensation and $2.8 million of depreciation and amortization expense.
  • U.S. segment net loss to common stockholders was $5.9 million, a decrease of $16.0 million year-over-year. International segment net loss to common stockholders was $4.6 million, an increase of $0.7 million year-over-year.
  • Adjusted EBITDA was negative $2.9 million for the quarter, reflecting an improvement of $12.8 million year-over-year.
  • Cash, cash equivalents and marketable securities were $268.8 million as of December 31, 2023.

Fourth Quarter 2023 Business Highlights

  • Launched Xometry Teamspace in October after a successful beta test with several large customers in Q3. The cloud-based collaboration tool enables the customer’s employees to manage projects within Xometry’s AI-powered platform, streamlining order management, increasing efficiency and driving data-based decision-making. Since the launch, over 1,500 teams have been created.
  • Added IATF 16949 Automotive standard to the marketplace for our automotive buyers. IATF (“International Automotive Task Force”) is the international standard for quality management systems in the automotive industry.
  • Updated process recommender to the AI-powered Xometry Instant Quoting Engine®, expanding coverage of manufacturing processes and improving accuracy. As computer-aided design (“CAD”) files are uploaded to the Xometry marketplace, the new process recommender instantly analyzes the geometric features of the file, identifies the most appropriate manufacturing process for the customer, and configures their quote.
  • Launched add-in for SOLIDWORKS in Europe, the U.K. and Türkiye. Buyers can now get instant quotes, lead times, and design-for-manufacturability feedback from Xometry directly in the CAD software.

Full Year Financial Highlights

  • Total revenue for the full year 2023 was $463 million, an increase of 22% year-over-year.
  • Marketplace revenue for the full year of 2023 was $395 million, an increase of 30% year-over-year.
  • Supplier services revenue for the full year of 2023 was $68.7 million, a decrease of 12% year-over-year driven primarily by the exit of the tools and materials business, which reduced revenue by approximately $6 million year-over-year.
  • Total gross profit for the full year of 2023 was $178 million, an increase of 22% year-over-year.
  • Marketplace gross profit margin improved to 30.8% for the year ended December 31, 2023 from 28.2% for the year ended December 31, 2022.
  • Net loss attributable to common stockholders was $67 million for the full year of 2023, a decrease of $12 million year-over-year. Net loss for the full year of 2023 included $22 million of stock-based compensation and $11 million of depreciation and amortization expense.
  • U.S. segment net loss to common stockholders was $49.7 million, a decrease of $12.1 million year-over-year. International segment net loss to common stockholders was $17.8 million, an increase of $0.5 million year-over-year.
  • Adjusted EBITDA was negative $27.5 million for the full year 2023, reflecting an improvement of $17.3 million.

Full Year Business Highlights

  • Grew the number of Active Suppliers 36% year-over-year from 2,529 to 3,429.
  • Expanded further in Europe with the launch of xometry.uk, a localized marketplace for UK customers. Xometry’s localized marketplaces allow regional customers to get quotes and purchase parts directly in local currency.
  • Introduced instant quoting for parts with multiple finishes. Buyers can identify parts requiring multiple finishes and the instant quoting engine will automatically price them. This instant feedback helps buyers make decisions in real-time.
  • Introduced a new quick-turn injection molding service for quotes in as fast as two hours and parts in as little as five business days.
  • Acquired Tridi Teknoloj A.S. (“Tridi”) located in Istanbul, Türkiye. The acquisition of Tridi extends our marketplace capabilities in Europe by opening an array of affordable suppliers and the ability to serve all of Europe within a 24-hour turnaround period.
  • Expanded AI-powered Xometry Instant Quoting Engine to include instant-quoting of inserts, multi-part assemblies, and expanded sheet-cutting processes. The enhanced features allow buyers to instantly get pricing and lead times on CNC, sheet metal and sheet-cut parts with standard inserts while also analyzing multi-party assemblies, further accelerating Xometry’s assembly production work.
  • Introduced expanded sheet-cutting options to include a wider array of metal, composite and rubber materials. Xometry’s sheet-cutting service can cut a variety of materials using the latest laser and waterjet-cutting technologies.
  • Launched Instant Quoting for Alibaba Group’s 1688.com on-demand manufacturing services through Xometry APAC. The collaboration gives buyers in China the ability to receive instant quotes and lead times from Chinese suppliers, data that is fueled by Xometry’s AI-powered Instant Quoting Engine. Xometry is the only partner specialized in the structural parts on 1688.com that will provide real-time pricing and lead times.
  • Announced a partnership with Google Cloud to help accelerate new auto-quote methods and models within the AI-powered Xometry Instant Quoting Engine. Using Vertex AI, Xometry will accelerate the deployment of its instant-quoting to encompass the broadest and most comprehensive set of manufacturing technologies. The Vertex AI platform will enable us to get to market faster with new offerings in entirely new categories, allowing us to become more indispensable to our customers and to our suppliers globally.
  • Expanded Thomas Marketing Services’ self-serve offering to include bundles with advertising and video services. Added two additional self-serve profile options for the more than 500,000 suppliers on Thomasnet.com. “Thomas Verified” and “Thomas Verified + Video” offer manufacturers enhanced visibility and targeting to prospects from preferred industries, as well as custom video options.
  • Added AS9100 Certified to the Instant Quoting Engine for our aerospace and defense buyers in October. AS9100 is a certification defining the design and manufacturing standard for aerospace and defense products including parts, components, and assemblies. This is particularly relevant for customers doing production work including flight parts.
  • Expanded International offerings including Portuguese language capability and new automated inspection reports in Europe. Buyers now can conveniently pick from multiple report options on the Xometry Europe marketplace including First Article Inspection Report and Measurement Report. Xometry Asia added Fused Deposition Modeling auto-quoting capabilities.
Financial Summary(1)
(In thousands, except per share amounts)
(Unaudited)
For the Three Months
Ended December 31,
For the Year
Ended December 31,
2023 2022 %
Change
2023 2022 %
Change
Consolidated
Revenue $ 128,145 $ 98,061 31 % $ 463,406 $ 380,921 22 %
Gross profit 49,085 35,202 39 % 178,259 145,991 22 %
Net loss attributable to common stockholders (10,551 ) (25,813 ) 59 % (67,472 ) (79,059 ) 15 %
EPS, basic and diluted, of Class A and Class B common stock (0.22 ) (0.54 ) 59 % (1.41 ) (1.68 ) 16 %
Adjusted EBITDA(2) (2,850 ) (15,639 ) 82 % (27,490 ) (44,799 ) 39 %
Non-GAAP net loss(2) (400 ) (15,119 ) 97 % (19,355 ) (43,131 ) 55 %
Non-GAAP EPS, basic and diluted(2), of Class A and Class B common stock (0.01 ) (0.32 ) 97 % (0.40 ) (0.91 ) 56 %
Marketplace
Revenue $ 112,090 $ 79,148 42 % $ 394,754 $ 303,223 30 %
Cost of revenue 77,024 58,323 (32 )% 273,264 217,779 (25 )%
Gross Profit $ 35,066 $ 20,825 68 % $ 121,490 $ 85,444 42 %
Gross Margin 31.3 % 26.3 % 5.0 % 30.8 % 28.2 % 2.6 %
Supplier services
Revenue $ 16,055 $ 18,913 (15 )% $ 68,652 $ 77,698 (12 )%
Cost of revenue 2,036 4,536 55 % 11,883 17,151 31 %
Gross Profit $ 14,019 $ 14,377 (2 )% $ 56,769 $ 60,547 (6 )%
Gross Margin 87.3 % 76.0 % 11.3 % 82.7 % 77.9 % 4.8 %

(1)   Our 2022 results have been revised to reflect immaterial corrections related to certain captions within the Consolidated Balance Sheet, Consolidated Statement of Operations and Comprehensive Loss and Consolidated Statement of Cash Flows. See tables below for additional details with respect to the line items impacted.
(2)   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(3):
As of December 31,
2023 2022 %
Change
Active Buyers(4) 55,458 40,664 36 %
Percentage of Revenue from Existing Accounts(4) 96 % 96 %
Accounts with Last Twelve-Months Spend of at Least $50,000(4) 1,331 1,027 30 %
Active Paying Suppliers(4)(5) 7,271 7,715 (6 )%

(3)   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.
(4)   Amounts shown for Active Buyers, Accounts with Last Twelve-Months Spend of at Least $50,000, and Active Paying Suppliers are as of December 31, 2023 and 2022, and Percentage of Revenue from Existing Accounts is presented for the quarters ended December 31, 2023 and 2022.
(5)   Excluding the impact of the exit of the supplies business, Active Paying Suppliers was flat year-over-year.

Financial Guidance and Outlook:
Q1 2024
(in millions)
Low High
Revenue $ 118 $ 120
Adjusted EBITDA $ (9 ) $ (7 )
  • Expect Q1 2024 revenue growth of 12%-14% year-over-year to $118-$120 million.
  • Expect Q1 2024 Adjusted EBITDA loss of $7.0-$9.0 million.
  • Expect fiscal 2024 marketplace revenue growth of at least 20% year-over-year and expect supplier services revenue to be down approximately 10% year-over-year driven by the discontinuation of the sale of tools and materials and the wind down of non-core services.
  • Expect to be Adjusted EBITDA profitable in the third quarter of 2024. For fiscal 2024, we expect improved operating leverage partly offset by international and enterprise growth investments.

Xometry’s first quarter 2024 and full year 2024 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.

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

Marketplace revenue: includes the sale of parts and assemblies on our platform.

Supplier service revenue: includes the sales of marketing and advertising services and, to a lesser extent, financial service products, SaaS-based solutions and the sale of supplies, which was discontinued during the second quarter of 2023.

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. We adjusted the number of our 2022 active suppliers in 2023 to reflect an immaterial correction.

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, lease abandonment, restructuring charges, costs to exit the supplies business 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.

About Xometry
Xometry’s (NASDAQ:XMTR) AI-powered marketplace, popular Thomasnet® industrial sourcing platform and suite of cloud-based services are rapidly digitizing the $2 trillion manufacturing industry. Xometry provides manufacturers the critical resources they need to grow their business and makes it easy for buyers to create locally resilient supply chains. The Xometry Instant Quoting Engine® leverages millions of pieces of data to analyze complex parts in real-time, matches buyers with the right suppliers globally, and provides accurate pricing and lead times. Learn more at www.xometry.com or follow @xometry.