Xometry, Inc. Reports Third Quarter 2021 Results
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Xometry, Inc. Reports Third Quarter 2021 Results

ROCKVILLE, Md., Nov. 10, 2021 (GLOBE NEWSWIRE) -- Xometry, Inc. (NASDAQ:XMTR), a leading AI-enabled marketplace for on-demand manufacturing, today reported financial results for the third quarter ended September 30, 2021, including the following highlights:

“Xometry’s third quarter 2021 performance was outstanding as we saw accelerated demand from larger customers across many verticals on our platform”, said Randy Altschuler, Xometry’s CEO. “Active Buyer growth was robust at 61% year-over-year and Accounts with Last Twelve Month Spend of at least $50,000 increased 67% year-over-year. Excluding the sales of masks by one customer which accounted for significant revenue in the prior year, third quarter revenue accelerated significantly to 77% growth year-over-year. Additionally, we delivered significant improvement in gross margin on a year-over-year and quarter-over-quarter basis driven by AI based pricing and expanding seller network.”

“We remain in the early innings of the secular digitization of the manufacturing industry, one of the largest industries in the world. We continue to grow our great team to build out the leading global on-demand manufacturing marketplace including the recent acquisitions of Big Blue Saw and FactoryFour. Big Blue Saw extends our marketplace capabilities in water jet and laser cutting while FactoryFour will provide a SaaS based solution to help manufacturers in the Xometry marketplace improve lead times and make strong, data-driven decisions through real-time production tracking. We expect these acquisitions to make an impact on our product offering beginning in 2022.” 

“Marketplace trends remain robust in Q4 and we expect revenue growth of 75-80% year-over-year excluding sales of masks by one customer in both periods. Our machine learning pricing algorithms continue to drive improving gross margins and we expect that trend to continue with sequential growth in gross margins from Q3 to Q4.”

Unaudited Financial Summary
(In thousands, except per share amounts)

    For the Three Months Ended September 30,           For the Nine Months Ended September 30,        
    2021     2020     % Change     2021     2020     % Change  
                                     
Revenue   $ 56,727     $ 41,953       35 %   $ 151,238     $ 103,425       46 %
Gross profit     14,494       10,175       42 %     36,205       23,806       52 %
Net loss     (14,711 )     (6,183 )     138 %     (37,476 )     (20,909 )     79 %
EPS—basic and diluted     (0.33 )     (1.99 )     (83 )%     (1.87 )     (3.98 )     (53 )%
Adjusted EBITDA (Non-GAAP)(1)     (10,024 )     (4,605 )     118 %     (27,905 )     (16,910 )     65 %

(1) These non-GAAP financial measures, and 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:

    As of September 30,  
    2021     2020     %
Change
 
                   
Active Buyers(2)     26,187       16,266       61 %
Percentage of Revenue from Existing Accounts(2)     95 %     96 %     (1 )%
Accounts with Last Twelve-Months Spend of at Least $50,000(2)     603       361       67 %

(2) Amounts shown for Active Buyers and Accounts with Last Twelve-Months Spend of at Least $50,000 are as of September 30, 2021 and 2020, and Percentage of Revenue from Existing Accounts is presented for the quarters ended September 30, 2021 and 2020.

Subsequent to Third Quarter 2021

On November 1, 2021, the Company acquired certain assets and liabilities from Big Blue Saw LLC, subject to an Asset Purchase Agreement for total consideration of $2.5 million. The total consideration includes cash consideration at closing of $1.25 million, $250,000 of Class A common stock at closing and contingent consideration of $1.0 million.

On November 5, 2021, the Company acquired certain assets and liabilities from Fusiform, Inc. (dba FactoryFour), subject to an Asset Purchase Agreement for total consideration of $6.3 million. The total consideration includes cash consideration at closing of $1.9 million, $1.9 million of Class A common stock at closing and contingent consideration of $2.5 million.

Financial Guidance and Outlook:

    Q4 2021  
    (in millions)  
    Low       High  
Revenue   $ 60.0       $ 62.0  
Adjusted EBITDA   $ (12.0 )     $ (11.0 )

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, a non-GAAP financial measure, as described below. This non-GAAP financial measure is presented to enhance the user’s overall understanding of Xometry’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The non-GAAP financial measure 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 this measure 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 this non-GAAP financial measure provides 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. An additional limitation of non-GAAP financial measures is that they 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

The Company defines Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) as net income (loss) excluding interest income (expense), income tax (expense) benefit, and certain other non-cash or non-recurring items impacting net loss from time to time, principally comprised of depreciation and amortization, stock-based compensation, charitable contributions and impairment charges. Management believes that the exclusion of certain expenses and gains in calculating Adjusted EBITDA 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 amounts of such expenses is the result of long-term investment decisions made in previous periods rather than day-to-day operating decisions.

Active Buyers: The Company defines “buyers” as individuals who have placed an order to purchase on-demand parts or assemblies on our platform.  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.

Percentage of Revenue from Existing Accounts: The Company defines “accounts” 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.

About Xometry

Xometry, Inc. (NASDAQ: XMTR) is a leading AI-enabled marketplace for on demand manufacturing, transforming one of the largest industries in the world. Xometry uses its proprietary technology to create a marketplace that enables buyers to efficiently source on-demand manufactured parts and assemblies, and empowers sellers of manufacturing services to grow their businesses. Xometry's buyers range from self-funded startups to Fortune 100 companies. Learn more at www.xometry.com or follow @xometry.

Conference Call

The Company will discuss its third quarter and year to date financial results during a teleconference on 11/10/2021, at 5:00 PM EST/2:00 PM PT. The conference call can be accessed in the U.S. at 877-313-2061 or outside the U.S. at 470-495-9537 with the conference ID# 8195399. A live audio webcast of the call will also be available simultaneously at  investors.xometry.com. Following completion of the call, a recorded replay of the teleconference will be available in the investor relations section of Xometry's website. The earnings webcast presentation will be archived within the Investor Relations section of Xometry's website.

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 third quarter and full year 2021, and demand for our marketplace 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, including the impact of the COVID-19 pandemic on our business and operations and our ability to forecast our performance due to our limited operating history and the COVID-19 pandemic, 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, and our brand and reputation. 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 Quarterly Report on Form 10-Q for the period ended September 30, 2021. 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.

(Tables Follow)

Investor Contact: Media Contact:
Shawn Milne
VP Investor Relations
240-335-8132
Email Contact
Ted Weismann
fama PR for Xometry
617-396-7740
Email Contact

 

Xometry, Inc. and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)

    September 30,
2021
    December 31,
2020
 
             
Assets            
Current assets:            
Cash and cash equivalents   $ 57,778     $ 59,874  
Marketable securities     266,739        
Accounts receivable, less allowance for doubtful accounts of $0.7 million as of September 30, 2021 and $0.6 million as of December 31, 2020, respectively     25,157       14,574  
Inventory     1,427       2,294  
Prepaid expenses     4,988       913  
Total current assets     356,089       77,655  
Property and equipment, net     8,615       6,113  
Operating lease right-of-use assets     3,101       1,922  
Other assets     204       788  
Intangible assets, net     1,455       1,652  
Goodwill     833       833  
Total assets   $ 370,297     $ 88,963  
Liabilities, convertible preferred stock and stockholders’ equity            
Current liabilities:            
Accounts payable   $ 5,198     $ 5,640  
Accrued expenses     17,487       13,606  
Contract liabilities     3,379       2,355  
Operating lease liabilities, current portion     1,108       1,013  
Finance lease liabilities, current portion     5       14  
Short-term debt           15,753  
Total current liabilities     27,177       38,381  
Operating lease liabilities, net of current portion     2,197       1,118  
Total liabilities     29,374       39,499  
Commitments and contingencies (Note 12)            
Convertible preferred stock            
Convertible preferred stock, $0.000001 par value, Seed-1, Seed-2, Series A-1, Series A-2, Series B, Series C, Series D and Series E. Authorized; zero shares and 27,970,966 shares, zero shares and 27,758,941 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively           160,713  
Stockholders’ equity (deficit)            
Preferred stock, $0.000001 par value. Authorized; 50,000,000 shares and zero shares; zero shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively            
Common stock, $0.000001 par value. Authorized; zero shares and 42,000,000 shares; zero shares and 7,755,782 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively            
Class A Common stock, $0.000001 par value. Authorized; 750,000,000 shares and zero shares
41,714,711 shares and zero shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively
           
Class B Common stock, $0.000001 par value. Authorized; 5,000,000 shares and zero shares, 2,676,154 shares and zero shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively            
Additional paid-in capital     490,175       503  
Accumulated other comprehensive income     186       210  
Accumulated deficit     (149,438 )     (111,962 )
Total stockholders’ equity (deficit)     340,923       (111,249 )
Total liabilities, convertible preferred stock and stockholders’ equity   $ 370,297     $ 88,963  


Xometry, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except per share amounts)

    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2021     2020     2021     2020  
                   
Revenue   $ 56,727     $ 41,953     $ 151,238     $ 103,425  
Cost of revenue     42,233       31,778       115,033       79,619  
Gross profit     14,494       10,175       36,205       23,806  
Sales and marketing     9,828       5,986       26,250       15,842  
Operations and support     5,775       3,671       15,594       10,138  
Product development     4,376       3,003       12,131       8,879  
General and administrative     8,778       3,282       18,343       8,792  
Total operating expenses     28,757       15,942       72,318       43,651  
Loss from operations     (14,263 )     (5,767 )     (36,113 )     (19,845 )
Other (expenses) income                        
Interest expense     (79 )     (309 )     (799 )     (939 )
Interest and dividend income     417       2       457       215  
Other expenses     (786 )     (109 )     (1,021 )     (340 )
Total other expenses     (448 )     (416 )     (1,363 )     (1,064 )
Net loss     (14,711 )     (6,183 )     (37,476 )     (20,909 )
Deemed dividend to preferred stockholders           (8,801 )           (8,801 )
Net loss attributable to common stockholders   $ (14,711 )   $ (14,984 )   $ (37,476 )   $ (29,710 )
Net loss per share, basic and diluted   $ (0.33 )   $ (1.99 )   $ (1.87 )   $ (3.98 )
Weighted-average number of shares outstanding used to compute
net loss per share, basic and diluted
    43,962,863       7,546,458       20,092,600       7,458,671  
                         
                         
Comprehensive loss:                        
Foreign currency translation   $ (41 )   $ (65 )   $ (24 )   $ (92 )
Total other comprehensive loss     (41 )     (65 )     (24 )     (92 )
Net loss     (14,711 )     (6,183 )     (37,476 )     (20,909 )
Total comprehensive loss   $ (14,752 )   $ (6,248 )   $ (37,500 )   $ (21,001 )

 

Xometry, Inc. and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)

    Nine Months Ended
September 30,
 
    2021     2020  
Cash flows from operating activities:            
Net loss   $ (37,476 )   $ (20,909 )
Adjustments to reconcile net loss to net cash used in operating activities:            
Depreciation and amortization     2,304       2,256  
Reduction in carrying amount of right-of-use asset     912       770  
Stock based compensation     4,747       679  
Non-cash interest expense     111       238  
Loss on debt extinguishment     272       -  
Donation of common stock     1,157       -  
Unrealized loss on marketable securities     239       -  
Changes in other assets and liabilities:            
Accounts receivable, net     (10,645 )     (4,381 )
Inventory     842       (618 )
Prepaid expenses     (4,080 )     88  
Other assets     580       (544 )
Accounts payable     (400 )     (3,142 )
Accrued expenses     3,931       8,100  
Contract liabilities     1,053       1,038  
Lease liabilities     (917 )     (720 )
Net cash used in operating activities     (37,370 )     (17,145 )
Cash flows from investing activities:            
Purchase of marketable securities     (266,978 )     -  
Purchase of short-term investments     -       (17,711 )
Proceeds from short-term investments     -       28,571  
Purchases of property and equipment     (4,625 )     (2,888 )
Net cash (used in) provided by investing activities     (271,603 )     7,972  
Cash flows from financing activities:            
Proceeds from issuance of Series A-2, Series B, Series C, Series D and Series E convertible preferred stock, net of issuance costs     -       52,409  
Repurchase of Series A-2, Series B, Series C and Series D convertible preferred stock     -       (12,852 )
Deemed dividend to preferred stockholders     -       (8,801 )
Proceeds from initial public offering, net of underwriters' discount     325,263       -  
Payments in connection with initial public offering     (3,995 )     -  
Proceeds from stock options exercised     1,787       405  
Proceeds from term loan     -       4,000  
Repayment of term loan     (16,136 )     -  
Proceeds from other borrowings     -       4,783  
Repayment of other borrowings     -       (4,783 )
Payments on finance lease obligations     (9 )     (9 )
Net cash provided by financing activities     306,910       35,152  
Effect of foreign currency translation on cash and cash equivalents     (33 )     (9 )
Net (decrease) increase in cash and cash equivalents     (2,096 )     25,970  
Cash and cash equivalents at beginning of period     59,874       40,122  
Cash and cash equivalents at end of period   $ 57,778     $ 66,092  
Supplemental cash flow information:            
Cash paid for interest   $ 907     $ 970  
Non-cash investing activity:            
Non-cash purchase of property and equipment   $ (19 )   $ -  

 

Xometry, Inc. and Subsidiaries
Unaudited Reconciliations of Non-GAAP Financial Measures
(In thousands)

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2021     2020     2021     2020  
Adjusted EBITDA:                        
Net loss   $ (14,711 )   $ (6,183 )   $ (37,476 )   $ (20,909 )
Add (deduct):                        
                         
Interest expense, interest and dividend income and other expense     448       416       1,363       1,064  
Depreciation and amortization(1)     816       869       2,304       2,256  
Charitable contribution of common stock     1,157             1,157        
Stock-based compensation(2)     2,266       293       4,747       679  
Adjusted EBITDA   $ (10,024 )   $ (4,605 )   $ (27,905 )   $ (16,910 )

(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 expense related to stock-based awards granted to employees, as included in the Company’s GAAP results of operations.

 

Xometry, Inc. and Subsidiaries
Unaudited Segment Results
(In thousands)

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2021     2020     2021     2020  
Segment Revenue:                        
U.S.   $ 51,739     $ 41,145     $ 140,266     $ 101,537  
Europe     4,988       808       10,972       1,888  
Total revenue   $ 56,727     $ 41,953     $ 151,238     $ 103,425  
                         
Segment Net Loss:                        
U.S.   $ (12,550 )   $ (4,101 )   $ (30,152 )   $ (16,092 )
Europe     (2,161 )     (2,082 )     (7,324 )     (4,817 )
Total net loss   $ (14,711 )   $ (6,183 )   $ (37,476 )   $ (20,909 )

 

Xometry, Inc. and Subsidiaries
Unaudited Supplemental Information
(In thousands)

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2021     2020     2021     2020  
Summary of Stock-based Compensation Expense                        
Sales and marketing   $ 335     $ 46     $ 690     $ 106  
Operations and support     670       75       1,364       175  
Product development     488       109       979       253  
General and administrative     773       63       1,714       145  
Total stock-based compensation expense   $ 2,266     $ 293     $ 4,747     $ 679  
                         
Summary of Depreciation and Amortization Expense                        
Cost of revenue   $ 21     $ 60     $ 70     $ 178  
Sales and marketing     26       161       88       508  
Operations and support     31       46       118       144  
Product development     672       514       1,913       1,220  
General and administrative     66       88       115       206  
Total depreciation and amortization expense   $ 816     $ 869     $ 2,304     $ 2,256  

For the three and nine months ended September 30, 2021, general and administrative expense includes $1.2 million of expense related to charitable contributions.