AM Investment Strategies
AMS Spring 2023

Xometry Reports Revenue Growth, Positive Outlook for 2022


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Xometry (NASDAQ: XMTR) ended its first year as a public company on a high note, delivering 77% revenue growth and 121% gross profit growth year-over-year in its fourth quarter of 2021. Driven primarily by the rapid adoption of the platform by large accounts across North America and Europe, the total revenue for the entire year was $218.3 million, an increase of 54% year-over-year. In addition, the Maryland-based custom on-demand manufacturing marketplace said it plans to deliver up to $400 million in revenue in 2022, an anticipated growth of up to 83%, spurred by a rise in active buyers and sellers, revenue synergies from its acquisitions, and expanded supplier services.

“With our cloud-based software platform, we aim to be the operating system for hundreds of thousands of sellers,” pointed out CEO Randy Altschuler during an earnings call with investors following the release of the 2021 finance report. “Our two-sided marketplace has performed exceptionally well through the manufacturing volatility of the past two years, including COVID, ongoing supply chain disruptions, and the current tragedy in Ukraine.”

Xometry CEO Randy Altschuler

Xometry CEO Randy Altschuler. Image courtesy of Xometry.

Described by the company as a “strong finish to 2021,” the fourth quarter saw the completion of the strategic acquisition of Thomas, one of the leading online platforms for product sourcing and supplier selection resources for the industry, on December 9, 2021, adding 1.4 million registered buyers and roughly 500,000 sellers to Xometry’s rapidly growing marketplace.

Expected to accelerate the growth of Xometry’s marketplace, the addition of Thomas could create an exceptional scale of buyers and manufacturers. Both teams have already been integrated and are centered around marketplace and seller services.

Other highlights of the quarter include a newly released version 2.0 of the Xometry app for Autodesk Fusion 360 for manufacturing feedback directly into the CAD environment; the acquisition of Big Blue Saw and FactoryFour in early November 2021. FactoryFour’s cloud-based software will integrate seamlessly with the Xometry marketplace and platform, providing suppliers a one-stop view into all their orders.

Moreover, the number of accounts with the last twelve-month spend of at least $50,000 increased 80% year over year to 701, adding a record of 99 accounts to that metric in Q4. Given the success of Xometry’s land-and-expand strategy, Altschuler said they are investing to expand enterprise sales efforts in the near term.

On the downside, net losses increased $13.7 million year-over-year to $23.9 million for the quarter (or 53 cents per share), and adjusted EBITDA was negative $11.9 million, reflecting an increase of $5.3 million compared to the same quarter in 2020.

Additionally, while the company remains confident in its expansion and growth plans, Xometry’s stock has plummeted from its all-time high of $81.35 on August 2, 2021 (just a month after going public) to today’s $34.90 low price, just four days after releasing its first full-year earnings report. Yet, Wall Street analysts predict that Xometry’s share price could reach $81.40 by December 9, 2022, which would drive the share price to its initial value.

Xometry celebrates IPO at Nasdaq Exchange.

Xometry celebrates going public at the NASDAQ on June 29, 2021. Image courtesy of Xometry.

As for the full year, Xometry reported revenue of $214.2 million, up 52% from $141.4 million on December 31, 2020. There was a 72% increase in total gross profit and a 26.2% improvement in gross profit margin. Trickling down from the fourth quarter, the full year also reflected an increase in net losses, this time of $30.3 million year-over-year, coming down to $61.4 million for the full year 2021, or $2.33 per share. The same happened with Xometry’s adjusted EBITDA, which was negative $39.8 million for the full year 2021, reflecting an increase of $16.3 million year-over-year.

Company management discussed upbeat guidance for 2022, forecasting revenue in the range of  $390 million to $400 million. In early February, Xometry raised approximately $278.9 million in net proceeds from its convertible notes offering and expects its first quarter of 2022 to leave revenue in the range of $81 million to $82 million, representing year-over-year growth somewhere between 84% to 87%. In the first quarter, adjusted EBITDA loss could reach up to $13.5 million since the company is increasing its spending by approximately $2 million, including investments in sales, technology, and international expansion.

As Xometry’s marketplace continues to scale and the number of transactions grows, it claims its machine learning becomes smarter, driving better matches for buyers and sellers and helping improve gross margins. At the same time, the company continues to ramp up its network of active sellers, including in Europe, where the company saw revenue increase 300% year over year, and shortly in the Asia Pacific region, where Xometry hired a general manager to scale up the team and platform. With its heightened interest in international markets and investments, Xometry has an enormous opportunity to lead the marketplace for custom manufacturing.

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