3D Printing Financials: Xometry & SLM’s Q2 Earnings Reveal

In the rapidly evolving manufacturing world, digital transformation and specialized innovation drive success. Two recent earnings reports from US-based online marketplace Xometry (NASDAQ: XMTR) and German metal additive manufacturing (AM) pioneer SLM Solutions (ETR: AM3D) offer great insights into the sector’s dynamics.

Digital marketplace momentum

Based out of Maryland, Xometry reported second-quarter revenue of $111 million, marking an impressive 16% year-over-year increase. Delving deeper, the marketplace revenue contributed $93.5 million, up 24% compared to the previous year, driven by strong demand across many verticals, including general manufacturing, energy, aerospace, and robotics.

Diving into the dynamics behind this revenue surge, the company recorded a 44% year-on-year growth in active buyers, totaling 48,294, bolstered by 3,578 new active buyers joining the platform. Moreover, existing accounts played a crucial role, accounting for 96% of the marketplace revenue. The momentum has carried over into Q3, which began with an encouraging upswing in marketplace growth, explained CEO Randy Altschuler during an earnings call with investors. Xometry is also processing significant orders, including the most important multiyear production order it has ever received.

Xometry part production. Image courtesy of Xometry.

With artificial intelligence (AI) at the forefront, the company’s digital marketplace grew 24% annually. Altschuler commented on the success: “The underpinnings of marketplace growth are robust with 44% active buyer growth and continued strong order growth.” He emphasized the company’s digital marketplace’s key role in empowering customers across sectors like spacecraft, electric vehicles, medical devices, and robotics.

However, it wasn’t all smooth sailing. A significant decision to discontinue sales of supplies in the US resulted in a $1.7 million year-over-year revenue impact. Xometry also reduced its workforce in May 2023 by approximately 4% on top of the 6% previously announced in the first quarter of the year, signaling the constant balancing act companies play between growth and efficiency.

Crafting the future with metal

As for SLM Solutions, the company reported revenues of Є27.9 million ($30.4 million) for the second quarter of the year, a subtle increase compared to 2022’s second quarter of Є26 million ($28.4 million). This upward trajectory in the company’s quarterly performance, in combination with a dynamic first quarter, culminated in a six-month record revenue of Є52 million ($56.7 million), marking a 22% jump from H1 2022’s Є42.5 ($46.3 million).

However, the promising revenue landscape was contrasted by its overall quarterly losses. The company posted a negative result of Є7.3 million ($8 million), deepening from the negative Є1.7 million ($1.9 million) from the same quarter last year. This accentuates the challenges even pioneering companies face in aligning revenue growth with profitability.

Launch of SLM Solutions’ NXG XII 600 machine. Image courtesy of SLM Solutions

Despite a keen demand for their flagship NXG XII 600 machines and a versatile product catalog, specific financial pressures persisted, including unfavorable currency fluctuations, a substantial discount on a unique order, an NXG XII 600 order with unmet variable compensation conditions, rising electricity costs, and extraordinary expenses due to the Nikon acquisition, completed in January 2023. The broadening reach of metal AM is evident, yet the financial difficulties are complex and widely present in the company’s operations.

At its annual general meeting on July 13, 2023, SLM Solutions proposed and received approval to change its name to “Nikon SLM Solutions AG.” In addition, during the first half of 2023, the company secured a loan of Є28.7 million ($30.2 million) from Nikon, primarily to settle a major portion of a 2017 convertible bond. They also received a short-term loan of Є10 million ($10.9 million) from Nikon Europe BV. However, various financial outflows, including interest and loan repayments, somewhat counteracted this influx.

Shared narratives

Despite challenges, both companies demonstrate resilience and a commitment to harnessing technology for growth. Their diverse geographical footprints also offer a lens into the manufacturing industry’s performance in different global markets.

Both companies work in manufacturing, but they show how digital innovations are changing the industry’s direction. Xometry’s digital marketplace strategy is breaking barriers, making manufacturing solutions accessible to more clients. While SLM Solutions, through its technological expertise, is redefining how products are crafted, catering to a niche yet growing market segment.

In terms of top-line revenue, both Xometry and SLM Solutions exhibited strong growth, with Xometry’s revenue standing at $111 million and SLM Solutions at Є27.9 million ($30.4 million). However, both faced challenges on the profitability front, with Xometry posting a net loss of $26.6 million and SLM Solutions having a negative result of Є7.3 million ($8 million for the second quarter.

For the second half of 2023, Xometry expects Q3 revenue between $119 million to $121 million, driven by solid marketplace growth. Adjusted EBITDA loss is expected to reduce by 25% to 36% quarter-over-quarter. Notably, the company aims to be EBITDA profitable by the fourth quarter of 2023. SLM Solutions expects notable sales growth and a significantly improved EBITDA for 2023. It’ll be intriguing to see how these pioneers navigate challenges and leverage opportunities, shaping the manufacturing sector’s future.