3D Printing Financials: Xometry’s Scaling up and Strong Start to 2024

Xometry (Nasdaq: XMTR) kicked off 2024 with strong results, boosting its marketplace and technology to new heights. Both revenue and gross margin soared, fueled by an expanding global network of buyers and suppliers and continuous improvements to its AI-powered marketplace platform, which connects buyers with suppliers in the manufacturing sector. These gains signal a bright future for Xometry and the on-demand manufacturing industry.

Boosted by solid marketplace dynamics, the company reported revenue of $123 million, up 16% over the previous year. This uplift was largely fueled by a surge in marketplace revenue, which rose to $107 million, a 24% increase.

Gross profit from the marketplace jumped by 37%, pushing gross margins to an unprecedented 32%. This margin increase, representing an advance of 320 basis points from the previous year, means that for every dollar of sales, Xometry now earns 32 cents in profit—3.20% more than last year.

Despite these gains, Xometry reported a net loss of $16.6 million for the quarter. Still, this represents a decrease of $1.7 million in losses year-over-year, suggesting an improvement in financial health. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also reflected positive changes, with a loss of $7.5 million yet showing a 37% improvement year-over-year.

Marketplace growth was driven by a 32% boost in active buyers, growing from 44,451 in March 2023 to 58,504 this year. On the supplier side, there was a 6% reduction in active paying suppliers, partially due to the company’s decision to exit the lower-margin tools and materials business. Excluding this segment, the reduction was just 2%. These changes suggest that Xometry might be strategically refining its supplier base to focus on more profitable operations, potentially aligning with other efforts to improve profitability. This strategic refinement appears to support its reported progress on key growth initiatives, particularly in growing relationships with large customers.

Other growth initiatives for 2024 include expanding its buyer and supplier networks and growing its international presence. One noteworthy progress has been the launch of Teamspace, an enterprise collaboration tool designed to enhance procurement efficiency for teams managing crucial programs. Since its introduction, over 2,300 teams have used this feature, which offers enhanced collaboration tools and comprehensive quote histories.

Additionally, Xometry has revamped its marketplace buyer dashboard to include new tooling processes like injection molding. This enhancement is part of a strategy to expand its service offerings. The company has also begun beta-testing several new features for Thomas, including new self-serve tools for suppliers to create custom advertising campaigns on Thomasnet. The latest tools let suppliers select from among 78,000 categories and keywords that best reflect their products and services and present a range of suggested budgets tailored to their marketing spend.

In terms of international expansion, Xometry’s revenue from outside the United States has grown, particularly in European and Asian markets. International revenue has shown impressive growth, escalating from $3.1 million in 2020 to $16.3 million in 2021, $33.2 million in 2022, and reaching $60.1 million in 2023. The company has also added new features to its European platform, such as vacuum casting in the instant quoting engine—which allows customers to take advantage of low-cost, high-quality plastic production—and new color options for finishing.

Overall, Xometry’s financial trajectory has shown significant growth over recent years, with annual revenue escalating from $141 million in 2020 to $218 million in 2021, then $381 million in 2022 and $463 million in 2023. Even more impressive is that Xometry reported securing revenue of $481 million in the last twelve months.

Looking ahead to the rest of 2024, Xometry anticipates a revenue growth of between 14% and 16% for the second quarter, projecting revenue between $127 million and $129 million. The marketplace is expected to continue its strong performance with roughly 20% year-over-year growth, while supplier services are forecasted to decline by 15% due to the discontinuation of tools and materials sales and the winding down of non-core services. The company also projects an Adjusted EBITDA loss of $6 million to $8 million for the second quarter. For the full year, Xometry expects marketplace growth of at least 20%, offset partly by increased investments in international and enterprise growth, aiming to improve operating leverage year over year.