Xometry(XMTR) - 2024 Q3 - Quarterly Report

Platform Metrics - Active Buyers on the platform reached 64,851 as of September 30, 2024, up 24% from 52,382 as of September 30, 2023[93] - Accounts with Last Twelve-Month Spend of at least $50,000 reached 1,506 as of September 30, 2024, up 23% from 1,223 as of September 30, 2023[96] - Active Paying Suppliers on the platform was 6,762 as of September 30, 2024, down 9% from 7,415 as of September 30, 2023[97] Revenue and Profitability - 97% of revenue for the quarter ended September 30, 2024 was generated from existing accounts[95] - Revenue for Q3 2024 was$ 141.7 million, a 19.1% increase from $118.9 million in Q3 2023[116] - Gross profit for Q3 2024 was$ 55.8 million, a 20.7% increase from $46.2 million in Q3 2023, with gross margin improving to 39.4% from 38.9%[116] - Total revenue increased by$ 22.8 million (19%) from $118.9 million in Q3 2023 to$ 141.7 million in Q3 2024, driven by a $24.5 million (24%) increase in marketplace revenue[119] - Marketplace revenue grew to$ 127.0 million in Q3 2024, up from $102.5 million in Q3 2023, primarily due to increased buyer activity on the platform[119] - Supplier services revenue decreased by$ 1.7 million (10%) from $16.5 million in Q3 2023 to$ 14.7 million in Q3 2024, driven by reductions in Thomas non-core services[120] - Gross profit increased by $9.6 million (21%) from$ 46.2 million in Q3 2023 to $55.8 million in Q3 2024, with marketplace gross margin improving to 33.6% from 31.1%[124][125] - Total revenue for the nine months ended September 30, 2024, increased by$ 61.7 million (18%) to $397.0 million, with marketplace revenue growing 24% to$ 351.4 million[136] - Gross profit increased by 21% to $156.6 million for the nine months ended September 30, 2024, with marketplace gross margin improving to 33.1% from 30.6% in the prior year period, largely due to AI-driven platform optimization[141][142] Operating Expenses - Operating expenses for Q3 2024 were$ 67.3 million, a 13.2% increase from $59.4 million in Q3 2023, but operating expenses as a percentage of revenue decreased to 47.5% from 50.0%[116][118] - Sales and marketing expenses for Q3 2024 were$ 27.2 million, a 17.2% increase from $23.2 million in Q3 2023, but decreased as a percentage of revenue to 19.2% from 19.5%[116][118] - Product development expenses for Q3 2024 were$ 9.3 million, a 9.6% increase from $8.5 million in Q3 2023, but decreased as a percentage of revenue to 6.6% from 7.2%[116][118] - General and administrative expenses for Q3 2024 were$ 16.1 million, a 7.5% increase from $14.9 million in Q3 2023, but decreased as a percentage of revenue to 11.3% from 12.6%[116][118] - Sales and marketing expenses increased by$ 4.0 million (17%) to $27.2 million in Q3 2024, with advertising expenses rising 22% to$ 9.4 million[126] - Product development expenses increased by $0.8 million (10%) to$ 9.3 million in Q3 2024, primarily due to higher software costs[127] - General and administrative expenses increased by $1.1 million (7%) to$ 16.1 million in Q3 2024, driven by higher employee compensation costs[128] - Sales and marketing expenses increased by 20% to $81.9 million for the nine months ended September 30, 2024, primarily due to additional employee compensation and advertising costs[143] - Product development expenses increased by 13% to$ 29.0 million for the nine months ended September 30, 2024, driven by higher amortization and software costs[144] - General and administrative expenses decreased by 16% to $47.5 million for the nine months ended September 30, 2024, due to the abandonment of company leases and reduced facilities costs[144] Net Income and Loss - Net loss for Q3 2024 was$ (10.2) million, compared to $(12.0) million in Q3 2023, with net loss as a percentage of revenue improving to (7.1)% from (10.1)%[116][118] - Non-GAAP net income for Q3 2024 was$ 1.1 million, compared to a Non-GAAP net loss of $(2.6) million in Q3 2023, representing 0.8% of revenue versus (2.2)% in the prior year[103] - Non-GAAP net loss for the nine months ended September 30, 2024, was$ (5.2) million, compared to $(19.0) million in the same period in 2023, representing (1.3)% of revenue versus (5.7)% in the prior year[104] Adjusted EBITDA - Adjusted EBITDA loss for the three months ended September 30, 2024 was$ (0.6) million, compared to $(4.2) million for the same quarter in 2023[100] - Adjusted EBITDA Margin for the quarter ended September 30, 2024 was (0.4)% of revenue, compared to (3.5)% for the same quarter in 2023[100] - Adjusted EBITDA loss for the nine months ended September 30, 2024 was$ (10.7) million, compared to $(24.6) million for the same period in 2023[100] - Adjusted EBITDA Margin for the nine months ended September 30, 2024 was (2.7)% of revenue, compared to (7.3)% for the same period in 2023[100] Cash Flow and Financial Position - Net cash used in operating activities was$ 24.5 million for the nine months ended September 30, 2024, primarily due to a net loss of $40.5 million and a decrease in operating assets and liabilities[154] - Net cash used in investing activities was$ 14.7 million for the nine months ended September 30, 2024, driven by purchases of marketable securities and property and equipment[154] - Net cash provided by financing activities was $3.2 million for the nine months ended September 30, 2024, primarily from the exercise of stock options[154] - The company's cash and cash equivalents and marketable securities totaled$ 234.0 million as of September 30, 2024, sufficient to support working capital and capital expenditure requirements for at least the next twelve months[150] International Operations and Currency Impact - International operations generate approximately 16% of the company's revenues, with a majority in Euros[158] - A 10% unfavorable change in the average Euro exchange rate would decrease revenues by 1.3% for the nine months ended September 30, 2024[158] - The company's revenues were not materially impacted by exchange rate changes between September 30, 2023, and September 30, 2024[158] - U.S. operating segment revenue grew to $117.6 million in Q3 2024, up from$ 103.4 million in Q3 2023, while International segment revenue increased to $24.1 million from$ 15.5 million[121] - Total revenue for the U.S. operating segment increased to $333.1 million for the nine months ended September 30, 2024, up from$ 292.7 million in the same period in 2023, while the International operating segment revenue rose to $63.9 million from$ 42.5 million[138] Business Strategy and Acquisitions - The company acquired Tridi Teknoloj A.S. on January 2, 2023, extending marketplace capabilities in Europe and providing access to the Turkish market[90] - The company exited the tools and materials business and wound down Thomas non-core services, impacting Active Paying Suppliers[97] Interest and Dividend Income - Interest and dividend income for Q3 2024 was $2.8 million, a 7.1% decrease from$ 3.0 million in Q3 2023[116] Inflation and Risk Management - Inflation has not had a material effect on the company's business, results of operations, or financial condition[159] - Significant inflationary pressures could harm the company's business if costs cannot be offset through price increases[159] - The company does not use derivative financial instruments to manage interest rate risk exposure[157]