Xometry(US:XMTR)2025-05-06 20:10PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements for Xometry, Inc. for the quarter ended March 31, 2025, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with accompanying notes, showing a 23% year-over-year revenue increase to $151.0 million, a net loss of $15.1 million (an improvement from a $16.6 million loss in the prior year), and a cash and marketable securities balance of $231.4 million Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $690.1 million, a slight increase from $680.1 million at year-end 2024, with cash and cash equivalents decreasing to $15.5 million from $22.2 million, while marketable securities stood at $215.9 million, and total liabilities increased to $379.1 million, primarily due to a rise in accounts payable and accrued cost of revenue Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $15,507 | $22,232 | | Marketable securities | $215,874 | $217,603 | | Accounts receivable, net | $85,529 | $73,962 | | Total current assets | $334,618 | $327,540 | | Total Assets | $690,110 | $680,129 | | Current Liabilities | | | | Accounts payable and accrued cost of revenue | $50,218 | $35,023 | | Total current liabilities | $89,428 | $74,787 | | Total Liabilities | $379,077 | $364,533 | | Total Equity | $311,033 | $315,596 | Condensed Consolidated Statements of Operations and Comprehensive Loss For the three months ended March 31, 2025, revenue grew 23% year-over-year to $151.0 million, gross profit increased to $56.3 million from $47.9 million, and the company reported a net loss of $15.1 million, or ($0.30) per share, an improvement from the $16.6 million net loss, or ($0.34) per share, in the same period of 2024 Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $150,971 | $122,690 | | Gross Profit | $56,331 | $47,902 | | Loss from operations | ($15,391) | ($17,857) | | Net loss attributable to common stockholders | ($15,078) | ($16,616) | | Net loss per share, basic and diluted | ($0.30) | ($0.34) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities significantly improved to $3.7 million in Q1 2025 from $11.7 million in Q1 2024, while net cash used in investing activities was $3.7 million, a shift from $2.9 million provided in the prior-year period, mainly due to higher purchases of property and equipment, with cash and cash equivalents ending the period at $15.5 million Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3,691) | ($11,734) | | Net cash (used in) provided by investing activities | ($3,686) | $2,927 | | Net cash provided by financing activities | $510 | $1,233 | | Net decrease in cash and cash equivalents | ($6,725) | ($7,723) | | Cash and cash equivalents at end of period | $15,507 | $45,701 | Notes to Condensed Consolidated Financial Statements (Unaudited) The notes detail the company's accounting policies and provide further information on financial statement items, including the disaggregation of revenue into Marketplace and Supplier Services, segment reporting for U.S. and International operations, details on the $287.5 million convertible notes, and a Q1 2025 restructuring action that incurred $1.5 million in costs - The company operates a global AI-powered online manufacturing marketplace (Xometry) and an industrial sourcing platform (Thomasnet®), connecting buyers with a network of manufacturers27 Disaggregated Revenue and Gross Profit (Q1 2025, in thousands) | Line of Business | Revenue | Cost of Revenue | Gross Profit | | :--- | :--- | :--- | :--- | | Marketplace | $136,353 | $93,046 | $43,307 | | Supplier Services | $14,618 | $1,594 | $13,024 | Segment Revenue (Q1 2025 vs Q1 2024, in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | | :--- | :--- | :--- | | U.S. | $127,820 | $103,363 | | International | $23,151 | $19,327 | - In Q1 2025, the company initiated a restructuring, incurring $1.5 million for employee termination costs related to reducing its workforce112 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the financial results for Q1 2025, highlighting a 23% revenue growth driven by a 27% increase in Marketplace revenue, achieving positive Adjusted EBITDA of $0.1 million, a significant improvement from a loss of $7.5 million in Q1 2024, attributed to operating efficiencies, with key operational metrics like Active Buyers and high-value accounts continuing to grow, and covering components of operating results, liquidity, and capital resources, including the status of the 2027 convertible notes Key Marketplace Operational and Business Metrics The company's marketplace showed strong growth in user engagement and value, with Active Buyers increasing 22% year-over-year to 71,454, high-value accounts growing 12% to 1,545, and existing accounts contributing 98% of revenue in the quarter - Active Buyers reached 71,454 as of March 31, 2025, a 22% increase from 58,504 a year prior136 - Accounts with LTM spend of at least $50,000 grew 12% to 1,545 as of March 31, 2025, from 1,381 a year ago141 - For the quarter ended March 31, 2025, 98% of revenue was generated from existing accounts, indicating strong customer retention and repeat business139 Non-GAAP Financial Measures Xometry achieved positive Adjusted EBITDA of $0.1 million in Q1 2025, a significant turnaround from a $(7.5) million loss in Q1 2024, and Non-GAAP Net Income was $0.8 million, compared to a Non-GAAP Net Loss of $(5.7) million in the prior-year quarter, reflecting improved operating efficiency and margin expansion Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(15,076) | $(16,604) | | Adjustments | $15,154 | $9,145 | | Adjusted EBITDA | $78 | $(7,459) | Non-GAAP Net Income (Loss) Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(15,076) | $(16,604) | | Adjustments | $15,904 | $10,862 | | Non-GAAP Net Income (Loss) | $828 | $(5,742) | Results of Operations Total revenue for Q1 2025 increased by 23% to $151.0 million, driven by a 27% growth in Marketplace revenue, while Supplier Services revenue saw a 6% decline, with gross profit rising 18% to $56.3 million, though gross margin slightly decreased to 37.3% from 39.0% due to revenue mix shift, and operating expenses as a percentage of revenue decreased from 53.6% to 47.5%, demonstrating improved operating leverage Revenue by Line of Business (in thousands) | Line of Business | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Marketplace | $136,353 | $107,186 | +27% | | Supplier services | $14,618 | $15,504 | -6% | | Total Revenue | $150,971 | $122,690 | +23% | - Gross margin for Marketplace was relatively stable at 31.8% in Q1 2025 vs 32.0% in Q1 2024, while Supplier Services gross margin improved to 89.1% from 87.9%180181 - Sales and marketing expense decreased by 3% to $26.4 million, primarily due to lower commissions and advertising spend182 - Operations and support, product development, and general and administrative expenses all increased in absolute dollars but decreased as a percentage of revenue, indicating scaling efficiency184185186 Liquidity and Capital Resources As of March 31, 2025, the company held $231.4 million in cash, cash equivalents, and marketable securities, which management believes is sufficient for at least the next twelve months, with the primary source of financing being equity sales and the $287.5 million in 1% convertible senior notes due 2027, and net cash used in operations significantly improving to $3.7 million for the quarter - The company has $231.4 million in cash, cash equivalents, and marketable securities as of March 31, 2025194 - The company has $287.5 million in aggregate principal amount of 1% convertible senior notes due in 2027, with a carrying value of $284.1 million as of March 31, 2025196203 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,691) | $(11,734) | | Net cash (used in) provided by investing activities | $(3,686) | $2,927 | | Net cash provided by financing activities | $510 | $1,233 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are foreign currency exchange risk and inflation risk, with international operations, mainly in Euros, accounting for about 15% of revenue in Q1 2025, where a hypothetical 10% unfavorable change in the Euro exchange rate would have decreased revenue by 1.2%, and the company does not believe inflation has had a material effect on its business to date - International operations generate approximately 15% of revenues, with a majority in Euros. A 10% unfavorable change in the Euro exchange rate would have decreased Q1 2025 revenues by 1.2%217 - Management does not believe that inflation has had a material effect on the business, but notes that an inability to pass on significant inflationary pressures could harm future results218 Item 4. Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of March 31, 2025, with no material changes to the internal control over financial reporting identified during the quarter - Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective220 - There were no changes to internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls221 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company states that it is not a party to any legal proceedings that are reasonably expected to have a material adverse effect on its financial condition or operations, and there were no material legal proceedings or developments in Q1 2025 - As of March 31, 2025, the company is not party to any material legal proceedings225226 Item 1A. Risk Factors The company notes that there have been no material changes to its risk factors as disclosed in its 2024 Annual Report on Form 10-K, except for an expanded discussion on the risks associated with changes in U.S. and international trade policies, highlighting potential impacts from tariffs and other restrictive measures on raw material costs, supply chain stability, and customer demand - The company highlights the risk that changes in U.S. and international trade policies, such as new tariffs, could adversely impact the business by increasing costs, disrupting supply chains, and reducing customer demand229 - Trade disputes and political tensions may exacerbate unfavorable macroeconomic conditions, including inflation and market instability, which could negatively impact customer demand and the company's stock price230 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds In January 2025, the company issued 16,716 shares of Class A common stock, valued at $0.6 million, as contingent consideration related to the 2023 acquisition of Tridi, with the issuance exempt from registration under Section 4(a)(2) of the Securities Act - In January 2025, the company issued 16,716 shares of Class A common stock ($0.6 million value) as contingent consideration for the acquisition of Tridi234 Other Items (3, 4, 5, 6) This section confirms there were no defaults upon senior securities (Item 3) and no mine safety disclosures (Item 4), and under Item 5, it is noted that no directors or officers adopted or terminated securities trading plans during the last fiscal quarter, with Item 6 listing the exhibits filed with the report - Item 3 (Defaults Upon Senior Securities) and Item 4 (Mine Safety Disclosures) are not applicable235236 - No directors or executive officers adopted or terminated any securities trading plans during the last fiscal quarter237