Xometry, Inc., Gaithersburg, Maryland, USA, has reported its financial results for the third quarter ended September 30, 2023, posting record revenue and gross profit.
“In Q3 2023, we had record financial results including our highest revenue and gross profit in Xometry history. Xometry delivered strong 22% marketplace revenue growth year-over-year and significantly improved operating leverage, reducing Q3 adjusted EBITDA loss by 51% quarter-over-quarter, well ahead of expectations,” stated Randy Altschuler, Xometry’s CEO. “Driven by AI, the underpinnings of marketplace growth are robust with over 40% Active Buyer and order growth in Q3. We are improving operating leverage across the business, including increased marketing efficiency with record additions in net Active Buyers. Xometry continues to expand marketplace functionality including the recent integration of Teamspace, furthering our enterprise sales solutions and increasing our organic buyer growth. We are excited to announce our new Google Cloud AI partnership, which will accelerate instant quoting into many new categories on our platform. We expect to continue to rapidly gain market share and accelerate marketplace revenue growth in Q4.”
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Q3 financial highlights
In the third quarter of 2023, total revenue was $119 million, marking a 15% increase from the previous year. Marketplace revenue for the same period was $102 million, up 22% year-over-year. However, supplier services revenue decreased by 16%, resulting in $16.5 million, primarily due to the discontinuation of the tools and materials business, which led to a revenue reduction of $2 million from the previous year. The total gross profit for the third quarter of 2023 was $46.2 million, a 13% increase year-over-year.
The net loss for Q3 2023 included $5.7 million from stock-based compensation and $2.5 million from depreciation and amortisation expenses. The adjusted EBITDA was a negative $4.2 million for the quarter, showing an improvement of $2.3 million compared to the previous year. As of September 30, 2023, cash, cash equivalents, and marketable securities amounted to $276.8 million.
Q3 2023 business highlights
Xometry has partnered with Google Cloud to boost the development of new auto-quote methods and models in its AI-driven Instant Quoting Engine. By utilising Vertex AI, Xometry aims to expedite the roll-out of instant-quoting across a wider and more comprehensive range of manufacturing technologies. The Vertex AI platform facilitates quicker market entry for Xometry’s new offerings in completely new categories, increasing its value to customers and suppliers worldwide.
Xometry’s two-sided digital marketplace is revolutionising manufacturing by digitising a previously manual process that could take weeks to move from design to production. By speeding up this process, Xometry is aiding customers in building resilient supply chains. Simultaneously, it is equipping manufacturers with digital tools to significantly expand their businesses.
“Since our inception, Xometry’s two-sided marketplace has harnessed data and the power of AI to connect buyers and suppliers in real-time, driving the digitisation of industry around the world,” shared Matt Leibel, Xometry’s Chief Technology Officer. “Google Cloud’s expertise in AI and its Vertex AI platform will help enable us to get to market even faster with new offerings in entirely new categories, allowing us to become even more indispensable to our customers and suppliers globally.”
Brad Little, VP, Google Cloud, stated, “Xometry is at the forefront of the AI adoption cycle. Our innovative work with Xometry to power their AI-driven digital marketplace has the potential to transform custom manufacturing, while seamlessly and efficiently connecting customers and suppliers globally.”
In October, following a successful beta test with several large customers in Q3, the company launched Xometry Teamspace. This is a cloud-based collaboration tool that enables employees within the same company to manage projects using Xometry’s AI-powered platform. As a valuable addition to Xometry’s online marketplace, Teamspace streamlines order management, enhances efficiency, and promotes data-driven decision-making. Since its launch, over 300 teams have been established.
Xometry has added “Build America, Buy America” as a recognised certification on the Thomasnet.com manufacturing sourcing platform, which hosts over 500,000 suppliers across North America. This new category on Thomasnet.com simplifies the process for enterprise buyers to identify manufacturers compliant with the BABA initiative, a key aspect of the bipartisan Infrastructure Investment and Jobs Act.
Thomasnet.com has also introduced two additional self-serve profile options for its over 500,000 suppliers. ‘Thomas Verified’ and ‘Thomas Verified + Video’ options offer manufacturers increased visibility and targeted exposure to preferred industries, along with custom video options.
In October, Xometry included the AS9100 certification in its Instant Quote Engine for aerospace and defence buyers. AS9100 is a certification that defines the design and manufacturing standards for aerospace and defence products, such as parts, components, and assemblies. This is particularly significant for customers involved in production work, including flight parts.
The company expanded its international offerings, adding Portuguese language capability and introducing new automated inspection reports in Europe. Buyers on the Xometry Europe marketplace can now choose from multiple report options, including the First Article Inspection Report (FAIR) and the Measurement Report. Additionally, Xometry Asia has added auto-quoting capabilities for Fused Filament Fabrication (FFF) AM.