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Xometry, Inc. (XMTR)·Q3 2024 Earnings Summary

Executive Summary

  • Record Q3 with revenue $141.70M (+19% Y/Y), gross profit $55.83M (+21% Y/Y), and record marketplace gross margin 33.6%, driven by 24% Y/Y marketplace revenue growth and AI-pricing/supplier matching; adjusted EBITDA loss improved to $0.63M (0.4% of revenue) .
  • Company beat its own Q3 revenue guide of $136–$138M, delivering $141.70M (≈+3%–4% vs guidance), on stronger marketplace growth and operating leverage .
  • Q4 outlook: revenue $145–$147M and “slightly” adjusted EBITDA profitable; full-year 2024 marketplace growth outlook raised to 22%–23% (from at least 20%) .
  • Stock reaction catalyst: accelerating marketplace unit economics (record marketplace margin), raised FY marketplace growth framework, and imminent EBITDA breakeven, offset by Supplier Services contraction and ongoing international segment losses .

What Went Well and What Went Wrong

  • What Went Well

    • Record top-line and profitability metrics: “record revenues, record gross profit and record marketplace gross margin,” with marketplace gross margin up 250 bps Y/Y to 33.6% as AI models improve pricing/matching across an expanding supplier network .
    • International momentum: international revenue +55% Y/Y in Q3, approaching ~$100M annual run-rate; management targets 30%–40% of marketplace revenue long term .
    • Operating leverage and path to profitability: adjusted EBITDA loss improved 85% Y/Y to $0.63M; guiding slight adjusted EBITDA profit in Q4 and positive for FY25 .

  • What Went Wrong

    • Supplier Services headwinds: revenue down 10% Y/Y to $14.73M and active paying suppliers down 9% Y/Y as non-core services were exited and ad/marketing moderated; rebuild under way on Thomas platform .
    • GAAP loss persists: Q3 GAAP net loss of $10.20M; non-GAAP net income $1.11M reflects add-backs (notably $6.95M SBC and $3.21M D&A) .
    • International profitability lag: International segment loss widened to $6.02M in Q3 as investments continue; management framed profitability as “over the next few years” .

Financial Results

MetricQ1 2024Q2 2024Q3 2024
Revenue ($M)$122.69 $132.60 $141.70
Gross Profit ($M)$47.90 $52.88 $55.83
Gross Margin (%)39.0% 39.9% 39.4%
Marketplace Revenue ($M)$107.19 $117.29 $126.97
Supplier Services Revenue ($M)$15.50 $15.31 $14.73
Marketplace Gross Margin (%)32.0% 33.5% 33.6%
Adjusted EBITDA ($M)$(7.46) $(2.63) $(0.63)
GAAP Net Loss ($M)$(16.62) $(13.70) $(10.20)
GAAP Diluted EPS ($)$(0.34) $(0.28) $(0.21)
Non-GAAP Net Income (Loss) ($M)$(5.74) $(0.61) $1.11
Cash & Equivalents ($M)$45.70 $22.07 $17.43
Marketable Securities ($M)$208.08 $218.83 $216.61

Segment breakdown (revenue and segment loss):

MetricQ1 2024Q2 2024Q3 2024
U.S. Revenue ($M)$103.36 $112.17 $117.58
International Revenue ($M)$19.33 $20.43 $24.11
U.S. Segment Net Loss ($M)$(11.82) $(7.11) $(4.18)
International Segment Net Loss ($M)$(4.80) $(6.58) $(6.02)

KPIs:

KPI (period end)Q1 2024Q2 2024Q3 2024
Active Buyers58,504 61,530 64,851
Accounts with LTM ≥$50k1,381 1,436 1,506
Active Paying Suppliers (TTM)7,159 6,992 6,762

Performance vs Q3 guidance (company):

MetricCompany Guidance (Q3 2024)Actual (Q3 2024)
Revenue ($M)$136–$138 $141.70
Adjusted EBITDA ($M)$(1.5) to $(3.5) $(0.63)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)Q4 2024—$145–$147 New
Adjusted EBITDAQ4 2024—Slightly positive New
Marketplace Revenue GrowthFY 2024At least 20% Y/Y 22%–23% Y/Y Raised
Supplier Services RevenueQ4 2024—Down ~10% Y/Y New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024, Q2 2024)Current Period (Q3 2024)Trend
AI/Technology (Vertex AI, pricing/matching)Launched Vertex AI partnership; target multiple new auto-quoted models; marketplace GM 32.0% . In Q2, instant quoting categories expanded; marketplace GM 33.5% .Released instant quoting for laser tube cutting & bending; marketplace GM 33.6%; AI cited as main driver .Accelerating deployment; sustained margin expansion.
Enterprise/TeamspaceTeamspace >2,300 teams, ERP integrations .Teamspace >3,300 teams (Q2); deepening enterprise engagement .>4,000 teams; LTM ≥$50k accounts +70 net adds, record for year .
InternationalQ1 intl rev +69% Y/Y; 18% of marketplace . Q2 intl +31% Y/Y; 15% of marketplace .Intl +55% Y/Y; approaching ~$100M run-rate; target 30%–40% of marketplace .Re-acceleration; runway to mix shift higher.
Supplier Services (Thomas)Beta self-serve ads; platform modernization .Modernization continues; 88.9% GM .Focus on restoring growth; self-serve tools enhanced; 89.6% GM .
Macro/TariffsUncertain manufacturing environment noted .Uncertain environment persists .Election/tariff policy impact neutral; reshoring could help; flexibility across geographies .
Profitability pathTarget EBITDA breakeven at ~$600M rev run-rate .Same framework, 20%+ incremental EBITDA .Slightly ahead of breakeven target; Q4 slightly positive; FY25 positive .

Management Commentary

  • CEO: “Q3 2024 represented another record-setting quarter…record revenues, record gross profit and record marketplace gross margin while capturing additional market share globally.”
  • CFO: “Q3 Adjusted EBITDA loss was $0.6 million or 0.4% of revenue…improved 85% year-over-year, driven by growth in revenue, gross profit and operating efficiencies.”
  • On AI and margins: “AI is the main driver of our gross margin expansion…price prediction accuracy…expanding the supplier network…approaching that 35% level as we exit the year.”
  • On 2025 growth: “We believe our growth initiatives can drive at least 20% marketplace growth in 2025…overall revenue growth in 2025 to exceed 2024.”

Q&A Highlights

  • 2025 growth drivers: Continued buyer/supplier network expansion, broader instant-quoted processes, enterprise penetration; at least 20% marketplace growth expected .
  • Supplier Services outlook: Aim to stabilize Q/Q into 2025 and return to growth as modernization of Thomas ad stack takes hold .
  • Marketplace gross margin trajectory: AI-led pricing/matching and supplier expansion underpin path toward ~35% exiting 2024 and 35%–40% long-term .
  • International profitability: Strong growth led by Europe; APAC wins emerging; profitability expected over coming years as scale builds .
  • Q4 growth cadence: Sequential moderation vs Q2–Q3 given tougher Y/Y comp and holiday seasonality; macro uncertainty considered in guide .

Estimates Context

  • S&P Global consensus estimates were unavailable at query time (API limit exceeded). We cannot provide consensus comparisons for revenue/EPS/EBITDA this quarter.
  • Context vs company guidance: Xometry exceeded its Q3 revenue guide ($136–$138M) by delivering $141.70M, and adjusted EBITDA outperformed the guided loss range (actual $(0.63)M vs $(1.5)–$(3.5)M) .
  • Management characterized results as “better-than-expected” and raised the FY marketplace growth outlook to 22%–23% (from at least 20%) .

Key Takeaways for Investors

  • AI-driven marketplace scaling: record marketplace margin and consistent expansion show durable unit economics; long-term target 35%–40% appears credible as data/supplier density compounds .
  • Path to profitability: slightly positive adjusted EBITDA targeted in Q4; FY25 adjusted EBITDA positive, supported by 20%+ incremental EBITDA flow-through .
  • Growth mix improving: accelerated international growth (+55% Y/Y) with Europe lead and APAC ramp; potential for mix shift toward 30%–40% of marketplace revenue longer term .
  • Enterprise deepening: Teamspace adoption and ERP integrations broaden wallet share; LTM ≥$50k accounts up to 1,506 .
  • Watch Supplier Services rebuild: near-term revenue pressure persists, but ~90% gross margin and platform modernization set stage for 2025 reacceleration .
  • Near-term trading lens: Q4 guide and margin trajectory to ~35%, plus the raised FY marketplace growth outlook, are likely positive catalysts; monitor seasonality/macro tempering Q4 growth pace .

Additional Notes on Non-GAAP

  • Q3 non-GAAP net income of $1.11M vs GAAP net loss of $10.20M primarily reflects add-backs: $6.95M stock-based comp, $3.21M D&A, $0.46M amortization of deferred note costs, and other adjustments per reconciliation .
  • Balance sheet context: $17.43M cash, $216.61M marketable securities, and $283.16M convertible notes as of 9/30/24 .

Other Q3-relevant Releases

  • Europe marketplace tools launched to streamline complex orders across EU/UK/Turkey and add collaboration features; marketplace now in 16 languages .
  • Roy Azevedo (ex-Raytheon) appointed to Board, bringing deep manufacturing and supply chain expertise .