SEC Filing | Xometry, Inc.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-40546

XOMETRY, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	32-0415449
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7529 Standish Place Suite 200 Derwood, MD	20855
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (240) 335-7914

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Class A common stock, par value $0.000001 per share

XMTR

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

As of August 3, 2022, the registrant had 44,592,744 shares of Class A common stock, $0.000001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Deficit)	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “can,” “will,” “would,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “forecasts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:


	•		our expectations regarding our revenue, expenses and other operating results;


	•		the anticipated growth of our business, including the anticipated growth of revenue from supplier services, our ability to effectively manage or sustain our growth and to achieve or sustain profitability;


	•		the ongoing effects of the COVID-19 pandemic or other macroeconomic factors and geopolitical tension, such as those associated with Russia's invasion of Ukraine, which may lead to periods of global economic uncertainty;


	•		future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements;


	•		our ability to attract new buyers and suppliers and successfully engage new and existing buyers and suppliers;


	•		the costs and success of our sales and marketing efforts, and our ability to promote our brand;


	•		our reliance on key personnel and our ability to identify, recruit and retain skilled personnel;


	•		our ability to effectively manage our growth, including any international expansion;


	•		our ability to obtain, maintain, protect and enforce our intellectual property or other proprietary rights and any costs associated therewith;


	•		our ability to compete effectively with existing competitors and new market entrants; and


	•		the growth rates of the markets in which we compete.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section titled Risk Factors Part II, Item 1A, and elsewhere in this Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based on information available to us as of the date of this Form 10-Q. And while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete. Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Form 10-Q to reflect events or circumstances after the date of this Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)


	June 30,			December 31,
	2022			2021
	(unaudited)			(audited)
Assets
Current assets:
Cash and cash equivalents	$	46,833		$	86,262
Marketable securities		309,830			30,465
Accounts receivable, less allowance for doubtful accounts of $1.5 million as of June 30, 2022 and $0.8 million as of December 31, 2021		43,991			32,427
Inventory		1,727			2,033
Prepaid expenses		7,724			6,664
Other current assets		4,118			5,580
Total current assets		414,223			163,431
Property and equipment, net		13,443			10,287
Operating lease right-of-use assets		24,029			27,489
Investment in unconsolidated joint venture		4,301			4,198
Intangible assets, net		41,147			41,736
Goodwill		259,971			254,672
Other assets		627			773
Total assets	$	757,741		$	502,586
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	14,175		$	12,718
Accrued expenses		29,157			30,905
Contract liabilities		10,725			7,863
Operating lease liabilities, current portion		5,723			5,549
Finance lease liabilities, current portion		—			2
Total current liabilities		59,780			57,037
Operating lease liabilities, net of current portion		14,053			16,920
Convertible notes		278,972			—
Income taxes payable		1,532			1,468
Other liabilities		1,789			1,678
Total liabilities		356,126			77,103
Commitments and contingencies (Note 13)
Stockholders’ equity
Preferred stock, $0.000001 par value. Authorized; 50,000,000 shares; zero shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		—			—
Class A Common stock, $0.000001 par value. Authorized; 750,000,000 shares; 44,545,080 shares and 43,998,404 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		—			—
Class B Common stock, $0.000001 par value. Authorized; 5,000,000 shares; 2,676,154 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively		—			—
Additional paid-in capital		610,331			597,641
Accumulated other comprehensive income		85			149
Accumulated deficit		(209,906	)		(173,341	)
Total stockholders’ equity		400,510			424,449
Noncontrolling interest		1,105			1,034
Total equity		401,615			425,483
Total liabilities and stockholders’ equity	$	757,741		$	502,586

See accompanying notes to the unaudited condensed consolidated financial statements.

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(In thousands, except share and per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021

Revenue	$	95,615		$	50,589		$	179,286		$	94,510
Cost of revenue		57,919			38,714			108,651			72,800
Gross profit		37,696			11,875			70,635			21,710
Sales and marketing		18,145			8,858			37,430			16,422
Operations and support		12,180			5,489			24,538			9,820
Product development		7,796			4,091			15,085			7,755
General and administrative		15,057			5,238			28,017			9,562
Impairment of long-lived assets		119			—			119			—
Total operating expenses		53,297			23,676			105,189			43,559
Loss from operations		(15,601	)		(11,801	)		(34,554	)		(21,849	)
Other (expenses) income
Interest expense		(1,209	)		(350	)		(1,978	)		(681	)
Interest and dividend income		474			—			570			—
Other expenses		(482	)		(113	)		(1,444	)		(235	)
Income from unconsolidated joint venture		269			—			303			—
Total other expenses		(948	)		(463	)		(2,549	)		(916	)
Loss before income taxes		(16,549	)		(12,264	)		(37,103	)		(22,765	)
Benefit for income taxes		—			—			559			—
Net loss		(16,549	)		(12,264	)		(36,544	)		(22,765	)
Net income attributable to noncontrolling interest		4			—			21			—
Net loss attributable to common stockholders	$	(16,553	)	$	(12,264	)	$	(36,565	)	$	(22,765	)
Net loss per share, basic and diluted	$	(0.35	)	$	(1.46	)	$	(0.78	)	$	(2.79	)
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		47,074,246			8,390,088			46,932,702			8,158,753


Comprehensive loss:
Foreign currency translation	$	14		$	(13	)	$	(14	)	$	17
Total other comprehensive (loss) income		14			(13	)		(14	)		17
Net loss		(16,549	)		(12,264	)		(36,544	)		(22,765	)
Comprehensive loss		(16,535	)		(12,277	)		(36,558	)		(22,748	)
Comprehensive income attributable to noncontrolling interest		37			—			71			—
Total comprehensive loss attributable to common stockholders	$	(16,572	)	$	(12,277	)	$	(36,629	)	$	(22,748	)

See accompanying notes to the unaudited condensed consolidated financial statements.

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(Unaudited)

Three months ended June 30, 2022 and 2021

(In thousands, except share and per share data)


	Convertible Preferred Stock
	Seed-1, Seed-2, Series A-1, Series A-2, Series B, Series C, Series D, Series E				Common Stock				Class A - Common Stock				Class B - Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders'			Noncontrolling		Total
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			(Deficit) Equity			Interest		(Deficit) Equity
Balance, March 31, 2022		—	$	—		—	$	—		44,244,667	$	—		2,676,154	$	—	$	602,360	$	104		$	(193,353	)		409,111		$	1,068		410,179
Exercise of common stock options		—		—		—		—		260,147		—		—		—		1,207		—			—			1,207			—		1,207
Donated common stock		—		—		—		—		40,266		—		—		—		1,285		—			—			1,285			—		1,285
Stock based compensation		—		—		—		—		—		—		—		—		5,479		—			—			5,479			—		5,479
Comprehensive loss
Foreign currency translation		—		—		—		—		—		—		—		—		—		(19	)		—			(19	)		33		14
Net loss		—		—		—		—		—		—		—		—		—		—			(16,553	)		(16,553	)		4		(16,549	)
Total comprehensive loss		—		—		—		—		—		—		—		—		—		—			—			(16,572	)		37		(16,535	)
Balance, June 30, 2022		—	$	—		—	$	—		44,545,080	$	—		2,676,154	$	—	$	610,331	$	85		$	(209,906	)	$	400,510		$	1,105	$	401,615

Balance, March 31, 2021		27,758,941	$	160,713		8,239,494	$	—		—	$	—		—	$	—	$	1,854	$	240		$	(122,463	)	$	(120,369	)	$	—	$	(120,369	)
Exercise of common stock options		—		—		426,303		—		—		—		—		—		486		—			—			486			—		486
Stock based compensation		—		—		—		—		—		—		—		—		1,975		—			—			1,975			—		1,975
Comprehensive loss
Foreign currency translation		—		—		—		—