SEC Filing | Xometry, Inc.

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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 March 31, 2023


☐	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.)

6116 Executive Blvd Suite 800 North Bethesda, MD	20852
(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, a 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 ☒

As of May 1, 2023, the registrant had 45,168,110 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 (Unaudited)	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures		38

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 our ability to effectively manage or sustain our growth and to achieve or sustain profitability;


	•		the effects of public health crises 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 effectively manage our costs and expenses, which may be impacted by inflationary pressures;


	•		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 (Unaudited)

(In thousands, except share and per share data)


	March 31,			December 31,
	2023			2022

Assets
Current assets:
Cash and cash equivalents	$	39,705		$	65,662
Marketable securities		256,458			253,770
Accounts receivable, less allowance for credit losses of $1.9 million and $2.0 million as of March 31, 2023 and December 31, 2022		52,217			49,188
Inventory		1,444			1,571
Prepaid expenses		7,055			7,591
Other current assets		15,897			12,273
Total current assets		372,776			390,055
Property and equipment, net		21,597			19,079
Operating lease right-of-use assets		24,303			25,923
Investment in unconsolidated joint venture		4,134			4,068
Intangible assets, net		39,041			39,351
Goodwill		262,441			258,036
Other assets		385			413
Total assets	$	724,677		$	736,925
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	12,320		$	12,437
Accrued expenses		32,121			33,430
Contract liabilities		9,974			8,509
Income taxes payable		4,113			3,956
Operating lease liabilities, current portion		6,256			5,471
Total current liabilities		64,784			63,803
Convertible notes		280,375			279,909
Operating lease liabilities, net of current portion		15,500			16,940
Deferred income taxes		406			429
Other liabilities		1,260			1,011
Total liabilities		362,325			362,092
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 March 31, 2023 and December 31, 2022, respectively		—			—
Class A Common stock, $0.000001 par value. Authorized; 750,000,000 shares; 45,098,314 shares and 44,822,264 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		—			—
Class B Common stock, $0.000001 par value. Authorized; 5,000,000 shares; 2,676,154 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		—			—
Additional paid-in capital		628,808			623,081
Accumulated other comprehensive income		159			28
Accumulated deficit		(267,710	)		(249,366	)
Total stockholders’ equity		361,257			373,743
Noncontrolling interest		1,095			1,090
Total equity		362,352			374,833
Total liabilities and stockholders’ equity	$	724,677		$	736,925

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 March 31,
	2023			2022

Revenue	$	105,326		$	83,671
Cost of revenue		65,957			50,732
Gross profit		39,369			32,939
Sales and marketing		22,439			19,285
Operations and support		12,608			12,358
Product development		8,125			7,290
General and administrative		15,957			12,959
Impairment of assets		27			—
Total operating expenses		59,156			51,892
Loss from operations		(19,787	)		(18,953	)
Other (expenses) income
Interest expense		(1,198	)		(769	)
Interest and dividend income		2,695			96
Other income (expenses)		17			(962	)
Income from unconsolidated joint venture		66			34
Total other income (expenses)		1,580			(1,601	)
Loss before income taxes		(18,207	)		(20,554	)
(Provision) benefit for income taxes		(136	)		559
Net loss		(18,343	)		(19,995	)
Net income attributable to noncontrolling interest		1			17
Net loss attributable to common stockholders	$	(18,344	)	$	(20,012	)
Net loss per share, basic and diluted	$	(0.38	)	$	(0.43	)
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		47,699,561			46,789,585


Comprehensive loss:
Foreign currency translation	$	135		$	(28	)
Total other comprehensive income (loss)		135			(28	)
Net loss		(18,343	)		(19,995	)
Comprehensive loss		(18,208	)		(20,023	)
Comprehensive income attributable to noncontrolling interest		5			34
Total comprehensive loss attributable to common stockholders	$	(18,213	)	$	(20,057	)

See accompanying notes to the unaudited condensed consolidated financial statements.

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

Three months ended March 31, 2023 and 2022

(In thousands, except share and per share data)


	Class A - Common Stock				Class B - Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Accumulated			Total Stockholders'			Noncontrolling		Total
	Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			Equity			Interest		Equity
Balance, December 31, 2022		44,822,264	$	—		2,676,154	$	—	$	623,081	$	28		$	(249,366	)	$	373,743		$	1,090	$	374,833
Exercise of common stock options		82,909		—		—				483		—			—			483			—		483
Vesting of Restricted Stock Units		169,446		—		—		—		—		—			—			—			—		—
Other common stock issued		3,562		—		—		—		180		—			—			180			—		180
Donated common stock		20,133		—		—		—		370		—			—			370			—		370
Stock based compensation		—		—		—		—		4,694		—			—			4,694			—		4,694
Comprehensive income
Foreign currency translation		—		—		—		—		—		131			—			131			4		135
Net (loss) income		—		—		—		—		—		—			(18,344	)		(18,344	)		1		(18,343	)
Total comprehensive (loss) income		—		—		—		—		—		—			—			(18,213	)		5		(18,208	)
Balance, March 31, 2023		45,098,314	$	—		2,676,154	$	—	$	628,808	$	159		$	(267,710	)	$	361,257		$	1,095	$	362,352

Balance, December 31, 2021		43,998,404	$	—		2,676,154	$	—	$	597,641	$	149		$	(173,341	)	$	424,449		$	1,034	$	425,483
Exercise of common stock options		246,263		—		—		—		1,263		—			—			1,263			—		1,263
Stock based compensation		—		—		—		—		3,456		—			—			3,456			—		3,456
Comprehensive income
Foreign currency translation		—		—		—		—		—		(45	)		—			(45	)		17		(28	)
Net (loss) income		—		—		—		—		—		—			(20,012	)		(20,012	)		17		(19,995	)
Total comprehensive (loss) income		—		—		—		—		—		—						(20,057	)		34		(20,023	)
Balance, March 31, 2022		44,244,667	$	—		2,676,154	$	—	$	602,360	$	104		$	(193,353	)	$	409,111		$	1,068	$	410,179

See accompanying notes to the unaudited condensed consolidated financial statements.

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(18,343	)	$	(19,995	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,566			1,799
Impairment of assets		27			—
Reduction in carrying amount of right-of-use asset		1,935			1,765
Stock based compensation		4,694			3,456
Revaluation of contingent consideration		—			434
Income from unconsolidated joint venture		(66	)		(34	)
Donation of common stock		370			—
Losses on marketable securities		—			858
Non-cash income tax benefit		—			(559	)
Loss on sale of property and equipment		91			71
Amortization of deferred costs on convertible notes		466			312
Deferred taxes benefit		(23	)		(2	)
Changes in other assets and liabilities:
Accounts receivable, net		(2,804	)		(6,145	)
Inventory		133			(180	)
Prepaid expenses