10-Q
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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, 2023

OR

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.

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

 

 

 

Emerging growth company

 

 

 

 

 

 

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 August 1, 2023, the registrant had 45,292,345 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)

5

Notes to Condensed Consolidated Financial Statements (Unaudited)

6

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

40

Item 4.

Controls and Procedures

40

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

42

Item 1A.

Risk Factors

42

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

42

Item 3.

Defaults Upon Senior Securities

42

Item 4.

Mine Safety Disclosures

42

Item 5.

Other Information

42

Item 6.

Exhibits

43

Signatures

44

 

 

i


 

 

 

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.

ii


 

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)

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

56,738

 

 

$

65,662

 

Marketable securities

 

 

229,411

 

 

 

253,770

 

Accounts receivable, less allowance for credit losses of $2.0 million and $2.0 million as of June 30, 2023 and December 31, 2022

 

 

57,658

 

 

 

49,188

 

Inventory

 

 

1,339

 

 

 

1,571

 

Prepaid expenses

 

 

5,831

 

 

 

7,591

 

Other current assets

 

 

13,825

 

 

 

12,273

 

Total current assets

 

 

364,802

 

 

 

390,055

 

Property and equipment, net

 

 

23,990

 

 

 

19,079

 

Operating lease right-of-use assets

 

 

14,401

 

 

 

25,923

 

Investment in unconsolidated joint venture

 

 

4,271

 

 

 

4,068

 

Intangible assets, net

 

 

37,589

 

 

 

39,351

 

Goodwill

 

 

263,002

 

 

 

258,036

 

Other assets

 

 

427

 

 

 

413

 

Total assets

 

$

708,482

 

 

$

736,925

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

12,592

 

 

$

12,437

 

Accrued expenses

 

 

37,136

 

 

 

33,430

 

Contract liabilities

 

 

9,999

 

 

 

8,509

 

Income taxes payable

 

 

2,796

 

 

 

3,956

 

Operating lease liabilities, current portion

 

 

6,504

 

 

 

5,471

 

Total current liabilities

 

 

69,027

 

 

 

63,803

 

Convertible notes

 

 

280,840

 

 

 

279,909

 

Operating lease liabilities, net of current portion

 

 

14,372

 

 

 

16,940

 

Deferred income taxes

 

 

385

 

 

 

429

 

Other liabilities

 

 

1,382

 

 

 

1,011

 

Total liabilities

 

 

366,006

 

 

 

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 June 30, 2023 and December 31, 2022, respectively

 

 

 

 

 

 

Class A Common stock, $0.000001 par value. Authorized; 750,000,000 shares; 45,243,447 shares and 44,822,264 shares issued and outstanding as of June 30, 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 June 30, 2023 and December 31, 2022, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

635,267

 

 

 

623,081

 

Accumulated other comprehensive income

 

 

359

 

 

 

28

 

Accumulated deficit

 

 

(294,264

)

 

 

(249,366

)

Total stockholders’ equity

 

 

341,362

 

 

 

373,743

 

Noncontrolling interest

 

 

1,114

 

 

 

1,090

 

Total equity

 

 

342,476

 

 

 

374,833

 

Total liabilities and stockholders’ equity

 

$

708,482

 

 

$

736,925

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

1


 

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,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

111,008

 

 

$

95,615

 

 

$

216,334

 

 

$

179,286

 

 

Cost of revenue

 

 

67,452

 

 

 

57,919

 

 

 

133,409

 

 

 

108,651

 

 

Gross profit

 

 

43,556

 

 

 

37,696

 

 

 

82,925

 

 

 

70,635

 

 

Sales and marketing

 

 

22,666

 

 

 

18,145

 

 

 

45,105

 

 

 

37,430

 

 

Operations and support

 

 

14,220

 

 

 

12,180

 

 

 

26,828

 

 

 

24,538

 

 

Product development

 

 

8,922

 

 

 

7,796

 

 

 

17,047

 

 

 

15,085

 

 

General and administrative

 

 

25,582

 

 

 

15,057

 

 

 

41,539

 

 

 

28,017

 

 

Impairment of assets

 

 

219

 

 

 

119

 

 

 

246

 

 

 

119

 

 

Total operating expenses

 

 

71,609

 

 

 

53,297

 

 

 

130,765

 

 

 

105,189

 

 

Loss from operations

 

 

(28,053

)

 

 

(15,601

)

 

 

(47,840

)

 

 

(34,554

)

 

Other income (expenses)

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,193

)

 

 

(1,209

)

 

 

(2,391

)

 

 

(1,978

)

 

Interest and dividend income

 

 

2,959

 

 

 

474

 

 

 

5,654

 

 

 

570

 

 

Other expenses

 

 

(576

)

 

 

(482

)

 

 

(559

)

 

 

(1,444

)

 

Income from unconsolidated joint venture

 

 

237

 

 

 

269

 

 

 

303

 

 

 

303

 

 

Total other income (expenses)

 

 

1,427

 

 

 

(948

)

 

 

3,007

 

 

 

(2,549

)

 

Loss before income taxes

 

 

(26,626

)

 

 

(16,549

)

 

 

(44,833

)

 

 

(37,103

)

 

Benefit (provision) for income taxes

 

 

67

 

 

 

 

 

 

(69

)

 

 

559

 

 

Net loss

 

 

(26,559

)

 

 

(16,549

)

 

 

(44,902

)

 

 

(36,544

)

 

Net (loss) income attributable to noncontrolling interest

 

 

(5

)

 

 

4

 

 

 

(4

)

 

 

21

 

 

Net loss attributable to common stockholders

 

$

(26,554

)

 

$

(16,553

)

 

$

(44,898

)

 

$

(36,565

)

 

Net loss per share, basic and diluted, of Class A and Class B common stock

 

$

(0.55

)

 

$

(0.35

)

 

$

(0.94

)

 

$

(0.78

)

 

Weighted-average number of shares outstanding used to compute
   net loss per share, basic and diluted, of Class A and Class B common stock

 

 

47,865,990

 

 

 

47,074,246

 

 

 

47,783,235

 

 

 

46,932,702

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

$

224

 

 

$

14

 

 

$

359

 

 

$

(14

)

 

Total other comprehensive income (loss)

 

 

224

 

 

 

14

 

 

 

359

 

 

 

(14

)

 

Net loss

 

 

(26,559

)

 

 

(16,549

)

 

 

(44,902

)

 

 

(36,544

)

 

Comprehensive loss

 

 

(26,335

)

 

 

(16,535

)

 

 

(44,543

)

 

 

(36,558

)

 

Comprehensive income attributable to noncontrolling interest

 

 

19

 

 

 

37

 

 

 

24

 

 

 

71

 

 

Total comprehensive loss attributable to common stockholders

 

$

(26,354

)

 

$

(16,572

)

 

$

(44,567

)

 

$

(36,629

)

 

 

See accompanying notes to the unaudited condensed consolidated financial statements.

2


 

XOMETRY, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

Three months ended June 30, 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, March 31, 2023

 

45,098,314

 

 

$

 

 

 

2,676,154

 

 

$

 

 

$

628,808

 

 

$

159

 

 

$

(267,710

)

 

$

361,257

 

$

1,095

 

$

362,352

 

Exercise of common stock options

 

85,998

 

 

 

 

 

 

 

 

 

 

 

 

661

 

 

 

 

 

 

 

 

 

661

 

 

 

 

661

 

Vesting of restricted stock units

 

59,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

5,798

 

 

 

 

 

 

 

 

 

5,798

 

 

 

 

5,798

 

Comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

200

 

 

 

 

 

 

200

 

 

24

 

 

224

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,554

)

 

 

(26,554

)

 

(5

)

 

(26,559

)

Total comprehensive (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(26,354

)

 

19

 

 

(26,335

)

Balance, June 30, 2023

 

45,243,447

 

 

$

 

 

 

2,676,154

 

 

$

 

 

$

635,267

 

 

$

359

 

 

$

(294,264

)

 

$

341,362

 

$

1,114

 

$

342,476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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