Xometry, a global AI-powered manufacturing marketplace, has announced the pricing of its $225 million aggregate principal amount of 0.75% Convertible Senior Notes due 2030. This private placement, anticipated to close on June 12, 2025, is expected to yield approximately $217.0 million in net proceeds. These funds are primarily intended for the repurchase of existing convertible notes, the funding of capped call transactions, and the repurchase of common stock, thereby strengthening the company’s financial position.
The Notes were offered to qualified institutional buyers pursuant to Rule 144A and are not registered under the Securities Act of 1933.
Notes Overview and Use of Proceeds
The initial purchasers of these notes have an option to buy up to an additional $25 million in notes. This option can be exercised within 13 days, starting from the notes’ issuance date.
These notes represent unsecured obligations for Xometry. They will earn interest at a rate of 0.75% annually, with payments made every six months on June 15 and December 15, beginning December 15, 2025. The notes are scheduled to mature on June 15, 2030, unless they are converted into stock, redeemed by Xometry, or repurchased before that date.
The offering is expected to generate approximately $217.0 million in net proceeds for Xometry, a sum that could rise to $241.3 million if the initial purchasers fully exercise their option for additional notes. Xometry plans to use the funds from the offering to cover about $15.7 million in costs for capped call transactions. The company will also use approximately $8.0 million to repurchase shares of Xometry’s Class A common stock concurrently with the offering. A larger portion, $216.7 million, is set aside to repurchase about $201.7 million of Xometry’s outstanding 1.00% Convertible Senior Notes due 2027.
Should the initial purchasers exercise their option for additional notes, Xometry anticipates deploying these incremental proceeds towards further capped call transactions, bolstering working capital, and addressing other general corporate needs. These corporate needs may encompass additional repurchases of the 2027 notes or strategic investments in complementary businesses, products, services, or technologies, though no definitive agreements for such endeavors are in place.
Conversion, Redemption, and Repurchase Provisions
Before March 15, 2030, noteholders can convert their notes into Xometry Class A common stock only if certain conditions are met. However, starting March 15, 2030, and up until two trading days before the maturity date, noteholders gain the flexibility to convert their notes at any time, regardless of these prior conditions, in increments of $1,000 principal amount. When a conversion occurs, Xometry has the discretion to provide noteholders with cash, shares of its Class A common stock, or a combination of both.
The notes’ initial conversion rate is set at 21.2495 shares of Xometry’s Class A common stock per $1,000 principal amount of Notes. This translates to an initial conversion price of $47.06 per share, representing a 30% premium over Xometry’s Class A common stock’s last reported sale price on the Nasdaq Global Select Market as of June 9, 2025. This rate is subject to customary anti-dilution adjustments.
Xometry cannot redeem these notes before June 20, 2028. After this date, and prior to 41 trading days before the notes mature, Xometry may choose to redeem all or a portion of the notes for cash, subject to certain limitations. This redemption option becomes active if Xometry’s Class A common stock’s closing price has been at least 130% of the conversion price for at least 20 trading days within any 30-day period. If Xometry exercises this right, the redemption price will be 100% of the principal amount of the notes being redeemed, plus any accrued and unpaid interest. If Xometry redeems only part of the outstanding notes, at least $100 million in aggregate principal amount of notes must remain outstanding.
Should Xometry undergo a “fundamental change,” noteholders may, under specific conditions, require Xometry to repurchase all or a portion of their notes for cash. The repurchase price would be 100% of the principal amount of the notes, plus any accrued and unpaid interest. Additionally, if certain corporate events occur before the notes’ maturity, or if Xometry issues a redemption notice, the conversion rate of the notes may be increased for noteholders who choose to convert their notes in connection with such events or redemption.
Market Dynamics and Hedging Strategies
To manage potential dilution from the convertible notes, Xometry entered into capped call transactions with certain financial institutions. These agreements are designed to reduce the dilution of Xometry’s Class A common stock if the notes convert into shares, and to help offset any cash payments Xometry might need to make beyond the notes’ principal amount. The cap price for these transactions starts at $63.35, which is a 75.0% premium over Xometry’s Class A common stock price on June 9, 2025.
These financial institutions typically adjust their hedging positions related to the capped call transactions by trading Xometry’s Class A common stock or related derivatives. Such activities, including concurrent transactions where Xometry repurchased approximately $8.0 million of its Class A common stock and $201.7 million of its 2027 convertible notes, can influence the market price of Xometry’s Class A common stock and the new notes. This market activity could impact the notes’ effective conversion price and potentially affect noteholders’ ability to convert or the value of the consideration they receive. Xometry cannot predict the full extent of this market impact.
The company stressed that notes were offered only to qualified institutional buyers via a private offering memorandum. They are not registered under the Securities Act or any state securities laws and cannot be sold publicly without an applicable exemption.
Investment in 3D Printing
Xometry’s latest financing efforts emerge within a dynamic landscape where recent capital infusions, particularly through private placements, indicate a clear market preference for financially disciplined, application-driven companies that prioritize measurable impact over purely speculative growth.
This is exemplified by Stratasys, a 3D printer OEM, which in April secured a $120 million strategic investment from Israeli private equity firm Fortissimo Capital, following CFIUS approval. This transaction involved the direct purchase of new ordinary shares, elevating Fortissimo to Stratasys’s largest shareholder with approximately a 15.5% stake.
Similarly, Florida-based additive manufacturing firm Sintavia recently secured a $10 million subordinated debt investment from the Stifel North Atlantic AM-Forward Fund, provided through the Small Business Investment Company (SBIC) program, aimed at enhancing its aerospace-focused 3D printing operations and supporting its working capital needs.
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Featured image shows Xometry’s global digital marketplace. Photo via Xometry.
