Xometry hails strong start to 2022 with Q1 revenue up 90% year over year

Global manufacturing marketplace Xometry (XMTR) has revealed a strong start to the year in its Q1 2022 financials, driven by the launch of its Xometry Everywhere AI-driven quoting engine and expansion into new geographies. 

Over the course of Q1 2022, the firm generated $83.7 million in revenue, an impressive 90 percent more than the $44 million it brought in during Q1 2021, and a 24.7 percent increase on the $67.1 million reported in Q4 2021.

According to Xometry’s CEO Randy Altschuler, the revenue increase was primarily due to robust marketplace growth and expansion of the firm’s supplier services with the acquisition of digital marketing leader Thomas. On the firm’s earnings call, he also attributed the firm’s recent growth to strong demand from the consumer products, automotive, electronics, and semiconductor markets. 

“In Q1 2022, Xometry delivered strong growth across the board, expanded our marketplace to new geographies and extended the reach of our AI-driven quoting engine through the launch of Xometry Everywhere,” said Altschuler. “We also improved our supplier services including new products from Thomas. Although we are still in the early innings of the secular digitization of the manufacturing industry, Xometry has become the digital marketplace connecting buyers with suppliers.

“With our supplier network expanding domestically and abroad, we are playing an instrumental role in helping create locally resilient supply chains irrespective of macro events.”

A message from NASDAQ welcoming Xometry to its stock exchange.
A message from NASDAQ welcoming Xometry to its stock exchange. Photo via Xometry.

Xometry’s Q1 2022 financials

When reporting its financials, Xometry tends to measure its success via its number of active buyers and sellers, in addition to various profitability metrics. This time, though, the firm has broken down the revenue for its Marketplace and Supplier Services offerings.

Xometry’s Marketplace revenue consists of the firm’s historical business and excludes its supplies and financial services. Marketplace revenue for Q1 2022 was $64.4 million, a rise of more than 50 percent year-over-year. Measuring the firm’s success on its active buyers, Xometry had a successful Q1 2022, with the number of Marketplace active buyers rising 44 percent from the 21,345 it reported in Q1 2021 to 30,683. 

According to Altschuler, the firm’s Marketplace growth was driven by continued strong growth in active buyers and rapid adoption of the platform by larger accounts in North America and Europe. The number of accounts spending more than $50,000 within the last 12 months increased by 92 percent year-over-year to 790, with 89 accounts added during Q1 2022. 

“In Q1, we received larger production orders from several customers across industries and manufacturing processes, including robotic assemblies in agriculture and injection molding for an electric vehicle company,” Altschuler explained. “Given the success of our land and expand strategy, we continue to invest in our enterprise sales engine.”

Turning to the firm’s Supplier Services segment, the vast majority of which is the Thomas Marketing Services and advertising business plus historical Xometry supplies and financial services, the firm generated $19.3 million during the quarter.

The company also saw some success on the cost front during Q1 2022, reporting a gross profit increase of 235% year-over-year to $32.9 million. Xometry reported a net loss of $20 million for Q1 2022, an increase of $9.5 million year-over-year, while EBITDA increased by $3.9 million to -$12.7 million for the quarter. 

On the earnings call, Xometry CFO James Rallo said: “As our marketplace continues to scale and as the number of transactions grows, our machine learning becomes smarter, driving better matches for buyers and sellers and increasing our gross margin over time.”

Xometry financials ($)Q1 2021Q1 2022Difference (%)
Gross Profit9.8m32.9m235
Net Loss-10.5m-20m-95

Xometry’s upwards growth trajectory

Xometry made a number of business moves over the course of Q1 2022 that contributed to the firm’s rapid revenue growth during the period. In March, the firm introduced its Xometry Everywhere software which extends the reach of its AI-driven instant quoting pricing engine to various third-party sites. Xometry Everywhere is also available for integration into the procurement processes of Fortune 1000 companies. 

On the earnings call, Altschuler said the firm plans to utilize the Xometry Everywhere software to integrate the firm’s pricing engine into the Thomasnet platform in Q2, which will provide Thomas’ 1.4 million registered users with access to Xometry’s marketplace. 

“Additionally, we will expand the menu of our marketplace, extending our quoting capabilities into new categories based on the data and suppliers from the Thomas network,” he said. “Buyers will not only be able to choose from expanded categories and processes, but will be able to more easily find local suppliers with expanded sets of certifications.”

The company also obtained ISO 13485 certification for the manufacture of medical devices, allowing it to expand the breadth of medical device offerings on its marketplace. 

Another key contributor to the firm’s growth during Q1 2022 was the expansion of its European operations, including an enhanced website for its European customers that makes it easier for buyers to compare technologies, materials, and finishes in real-time. Additionally, Xometry added a new Spanish site and launched a local manufacturing network in China, from which it began taking orders in April.

3D printed plastic parts from Xometry. Photo via Xometry.

Forecasting further growth

Xometry’s strong performance during Q1 2022 has given the firm the confidence to raise the bottom end of its revenue guidance for FY 2022 to between $392-400 million, which would represent a year-on-year rise of between 80-83 percent. 

For Q2 2022, the firm is projecting revenue in the range of $91.5-93.5 million which would constitute a year-on-year growth of between 81-85 percent. 

In his closing remarks on the call, Rallo explained that two factors would influence the revenue for Q2 2022, namely the conversion of Thomas users to buyers on the firm’s marketplace, and a notable shift to production orders from its largest customers.

“First, we expect the majority of revenue synergies from the Thomas acquisition to be driven by the conversion of Thomas users to buyers on the Xometry marketplace,” he said. “Based on the timing of our product release and road map, we expect the revenue synergies to commence later in Q2 and build through the balance of 2022. Second, we are seeing a notable shift to production orders from many of our biggest customers. This shift can be seen in the strong growth in accounts with LTM spend of at least $50,000. 

“As a result, revenue from these accounts will ramp up significantly as the year progresses.”

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Featured image shows a message from NASDAQ welcoming Xometry to its stock exchange. Photo via Xometry.