Global manufacturing marketplace Xometry (XMTR) has revealed that its revenue grew by 35% during Q3 2021 in line with a drastic surge in its number of active users.
In the course of Q3 2021, the firm generated $57 million of income, $15 million more than the $42 million it brought in during the mid-pandemic third quarter of 2020. According to Xometry, this revenue recovery can largely be attributed to a rapid growth in its number of active buyers, which rose by 61% from 16,266 to 26,187 over the same period.
The firm’s financials come at a time of rising competition within 3D printing’s service bureau sector, with the likes of Shapeways, Protolabs, Fast Radius and more all seeking to gain a greater share of the same client base. Despite Xometry’s impressive user growth figures during Q3, investors’ response to them has been lukewarm at best, as its shares have remained flat since the results came out.
“Xometry’s third quarter 2021 performance was outstanding,” said Randy Altschuler, Xometry’s CEO, “[but] we remain in the early innings of the secular digitization of the manufacturing industry, one of the largest industries in the world. We continue to grow our great team to build out the leading global on-demand manufacturing marketplace.”
Xometry’s Q3 2021 financials
Unlike many of its competitors, Xometry doesn’t report its financials by technology, division, or even region. Instead, the company’s results focus on its user numbers and profitability metrics, and in the case of the former, its figures reveal a surge in orders from its largest customers. In fact, between Q3 2020 and 2021, the number of Xometry users that spent $50,000 or more rose from 361 to 603.
Accounting for where these new users came from, Altschuler says that Xometry has seen “accelerated demand across many verticals,” but particularly from clients in the consumer, medical and defense sectors. On the firm’s earnings call, Altschuler also identified the “flexibility and instant access” of its services as being key to driving their adoption, especially given the world’s ongoing supply chain instability.
Compared to its bottom-line Q3 2020 performance, Xometry’s gross profit and net loss rose drastically in Q3 2021 as well, jumping by 42% and 138% respectively. However, given that the business only went public on the NASDAQ Global Select Market in June, it hasn’t issued any figures from Q3 2019, thus it’s not possible to balance its profitability or revenue against those reported pre-pandemic.
What’s more, the company may have generated a reported $302 million from its IPO, but Fast Radius is also set to go public via a $1.4 billion merger, raising $445 million in the process. Likewise, Shapeways is expected to gain $195 million through a similar deal later this year, so Xometry now faces fierce competition, as it seeks to continue expanding on its customer base and growing its revenue.
|Xometry Financials ($)||Q3 2020||Q3 2021||Difference (%)||YTD 2020||YTD 2021||Difference (%)|
|EPS, basic and diluted||-1.99||-0.33||-83||-3.98||-1.87||-53|
Investing in organic growth
Since completing its IPO, Xometry has invested heavily in improving its existing supplier network and service offering, as a means of driving greater demand from its long-term user base. During the third quarter, the firm established a reseller network in Mexico, allowing it to better tap into the manufacturing market there, while launching an upgraded version of its app with improved Fusion 360 support.
Enhancements such as these, have enabled Xometry to drive growth from within existing accounts, and moving forwards, it sees further opportunities to “become an enterprise solution embedded in [users’] product design and procurement workflows.”
Using some of the funding gained from its IPO, the company has also acquired Big Blue Saw and FactoryFour. While buying up the former will allow Xometry to enhance its water jet and laser cutting capabilities, incorporating the technologies of the latter in 2022, is expected to provide its users with improved part tracking and quality control over their orders.
Moving forwards, the firm has identified a “massive opportunity for international growth” as well, given that more than 90% of its revenue is currently generated within the U.S. In order to harness this potential growth, Altschuler says that Xometry is expanding in the UK, France, and Italy, and having recently hired Vivian Zhang as its Asian Pacific GM, it intends to “launch in the region in early 2022.”
Projecting further growth in Q4
Looking ahead to Q4 2021, Xometry has set its guidance at $60-$62 million, which if realized, would constitute 58-63% growth compared to Q4 2020. However, given that 10% of the firm’s revenue came from one COVID-related mask customer last year, its outlook would mean a 75-80% rise in income, if this order were to be excluded from its figures.
In terms of EBITDA, Xometry has set its guidance at $11-12 million, as it continues to invest in its marketing expansion, and Altschuler concluded his call by saying that its acquisitions won’t make an impact until 2022, but he does expect its existing services to continue attracting clients, as they offer supply chain-reinforcing on-demand manufacturing capabilities.
“The wonderful thing about the Xometry marketplace is that it provides our buyers with convenient and instant access to a large broad set of seller capabilities,” added Altschuler. “Buyers are looking for better options and increased flexibility to help alleviate their supply chain challenges, and there’s frankly no better place for a buyer to go than the Xometry marketplace.”
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Featured image shows a projected message from NASDAQ welcoming Xometry onto its stock exchange. Image via Xometry.