Xometry reports strong 19% revenue growth in Q3 2024, despite some losses

Xometry, Inc. (NASDAQ: XMTR), a leading AI-powered marketplace that connects enterprise buyers with suppliers in manufacturing services, reported a notable 19% growth in revenue in Q3 2024 compared to the same period in 2023. Despite this growth, Xometry faced some losses, balancing a record-setting quarter with ongoing investments and strategic shifts.

In Q3 2024 total revenues at Xometry reached $141.7 million, compared to $119 million in the previous year. The company achieved significant milestones across its marketplace operations. Marketplace revenue reached $127 million, representing a strong 24% increase year-over-year. This growth was driven by increased engagement from buyers and suppliers on its AI-powered platform, underscoring the company’s appeal to a global audience. The number of active buyers on the platform rose by 24%, reaching 64,851 as of September 30, 2024, up from 52,382 a year earlier. This increase in active buyers reflects Xometry’s effectiveness in meeting diverse procurement needs in the manufacturing sector. Furthermore, high-spending accounts, defined as those spending more than $50,000 over the last 12 months, grew by 23%, with 1,506 accounts as of Q3 2024, a clear indicator of the platform’s appeal among high-value customers.

“Q3 2024 represented another record-setting quarter for our company. Powered by our AI-driven marketplace, we achieved record revenues, record gross profit and record marketplace gross margin while capturing additional market share globally,” Xometry’s CEO Randy Altschuler

CEO Randy Altschuler emphasized the significance of Q3 2024 as a record-setting quarter for Xometry, attributing its success to the AI-powered marketplace and the company’s expanding networks of global buyers and suppliers. He expressed confidence that the company’s strengths in data-driven AI, enterprise relationships, and network expansion would fuel future revenue and gross profit growth. CFO James Miln highlighted the importance of Xometry’s improved operating leverage and profitability indicators, crediting the marketplace margin improvements and operational efficiencies for the company’s positive financial trajectory.

While marketplace growth flourished, Xometry’s supplier services revenue fell by 10%, largely due to the company’s decision to exit non-core services. This decline aligns with Xometry’s strategic focus on its core marketplace operations, which continue to be the primary driver of its financial performance. The company’s profitability metrics also showed positive trends; adjusted EBITDA loss improved by 85% year-over-year. This was largely due to a 250 basis point increase in marketplace gross margin and various operational efficiencies, demonstrating Xometry’s focus on improving profitability even as it expands its service offerings.

Beyond financial performance, Xometry made significant operational advancements during Q3 2024. In the U.S. market, the company added new capabilities to its marketplace, introducing instant pricing and lead-time estimates for tube cutting and bending services. This feature aims to simplify the procurement process for buyers with specific manufacturing needs and reflects Xometry’s continuous efforts to make its marketplace more responsive and user-friendly. In Europe, Xometry enhanced its platform for high-volume manufacturing projects, providing enterprise customers with tools to better manage complex orders. This European expansion included adding the Hungarian language to the marketplace, bringing the total number of supported languages to 16 and enabling Xometry to reach a wider international audience.

Xometry’s supplier network also saw robust growth. Since early 2021, the number of active suppliers has expanded from 1,410 to over 4,200, with the company emphasizing suppliers with key quality certifications. This growing supplier base allows Xometry to meet the needs of larger customers across key industries, positioning it well for continued marketplace expansion. Additionally, the company bolstered its leadership by appointing Roy Azevedo, former president of two Raytheon Technologies business units, to its Board of Directors in October 2024. Azevedo’s background in engineering, global manufacturing, and supply chain management aligns with Xometry’s strategic focus areas and brings valuable expertise to the board.

From a financial perspective, Xometry’s third-quarter results reflect both growth and calculated losses. The company reported a net loss of $10.2 million, which is an improvement of $1.8 million from Q3 2023. This net loss included $7 million in stock-based compensation, $0.1 million in payroll tax expenses related to stock-based compensation, and $3.2 million in depreciation and amortization expenses. On a non-GAAP basis, however, Xometry reported a net income of $1.1 million, marking a significant shift from the non-GAAP net loss of $2.6 million recorded in Q3 2023.

Looking forward, Xometry aims to further expand its AI-powered platform, grow its supplier network, and deepen its relationships with enterprise buyers. The company’s focus on platform enhancements and international expansion suggests a strong trajectory for sustained growth in the competitive manufacturing services sector.