Xometry Inc. wrapped up its best financial quarter on Sept. 30 since launching in 2014 as an online marketplace. On the marketplace, thousands of companies buy and sell manufacturing services like 3D printing and injection molding.
The company said third-quarter revenue grew 15% year over year to over $118 million. Gross profit also reached a new quarterly peak, and the number of active buyers increased by a record 43% to over 52,000 by the end of Q3.
“We had record financial results including our highest revenue and gross profit in Xometry’s history,” CEO Randy Altschuler said on a Q3 earnings call this week, according to a transcript from Seeking Alpha.
Xometry cited several developments it recently launched to continue producing positive results. Among them are new efforts to advance with AI-based strategies that improve how it enables buyers and sellers of manufacturing services to process quotes on manufacturing contracts.
Working with Google’s Vertex AI
These AI efforts include a new partnership with Google Cloud to use its Vertex AI platform for Xometry’s AI-powered Instant Quoting Engine.
“Leveraging Vertex AI, Xometry expects to accelerate the deployment of new auto-quoting models,” Altschuler said. He added that Xometry can apply AI to hundreds of unique product categories, including on its Thomasnet.com B2B marketplace, to “further grow our customer-share wallet in the giant custom manufacturing market.”
“The Vertex AI platform will enable us to get to market faster with new offerings in entirely new categories, allowing us to become more indispensable to our customers and to our suppliers globally,” he said.
James Rallo, chief financial officer, said Xometry’s marketplace revenue included “78% year-over-year growth in our International segment, primarily in our European markets.”
“In both the U.S. and internationally, growth was across many customer verticals, including general manufacturing, industrial equipment, aerospace and defense,” Altschuler said.
Collaborating with Alibaba’s 1688.com
He added that, in early Q4, Xometry Asia collaborated with Alibaba Group. Together, they launched Xometry’s instant quoting mobile app technology on Alibaba’s 1688.com B2B wholesale marketplace. Altschuler said he expects that to generate increased business in China.
Along with Xometry.com, the company provides “localized marketplaces in 14 different languages, with networks of suppliers across Europe and Asia as well as North America,” Altschuler said.
Xometry also reported several other developments in Q3:
- Launched Xometry Teamspace in October after a successful beta test with several large customers in Q3. Teamspace is a cloud-based collaboration tool that lets employees at the same company manage projects within Xometry’s AI-powered platform. Teamspace helps streamline order management, increase efficiency and drive data-based decision-making.
- Added “Build America, Buy America” as a recognized certification on the Thomasnet.com manufacturing sourcing platform of more than 500,000 suppliers throughout North America.
- Added AS9100 Certified to the Instant Quote Engine for aerospace and defense buyers. AS9100 is a certification defining the design and manufacturing standard for aerospace and defense products, including parts, components, and assemblies.
Xometry said it narrowed its Q3 net loss by 20.2% year over year to $12.01 million.
A ‘path to profitability’
In addition, Altschuler noted that the company improved its adjusted EBITDA loss by 51% from the prior quarter to $4.22 million in Q3. He added that increased revenue and improved operating efficiencies were putting Xometry on a “path to profitability.”
“We could go from a $11.8 million adjusted EBITDA loss in Q1, to potentially break even in Q4,” he said. “This positions Xometry for robust growth in full-year adjusted EBITDA profitability in 2024.” EBITDA, which stands for earnings before interest, taxes, depreciation and amortization, is considered a critical measure of a company’s overall financial performance.
For the third quarter ended Sept. 30, Xometry reported:
- Q3 revenue increased 15% year over year to $118.93 million, as gross profit rose 13% to $46.25 million
- Q3 net loss narrowed 20.2% to $12.01 million from $15.04 million.
- Q3 active buyers increased 43% year-over-year to 52,467 with a record net addition of 4,173 active buyers.
For the nine months ended Sept. 30:
- Xometry revenue increased 18.5% to $335.26 million, as gross profit rose 15.8% to $129.17 million.
- Net loss widened 10.3% to $56.91 million from $51.60 million.
Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. [email protected].
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