8-K: Xometry Changes Accounting Firms, Dismisses KPMG and Appoints Deloitte & Touche

Xometry, Inc. has dismissed KPMG LLP as its independent auditor and appointed Deloitte & Touche LLP, effective March 3, 2025.

Summary

• Xometry, Inc. announced the dismissal of KPMG LLP as its independent registered public accounting firm on March 3, 2025.
• The decision was made by the Audit Committee of the Board of Directors following careful deliberation.
• KPMG was notified of the dismissal on March 4, 2025.
• The audit reports from KPMG for the fiscal years ended December 31, 2023 and 2024 did not contain any adverse opinions, disclaimers, or qualifications regarding uncertainty, audit scope, or accounting principles.
• There were no disagreements between Xometry and KPMG on accounting principles, practices, financial statement disclosure, or auditing scope or procedure during the fiscal years ended December 31, 2023 and 2024 and the subsequent interim period through March 4, 2025.
• A material weakness in internal control over financial reporting, initially disclosed in the 2022 Annual Report and related to revenue and costs of revenue following the acquisition of Thomas Publishing, Inc., was fully remediated as of December 31, 2023.
• Deloitte & Touche LLP was appointed as the new independent registered public accounting firm on March 3, 2025, subject to completion of standard client acceptance procedures.
• Xometry did not consult with Deloitte & Touche LLP on accounting principles or the type of audit opinion during the relevant periods.
• KPMG has provided a letter to the SEC agreeing with Xometry's statements in the Form 8-K, except for the statements in Item 4.01(b).

Sentiment

Score: 6

Explanation: The sentiment is neutral. While a change in auditors can sometimes be concerning, the document indicates a smooth transition with no apparent disagreements. The prior material weakness was also remediated.

Positives

• KPMG's audit reports for 2023 and 2024 did not contain any adverse opinions or qualifications.
• A previously disclosed material weakness in internal control was remediated as of December 31, 2023.
• The transition to a new auditor appears to be amicable, with KPMG agreeing with most of Xometry's statements.

Risks

• The change in auditors could potentially raise concerns among investors until Deloitte & Touche LLP has completed its initial audit and provided its opinion.
• Although remediated, the past material weakness in internal control could still be a point of scrutiny.

Future Outlook

The company will be working with Deloitte & Touche LLP for future audits.

Industry Context

Changes in auditors are not uncommon, but they can sometimes signal underlying issues or disagreements. In this case, the company states there were no disagreements with KPMG.

Comparison to Industry Standards

• Switching auditors is a normal business practice, but the reasons behind the change are always scrutinized.
• Companies like General Electric have also switched from KPMG to Deloitte in the past, citing similar reasons of audit committee decisions.
• The key is whether the transition is smooth and transparent, and whether the new auditor provides a fresh perspective without disrupting financial reporting.

Stakeholder Impact

• Shareholders may have questions about the change in auditors, but the company's explanation should alleviate concerns.
• Employees in the finance and accounting departments will need to work with the new auditor.

Next Steps

• Deloitte & Touche LLP will complete its standard client acceptance procedures.
• Deloitte & Touche LLP will begin auditing Xometry's financial statements.

Key Dates