10-Q: Xometry Q3 2025: Revenue Surges, Adjusted EBITDA Turns Positive

Xometry, Inc. reported strong revenue growth and a significant improvement in Adjusted EBITDA for the third quarter and first nine months of 2025, driven by increased marketplace activity.

Summary

• Total revenue increased by 28% to $180.7 million for the three months ended September 30, 2025, compared to $141.7 million in the prior year.
• Marketplace revenue grew by 31% to $166.6 million for the quarter, primarily due to increased buyer activity, especially from enterprise customers.
• Gross profit rose by 29% to $72.0 million for the quarter, with total gross margin improving to 39.9% from 39.4% in the prior year.
• Adjusted EBITDA for the quarter was $6.1 million, a significant improvement from a loss of $(0.6) million in the same period last year, with Adjusted EBITDA Margin reaching 3.4% of revenue.
• Non-GAAP net income for the quarter was $6.2 million, up from $1.1 million in the prior year.
• Active Buyers increased by 21% to 78,282 as of September 30, 2025, compared to 64,851 a year ago.
• 98% of revenue for the quarter was generated from existing accounts, highlighting strong customer retention and engagement.
• Accounts with Last Twelve-Month (LTM) Spend of at least $50,000 grew by 14% to 1,724 as of September 30, 2025.
• Net loss for the quarter increased to $(11.6) million from $(10.2) million in the prior year, and for the nine months, it increased to $(53.1) million from $(40.5) million, largely due to a $16.4 million loss on debt extinguishment.
• Issued $250.0 million in 0.75% convertible senior notes due 2030, with net proceeds of $241.4 million.
• Repurchased approximately $201.7 million of 2027 convertible notes for $216.7 million, resulting in a $16.4 million loss on debt extinguishment.
• Initiated a workforce reduction of approximately 5% in 2025, incurring $1.5 million in employee termination costs for the nine months ended September 30, 2025.

Sentiment

Score: 8

Explanation: The company demonstrates strong operational performance with significant revenue growth, positive Adjusted EBITDA and Non-GAAP net income, and robust customer metrics. While GAAP net loss increased due to a one-time debt extinguishment, the underlying business trends are highly positive. Strategic product launches and a successful capital raise further bolster confidence, despite macroeconomic and trade policy risks.

Positives

• Total revenue increased by 28% for the quarter and 24% for the nine months, demonstrating strong top-line growth.
• Marketplace revenue, the core business, showed robust growth of 31% for the quarter and 28% for the nine months, driven by increased buyer activity and enterprise customers.
• Gross profit margin improved for the quarter (39.9% vs 39.4%) and marketplace gross margin significantly improved (35.7% vs 33.6%), attributed to the AI-driven platform and expanding supplier network optimizing pricing.
• Adjusted EBITDA turned positive for both the three and nine months ended September 30, 2025, indicating improved operating efficiencies and leverage.
• Non-GAAP net income also turned positive for both periods, reflecting better underlying operational performance.
• Active Buyers increased by 21% year-over-year, showing successful customer acquisition and engagement.
• 98% of quarterly revenue came from existing accounts, indicating high customer stickiness and potential for recurring business.
• The number of accounts with LTM spend of at least $50,000 grew by 14%, suggesting successful expansion of relationships with larger customers.
• Successful issuance of new convertible notes and partial repurchase of older notes strengthens the balance sheet and manages debt maturity.

Negatives

• Net loss increased to $(11.6) million for the quarter and $(53.1) million for the nine months, primarily due to a $16.4 million loss on debt extinguishment.
• Net loss per share increased to $(0.23) for the quarter and $(1.05) for the nine months.
• Supplier services revenue decreased by 4% for the quarter and 5% for the nine months, mainly due to reductions in Thomas advertising and marketing services.
• Interest and dividend income decreased by 23% for the quarter and 20% for the nine months, due to lower investment in money market accounts as funds are used for operations.
• Other expenses increased significantly by $1.2 million for the quarter and $18.8 million for the nine months, largely driven by the loss on debt extinguishment and higher non-income based taxes.

Risks

• Macroeconomic factors such as inflation, interest rates, recessionary factors, foreign exchange rate volatility, tariffs, and geopolitical uncertainties (e.g., U.S. government shutdown, Russia-Ukraine war, Middle East conflict) may negatively affect business growth and results of operations.
• Changes in U.S. and international trade policies, including tariffs and restrictive trade measures, could increase raw material costs, impact supplier viability, necessitate price increases, and decrease customer demand.
• Trade disputes and political tensions may exacerbate unfavorable macroeconomic conditions, leading to financial market instability and economic downturns.
• Retaliatory trade policies or anti-U.S. sentiment in certain regions could lead to increased preference for local competitors, heightened regulatory scrutiny, and difficulties in attracting non-U.S. customers and suppliers.
• The complexity of tariffs may increase the risk of civil or criminal enforcement actions related to trade regulations.
• Inherent limitations on the effectiveness of disclosure controls and internal control over financial reporting mean that not all errors or fraud may be prevented or detected.

Future Outlook

The company expects to continue investing in its sales and marketing capabilities to increase brand awareness and penetrate existing accounts. Product development expenses are also expected to increase as the company continues to enhance its platforms. Management believes existing cash and marketable securities will be sufficient to support working capital and capital expenditure requirements for at least the next twelve months. The company is assessing the impact of the recently enacted One Big Beautiful Bill Act (OBBBA) but does not anticipate a material impact on its financial statements based on preliminary assessment. The company also notes the potential for delays or disruptions from a U.S. government shutdown, though no contracts have been impacted to date.

Management Comments

• Our mission is to accelerate innovation by providing real-time, equitable access to global manufacturing capacity and demand.
• Our vision is to drive efficiency, sustainability and innovation for industries worldwide by lowering the barriers to entry to the manufacturing ecosystem.
• Our business benefits from a virtuous network effect, because adding buyers to our platform generates greater demand on our marketplace which in turn attracts more suppliers to the platform, allowing us to rapidly scale and increase the number of manufacturing processes offered on our platform.
• We expect to continue to add suppliers to our platform that have new and innovative manufacturing processes.
• The increase in Adjusted EBITDA was driven primarily by increased operating efficiencies as we continue to grow our revenue and margins faster than our expenses.
• We believe our existing cash and cash equivalents and marketable securities will be sufficient to support our working capital and capital expenditure requirements for at least the next twelve months.

Industry Context

The company operates within the rapidly digitizing manufacturing industry, leveraging AI-powered online marketplaces to connect buyers with a global network of manufacturing facilities. This aligns with broader industry trends towards more resilient, efficient, and on-demand supply chains. The expansion of manufacturing categories and services, along with the launch of collaboration software like Teamspace in Europe and the Workcenter mobile app, reflects the ongoing digital transformation and the increasing adoption of cloud-based solutions in manufacturing.

Comparison to Industry Standards

• NA

Corporate Governance

Legal Proceedings

• No material legal proceedings that are reasonably expected to have a material adverse effect on consolidated results of operations, financial condition, or cash flows.

Stakeholder Impact

• **Shareholders**: Potential for long-term value creation due to strong revenue growth and improved operational efficiency (Adjusted EBITDA, Non-GAAP Net Income). Potential dilution from convertible notes is mitigated by capped call transactions. Treasury stock repurchase indicates capital management.
• **Employees**: Workforce reduction of approximately 5% due to restructuring, impacting some employees. Continued investment in product development and operations suggests ongoing opportunities for others.
• **Customers/Buyers**: Enhanced platform features (Teamspace Europe, Workcenter mobile app), expanding manufacturing categories, and a growing supplier network improve sourcing efficiency and supply chain resilience.
• **Suppliers**: Access to an extensive, diverse base of buyers, new dynamic ad serving technology (Thomasnet), financial service products, and the Workcenter app to optimize productivity and facilitate faster payments.
• **Creditors**: Issuance of new convertible notes and partial repurchase of existing notes demonstrates active debt management and access to capital markets.

Next Steps

• Continue to invest in sales and marketing to increase brand awareness and penetrate existing accounts.
• Continue to invest in product development to enhance platform features and expand offerings.
• Add new suppliers to the platform with innovative manufacturing processes to meet buyer needs and maintain competitiveness.
• Monitor and assess the full impact of the One Big Beautiful Bill Act (OBBBA) on consolidated financial statements.
• Manage potential impacts from the ongoing U.S. government shutdown on contracts and cash flows.

Key Dates

Recommendation

The filing indicates strong underlying business momentum with significant revenue growth in the core marketplace segment and a positive shift in key profitability metrics like Adjusted EBITDA and Non-GAAP net income. The increase in active buyers and high revenue retention from existing accounts demonstrate a robust and sticky business model. While the GAAP net loss increased, it was largely driven by a non-recurring debt extinguishment loss, which masks the operational improvements. Strategic product launches and a healthy liquidity position further support future growth. Despite macroeconomic and trade risks, the company's performance suggests a strong growth trajectory and improving efficiency, making it an attractive investment.

Keywords

Xometry, Manufacturing Marketplace, AI-powered manufacturing, On-demand manufacturing, Custom parts, 3D printing, CNC manufacturing, Sheet metal, Industrial sourcing, Thomasnet, Workcenter, Teamspace, Convertible notes, SEC filing, Q3 2025 results, Financial technology, Supply chain digitization