Xometry, Inc. — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual filing; the supplied text does not provide a complete standalone Q4 income statement or cash flow statement. Xometry operates an online marketplace connecting buyers with manufacturing suppliers, alongside supplier services that include marketing, software, supplies, and financial products.
Key financial results
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Revenue | $381.1 million | $218.3 million |
| Gross profit / margin | $147.6 million / 38.7% | $57.1 million / 26.2% |
| Operating loss | $(74.1) million | $(58.7) million |
| Net loss | $(76.0) million | $(61.4) million |
| Net loss per share, diluted | $(1.61) | $(2.33) |
| Adjusted EBITDA (non-GAAP) | $(41.8) million | $(39.8) million |
| Cash used in operating activities | $(62.6) million | $(68.6) million |
- Revenue increased 75% year over year. FY 2022 marketplace revenue was $303.1 million and supplier services revenue was $77.9 million, approximately 20% of total revenue.
- Marketplace gross margin was 28.6%; supplier services gross margin was 78.0%. Management attributed marketplace margin improvement in part to more efficient AI-driven pricing and increased supplier competition; overall margin also benefited from the larger supplier-services contribution.
- Adjusted EBITDA margin improved to (11.0)% from (18.2)%, although the adjusted EBITDA loss increased in dollars. Non-GAAP net loss was $40.1 million, versus $40.4 million in 2021; this measure excludes specified non-cash and other items.
Liquidity, debt, and cash flow
- At December 31, 2022, cash and cash equivalents were $65.7 million and marketable securities were $253.8 million, totaling $319.4 million. Management said these resources should cover anticipated needs for at least the next twelve months, while noting actual cash use may differ from assumptions.
- Operating cash use was $62.6 million. Investing cash use was $238.6 million, primarily reflecting purchases of marketable securities and $13.7 million of property and equipment purchases. Financing provided $281.0 million, principally from convertible-note proceeds.
- The company issued $287.5 million principal amount of 1.00% convertible senior notes due 2027, receiving $278.2 million net proceeds after issuance costs. The notes’ carrying value was $279.9 million at year-end; the initial conversion price was approximately $56.11 per share. The notes are unsecured and may be settled in cash, shares, or a combination at the company’s election.
- Current assets were $390.1 million and current liabilities were $63.8 million. Accumulated deficit was $249.4 million. The filing reports no cash dividends paid and no expectation of dividends in the foreseeable future.
Changes, outlook, and material items
- Revenue grew from $141.4 million in 2020 and $218.3 million in 2021 to $381.1 million in 2022. Growth reflected increased marketplace activity, existing-account spending, and Thomas acquisition-related supplier services revenue. U.S. revenue was $347.8 million; international revenue was $33.2 million.
- Active buyers increased 45% to 40,664, and active suppliers increased 22% to 2,447. For Q4 2022, 96% of revenue came from existing accounts; accounts with at least $50,000 in trailing-twelve-month marketplace spend rose 47% year over year to 1,027.
- In December 2022, the company announced a workforce reduction of approximately 6%, recording $1.5 million of termination costs. Management expects approximately $8.0 million of annualized operating expense savings; most termination costs were expected to be paid in Q1 2023.
- Management said supplier services revenue is expected to grow over time and may benefit gross margin. The filing does not provide a specific FY 2023 revenue, earnings, or cash-flow forecast. Management expects continued investment in technology, sales and marketing, supplier services, and international expansion, while acknowledging uncertain returns and macroeconomic risks.
- On January 2, 2023, Xometry acquired Turkey-based Tridi for approximately $3.8 million, plus contingent consideration of up to $1.25 million in shares tied to revenue targets.
- The company recorded $0.8 million of asset impairments, primarily related to abandoned software projects and assets to be disposed of. It reported no material litigation expected to adversely affect its financial position, results, or cash flows.
Principal risks and controls
- Xometry has incurred losses since inception and says it expects future losses; profitability is not assured. The business also faces demand, competition, pricing and supplier-quality risks, as well as inflation, recession, geopolitical, cybersecurity, privacy, international operations, and third-party fulfillment risks.
- A material weakness existed in internal control over financial reporting as of December 31, 2022, related to risk assessment and process-level controls, primarily for revenue and cost of revenue, following the Thomas integration. Management reported remediation steps but said the weakness was not yet fully remediated. KPMG issued an adverse opinion on internal control effectiveness; its opinion on the financial statements was unqualified, and no misstatements were identified due to the weakness.
- Class B shares carry 20 votes per share versus one vote for Class A; the co-founders collectively held approximately 54.4% of voting power at year-end. This concentrates voting control.
Investor verification priorities
- Track marketplace growth and gross margin separately from acquisition-driven supplier services revenue and its higher margin.
- Monitor operating cash burn, receivables, and the use and maturity or potential dilution associated with the 2027 convertible notes.
- Confirm the expected $8.0 million restructuring savings are realized and assess any effects on execution, service quality, and growth.
- Review whether management’s remediation of the material weakness is sustained and whether auditor opinions on controls change.
- Assess Thomas integration, Tridi’s performance and contingent consideration, and any future acquisition-related costs or impairments.