Xometry, Inc. (XMTR) - Q3 2025 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025. Xometry operates a global AI-powered online manufacturing marketplace and the Thomasnet industrial sourcing platform. The company connects buyers with a network of over 4,375 suppliers across four continents to source custom-manufactured parts and assemblies. The company is organized into two reportable segments: U.S. and International.
Key Financial Metrics
| Metric | Q3 2025 | Q3 2024 | YTD 9M 2025 | YTD 9M 2024 |
|---|---|---|---|---|
| Revenue | $180.7M | $141.7M | $494.2M | $397.0M |
| Gross Profit | $72.0M | $55.8M | $193.5M | $156.6M |
| Gross Margin | 39.9% | 39.4% | 39.2% | 39.4% |
| Net Loss | $(11.6M) | $(10.2M) | $(53.1M) | $(40.5M) |
| Adjusted EBITDA | $6.1M | $(0.6M) | $10.1M | $(10.7M) |
| Cash & Marketable Securities | $224.5M (as of Sept 30, 2025) | |||
| Convertible Notes (Carrying Value) | $326.9M |
Material Changes vs. Prior Period
- Revenue Growth: Q3 2025 revenue increased 28% year-over-year (YoY), driven primarily by a 31% increase in Marketplace revenue ($166.6M). Supplier Services revenue declined 4% to $14.1M.
- Profitability: The company reported a Net Loss of $11.6M for Q3 2025, compared to $10.2M in Q3 2024. However, Adjusted EBITDA turned positive at $6.1M, a significant improvement from a loss of $0.6M in the prior year quarter.
- Segment Performance: The U.S. segment generated $10.3M in Adjusted EBITDA for Q3 2025, up from $1.4M in Q3 2024. The International segment remained unprofitable with Adjusted EBITDA of $(4.2M).
- Debt Restructuring: In June 2025, the company issued $250.0M in 0.75% Convertible Senior Notes due 2030. Proceeds were used to repurchase approximately $201.7M of the 2027 Notes, resulting in a $16.4M loss on debt extinguishment recorded in the nine months ended September 30, 2025.
- Operating Expenses: Total operating expenses increased 23% YoY in Q3 to $83.1M, largely due to higher stock-based compensation and consulting costs, though expenses as a percentage of revenue decreased.
Guidance, Outlook, and Risks
- Operational Metrics: Active Buyers grew 21% YoY to 78,282. Accounts with Last Twelve-Month (LTM) spend of at least $50,000 increased 14% to 1,724. 98% of Q3 revenue came from existing accounts.
- Restructuring: The company initiated a workforce reduction of approximately 5% in 2025 to improve efficiency, incurring $1.5M in termination costs for the nine months ended September 30, 2025.
- Government Shutdown Risk: The U.S. government shutdown began October 1, 2025. While no contracts were impacted as of the filing date, an extended shutdown could delay funding for U.S. government contracts and disrupt cash flows.
- Trade Policy: The company faces risks from new tariffs and trade restrictions, which could increase raw material costs and reduce demand from customers sensitive to trade policies.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBBA) was enacted in July 2025. Management does not currently expect a material impact on financial statements.
Investor Verification Checklist
- Debt Extinguishment Impact: Verify the specific impact of the $16.4M loss on debt extinguishment on the YTD Net Loss and confirm the remaining principal balance of the 2027 Notes ($85.8M).
- Supplier Services Decline: Investigate the reasons behind the 4% decline in Supplier Services revenue despite overall marketplace growth.
- International Segment Losses: Review the trajectory of the International segment, which continues to report negative Adjusted EBITDA ($10.1M loss YTD 2025).
- Government Exposure: Assess the percentage of revenue derived from U.S. government contracts to gauge exposure to the ongoing government shutdown.
- Capital Allocation: Confirm the utilization of the $250M 2030 Notes proceeds, specifically the $17.5M used for capped call transactions and $8.1M for treasury stock repurchases.