Xometry, Inc. (XMTR)

Xometry operates in the custom manufacturing industry, which is a massive, highly fragmented, and regionalized industry in need of solutions to drive efficiency. The company estimates the addressable market for its marketplace is approximately $275 billion based on the estimated size of the market for key manufacturing processes offered on its platform, including computer numerical control machining, injection molding, 3D printing, sheet forming and cutting, die casting, urethane casting, tube cutting and tube bending. The Thomasnet industrial sourcing platform, which offers over 80,000 industrial categories, further expands the total addressable market. The industry is undergoing increased digitization via global thematic shifts, including changing demand for production, new manufacturing technologies, and shifting value chains. Sourcing manufacturing opportunities is a complex, costly and time-consuming process, and there is a significant opportunity to help companies improve supply chain diversification, access just-in-time production, and build supply chain resilience. Artificial intelligence is becoming foundational to manufacturing's digital transformation, and AI-driven platforms are enabling faster decision-making, greater resilience, and improved constructive competitiveness across the manufacturing ecosystem.

The domestic and global on-demand manufacturing industry is localized and highly fragmented. The company competes for buyers primarily with local manufacturers who may not be digitally enabled and do not provide online instant quote capabilities and lead times. Competitors include vertically integrated service bureaus, traditional brokers, the service bureau divisions of the additive original equipment manufacturing companies, independent machine shops and 3D printing service bureaus and digital manufacturing service companies. For buyers, the company competes on the basis of competitive pricing, user experience and superior customer service. For suppliers, the company competes with brokers and listing services, as well as companies that sell software and services to suppliers, enabling them to sell from their own website or otherwise run their business independently of the platform. The company competes for suppliers on the basis of providing real-time access to orders, cash flow stability, global access to customers and services and financial products.

The company generates the majority of its revenue from the sale of parts and assemblies to customers on its marketplace, which is referred to as marketplace revenue. Revenue from services includes the sale of marketing and advertising services and financial service products. The company's marketplace revenue is primarily comprised of sales of parts and assemblies to customers through its platform, with customer purchases ranging from rapid prototyping of single parts to high-volume production. Services revenue includes the sale of marketing and advertising services through the Thomasnet industrial sourcing platform, financial services, and Workcenter, the cloud-based manufacturing execution system. The company's business benefits from a network effect, because adding buyers to the platform generates greater demand on the marketplace which in turn attracts more suppliers to the platform.

Marketplace revenue is primarily comprised of sales of parts and assemblies to customers through the platform. Buyers purchase specialized CNC manufacturing, sheet metal manufacturing, 3D printing, injection molding, urethane casting, stamping, extrusions, tube cutting, tube bending and finishing services. For the year ended December 31, 2025, marketplace revenue was $629.6 million ¹, with a gross margin of 34.7% ². For the year ended December 31, 2024, marketplace revenue was $485.9 million ³, with a gross margin of 33.5% ⁴. The marketplace is powered by proprietary machine learning technology that continuously learns from hundreds of millions of data inputs generated across marketplace interactions, including quoting activity, order execution, supplier performance, pricing outcomes and customer behavior. The platform offers an Instant Quoting Engine that provides pricing and lead times, and delivers real-time automated design for manufacturing insights during the purchase funnel. The marketplace supports an expansive set of traditional and emerging manufacturing processes, a growing selection of materials, and comprehensive quality assurance options offered by the supplier network.

Services revenue includes the sale of marketing and advertising services and financial service products. For the year ended December 31, 2025, services revenue was $57.0 million ⁵, with a gross margin of 88.6% ⁶. For the year ended December 31, 2024, services revenue was $59.6 million ⁷, with a gross margin of 89.0% ⁸. The Thomasnet digital platform connects industrial buyers with over 500,000 listed North America suppliers ⁹ and offers a suite of digital marketing services including search engine optimization, content creation, data-driven advertising, analytics and insights. In late 2025, Thomasnet launched new platform tools including a dynamic advertising platform and improved search technology, with a new performance-based listings model allowing industrial business advertisers to set budgets and only pay for potential buyers who interact with their profiles. Workcenter is a cloud-based manufacturing execution system that gives suppliers a one-stop view into all of their Xometry and non-Xometry work. Financial services help suppliers manage their cash flow, including accelerated payouts and a seamless digital invoicing process.

During 2025, the company initiated restructuring actions to help improve efficiency and align resources by reducing its workforce by approximately 5% ¹⁰. For the year ended December 31, 2025, the company incurred $1.3 million ¹¹ for employee termination costs related to this restructuring. In June 2025, the company issued $250.0 million ¹² aggregate principal amount of 0.75% Convertible Senior Notes due 2030, including the exercise in full of the initial purchasers' option to purchase up to an additional $25.0 million ¹³ principal amount. The net proceeds from the issuance of the 2030 Notes were $241.4 million ¹⁴. The company used a portion of the net proceeds from the issuance of the 2030 Notes to repurchase approximately $201.7 million ¹⁵ in aggregate principal amount of outstanding 2027 Notes, with total cash paid of approximately $216.7 million ¹⁶, which included approximately $0.7 million ¹⁷ to pay accrued interest and an approximate $14.3 million ¹⁸ premium. The repurchase resulted in a $16.4 million ¹⁹ loss on debt extinguishment. The company entered into capped call transactions in connection with the issuance of the 2030 Notes, using approximately $17.5 million ²⁰ of the net proceeds to pay the cost. The company also purchased 220,994 ²¹ shares of its Class A common stock in privately negotiated transactions at an average price of $36.20 ²² per share on June 9, 2025, for $8.1 million ²³.

Total revenue increased 26% from $545.5 million ²⁴ for the year ended December 31, 2024 to $686.6 million ²⁵ for the year ended December 31, 2025. Gross profit increased 25% from $215.6 million ²⁶ for the year ended December 31, 2024 to $268.8 million ²⁷ for the year ended December 31, 2025. Net loss attributable to common stockholders was $61.7 million ²⁸ for 2025, compared to $50.4 million ²⁹ for 2024. Adjusted EBITDA was $18.5 million ³⁰ for 2025, compared to an Adjusted EBITDA loss of $(9.7) million ³¹ for 2024. Non-GAAP Net Income was $20.8 million ³² for 2025, as compared to Non-GAAP Net Loss of $(2.1) million ³³ for 2024. As of December 31, 2025, the company had $219.1 million ³⁴ in cash and cash equivalents and marketable securities.

The company aims to continue to drive strong growth and expanding Adjusted EBITDA margins by expanding its networks of buyers and suppliers. In 2025, Active Buyers increased 20% ³⁵ to 81,821 ³⁶ driven by strong enterprise growth and efficient corporate marketing initiatives. In 2026, the company plans to enhance its customer segmentation efforts, leveraging AI capabilities in its advertising technology stack to increase marketing efficiency through better personalization, targeting and customer engagement. The company expects to continue to rapidly expand its global network of active suppliers given significant market fragmentation and its ability to help suppliers grow their manufacturing businesses. In 2025, Active Suppliers increased 17% ³⁷ year-over-year to 4,996 ³⁸ as the company focused on adding larger, sophisticated suppliers with advanced certifications to support increasing enterprise growth. The company is extending the breadth and intelligence of its platform by expanding supported manufacturing capabilities and enhancing digital workflows across the production lifecycle. In late 2025, the company added the ability to auto quote injection molding, one of the largest categories in custom manufacturing.

The company is establishing Xometry as the core digital infrastructure for custom manufacturing for large enterprise customers by embedding technology directly into customer workflows through tools like Teamspace and ERP integrations. Marketplace accounts with last twelve month spend of at least $50,000 grew by 18% ³⁹ year-over-year to 1,760 ⁴⁰ in 2025. The number of Accounts with Last Twelve-Months Spend of at least $500,000 increased to over 140 ⁴¹ in fiscal year 2025 from over 100 ⁴² in fiscal year 2024. The company believes there is significant opportunity in the global manufacturing ecosystem for a marketplace like Xometry given consistent buyer needs and supplier fragmentation across international markets. The company continues to invest and grow its International business primarily driven by expansion in Europe, China and Turkey, offering localized platforms supporting 18 ⁴³ languages. In 2025, International revenue increased 27% ⁴⁴ to $113 million ⁴⁵, representing 18% ⁴⁶ of total marketplace revenue.

The company offers manufacturers a comprehensive suite of tools including Thomasnet advertising, financial products like Instant Pay, and Workcenter software that allow it to deepen supplier relationships and monetize the broader manufacturing ecosystem. Revenue from Services was approximately 8% ⁴⁷ of total revenue for the year ended December 31, 2025 with the majority generated from Thomasnet advertising and marketing services. The company is investing to restore Thomasnet advertising growth by improving the underlying platform technology. In late 2025, the company launched a new dynamic ad-serving technology platform and enhanced search experience to improve buyer and supplier engagement on the Thomasnet platform.

The company is focused on driving strong free cash flow conversion given its asset light model, with capital expenditures that are predominately capitalized software costs. The company is also focused on maintaining a strong balance sheet with approximately $219.1 million ⁴⁸ in cash and cash equivalents and marketable securities as of December 31, 2025. With the size and complexity of the custom manufacturing industry, the company believes there is an opportunity for selected, targeted, tuck-in acquisitions to expand its offerings and geographies including technology and talent.

The company's capital allocation is focused on scaling profitable growth through disciplined execution on organic growth and rigorous capital and resource allocation. The company's fiscal year 2025 financial results demonstrate its ability to deliver strong revenue and gross profit growth, operating leverage and increasing adjusted EBITDA margins. The company is focused on driving strong free cash flow conversion given its asset light model, with capital expenditures that are predominately capitalized software costs.

The company faces headwinds from unfavorable macroeconomic conditions both in the United States and abroad, including macroeconomic events, fluctuations in inflation, volatile market conditions, impacts from tariffs, the Russia-Ukraine war, conflict in the Middle East and other geopolitical tensions, which have led to economic uncertainty globally. Historically, during periods of economic uncertainty and downturns, businesses may slow spending on information technology and manufacturing, which may impact the company's business and its customers' businesses. Changes in U.S. and international trade policies and uncertainty in the tariff regime could adversely impact the company's business, results of operations and financial condition. In February 2026, the United States Supreme Court invalidated certain tariffs imposed by the U.S. government under emergency statutory authority in 2025, and shortly thereafter, President Trump signed an executive order implementing a new 10% global tariff pursuant to an alternative statutory authority, which may be raised up to 15%.

The company faces risks related to its ability to attract and retain a large community of buyers and suppliers, as the size and diversity of its community is critical to its success. The company may not continue to grow on pace with historical rates, and its revenue growth rate has fluctuated in prior periods. The company expects its revenue growth rate to continue to fluctuate over the short term and decline in the long term. The company has incurred net losses since its inception in 2013, incurred a net loss available to common stockholders of $61.7 million ⁴⁹ in 2025, and had an accumulated deficit of $432.0 million ⁵⁰ as of December 31, 2025. The company expects to continue the development and expansion of its business and may continue to generate net losses.

Management's message emphasizes that the company's financial performance demonstrates the success of its purposefully built marketplace model in the large and highly fragmented custom manufacturing market. The company's marketplace structure is designed to be a key differentiator to power growth and adoption amongst customers and suppliers, with service offerings deepening relationships with suppliers. Management believes results to date prove that a superior experience for both buyers and suppliers, fueled by the power of marketplace dynamics, can deliver sustainable growth and value. The company aims to continue to drive strong growth and expanding Adjusted EBITDA margins by consistent execution across key growth initiatives: expanding networks of buyers and suppliers, expanding the marketplace platform, driving deeper enterprise engagement, growing internationally, enhancing services offerings, and capital allocation focused on scaling profitable growth. Management states that fiscal year 2025 financial results demonstrate the ability to deliver strong revenue and gross profit growth, operating leverage and increasing adjusted EBITDA margins.

Total revenue was $686.6 million ⁵³ for the year ended December 31, 2025, compared to $545.5 million ⁵⁴ for the year ended December 31, 2024. Net loss attributable to common stockholders was $61.7 million ⁵⁵ for 2025, compared to $50.4 million ⁵⁶ for 2024. Net loss per share, basic and diluted, was $1.22 ⁵⁷ for 2025, compared to $1.03 ⁵⁸ for 2024. Gross profit was $268.8 million ⁵⁹ for 2025, compared to $215.6 million ⁶⁰ for 2024, with total gross margin of 39.1% ⁶¹ for 2025 compared to 39.5% ⁶² for 2024. Loss from operations was $45.5 million ⁶³ for 2025, compared to $56.1 million ⁶⁴ for 2024. As of December 31, 2025, the company had $219.1 million ⁶⁵ in cash and cash equivalents and marketable securities, and $335.8 million ⁶⁶ in aggregate principal amount of indebtedness for its convertible notes. The company recorded a $16.4 million ⁶⁷ loss on debt extinguishment in 2025 related to the partial repurchase of the 2027 Notes. For the U.S. reportable segment, total revenue was $573.8 million ⁶⁸ for 2025 and $456.7 million ⁶⁹ for 2024. For the International reportable segment, total revenue was $112.9 million ⁷⁰ for 2025 and $88.8 million ⁷¹ for 2024.

The company has incurred net losses since inception, with a net loss available to common stockholders of $61.7 million ⁵¹ in 2025 and an accumulated deficit of $432.0 million ⁵² as of December 31, 2025, and may never achieve or sustain profitability. The company's growth depends on its ability to attract and retain a large community of buyers and suppliers, and the loss of buyers or suppliers, or failure to attract new ones, could materially and adversely affect its business. The company's business model involves agreeing to pricing with a buyer in advance of sourcing the opportunity to a supplier, creating risk that the price a buyer pays may be less than the cost ultimately paid to a supplier. Changes in U.S. and international trade policies, including tariffs, could adversely impact the business, as the company derives the majority of its revenue from the sale of parts and assemblies, and tariffs may raise the cost of raw materials or components. The company relies on a third-party payment processor, Stripe, which may terminate the relationship with 120 days' advance notice, and any disruption could adversely affect the business.