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Xometry Improperly Recognized Revenue, Conveniently Forgot About Costs

The marketplace operator wrongly recognized certain sales but not the cost of those sales.

March 19, 2024

Xometry, Inc. (XMTR), an online marketplace connecting buyers and sellers of manufactured parts and assemblies, aggressively recognized revenue when it shouldn’t have but not the costs associated with those sales.

In 2022, Xometry overstated revenue and understated the cost of that revenue which resulted in the company overstating gross profit and understating its operating loss. One year later, in its latest annual report, Xometry revealed it had understated its net loss per share by seven cents, or 4.34% and:

—Overstated sales $0.13 million, or 0.03% in 2022
—Overstated gross profit $1.57 million, or 1.07% in 2022
—Understated operating loss $3 million, or 4.09% in 2022

The company says the errors are immaterial and will not correct inaccurate previous filings.

Xometry provided no detail regarding the cause of the misstatements other than to say it did not recognize sales and costs of sales in the proper period.

Management says its internal controls over financial reporting are effective.

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