Xometry (XMTR) and Genius Sports (GENI) Deliver in Q3
Shares of Xometry (XMTR) are up double digits to new highs today after the company smashed Q3 expectations and raised full-year guidance. Here are the headline numbers:
- Revenue $180.7 million (+27.5%) vs. estimates $168.3 million (7.4% beat).
- Adjusted EBITDA $6.1 million (up from -$600K in Q3 last year) vs. estimates of $4.6 million.
- Adjusted EPS $0.11 (+450%).
- Full-year guidance of $676 - $678 million (+24%) well ahead of estimates for $658 million (20.6%).
It was a very strong quarter, and management’s commentary on this morning’s call was bullish for the rest of the year and into 2026. They see revenue growth of at least 20% next year, which is likely a conservative estimate.
For full-year 2025, guidance has gone up, with Marketplace revenue expected to grow about 27.5% (roughly 35% of this should be from International customers) and Supplier Services to shrink about 5%. The work Xometry has done to launch the Workcenter mobile app, engage large enterprise customers (ERP integrations, Teamspace adoption, dedicated sales efforts, etc.) and continue to launch new AI-enabled tools all seems to be working. Plus, margins continue to grow (Marketplace gross margin hit a record 35.4% in the quarter).
All this in a generally weak environment for manufacturing. It’s impressive. This is a fantastic way to play the manufacturing reshoring trend. Hopefully management can continue to execute because the environment is ripe for Xometry. At midday, the stock is up about 20%. BUY HALF
Genius Sports (GENI) stock got off to a slow start this morning but is gaining momentum midday. It was a good quarter that should relieve some recent pressure on shares. Before we get to that, let’s address the elephant in the room.
There’s been a persistent hangover in most sports betting-related stocks lately due to the uncertainty that prediction market players have injected into the market. Side note: Shares of sportsbook operators DraftKings (DKNG) and Flutter (FLUT) were downgraded by BofA this morning, partially due to prediction market uncertainty (state taxes and iGaming headwinds were other challenges BofA noted for those two players). As you should know, Genius Sports is not a sportsbook operator but rather a sports data and technology company. Part of its business is providing data to the sportsbook operators (70% of revenue) while the rest consists of sports audience data and tools sold to various market participants, and a host of content and data-capture solutions used by teams, leagues, etc. to collect, analyze and monetize sports-related data (these last two sources are 30% of revenue).
On this morning’s conference call, Co-Founder and CEO Marke Locke addressed the uncertainty in the prediction markets, saying, “As they evolve and mature, prediction markets may provide a meaningful new opportunity for Genius Sports and expanding the addressable market. While these products are nascent, they’re evolving rapidly, and the need for Genius official data, marks and logos, and integrity solutions will only grow as prediction markets become more sophisticated. This means that we are extremely well-placed, should we decide to engage. With regard to timing, we are being extremely considered and deliberate in our approach…But I want to be clear, if we are confident that prediction markets will meet our robust regulatory and commercial thresholds. These developments could result in positive developments for Genius Sports and our future growth.”
In other words, Genius isn’t yet committing to working with prediction market players, which currently seem to operate in a Wild West regulatory environment, until management knows it can do so legally, profitably, and in a way that aligns with its long-term growth strategy. I think this is a prudent approach.
OK, on to the Q3 results:
- Revenue grew 38.3% to $166.3 million, beating by 6.1%.
- Adjusted EBITDA grew 32.3% to $34 million, beating slightly.
- Adjusted EPS of $0.05 was flat with last year.
- Full-year revenue guidance was raised by $10 million to $655 million (+28% vs. 2024).
- Full-year Adjusted EBITDA guidance was raised by $1 million.
The guidance raise for the year only reflects the outperformance in Q3 (i.e., about $10 million), so I would have liked to see a little more of a boost. However, Q4 can be a weird quarter with the holidays. Gross profit margin and adjusted EBITDA margin were a little light, partially due to a mismatch in timing between paying rights for the acquired Serie A (professional soccer league in Europe) and monetizing it (i.e., short-term issue).
Big picture, Genius continues to have a lot of irons in the fire. BetVision (merges live streaming and live betting into an immersive viewing experience) is still a new product. The Media Segment is growing faster than the other two segments. There are new rights deals to be monetized, and there is clearly a need for reputable data and Integrity Solutions (see NBA betting issues) from Genius.
In short, a bunch of noise in the arena lately thanks to prediction market drama, but Genius seems to have its act together. Management sees 20% revenue growth for many years. Sticking with GENI. BUY HALF
Copyright © 2025. All rights reserved. Copying or electronic transmission of this information without permission is a violation of copyright law. For the protection of our subscribers, copyright violations will result in immediate termination of all subscriptions without refund. Disclosures: Cabot Wealth Network exists to serve you, our readers. We derive 100% of our revenue, or close to it, from selling subscriptions to our publications. Neither Cabot Wealth Network nor our employees are compensated in any way by the companies whose stocks we recommend or providers of associated financial services. Employees of Cabot Wealth Network may own some of the stocks recommended by our advisory services. Disclaimer: Sources of information are believed to be reliable but they are not guaranteed to be complete or error-free. Recommendations, opinions or suggestions are given with the understanding that subscribers acting on information assume all risks involved. Buy/Sell Recommendations: are made in regular issues, updates, or alerts by email and on the private subscriber website. Subscribers agree to adhere to all terms and conditions which can be found on CabotWealth.com and are subject to change. Violations will result in termination of all subscriptions without refund in addition to any civil and criminal penalties available under the law.
