Pattern Group Q3 Earnings Call Highlights

Key Points

• Pattern raised its full-year outlook after third-quarter revenue grew 38% to $886 million and adjusted EBITDA increased 40% to $57 million. It now expects about $3.5 billion in full-year revenue and $220 million in adjusted EBITDA.
• New brand partnerships hit a quarterly record, with average deal size up 41% year over year. Revenue outside Amazon rose 86% and reached about 10% of total revenue, while international revenue grew 56%.
• Pattern is investing more in its technology and AI capabilities: third-quarter R&D expense, excluding stock-based compensation and related taxes, rose 105%. It ended the quarter with $352 million in cash, no debt, and generated $106 million in trailing-12-month free cash flow.

Pattern Group NASDAQ: PTRN raised its full-year revenue and adjusted earnings outlook after reporting 38% revenue growth in the third quarter of 2026, as it signed more large brand partners and expanded beyond Amazon.

The e-commerce services company reported revenue of $886 million and net income of $32 million. Adjusted earnings before interest, taxes, depreciation and amortization rose 40% from a year earlier to $57 million, with the adjusted EBITDA margin increasing to 6.5% from 6.4%.

Chief Financial Officer Jason Beesley said the timing of marketplace promotional events shifted approximately four percentage points of revenue growth from the third quarter into the second. Adjusted for that shift, third-quarter revenue growth was approximately 42%, he said.

Full-Year Outlook Raised

Pattern now expects full-year revenue of approximately $3.5 billion, representing about 40% growth from 2025. It raised its adjusted EBITDA outlook to approximately $220 million, or 34% growth. The company did not specify its previous outlook on the call.

For the fourth quarter, Pattern forecast revenue of $965 million to $985 million, up 34% to 36% year over year, and adjusted EBITDA of $54 million to $55 million, up 27% to 29%.

Net revenue retention, which the company uses to measure performance with existing brand partners, reached 127%, up from 122% a year earlier. Beesley said the updated outlook implies the measure will end the year at approximately 124% to 125%.

Co-Founder and Chief Executive Officer Dave Wright reiterated a longer-term net revenue retention target of 115%, while noting that the company has continued to exceed its expectations. Faster technology improvements or wider adoption of e-commerce through AI shopping tools could create upside to that long-term assumption, he said.

Large Brand Signings and Channel Expansion

Wright said the third quarter was Pattern’s largest on record for new brand partnerships. The company signed as many large brands in the quarter as it had in its strongest full year, he said. Pattern defines large brands as those at $20 million or above, Wright said, and its average deal size rose 41% from the third quarter of 2025.

Beesley said Pattern has given its sales team better tools to show prospective partners how they can improve their e-commerce performance across marketplaces. The company is also using agentic tools to onboard brands faster, he said. For the full year, Pattern expects new brand partner revenue to grow at roughly twice its 2025 rate.

Non-Amazon revenue grew 86% and accounted for approximately 10% of total revenue, up from 7% a year earlier. International revenue rose 56% to $106 million, or 12% of the total. Beesley said shifts in promotional events and tougher comparisons in Europe contributed to variability in international growth.

Revenue from software, logistics and other services increased 136% year over year to about $18 million. Beesley said transaction-based business models were a major driver. Pattern Fulfillment uses warehouses and shipping infrastructure already built for the company’s core inventory business, allowing it to grow without significant incremental capital expenditure, he said.

AI Investment and Partner Relationships

Pattern is increasing investment in its Pattern Intelligence technology, which Wright described as an intelligence layer designed to improve traffic, conversion, price and availability for brands. Research and development expense, excluding stock-based compensation and related taxes, rose 105% year over year in the third quarter.

Wright said the emergence of AI shopping assistants creates opportunities in product discovery and fulfillment. He also discussed a potential “trust layer” for agent-driven shopping, including reliable delivery, easier returns and possible protections against fraudulent charges. The concept remains in its early stages, he said.

Asked about brand partner Thorne following its acquisition by Procter & Gamble, Beesley said Pattern’s relationships with Thorne and the P&G brands it serves remained positive and that it was “business as usual.” Wright said the company expected that to continue.

Pattern ended the quarter with $352 million in cash and cash equivalents, no outstanding debt and $150 million in borrowing capacity. It generated $106 million in free cash flow over the trailing 12 months, up 50% year over year, and repurchased $18 million of Series A shares during the quarter under its $100 million buyback program.

About Pattern Group (NASDAQ:PTRN)

Pattern Group Inc NASDAQ: PTRN is an e-commerce technology and services company that helps brands grow and manage their online businesses. Its platform combines software, data, and operational services to support product distribution and sales across major digital marketplaces, retailer websites, and other e-commerce channels.

The company's services include marketplace management, digital advertising, product content and catalog optimization, pricing and assortment strategy, fulfillment coordination, and analytics.

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