Pattern Group (PTRN) Financials

Pattern Group (NASDAQ: PTRN) continues to show strong top-line growth. Revenue reached $876.8 million in Q2 2026, up 46.6% from $598.2 million in Q2 2025 and nearly double the $439.4 million reported in Q3 2024. Gross profit increased 49.7% year over year to $384.4 million, while net income rose 23.8% to $27.5 million. However, sequential momentum moderated: Q2 revenue increased 13.3% from Q1, but net income declined from $29.2 million to $27.5 million.

Profitability remains positive but somewhat pressured by rising operating expenses. Q2 operating income was $35.5 million, compared with $39.6 million in Q1, reducing the operating margin from approximately 5.1% to 4.1%. Marketing expense rose to $170.8 million in Q2 from $143.7 million in Q1, and selling, general and administrative expense increased to $165.1 million from $145.7 million. The company has remained profitable in recent quarters after a significant Q3 2025 loss that included a large adjustment attributable to common shareholders.

The balance sheet remains relatively strong, with $345.8 million of cash and equivalents and $893.9 million of current assets versus $380.1 million of current liabilities at June 30, 2026. Total equity increased to $645.6 million from $609.7 million at the end of Q1. Still, operating cash flow weakened sharply during Q2, falling to $14.7 million from $72.6 million in Q1, largely because operating assets and liabilities consumed $29.5 million of cash. Capital expenditures of $10.9 million left approximately $3.8 million of quarterly free cash flow.

• Revenue growth remains robust, with Q2 2026 revenue up 46.6% year over year and approximately double the level reported in Q3 2024.
• Gross profit increased 49.7% year over year to $384.4 million, indicating that gross profit growth has broadly kept pace with revenue expansion.
• The company has reported positive net income in each of the available 2026 and Q1-Q2 2025 periods, with Q2 2026 net income reaching $27.5 million.
• Cash and equivalents totaled $345.8 million, while current assets exceeded current liabilities by approximately $513.8 million, supporting near-term liquidity.
• Total equity rose to $645.6 million in Q2 2026 from $541.4 million in Q3 2025, strengthening the company’s capital base.
• Accounts receivable increased to $207.7 million from $141.3 million in Q1, and inventories rose to $318.3 million from $299.8 million, trends that may reflect growth but also require monitoring for working-capital efficiency.
• The company invested $10.9 million in property and equipment during Q2, up from $9.3 million in Q1, suggesting continued investment in expansion or operating capacity.
• Operating cash flow fell to $14.7 million in Q2 2026 from $72.6 million in Q1, and free cash flow was only about $3.8 million after capital expenditures.
• Operating margin declined sequentially as operating expenses rose faster than gross profit; marketing expense increased approximately 18.8% from Q1 to Q2.
• Weighted-average basic shares outstanding were 176.9 million in Q2 2026 versus 90.6 million in Q2 2025, representing substantial dilution despite modest share repurchases.