Pattern forecasts Q4 revenue of $965M-$985M as it raises full-year outlook to about $3.5B

• “We delivered another record quarter and raised our full year outlook.” (Co-Founder, President, CEO & Chairman David Wright)

• “Third quarter revenue reached $886 million, up 38% year-over-year… Adjusted EBITDA increased 40% to $57 million. We also delivered net income of $32 million.” (CEO Wright)

• “Net revenue retention… was 127%, up from 122% a year ago… Non-Amazon revenue grew 86%, reaching approximately 10% of total revenue and international revenue increased 56%.” (CEO Wright)

• “Excluding stock-based compensation and related taxes, R&D expense for Pattern was up 105% year-over-year in Q3, yet we continue to expand our adjusted EBITDA margins.” (CEO Wright)

• “We ended Q3 with $352 million in cash and cash equivalents, no outstanding debt and $150 million of borrowing capacity… During Q3, we bought back $18 million of Series A shares under our $100 million share repurchase program.” (Chief Financial Officer Jason Beesley)

Outlook

• “We now expect full year revenue to be approximately $3.5 billion, representing approximately 40% growth year-over-year.” (CFO Beesley)

• “We are raising our full year adjusted EBITDA outlook to approximately $220 million, representing 44% growth year-over-year.” (CFO Beesley)

• “For the fourth quarter, we expect revenue in the range of $965 million to $985 million… We expect Q4 adjusted EBITDA in the range of $54 million to $55 million.” (CFO Beesley)

• “Our updated outlook implies that the ending point of our NRR this year will be approximately 124% to 125%.” (CFO Beesley)

Financial Results

• “Third quarter revenue reached $886 million… Adjusted EBITDA increased… to $57 million… net income of $32 million.” (CEO Wright)

• “SaaS, logistics and other monetization revenue… increased 136% year-over-year to $18 million.” (CFO Beesley)

• “Adjusted EBITDA was $57 million in Q3… representing a 6.5% margin, up from 6.4% a year ago.” (CFO Beesley)

• “For the trailing 12 months ended in September 30, we generated $106 million of free cash flow, up 50% year-over-year.” (CFO Beesley)

Q&A

• Justin Patterson, KeyBanc Capital Markets Inc., Research Division: “I was hoping you could talk about just the rise of assistance… where we’ve seen more meaningful use cases of shopping… and… product investment as we head into 2027.” Title Wright: “We’re now seeing that start to shift into actual product discovery leading to purchases… the key areas are probably discovery and then overall fulfillment… we’re very early days on… a trust layer.”

• Ralph Schackart, William Blair & Company L.L.C., Research Division: “Walk us through the drivers… and… the potential implications for Pattern overall” regarding Thorne/P&G. CFO Beesley: “That continues to be… driven by the technology optimizations… [and] new brand partner revenue… we’re signing bigger brands… All indications continue to be positive and focused on growth, and it’s really just business as usual.”

• Eric Sheridan, Goldman Sachs Group, Inc., Research Division: “Key areas of investment priorities… and… bands of margin.” Title Wright: “We expect that to continue… we highlighted… our SaaS, logistics and other bucket grew 136%… That is a great business.”

• Colin Sebastian, Robert W. Baird & Co. Incorporated, Research Division: “Where… opportunities to expand… [Pi]… and… international and non-Amazon channels.” Title Wright: “Discoverability is moving and widening… [that’s] the biggest near-term opportunity.” CFO Beesley: “International… $106 million… our international revenue was only 12% of the total… Non-Amazon… 10%.”

• Bernard McTernan, Needham & Company, LLC, Research Division: “Expand upon… a trust layer.” Title Wright: “We’re very early days on the concept of a trust layer… there’s multiple potential components… commitment on delivery… returns… [and] a guarantee… when there’s a fraudulent charge.”

• Mark Stephen Mahaney, Evercore ISI Institutional Equities, Research Division: “Any update on the Thorne relationship… long-term NRR goal… [and] complexity of the Amazon marketplace.” Title Wright: “Every indicator is positive… same business is as usual… we believe the long-term target for NRR is 115%… our guidance… 124%, 125%… Amazon continues to make certain things easier, but… continues to add vectors of optimization.”

• Douglas Anmuth, JPMorgan Chase & Co, Research Division: “New brand partner strength… and… overall conversion increasing by 2 full points.” CFO Beesley: “We’ve built better tools for our sales team… and… using those Agentic tools to onboard the brands faster.” Title Wright: “Alexa or Agentic discovery… is converting at a much higher rate… these 2 points are just incredible results for brands.”

• Christopher Suchecki, Jefferies LLC, Research Division: “Balancing… scaling fulfillment… and… new facility launches.” CFO Beesley: “We are leveraging a logistics infrastructure that we already built for our core business model… [and] without a lot of incremental CapEx.”

• Brian Pitz, BMO Capital Markets Equity Research: “Broader consumer concerns… and… pipeline… new brand acquisition.” Title Wright: “We aren’t seeing any weakness. We’re seeing strength.” CFO Beesley: “Our average deal size going up… our immediate strategy is just sign great brands wherever they are.”

Sentiment Analysis

• Analysts’ tone was neutral-to-slightly positive, pressing for durability and exposure, with recurring questions on agentic commerce and customer concentration (e.g., “trust layer,” “bands of margin,” “broader consumer concerns,” and Thorne integration).

• Management tone was positive and confident in prepared remarks and remained steady in Q&A, using definitive language such as “We are confident in our advantage” and “We aren’t seeing any weakness.” (CEO Wright)

• Versus Q2, management continued the same themes (Pi, agentic commerce, non-Amazon and international mix, and operating leverage), while Q3 Q&A leaned more heavily into “agentic” shopping mechanics and “trust layer” framing. (CEO Wright)

Quarter-over-Quarter Comparison

• Q3 reiterated the prior-quarter marketplace-event timing discussion, with CFO Beesley noting, “these results reflect approximately 4 points of revenue shift from Q3 into Q2 due to the timing of marketplace promotional events, which we talked about last quarter.”

• Q3 guidance language moved from Q2 ranges (“full year revenue in the range of $3.4 billion to $3.5 billion”) to a point outlook (“full year revenue… approximately $3.5 billion”), alongside a higher adjusted EBITDA outlook (“approximately $220 million”). (CFO Beesley)

• Q2 emphasized milestones like “international revenue… $110 million” and “SaaS, logistics and other… $17 million,” while Q3 emphasized scaling and mix with “non-Amazon… approximately 10%” and “SaaS… $18 million,” plus explicit capital return (“bought back $18 million”). (CEO Wright; CFO Beesley)

Risks and Concerns

• “As a reminder, these results reflect approximately 4 points of revenue shift from Q3 into Q2 due to the timing of marketplace promotional events.” (CFO Beesley)

• On macro uncertainty, CEO Wright said, “It would be overstating probably for us to give any real guidance that you could rely on there,” while adding, “We feel very good about it.”

• On customer-change concerns tied to Thorne/P&G, management maintained, “every indicator is positive,” and “it’s really just business as usual.” (CEO Wright; CFO Beesley)

Final Takeaway

Management characterized Q3 as “another record quarter” with revenue of $886 million and raised full-year expectations to about $3.5 billion in revenue and about $220 million in adjusted EBITDA, while guiding Q4 revenue to $965 million-$985 million. Executives repeatedly attributed retention and growth to technology-led execution through “Pattern Intelligence,” expansion beyond Amazon and internationally, and increasing contribution from “SaaS, logistics and other,” while highlighting a $18 million share repurchase in the quarter and describing early frameworks for “agentic” commerce, including a potential “trust layer.”

Read the full Earnings Call Transcript

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