Pattern Group Inc.

What they do

Pattern operates a proprietary technology platform that uses AI and machine learning to optimize advertising, content, pricing, forecasting, and customer service for brands across more than 70 marketplaces in over 100 countries. The company primarily generates revenue by purchasing products from brand partners and selling them directly to consumers on marketplaces like Amazon, TikTok Shop, Walmart.com, Target.com, and eBay. It also earns revenue from subscription and consulting fees. Pattern manages the full marketplace experience, including logistics, content, and customer service.

Revenue drivers

• Consumer product sales on Amazon — The substantial majority of revenue comes from selling brand partners' products on Amazon. In Q1 2026, non-Amazon revenue was $71 million, implying Amazon remains the dominant channel.
• International revenue — Revenue from international markets totaled $90 million in Q1 2026, up 101% year-over-year, and is a fast-growing contributor.
• Non-Amazon marketplaces — Revenue not attributable to Amazon was $71 million in Q1 2026, up 119% year-over-year, as Pattern expands on platforms like TikTok Shop, Walmart.com, Target.com, and eBay.
• Subscription and consulting fees — In addition to product sales, Pattern earns 'other revenue' including subscription and consulting fees from brand partners, though this is a minor portion of total revenue.

Recent performance

In Q1 2026, Pattern reported record revenue of $774 million, up 43% year-over-year, and net income of $29 million (diluted EPS $0.16). NRR reached a record 127%, up from 115% in the prior year. Revenue for the trailing twelve months ended March 31, 2026 was not directly stated, but quarterly revenue has grown sequentially from $639.7M (Q3 2025) to $876.8M (Q2 2026). For fiscal 2025, annual revenue was $2.50 billion with net income of $16.2 million, but diluted EPS was negative $1.36 due to preferred stock dividends or similar items.

Strategy

Management aims to deepen existing brand partner relationships, evidenced by record NRR of 127%. They are expanding into international markets and non-Amazon marketplaces, with both revenue streams more than doubling year-over-year. Investments in technology, data, and warehouse automation are designed to improve operational efficiency and scale. Pattern's data advantage—now over 91 trillion data points—and AI capabilities are central to its ability to optimize and automate ecommerce growth. They also plan to continue launching and monetizing new solutions and expanding their brand partner base.

Risks

• Dependence on Amazon — A substantial majority of revenue comes from Amazon, so any loss of access, policy change, or fee increase could materially harm the business.
• Data reliance and accuracy — The platform relies on comprehensive marketplace data; losing access or data inaccuracies could impair operations and competitive advantage.
• Brand partner concentration — The loss of any significant brand partner could negatively impact revenue, as growth depends on maintaining and expanding relationships with a limited number of brands.
• Technology and AI disruption — Failure to keep pace with technological changes or to participate in AI-enabled shopping experiences that bypass third-party marketplaces could reduce growth.

Outlook

For Q2 2026, management guides revenue of $810-$820 million (35%-37% growth) and Adjusted EBITDA of $45-$46 million (30%-33% growth). For full-year 2026, they raised guidance to revenue of $3.29-$3.33 billion (32%-33% growth) and Adjusted EBITDA of $199-$201 million (30%-32% growth), up from prior guidance of ~25-26% revenue growth. The company expects continued strong performance driven by broad-based strength across existing brand partners, with a strong balance sheet and growing free cash flow.