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Pattern Group Inc. (PTRN)·Q3 2025 Earnings Summary

Executive Summary

  • Record Q3 performance with revenue $639.7M (+46% YoY), NRR 122% (record), and Adjusted EBITDA $41.1M (+88% YoY); GAAP net loss of $59.1M was driven by IPO-related SBC/taxes and a deemed dividend impacting EPS disclosure .
  • Revenue and EPS beat S&P Global consensus: revenue beat by ~$44M; Primary EPS beat by ~$0.76; company also highlighted strong international and non‑Amazon marketplace growth *. Values retrieved from S&P Global.
  • Q4 2025 guidance: revenue $680–$700M (+32–36% YoY) and Adjusted EBITDA $38–$40M (+44–48% YoY); FY25 growth implied at ~37% revenue and ~48% Adjusted EBITDA .
  • Strategic narrative centered on AI “intelligence layer,” agentic commerce, and channel/geographic diversification; management emphasized capital-light logistics, pipeline strength, and operating leverage as catalysts .

What Went Well and What Went Wrong

What Went Well

  • Revenue growth broad-based across existing partners (NRR 122%) and new products/marketplaces; non‑Amazon revenue up 81% YoY to $47.1M and international revenue up 72% YoY to $53.0M .
  • Adjusted EBITDA $41.1M (+88% YoY) with margin improvement; SG&A leveraged to 8.1% of revenue ex-IPO costs (vs. 8.6% in Q3’24) .
  • Clear AI/technology moat and product roadmap advancing agentic workflows; quote: “Our platform stands at the intersection of intelligence and execution” — Dave Wright .

What Went Wrong

  • GAAP net loss of $59.1M, including ~$92M IPO-related SBC/taxes and a non‑cash deemed dividend that drove loss to common shareholders and diluted EPS of -$2.19 .
  • Quarterly margin cadence expected to dip sequentially in Q4 (midpoint ~5.7% Adjusted EBITDA margin) due to mix variables; management flagged normal quarterly variability .
  • Macro uncertainties (trade policy, supply chain) acknowledged; while no current impact, management highlighted potential future headwinds tied to consumer sentiment and geopolitics .

Financial Results

Core P&L and Margin Trends

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$540.4M*$598.2M*$639.7M
GAAP Net Income (Loss) ($USD Millions)$22.8M*$23.8M*$(59.1)M
GAAP Diluted EPS (Continuing Ops) ($USD)$0.17*$0.243*$(2.19)
EBITDA ($USD Millions)$33.5M*$34.4M*$(55.9)M*
Adjusted EBITDA ($USD Millions)n/an/a$41.1M
Gross Margin (%)43.6%*42.9%*44.3%*
EBIT Margin (%)5.44%*5.04%*-9.41%*
Net Income Margin (%)4.22%*3.98%*-9.23%*

Values retrieved from S&P Global (asterisked cells).
Note: Company emphasizes non‑GAAP Adjusted EBITDA ($41.1M) vs. GAAP EBITDA (S&P shows negative), reflecting IPO charges and non‑recurring items .

Q3 2025 Actuals vs S&P Global Consensus

MetricConsensusActualBeat/Miss
Revenue ($USD Millions)$595.8M*$639.7M Beat by ~$44M
Primary EPS ($USD)$(2.71)*$(1.95)*Beat by ~$0.76
Adjusted EBITDA ($USD Millions)$34.6M*$41.1M Beat by ~$6.5M

Values retrieved from S&P Global (asterisked cells).
Disclosure note: Company’s GAAP diluted EPS to common shareholders was -$2.19 due to a deemed dividend associated with preferred conversion at IPO, causing divergence from S&P “Primary EPS” calculation .

KPIs and Mix

KPIQ3 2024Q3 2025
Net Revenue Retention (NRR)113% 122% (record)
International Revenue ($USD Millions)n/a$53.0M
Non‑Amazon Revenue ($USD Millions)n/a$47.1M
Cash & Equivalents ($USD Millions)$183.7M (9/30/24) $312.8M (9/30/25)
LTM Operating Cash Flow ($USD Millions)$66.5M $92.4M
LTM Free Cash Flow ($USD Millions)$48.6M $70.8M

Additional mix commentary: Management cited Europe +73%, APAC +68%, MENA +222% growth, and marketplace gains including Walmart +96%, TikTok Shop +392% off small base, Coupang ~$4.5M in Q3 with ~$11M expected for FY25 .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q4 2025Not provided$680–$700MInitiated
Adjusted EBITDA ($USD Millions)Q4 2025Not provided$38–$40MInitiated
Adjusted EBITDA Margin (%)Q4 2025Not provided~5.7% midpointInitiated; sequentially lower vs Q3
FY Revenue Growth (%)FY 2025Not provided~37% (implied)Initiated
FY Adjusted EBITDA Growth (%)FY 2025Not provided~48% (implied)Initiated

Management did not provide specific guidance for OpEx line items, OI&E, or tax rate in Q4; commentary emphasized continued investment in AI/technology and sales while maintaining profitability .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI “Intelligence Layer” & Agentic CommerceNo public transcripts available pre‑IPOPlatform “at the intersection of intelligence and execution”; advancing non‑deterministic, agentic workflows; aim to “operate a brand without touching a keyboard” Strengthening narrative; major strategic focus
Channel Diversification (non‑Amazon)No public transcripts available pre‑IPONon‑Amazon revenue +81% YoY; marketplace expansion including Walmart, TikTok Shop, Coupang Accelerating from small bases
International ExpansionNo public transcripts available pre‑IPOInternational +72% YoY with Europe +73%, APAC +68%, MENA +222% Robust global scaling
Supply Chain/Logistics StrategyNo public transcripts available pre‑IPOCapital-light approach; Las Vegas facility; targeting middle‑mile efficiencies; Chewy partnership for oversize Building efficiency moats
Macro/TariffsNo public transcripts available pre‑IPONo material impact observed; cautious on potential future headwinds Monitoring; no current drag
R&D/Technology InvestmentNo public transcripts available pre‑IPOInvestment to grow faster than revenue near-term, slight margin drag near-term; long-term efficiency upside Up-investing to extend moat

Management Commentary

  • “We delivered record results for Revenue, NRR, and Adjusted EBITDA… Our platform stands at the intersection of intelligence and execution, connecting brands and consumers seamlessly across digital surfaces.” — Dave Wright, CEO .
  • “Traffic is driven by our advertising tool, Destiny… conversion is driven by content optimization tools… while new product launches and marketplace/geographic expansion fuel growth.” — Jason Beesley, CFO .
  • “Our Q4 guidance implies 5.7% adjusted EBITDA margin at the midpoint… Quarterly margin fluctuations are typical due to product and marketplace mix.” — Jason Beesley .
  • “We take a capital-light logistics approach… add cross-dock nodes as needed; technology investment will grow faster than revenue near-term.” — Jason Beesley .
  • “Coupang generated ~$4.5M in the quarter… Walmart grew 96%, TikTok Shop +392% off small base.” — Dave Wright .

Q&A Highlights

  • Agentic commerce trajectory: management sees significant shopping path shifts into LLM-driven workflows; Pattern preparing bottom-of-funnel data tools (GEO Scorecard) to help brands win in agentic environments .
  • Growth drivers: strongest growth from existing partners (NRR 122%) plus new product launches and marketplace/geographic expansion; beauty and DIY tools grew >100% .
  • Guidance philosophy: embeds conservatism, excludes speculative new partner revenue; EBITDA growth > revenue growth in Q4 indicates model strength .
  • Logistics footprint and category coverage: capital-light; Chewy partnership enables oversize; some categories like cereal structurally unattractive for e-commerce economics .
  • Unit economics mix: marketplace/regional differences solved SKU-by-SKU; aim to normalize to consistent unit economics without bottom-line EBITDA mix drag .

Estimates Context

  • Revenue: Actual $639.7M vs S&P consensus $595.8M — beat driven by non‑Amazon and international growth and strong execution in traffic/conversion and new product launches * . Values retrieved from S&P Global.
  • EPS: S&P Primary EPS actual -$1.95 vs consensus -$2.71 — beat; note GAAP diluted EPS was -$2.19 due to IPO-related deemed dividend and SBC/taxes, explaining definitional differences *. Values retrieved from S&P Global.
  • EBITDA: S&P consensus $34.6M vs company Adjusted EBITDA $41.1M — beat on non‑GAAP basis; S&P “actual EBITDA” shows -$55.9M due to GAAP classification with IPO impacts. Investors should anchor on Adjusted EBITDA for operational comparison and use company reconciliations *. Values retrieved from S&P Global.

Key Takeaways for Investors

  • Solid fundamental beat on revenue and EPS with record NRR supports estimate upward revisions; pipeline and diversification across marketplaces/geographies add durability to growth .
  • Expect near-term margin variability (Q4 midpoint ~5.7% Adjusted EBITDA margin) as mix shifts; medium-term margin trajectory supported by AI-driven optimization and SG&A leverage .
  • Non‑Amazon and international growth are becoming material drivers; watch Coupang/TikTok/Walmart contributions and regional scaling in Europe/APAC/MENA for incremental upside .
  • IPO-related charges obscured GAAP earnings; normalized Adjusted EBITDA and cash generation (LTM FCF $70.8M) underline capital-efficient model and balance sheet strength ($312.8M cash, no debt) .
  • Near-term trading: positive setup from clean beats and Q4 guidance; potential volatility from definitional EPS/EBITDA differences and sequential margin cadence * . Values retrieved from S&P Global.
  • Medium-term thesis: AI “intelligence layer” and agentic workflows can deepen moat, improve conversion, and scale efficiently; investment uptick in technology should enhance long-run economics despite minor near-term margin drag .
  • Monitor macro/tariff dynamics; management not seeing impact yet but flagged possible future headwinds — assess resilience across diversified channels/geographies .

Footnotes:

  • Asterisked values are from S&P Global consensus/actuals. Values retrieved from S&P Global.
  • Company non‑GAAP metrics and reconciliations are provided in the Q3 2025 8‑K press release and exhibits .