Pattern Group Inc. Series A Common Stock Q2 FY2026 earnings call

• Core Performance & Customer Metrics • Delivered fourth consecutive quarter of 40%+ YoY revenue growth and 50%+ YoY adjusted EBITDA growth • Achieved a new record net revenue retention (NRR) of 129%, up from 127% in Q1 2026 and 118% YoY, exceeding the long-term target of 115% • Trailing 12-month operating cash flow reached $136 million (up 76% YoY), and free cash flow reached $106 million (up 92% YoY); ended the quarter with $346 million in cash, no outstanding debt, and $150 million in unused borrowing capacity

• Product & Technology Milestones • Launched Pattern Intelligence (PIE) in May 2026, which runs automated governed actions for brand partners across marketplaces at a scale of millions of actions per day, with interactive partner visibility and approval capabilities • Secured a new U.S. patent for True ROAS, the company's proprietary advertising measurement methodology that isolates true incremental ad performance net of organic and competitive dynamics • Named TikTok Shop's 2025/2026 Strategic Partner of the Year; over 100 brand partners now sell via TikTok Shop, which has become a key channel for new brand acquisition, particularly in beauty and fashion • Through the December 2025 acquisition of ROI Hunter, brand partners can now advertise directly to consumers in ChatGPT, adding to existing reach across Meta, Google, Snap, and TikTok • Accumulated 91 trillion data points across 13 years of operations, with 44 total patents issued or pending across the company's three-layer proprietary e-commerce ontology

• Operational & Strategic Updates • The new East Coast U.S. fulfillment facility is now operational, with early throughput meeting management targets; the facility includes hardware/software innovations that double expected throughput • R&D investment reached $12 million (excluding stock-based compensation), growing 89% YoY as the company invests ahead of revenue in AI capabilities, data infrastructure, and PIE expansion • Named one of 2026's best U.S. companies to work for by U.S. News & World Report, and ranked 9th on America's 2026 Top 100 Most Loved Workplaces list • Long-term strategy positions the company to capitalize on the growth of agentic/LLM-driven commerce via two core investments: (1) commerce infrastructure as a service to support real-time inventory, fulfillment, and returns for agentic transactions; (2) brand agentic commerce acceleration capabilities that optimize brand listings for LLM search surfaces

Total Q2 2026 revenue was $877 million, growing 47% year-over-year (YoY). Adjusted EBITDA was $54 million, growing 54% YoY, outpacing revenue growth for the fourth consecutive quarter. The three core operating segments are: 1. International: Revenue grew 87% YoY to $110 million, representing ~12.5% of total revenue. This was the first quarter international revenue exceeded $100 million, with strong growth across 20 Asian marketplaces. 2. Non-Amazon domestic/international: Revenue grew 93% YoY to $82 million, representing ~9% of total revenue (up from 7% one year prior), with strength across Tmall, TikTok Shop, Walmart, and Coupang. 3. SaaS, logistics and other: Revenue grew 123% YoY to $17 million, representing ~1.9% of total revenue. Existing brand partner revenue (all segments combined) drove the majority of total growth, with a record net revenue retention (NRR) of 129% this quarter.

• Full-year 2026 guidance was raised from prior levels, with new revenue guidance of $3.4 billion to $3.5 billion, representing 37% to 38% YoY growth
• Full-year 2026 adjusted EBITDA guidance was raised to $211 million to $213 million, representing 38% to 40% YoY growth, with full-year adjusted EBITDA margin still expected to expand YoY despite accelerated R&D investment
• End-of-year 2026 NRR is projected to be 123% to 124%, remaining well above the 115% long-term target, but expected to slowly moderate over the next several quarters due to tougher YoY comparables
• YoY revenue growth is expected to moderate to the 30%+ range in the second half of 2026, as the company laps the very high growth rates achieved in H2 2025
• Q3 2026 revenue guidance is $840 million to $860 million, representing 31% to 34% YoY growth; this accounts for a 4-percentage-point growth shift from Q3 to Q2 2026 due to major marketplace promotional events (including Amazon Prime Day) moving earlier in the calendar this year
• Q3 2026 adjusted EBITDA guidance is $51 million to $53 million, representing 25% to 29% YoY growth, with the slower growth rate also driven by the calendar shift of promotional events

• YoY comparables become significantly tougher in the second half of 2026 after very strong growth in H2 2025, which will drive a natural moderation in growth rates
• Large marketplace promotional event calendar shifts created quarterly timing noise that impacts Q3 2026 revenue and adjusted EBITDA
• NRR is expected to slowly moderate from the current record 129% over coming quarters due to tougher comparables
• Seasonal cost pressure on EBITDA margins is expected in Q4 2026, consistent with historical trends, driven by higher logistics and storage costs during the holiday period
• The company continues to invest ahead of revenue in R&D and infrastructure, which temporarily suppresses near-term margin expansion
• High Amazon concentration (over 90% of current total revenue runs through Amazon) creates exposure to any changes in Amazon's platform policies or market position

Q: Following P&G's announced acquisition of Thorne, how will this affect your partnership with Thorne, and how do you approach customer retention when acquired brands have access to the new parent's larger distribution capabilities? / A: Management learned of the acquisition at the same time as the public, and business with Thorne continues as usual. Pattern already works with other brands in the P&G portfolio, and there is no change-of-control provision in the existing Thorne agreement. Pattern has a long track record of strong, lasting partnerships with brands inside large CPG conglomerates that grew via acquisition, and expects the acquisition to bring additional resources that will benefit the partnership long-term.

Q: Non-Amazon revenue currently makes up only ~9% of total revenue. Where do you expect non-Amazon share to trend over the next 1-2 years? / A: Amazon remains a strong, important partner for Pattern, but global e-commerce GMV is less concentrated in Amazon than Pattern's current revenue mix. Non-Amazon revenue is growing 2-3x faster than Amazon revenue, so natural diversification will continue as Pattern expands to where consumers and brands need support. Pattern is channel-agnostic and focused on supporting brands regardless of where they sell, so the non-Amazon share will continue to rise in line with global consumer and brand channel trends, though no specific target is provided.

Q: NRR has continued to hit new record highs. Is there an observable ceiling to NRR, and what is driving this persistent strength? / A: AI and technology roadmap execution has doubled the company's NRR expectations from 12 months ago, as improved AI capabilities allow Pattern to optimize across more global marketplaces and more brand SKUs than previously possible. Even long-tenured brand partners continue to outperform the broader market, as technology improvements and opportunities to expand into new geographies and marketplaces drive ongoing growth. New cohorts are not meaningfully diluting NRR, and management believes Pattern is still in the early stages of addressing its large total addressable market.

Q: What explains the expected Q3 2026 margin moderation implied by guidance? / A: The implied margin moderation is almost entirely driven by the calendar shift of large marketplace promotional events from Q3 to Q2 2026, which moved $ billions of GMV and associated margin into Q2. After adjusting for this timing shift, Q3 margin trends align with expectations. Full-year 2026 still expects net margin accretion YoY, with the only ongoing drag being faster-than-revenue R&D investment that management expects will drive long-term growth.