Q2 2026 Pattern Group Inc Earnings Call Transcript
Key Points
- Record Q2 revenue of $877 million, up 47% year-over-year, with adjusted EBITDA up 54% to $54 million.
- Net revenue retention (NRR) hit a record 129%, up from 127% in Q1 and 118% a year ago, exceeding the long-term target of 115%.
- International revenue grew 87% year-over-year to $110 million, surpassing $100 million for the first time.
- Non-Amazon revenue grew 93% year-over-year, with strong performance across Tmall, TikTok Shop, Walmart, and Coupang.
- SaaS, logistics, and other revenue grew 123% year-over-year to $17 million, providing additional optionality.
- Raised full-year revenue outlook to $3.4-$3.5 billion (37-38% growth) and adjusted EBITDA to $211-$213 million (38-40% growth).
- Strong cash flow generation: trailing 12-month operating cash flow up 76% to $136 million and free cash flow up 92% to $106 million.
- Awarded a U.S. patent for True ROAS methodology, enhancing measurement capabilities.
- Named TikTok Shop's Strategic Partner of the Year, with over 100 brand partners now selling on the platform.
- Expanded advertising capabilities to ChatGPT through ROI Hunter, reaching consumers across multiple platforms.
- Q3 revenue growth is expected to moderate to 31-34% year-over-year due to tougher comparables and the shift of marketplace promotional events from Q3 to Q2.
- Q3 adjusted EBITDA growth is expected to be 25-29% year-over-year, lower than recent quarters, partly due to the event shift and seasonal pressures.
- NRR is expected to moderate to approximately 123-124% by year-end, down from the record 129% in Q2.
- R&D investment increased 89% year-over-year to $12 million, which is growing faster than revenue and could pressure margins.
- The company faces potential risks from brand acquisitions, such as P&G's acquisition of Thorne, which could lead to changes in partnerships, though no change of control provisions exist.
- Amazon still represents over 90% of total revenue, indicating high concentration risk despite diversification efforts.
- Q4 typically sees seasonal EBITDA margin pressure due to higher costs during the holiday period.
Good day, and thank you for standing by. Welcome to the Pattern Q2 2026 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Hamish Chung, VP of Finance. Please go ahead.
Thank you, operator. Good afternoon, and thank you for joining Pattern's earnings call for the Q2 2026. Before we begin, I'd like to remind everyone that today's discussion may contain forward-looking statements based on our current expectations, assumptions, and forecasts about future events. These forward-looking statements are subject to risks and uncertainties that could cause actual
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