Pattern Group (PTRN) Q4 2025 Earnings Transcript

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Date

Thursday, March 5, 2026 at 5 p.m. ET

Call participants

• Chief Executive Officer — David Wright
• Chief Financial Officer — Jason Beesley

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Takeaways

• Revenue -- $2.5 billion for the full year, representing 39% growth; fourth quarter revenue was $723 million, up 40% year over year.
• Net revenue retention (NRR) -- Achieved a record NRR of 124% for the full year, increasing from 116% in the prior year.
• International revenue -- Increased 63% for the year and rose 9% year over year in the fourth quarter, with 39% of the $460 billion sales pipeline outside The Americas.
• Non-Amazon (NASDAQ: AMZN) revenue -- Up 60% for the year and surged 94% in the fourth quarter; triple-digit growth in Q4 from Coupang (NYSE: CPNG), TikTok Shop (ByteDance, private), and Walmart (NYSE: WMT).
• SaaS services and logistics segment -- Grew 58% for the year and 162% in the fourth quarter.
• Existing brand partner revenue -- $2.2 billion, up 42% year over year; 53% of total revenue from brand partners with more than five years' tenure.
• New brand partner revenue -- $282 million, up 22% year over year, showing a double-digit acceleration from 2024.
• Adjusted EBITDA -- $153 million for the year (6.1% margin), growing 52%; fourth quarter adjusted EBITDA of $43 million at a 5.9% margin, up 59% year over year.
• R&D investment -- Increased 46% year over year; targeted to rise further in the coming year, focused on AI-driven technology and automation.
• Operating & free cash flow -- $99 million of operating cash flow (up 41%), $79 million free cash flow (up 58%), and a 52% adjusted EBITDA-to-free cash flow conversion rate.
• Balance sheet -- Ended with $289 million in cash and equivalents, no debt, and $150 million available under a revolving credit facility.
• Inventory & operational efficiency -- Days inventory outstanding improved to 72 days, a 10-day reduction; products reach marketplaces in approximately 1.5 days.
• Platform scale & data assets -- Pattern Intelligence layer powered by 66 trillion data points, up from 47 trillion six months prior; 5.53 billion automated bid changes and 40 million price changes executed in 2025.
• Share repurchase program -- Board authorized up to $100 million for share repurchases; management views this as a signal of confidence in ongoing growth and cash generation.
• Full-year 2026 revenue guidance -- Projected at $3.12 billion to $3.16 billion, representing 25%-26% growth; first quarter revenue guide of $710 million to $720 million, up 31%-33% year over year.
• 2026 adjusted EBITDA guidance -- Expected in the range of $180 million to $182 million (5.8% margin), up 17%-19%, with first quarter guidance at $41 million to $42 million, a 22%-24% increase.
• M&A activity -- Acquired ROI Hunter (Czech digital ad platform with 89 employees) and Next Wave (leading TikTok Shop operator), expanding capabilities in ad spend and affiliate networks.
• Marketplace expansion -- Added 12 new marketplaces during the year, now operating in more than 70; rapid scaling in TikTok Shop (224% Q4, 482% yearly growth, though off a small base) and Coupang ($11 million in 2025, up from zero).
• Technology & logistics moat -- Management highlighted the strategic value of operational control via inventory purchase model, real-time execution at scale, and a growing reverse logistics infrastructure.

Summary

Pattern Group (NASDAQ:PTRN) posted record revenue, net revenue retention, and profitability, underscoring the compounding impact of multi-year brand partnerships and platform investments. Management reported significant gains in non-Amazon and international channels, augmented by strategic acquisitions and enhancements to Pattern's data and logistics infrastructure. The board approved a $100 million share repurchase program, and the company finished the year with substantial cash and no debt, supporting guidance for continued revenue and EBITDA growth in 2026.

• Management expects net revenue retention to converge to a long-term 115% target by year-end, reflecting normalization after recent outperformance.
• The company's $460 billion sales pipeline is increasingly international, with 39% of targets from outside The Americas.
• AI-driven agentic commerce, data density, and rapid marketplace integration are positioned as major differentiators fueling both automation efficiencies and partner value.
• Leadership indicated that the company has maintained a seven-plus-year roadmap for a long time and is now beginning to realize that it could potentially compress that roadmap into a much shorter timeframe. The entire roadmap is based on the e-commerce formula for a brand.
• CEO Wright said, "Our Pattern Intelligence layer is now powered by more than 66 trillion data points, up significantly from 47 trillion just six months ago."
• CFO Beesley confirmed that variable cost components of cost of goods sold, marketplace commissions, and fulfillment grew slightly slower than revenue growth in the fourth quarter.
• The shift toward agentic shopping and marketplace complexity is prompting ongoing investment, including in reverse logistics and fulfillment infrastructure.
• Acquisitions of ROI Hunter and Next Wave are expected to accelerate expansion in digital ad management and social commerce channels.

Industry glossary

• Agentic shopping: E-commerce transactions initiated and completed by AI-powered agents acting on behalf of a consumer, automating product selection and purchase execution.
• Net revenue retention (NRR): Measures the percentage of recurring revenue retained from existing customers over a period, including upsells and expansions, but net of churn.
• Pattern Intelligence layer: Internal proprietary data and analytics system aggregating trillions of e-commerce data points for predictive and optimization purposes.
• Days inventory outstanding (DIO): Average number of days inventory remains in stock before being sold or moved through the supply chain.

Full Conference Call Transcript

David Wright, our Co-Founder and Chief Executive Officer, and Jason Beesley, our Chief Financial Officer. Today’s earnings call is being webcast and a replay will be available on our Investor Relations website following the call. Following our prepared remarks, we will open the call to questions. I will now turn the call over to our CEO, David Wright. David, please go ahead.

David Wright: Thanks, Hamish, and good afternoon, everyone. 2025 was a defining year for Pattern Group Inc. Series A Common Stock, marked by record revenue, record retention, and expanding profitability as a public company. For the full year, revenue increased 39% to $2,500,000,000. Jason will walk through the specifics of our margin expansion, cash generation, and our new share repurchase program in a moment. But I want to start by outlining four strategic metrics from our results that highlight our accelerating momentum. First, net revenue retention, or NRR. We delivered a record NRR of 124% for the year, up from 116% in 2024. As brands work with Pattern Group Inc.

Series A Common Stock, the benefits compound and they are leaning heavier into our platform. Second, international growth. Expanding our global footprint is paying off. International revenue increased 63% for the full year. That momentum accelerated in Q4 with international revenue up 9% year over year. Third, non-Amazon growth. Our channel diversification strategy is scaling rapidly. Non-Amazon revenue grew 60% for the full year and surged 94% in the fourth quarter. And fourth, SaaS services and logistics. We are successfully augmenting our core business of marketplace acceleration. This part of the business grew 58% for the full year and an impressive 162% in Q4.

While still a smaller portion of revenue, this performance reflects strong platform buildout, accelerating adoption, and continued expansion into higher margin offerings. Taken together, these results reflect not just growth, but increasing momentum across the entire e-commerce equation.

Stepping away from the specific financial results, I would like to talk about e-commerce overall. We are entering a new era of e-commerce, where traditional buying channels face simultaneous headwinds and tailwinds. At the center of this shift is the rapid adoption of LLMs and AI-driven discovery, which is fundamentally rewiring how consumers conduct product research and beginning to evolve the purchase path. Today’s consumer is highly empowered, using these technologies to instantly synthesize reviews and compare global specifications. This shift is compressing the funnel, moving consumers from research to transaction within a single interface, and bypassing the traditional multi-stop shopping journey. As this evolves into agentic shopping—where agents move beyond research to execute purchase decisions—Pattern Group Inc.

Series A Common Stock is uniquely positioned to empower brands in this new ecosystem.

In this hyper transparent environment, brands must focus on product quality and consumer delight to survive. We use our 66,000,000,000,000 data points to give brands deep visibility into consumer intent and category whitespace. By partnering with Pattern Group Inc. Series A Common Stock on the full product lifecycle, we arm our partners with the predictive data needed to innovate faster and capture share. This expanding value proposition is directly contributing to our record NRR.

Through this evolution, Pattern Group Inc. Series A Common Stock’s role remains resolutely brand-focused and channel-agnostic. Whether a transaction originates from a marketplace search, an LLM query, social commerce, or an autonomous agent, our objective remains the same: ensure our brand partners are optimized and winning the transaction wherever demand originates.

What sets us apart in this environment of both AI acceleration and AI disruption is our moat, built on a foundation of data, international breadth, logistics scale, and speed. In the world of AI, speed is a critical differentiator. It starts with our data density. Our Pattern Intelligence layer is now powered by more than 66,000,000,000,000 data points, up significantly from 47,000,000,000,000 just six months ago. Our technology allows us to execute at a significant scale. In 2025, our automation engine executed 5,530,000,000 marketplace bid changes and 40,000,000 price changes in real time. But intelligence alone is not enough. You have to be able to execute globally.

We pair that digital speed with the extensive international breadth of our platform, spanning 22 global offices and supporting expansion across more than 70 marketplaces. This reach is underpinned by our inventory purchase model. By owning the goods and managing the physical goods flow, we provide our partners with a level of agility and, quote, skin in the game that traditional service models simply cannot match. In an era of AI disruption, this operational control becomes a strategic advantage.

In 2025, we scaled our operations, increasing shipment volume and density while meaningfully improving speed. Products now reach marketplaces in approximately 1.5 days. Furthermore, our focus on operational efficiency resulted in our days inventory outstanding, or DIO, improving to 72 days, reflecting a 10-day reduction year over year. Pattern Group Inc. Series A Common Stock is built for where e-commerce is going. As AI reshapes discovery and automation accelerates execution, our platform combines intelligence with operational scale to help brands win. We are entering 2026 with momentum, a durable model, and a clear focus on profitable growth. We are confident in our ability to create long-term value for our brand partners and shareholders.

With that, I will turn it over to Jason to walk through the financials. Jason, over to you.

Jason Beesley: Thanks, David, and thank you to everyone for joining us today. 2025 was an exceptional year for Pattern Group Inc. Series A Common Stock with strong momentum carrying through the fourth quarter. For the full year, revenue grew 39% to $2,500,000,000. In the fourth quarter, revenue increased 40% year over year to $723,000,000. We achieved record net revenue retention of 124%, up from 116% last year. Existing brand partner revenue reached a record $2,200,000,000, up 42% year over year. New brand partner revenue was $282,000,000, up 22% year over year, a double-digit acceleration from 2024.

As a reminder, our growth is driven by three primary levers. First, technology-driven optimization remains foundational to NRR and is the primary driver of growth. As brands work with Pattern Group Inc. Series A Common Stock, the benefits from our ongoing work in optimizing the e-commerce equation compound. Improvements across content, advertising, pricing, and supply chain drive higher conversion and greater efficiency. For example, we launched a Destiny update that improved traffic performance by expanding the breadth of campaigns we can manage and increasing automation to drive greater speed and optimization. Second, new marketplaces and geographies. We continue expanding our global footprint and now operate in more than 70 worldwide.

As David shared, our non-Amazon revenue grew 60% for the full year and 94% in the fourth quarter. That momentum was driven in part by triple-digit year-over-year growth in Q4 on Coupang, TikTok Shop, and Walmart. More than two-thirds of our brands partner with Pattern Group Inc. Series A Common Stock across multiple marketplaces. This diversified presence deepens brand relationships and expands our growth opportunity. Third, adding product depth. As our relationships with our brand partners grow, we expand the product lines we sell and help launch new products into marketplaces with the benefit of deep brand knowledge and brand-specific optimization roadmaps. These expansions accelerated growth relative to 2024 and were meaningful contributors to NRR in 2025.

These growth vectors layer, and the compounding effect is why many of our largest and longest-tenured partners continue to accelerate their growth year after year. In 2025, more than 53% of our revenue was attributable to brand partners who have worked with Pattern Group Inc. Series A Common Stock for over five years, demonstrating how growth compounds over time.

Turning to operating expenses and profitability. For the full year, we achieved adjusted EBITDA of $153,000,000, or 6.1% adjusted EBITDA margin, reflecting 52% growth year over year. Excluding stock-based compensation, we saw leverage in our operations and G&A expense line. Sales and marketing grew in line with revenue, while we accelerated investment in R&D, which grew 46% year over year. We expect to continue to strategically invest in technology to fuel future growth. Looking at disaggregated expenses, our variable cost components of cost of goods sold, marketplace commissions, and fulfillment grew slightly slower than revenue growth. In the fourth quarter, adjusted EBITDA was $43,000,000, or a 5.9% margin, growing 59% year over year.

We realized some margin benefit in the quarter due to the timing of hiring, with certain roles shifting into Q1.

For the full year, we generated $99,000,000 of operating cash flow, up 41% year over year, and $79,000,000 of free cash flow, up 58% year over year, representing a 52% adjusted EBITDA-to-free cash flow conversion rate. We ended the period with $289,000,000 in cash and equivalents, no outstanding debt, and $150,000,000 of borrowing capacity available under our revolving credit facility. As David mentioned, we announced that our board of directors has authorized a share repurchase program of up to $100,000,000. We believe our repurchase program demonstrates our confidence in our ability to continue to deliver outsized growth, profitability, and cash flow generation.

To quickly recap, we exited 2025 with record results and strong momentum. Growth in the back half of the year benefited from incremental optimizations across the e-commerce equation as well as new product launches that performed exceptionally well, enabling us to deliver world-class NRR of 124% in 2025. We are on pace to eclipse $3,000,000,000 in revenue in 2026. Specifically, we expect revenue in the range of $710,000,000 to $720,000,000 in Q1, representing 31% to 33% growth year over year, and total revenue for the year of $3,120,000,000 to $3,160,000,000, up 25% to 26%.

There are a few things to consider as we think about the year ahead. First, we are entering the year with strong momentum, but that means we will face difficult comps in the second half of the year as we lap our record 40%+ growth rates. We also expect a more normalized cadence of new product expansions in the coming year. And as is typical in our forecasting methodology, we are taking a middle-of-the-road approach in our assumptions for new brand partner revenue in 2026 due to sales variation. As a reminder, NRR is a trailing twelve-month metric.

We are extremely happy with our recent NRR performance in excess of 120%, but, zooming out, we view 115% as an exceptional long-term target. As it relates to expenses, we expect to increase our investment in R&D this year as we look to further strengthen our technology moat in AI-driven technology and automation, optimize decision making, and improve efficiency across the platform. We will also invest to accelerate our go-to-market as we continue to deepen our penetration in existing and expand into new categories, marketplaces, and geographies. As such, we expect adjusted EBITDA in the range of $41,000,000 to $42,000,000 in Q1, representing 22% to 24% growth.

And we expect full-year adjusted EBITDA to be $180,000,000 to $182,000,000, or 5.8% of expected revenue, representing 17% to 19% growth. Stepping back, we are pleased with our results and remain committed to accelerating growth for our brand partners. We have a high degree of visibility into the underlying product performance and consumer behavior on a SKU-by-SKU basis, which underpins our forecasting methodology. We are operating from a position of strength and are committed to deliver long-term value to our shareholders. With that, I will turn it back to David before we open the call for questions.

David Wright: Thanks, Jason. 2025 was a milestone year for Pattern Group Inc. Series A Common Stock, not just in terms of performance, but in strengthening the foundation of our model. As a newly public company, we demonstrated that we can scale growth, profitability, and cash generation while continuing to invest in our long-term differentiation. E-commerce is evolving rapidly, driven by AI, automation, social commerce, and global scale. And Pattern Group Inc. Series A Common Stock is built to operate at the center of that change. Our focus remains clear: optimize the e-commerce equation, remove friction for brands, and deliver measurable outcomes at scale. We entered 2026 with strong momentum and confidence in our ability to deliver durable long-term value.

Thank you for your support. We will now open for questions.

Operator: Thank you. As a reminder, to ask a question, you will need to press *11 on your telephone. To remove yourself from the queue, you may press *11 again. We ask that you please limit yourself to one question and one follow-up to allow everyone the opportunity to participate. Our first question comes from the line of Eric Sheridan of Goldman Sachs. Your line is open, Eric.

Eric Sheridan: Thank you so much. In terms of the way you frame the year forward for 2026, can you help us better understand how much of that growth is being contributed by elements of existing brand partners or the potential to expand the scope of brand partners on your platform based on the backlog of conversations you are having today?

Jason Beesley: Yes, I will take that one. Thanks, Eric. When we look at our guidance, there are a few things that we keep in mind here. The first is the second half was great performance, and that was across both existing brand partners and new, as well as we had a lot of great optimizations that hit and some product launches that hit in the second half. So we are pretty excited about all that. When we look at the future, what we are talking about for the full year is $3,100,000,000+ growing 25% to 26%, with existing brand partner NRR converging to 115% by the end of the year generally as our long-term target.

That convergence will not happen immediately in Q1. As a reminder, NRR is a mathematical equation that takes the last twelve months over the prior last twelve months. So as those stronger comps move into the equation on the denominator, that is where that convergence will happen mathematically. On new brand partners, we really like the performance that we had in 2025. Our guidance takes more of a middle-of-the-road approach, looking at both the 2024 and 2025 growth rates and takes that into consideration. In terms of the pipeline, we have $460,000,000,000 in target opportunity list that we are attacking methodically over time, and we are growing sales and marketing resources to attack that.

We really like what we are seeing around the world, and we are confident in what we can do.

Eric Sheridan: Maybe just one follow-up then, building upon that. When you think about the exit philosophy, you had very strong growth in Q4 around non-Amazon channels. How should we be thinking about the momentum around non-Amazon channels continuing to build as well into 2026?

Jason Beesley: Thanks, Eric. We think that the growth in the non-Amazon channels just points to how big the opportunity is. We really only started moving into that space in the last five years, and the growth rate continues to increase as we add resources and focus on that. So we think that will be a nice tailwind to the future year.

David Wright: And maybe, Eric, thanks for the question. I will add a little color here. One thing that is interesting, Jason mentioned the $460,000,000,000 in pipeline that we have. For that pipeline, it is a defined brand in a defined geography. So when we look at where that is coming from, 39% of that pipeline is coming from outside The Americas. And so you can really start seeing, for any company like ours, this would be expected.

Where GMV is around the world, as we mature and get better and better across platforms and across geographies, we are starting to see even that sales pipeline, those numbers we are tracking, start to normalize more to the marketplaces outside the US and the geographies outside the US, further reinforcing your question.

Operator: Our next question comes from the line of Colin Sebastian of Baird. Please go ahead, Colin.

Colin Sebastian: Great. Thanks, and congrats on another strong quarter. Maybe one for David and one for Jason. David, obviously, you are benefiting from the moat that you have built with the intelligence layer and the logistics footprint now. But looking ahead, what are the top few areas of product innovation on the roadmap that you think have the best opportunity to move the needle? And then, Jason, as you sort of lean into some of these investments as we see this year, what is your expectation in terms of when those investments or those initiatives will augment top-line growth, and then maybe ultimately contribute incrementally to adjusted EBITDA margin? Thank you.

David Wright: Yes, thanks for the question. The roadmap is as exciting as I have ever seen it. And I guess it really comes down to, quite frankly, things that in the early five to eight years of the company—now we are twelve years in—there were things that we were really excited about that took a year or two. We are able to do some of those things in a month now, or less, just with the capabilities that are available to all companies. You just have to leverage them well. And then we are advantaged in a significant way by the 66,000,000,000,000 data points. So the true differentiation in AI of the future will be data.

And so you combine those things, and then we have had a seven-plus-year roadmap for a long time and are just starting to realize, wow, we could maybe compress that seven-year roadmap into, I do not know, a fraction of that amount. And again, our entire roadmap is based on the e-commerce formula for a brand. We are trying to make a brand win on revenue, and revenue for a brand is traffic times your conversion rate times availability. So again, there is the logistics piece that you referred to. If you look at last year, we were broken down: 35% of our growth we believe we could tie to optimization.

Twenty-one percent came from traffic and 11% from conversion; that equals that 35%. So we are just continuing to look and break down that formula and then do it internationally. It is quite a complex set of technology we are building, making faster progress than ever, and it is accelerating.

Jason Beesley: Great, and then maybe just to touch on your question, Colin. In terms of the investments, they are really in two spaces. First is in the R&D expense line, which historically we have grown in line with revenue, and that is to build technology, some of which is capitalized. That is also to do experimental work on how we can optimize the equation using large language models, which also uses tokens. So we expect a bit more growth in that ahead of revenue, and that is what is driving a small deleverage in the margin percentage in the short term. The other thing that we are doing is we are going to continue to build out our fulfillment capabilities.

Last year, we launched a Las Vegas facility. This year, we will launch an East Coast facility. We have a great track record of getting operational leverage as we do that, but in this specific year, there may be less leverage because of the back-to-back launches at facilities. To your question in terms of when will that show up in top line and leverage, I would say in the top line it continues to impress us how fast the tools allow us to run new optimizations. We are excited to see even top-line benefit in that even in the very near term.

As it relates to fulfillment, we will probably return to leverage in the fulfillment line items and the operations in the following year. Our general thesis of how we are trying to run this business is that we are looking to drive adjusted EBITDA dollar and free cash flow dollar growth, with a nice mix of profitability and free cash flow generation as we grow very fast. We are less focused on specific margin percentage in one quarter or year. We are focused on the great opportunity that we have to drive that dollar-based growth.

Colin Sebastian: That is great. Thank you very much, guys.

Operator: Our next question comes from the line of Justin Patterson of KeyBanc. Please go ahead, Justin.

Justin Patterson: Great. Thank you very much. I will speak with AI a bit. David, could you talk about just how agentic coding has really changed productivity across the workforce and the pace of product philosophy, and perhaps whether that changes your views on long-term headcount needs? And then just drilling back a little bit more, I would love to hear about some of the drivers of international growth. We have heard that localization is just getting a lot easier with AI tools, but would love to hear how that is influencing international. Thank you.

David Wright: Yes, great questions. Without question, we will gain efficiencies. Of course, there are multiple ways to do that. The primary driver for us—if you think about our space that is in the trillions, the opportunity that we have to go and chase, and we are two to three billion right now—so it is quite exciting to recognize, part of business is right time at the right place, and the right tools and the right technologies that come along to further that. On the international side and in terms of coding, it is not just coding that is being impacted from an AI standpoint.

You might almost talk about it as a complete refactoring of all jobs, where you start looking at what are the inputs and outputs of this job, what is the task to be done, and then what can you create skills around and a framework around executing from a technology standpoint and an agentic execution—what can you and what can you not? Of course, there are some things you cannot. You cannot move the box, and then we are always going to need some people around regulatory, making sure that we are within the guidelines of the law. The legal framework that we operate in, of course, is quite complex when you start going global.

Beyond that, I think that we will see not only a little leverage in terms of efficiency, but I think it will become quite staggering. I would imagine we are not going to be the only company in that area. The ones that are chasing, and chasing quickly, are going to see immediate benefits there.

Operator: Thank you. Our next question comes from the line of Bernard McTernan of Needham & Company. Your line is open, Bernard.

Bernard McTernan: Great. Thanks for taking the questions. Just had a question on the variable cost of the business. Jason, I know you called out how there was leverage on a year-over-year basis, but the cost did tick up sequentially as a percentage of revenue. Can you just remind us of the seasonality that we should expect in Q1, and if that contemplates continued leverage that we have been seeing? And then secondly, just wanted to follow up on the buyback. It was nice to see the $100,000,000 authorization. The stock is below where the IPO price is at; should we expect you guys to be buying back stock at these levels? Thank you.

Jason Beesley: Sure. Bernard, let me just clarify your question. When you say sequentially, do you mean quarter over quarter when you are talking about variable cost?

Bernard McTernan: Exactly. Ticking up from almost 85% in the third quarter to a little bit over 86% in the fourth quarter.

Jason Beesley: Sure. I will touch on that one first, and then I will talk more broadly about leverage on the expense buckets, and then I will go to the buyback. All marketplaces have slightly higher fees for operating on marketplaces in Q4 versus Q3. That is just a natural thing that happens when you sell on marketplaces, and we build that into the way we run the business, how we model our deals, all that. There is no real surprise there in terms of a little bit higher marketplace costs in the fourth quarter, particularly around things like storage and deliveries.

In terms of how our leverage path has been in 2025, if you take out stock-based compensation and IPO-related costs, we did see leverage on the disaggregated expenses in that sales and G&A line, and our variable components were within a normal variance that we see, as that is really driven mostly by product mix and, specifically to your point on Q4, a little bit of seasonality due to marketplace cost. So we are happy with our leverage. We talked about what it looks like in the future.

Specifically on the buyback, at this point, we think we are in a unique position of one of the few companies that has recently IPO’d that is delivering great growth, great profitability, and generating meaningful cash flow. So our strategy on capital allocation is: first, we are going to invest in growing the business; second, we are going to invest in M&A opportunities as they come that add to our capabilities; and then third, we like having the lever of a repurchase program to return value back to shareholders on that lever as well.

Exactly how we are going to use that and exactly what price we are going to use that will be a facts-and-circumstances, market-driven decision with guidance from our board. So I cannot speak to exactly how we will do that, but that is the general principle of why we announced the repurchase program, and we hope that it is seen as a sign of confidence in our ability.

Bernard McTernan: Appreciate all the thoughts. Thanks, Jason.

Jason Beesley: Thank you.

Operator: Next question comes from the line of Douglas Anmuth of JPMorgan. Your line is open, Doug.

Douglas Anmuth: Great. Thanks for taking the questions. One for Jason, one for David. First, Jason, can you talk a little bit more about the category priorities in 2026? I think in the past, you have kind of talked about beauty as having some of the characteristics that are similar to health and wellness, but curious on your progress there. And then David, just on agentic, I know you talked about the benefits of coding efficiencies and a little bit more on the expense side, but you also said that AI is fundamentally rewiring e-commerce and the purchase path. I am curious how this is changing how you are helping brands and customers at this point.

And are you seeing that AI-driven traffic is higher intent or has greater conversion versus Google and anything else that has been more traditionally top of funnel? Thanks.

Jason Beesley: Yes, Doug. Thanks. Our category priorities are vast. Health and wellness is where we started over twelve years ago, so it benefits from long brand partnerships with a lot of layered optimizations and a great trust-and-respect cycle in the go-to-market for new brands. That is really a category-specific cycle, but we are growing in lots of other categories as well. Beauty, particularly, over 100% growth. DIY tools is another fun one. Generally speaking, the way we think about it is that opportunity list that David talked about is split by brands, and we have direct outreach sales forces that are looking at different ways to reach and get traction in categories around the world.

We are focused on lots of categories; those are just a few that I would note.

David Wright: Thanks, Doug. Real quick on how AI is reshaping e-commerce. It is a fascinating time to be alive. It is very fun to be in our seats. If you think about the LLMs and how much shopping will take place there, that is one piece of agentic. Probably last week we all thought that OpenAI was really going to double down and make the instant checkout process work. I think that they recently have signaled maybe they are backing away from that a little bit. We will see where that goes. It appears that Gemini and others are continuing the path that they were on. We will continue to monitor that.

The best way to think about this is that in the last year we added 12 marketplaces. If you really think about and digest these models and these methods, they are quite similar to a marketplace. So for us to add two or three or four—or maybe one of them backs off, like OpenAI did—maybe it goes from four to three. The core issue that we are talking the most about with brands is the level of complexity and how quickly it is changing. Not a day goes by that we do not have a conversation with a brand on what they are looking for and how we can help solve the issues there.

It plays into our moat very well because it requires logistics—not only logistics—but one of the things we are starting to invest in quite a bit is the reverse logistics infrastructure. Because that process often just needs to be taken care of regardless of how they transact there. So not only do we have the data moat and the ability to execute quickly from a machine learning and tools perspective, but we also have the logistics moat that will allow us to expand quickly globally and help brands wherever the landscape changes or shifts. We are quite excited about it.

Douglas Anmuth: Great. Thank you both.

Jason Beesley: Thank you.

Operator: Our next question comes from the line of Mark Mahaney of Evercore. Please go ahead, Mark. Mark Mahaney, your line is open. Please make sure your line is unmuted.

Mark Mahaney: I am sorry. I am here. I want to ask about marketplaces. I know you mentioned in your prepared remarks, Coupang, TikTok Shop, Walmart. Give a sense of the life cycle of these or how long it takes to get these marketplaces up to material levels. Is this something that you can turn on, and is this quarters or is this years to get to where you are with those companies? Maybe that will help us think about your ability to successfully and effectively diversify to other marketplaces going forward. Thank you.

David Wright: Yes. Thanks, Mark. A couple of points there. Two that stand out for us that I think are quite compelling that we mentioned in the prepared remarks: one is TikTok. If you look at the fourth quarter numbers, TikTok Shop grew 224% for us, and in 2025 overall, 482%. Now they are reasonably small numbers but ramping quickly. I think I am fine to give an overall number on Coupang, because Coupang in 2024 was zero, and in 2025 our number there was $11,000,000. They can ramp quite quickly, and that is just one case in South Korea. It is a great marketplace, but there are others that can ramp just as quickly.

A lot of it is just maturity for us. I would say marketplace number two for us took a couple of years, and this year we added 12. We are just getting much better, and the platform is more modular, where we are able to add capability. When we build a new marketplace, we build our technology in modules that we stack on core modules that we can do quite quickly now.

Mark Mahaney: Thank you very much, David.

Jason Beesley: Thank you.

Operator: Our next question comes from the line of John Colantuoni of Jefferies. Your line is open, John.

John Colantuoni: Great. Thanks for the questions. David, starting with your opportunity in agentic commerce, since Pattern Group Inc. Series A Common Stock does not have internal last-mile delivery capabilities and is currently relying on marketplaces for checkout capabilities, maybe you can help us better understand if you are planning to invest into those capabilities to benefit from agentic commerce or if you can lean on your partners’ own capabilities in the new channel. And second, regarding first quarter outlook, it looks like revenue is expected flat to down sequentially versus the fourth quarter, which compares to up more like 4% or 5% sequentially in the past couple of years.

Is there anything about what you are seeing in the first quarter this year that could result in a divergence from historical seasonality? Thanks.

David Wright: First of all, we do leverage marketplace fulfillment when it exists. If you go across the 73 marketplaces, most do not have fulfillment, so we have to solve that problem. Our monthly DTC or final-mile delivery today stands at about 140,000 units a month. So we are building capability there. In the areas of the world where we do not have capability, of course we partner. At the end of the day, we are the interface for the brand, and we are finding the cheapest possible way to operate on a marketplace. If they have fulfillment, we will leverage it.

But even if a marketplace has fulfillment—take Amazon as an example—if their oversized offering is not competitive, we will fulfill it ourselves or leverage a partner to do it. Another example would be refrigerated products. We handle all of those ourselves because Amazon does not have a refrigerated offering. There is quite a varied set there, but we are getting quite capable, and this is a number-one priority on that.

Jason Beesley: Great. Thanks, John. Thanks for your question. Specifically as it relates to the quarter and thinking about it in the context of the full-year growth and what Q1, the shape of that growth, will be. I understand your point on the seasonality quarter over quarter. That is really a function of how much Q4 overperformed versus our expectations. It is pretty impressive. We have a lot of teams working on different growth levers; virtually every single one of them was above our expectations. So our guidance is grounded in not necessarily over-exceeding our expectations on every single lever. It is more of a middle-road approach.

We guide to the full year at $3,100,000,000, and we look at the shape of the year with Q1 and Q2 being stronger growth rates than Q3 and Q4.

Operator: Thank you. Our next question comes from the line of Mark Kelley of Stifel. Please go ahead, Mark.

Mark Kelley: Great. Thanks very much. David, I would love to get your perspective on the article yesterday that OpenAI is changing its instant checkout to pushing people more towards apps within ChatGPT instead of checking out right inside the app natively. From your perspective, does that change anything from your perspective? Does that signal what is to come for agentic commerce? That is the first question. And the second one is just a quick one for you, Jason. I think the first question, you walked through the NRR mechanics for 2026. Is the way to interpret that it kind of slowly trails off and you end the year at 115%? Is that the right way to think through quarter by quarter?

Thank you.

David Wright: Great question. That was an interesting change by OpenAI. We will see where that lands. I will say this is evolving quickly and changing daily, weekly, on the strategy, and we will see where that lands. If you take OpenAI as a specific example and you dive into it, there is a lot of complexity there. My understanding from them on the shift is they are starting to realize, “I need real-time and live inventory.” That will be complicated. “I need a reverse logistics process.” That will be complicated. I think they are realizing, for now, it is probably better to leverage partners here. We will see if that lasts.

I will repeat back something TikTok told me in a meeting where they said, “If I can get you to spend time on my platform, I can get you to buy things.” If you think about where we all are spending time now, we are all spending a significant amount of time on an LLM. My understanding is the rough number is about 22% of purchases over the holiday season had some impact by LLMs. Of course, there was not instant checkout, but they are being impacted nonetheless. So that is evolving. It is something that we are taking very seriously regardless of how exactly those flows go because they are impacting consumer behavior already.

The models today—Google and Google Gemini versus OpenAI, UCP versus ACP—have different philosophies today and probably will continue to ebb and flow over the years.

Jason Beesley: And then to your second question, yes, what we are saying is that the long-term goal is 115%. Our guidance takes that into account in terms of a directional space. But mathematically, since it is last twelve months over prior last twelve months, as those tougher comps move to the denominator, that will put downward pressure sequentially on that NRR metric, not immediate pressure in Q1, for example. The last thing I will say is these growth rates, while slightly lower than prior years, are always on a larger number, and having that law-of-large-numbers pressure on your growth rates is a good problem to have.

Mark Kelley: Perfect. Thank you both. Appreciate it.

Operator: Thank you. Our next question comes from the line of David Lusberg of BMO Financial Group. Your line is open, David.

David Lusberg: Thanks so much. I was curious, as you think about some of the new brand partners you onboarded during the quarter, if you could talk about the makeup of that cohort and if it looks similar to your broader cohort, if you are expanding the brands you are working with from different categories. And then you did do a couple of deals in the quarter. Maybe you can talk through the rationale of those deals and the value prop they unlock a bit for Pattern Group Inc. Series A Common Stock and business partners.

Jason Beesley: Thank you. Sure, I will take that. First on new brand partners, it was a really good quarter for signing new brand partners across many categories. If I was to highlight a few interesting things in the quarter, I would highlight we are signing more and more brands to do TikTok Shops. That is an emerging trend. Brands are more and more interested in having a more optimized experience there for consumers, and it is very complex and still evolving, so we are really on the forefront of that.

The other one I would highlight is we are signing more and more brands outside the US that want to come into the US, which is a fun and exciting trend that we are seeing.

David Wright: Then I will just cover quickly the two M&A deals that we did in the quarter. The first being ROI Hunter. That is a phenomenal little gem of a business out of the Czech Republic—89-person team FTE-wise—managing over $1,000,000,000 in ad spend across walled gardens, with phenomenal data and a great platform to help expand our brand. They have a very interesting way of thinking about advertising, which is very product-specific and very measurable. We are really pleased to have them join us and excited about the data and the access that gives us. Secondly is a company called Next Wave. Next Wave is one of the premier TikTok Shop operators.

As a matter of fact, we found them from a recommendation from TikTok themselves. It is a phenomenal team, great operators, and they have really expanded our capabilities and our affiliate network across TikTok. We believe we will see great momentum from those two. In terms of philosophy, we will continue to do that. Most of our M&A, as you watch, you will not see us buying revenue or trying to optimize purely for financial reasons. They will always be additive to our overall capability set. If you really dive into the guts of those, they are quite impressive adds at a very reasonable price.

Jason Beesley: Thank you.

Operator: Ladies and gentlemen, that is all the time we have for questions at this time. And that also concludes today’s conference call. Thank you for participating. You may now disconnect.

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