Financial Performance - Total revenues for the nine months ended September 30, 2025, reached $1,778.2 million, up from $1,280.7 million in the same period of 2024, representing a growth of approximately 39%[121] - Adjusted EBITDA for the nine months ended September 30, 2025, was $109.99 million, compared to $73.74 million in 2024, reflecting a year-over-year increase of about 49%[110] - Revenues for the three months ended September 30, 2025, increased by 45.6% to $639,655,000, driven by a 122% net revenue retention rate and significant growth in both Amazon and non-Amazon marketplaces[123] - For the nine months ended September 30, 2025, revenues increased by 38.8% to $1,778,211,000, supported by a 122% net revenue retention rate and substantial growth in international markets[132] Cost and Expenses - Cost of goods sold for the nine months ended September 30, 2025, was $1,002.1 million, up from $719.8 million in 2024, indicating a rise of approximately 39%[121] - Cost of goods sold for the same period rose by 43.0% to $356,132,000, reflecting a smaller percentage increase compared to revenue due to product and brand mix[124] - Operating expenses for the three months ended September 30, 2025, totaled 109.4% of revenue, with significant increases in general and administrative expenses by 106.6% to $177,936,000, largely due to stock-based compensation[125][128] - Research and development expenses surged by 503.9% to $24,584,000, primarily driven by stock-based compensation and increased headcount in technology roles[129] Profitability - Operating income for the nine months ended September 30, 2025, showed a loss of $642, compared to a profit of $64.1 million in 2024, highlighting a significant decline in operational profitability[121] Cash Flow and Financing - Cash and cash equivalents as of September 30, 2025, stood at $312.8 million, bolstered by $135.0 million in proceeds from the IPO after expenses[139] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $90,913,000, influenced by significant non-cash adjustments[142] - Net cash provided by operating activities was $68.9 million for the nine months ended September 30, 2024, consisting of $49.7 million of net income, $10.9 million of non-cash adjustments, and a cash increase of $8.4 million from working capital management[143] - As of September 30, 2025, the company had a $150 million borrowing capacity under a revolving credit facility, with no outstanding borrowings[149] - The revolving credit facility bears interest at a variable base rate plus an applicable margin ranging from 0.50% to 2.00%[148] Taxation - The provision for income taxes for the nine months ended September 30, 2025, showed a significant decrease of 193.5% to a benefit of $(16,202,000), primarily due to stock compensation and non-deductible expenses[138] Operational Insights - The company operates across more than 60 marketplaces, utilizing over 46 trillion data points to optimize ecommerce growth[96] - The technology platform is supported by approximately 400 professionals, including software engineers and data scientists, enhancing operational capabilities[98] - The company has developed strong relationships with over 200 brand partners across various industries, including health and wellness, beauty, and consumer electronics[98] - The company’s operating model leverages global economies of scale to optimize costs while investing in future growth, enhancing operational efficiencies through technology and warehouse automation[102] Stock and Amendments - The stock amendment expense recognized was $32.7 million, a non-cash expense related to the amendment of the Founder Preferred Stock, which is not expected to recur[119] - The company recognized a non-cash stock amendment expense of $32,676,000 in 2025, related to changes in the conversion terms of its preferred stock, which is not expected to recur[130] Risk Management - The company monitors foreign currency risk as fluctuations may impact financial results, although historically, transaction gains and losses have not been material[156] - The company has not engaged in foreign currency hedging transactions but may consider it in the future[156] - The company continues to monitor inflation impacts and aims to offset higher costs through pricing strategies and cost efficiency measures[158] - As of September 30, 2025, there have been no material changes to contractual obligations or commitments from previous disclosures[151]
Pattern(PTRN) - 2025 Q3 - Quarterly Report