Pattern Group
Pattern buys goods from brands such as Thorne and resells them on Amazon and other online marketplaces, running the selling for them.
Our viewNeutral Medium conviction
The scores
The profile · 1-4
Growth3/4 →
Revenue up 39.3% in 2025 and 46.6% in Q2 2026, organically, but 91% comes through Amazon and most from existing brands.
Business quality3/4 →
Retention of 124% to 129% shows brands staying, but most can leave on 60 days' notice and Amazon can buy from them direct.
Financial position4/4 ↑
$345.8M of cash, no debt, an undrawn $150M revolver and $106.1M of free cash flow over the year.
Execution record3/4 ↑
Beat the top of its guide in Q1 and Q2 2026 and raised the year twice, but has guided for only four quarters.
Per share capture3/4 ↑
Stock pay runs near 1.4% of revenue against a $100M buyback, but founders hold 86.4% of the vote.
Potential2/4 →
The prize is large but uncounted, and growth depends on brands that can leave and on Amazon's terms.
Risk profile2/4 ↓
Amazon brings 93% of revenue on terms it sets, and one brand supplying a sixth of inventory is changing owner.
Valuation3/4 ↑
At 14.2 times adjusted EBITDA the price needs 22% yearly growth against 37% to 38% guided for 2026.
Evidence quality3/4 →
Revenue, cash and shares are filed, but the two big brands are unnamed, Thorne's terms are unfiled and retention is the company's own measure.
The Verdict
We rate Pattern neutral. It buys goods from brands and resells them on Amazon and other online marketplaces, running the selling for them, and it is a solid business: brands stay and sell more through it each year, and revenue is growing fast. The price is fair: it assumes growth slows to about half today's pace, a bar that looks reachable. The view hinges on a few hands: Amazon brings almost all its revenue, two supplement brands supply a third of its stock, and one, probably Thorne, is being bought by P&G. We think the growth is real, but too much of it rests on two brands and one marketplace.
The long caseShopping keeps moving onto online marketplaces and brands hand that selling to specialists; Pattern must keep winning brands beyond two and beyond Amazon.
The evidence under this - 9 claims
C01facthigh confidence
Pattern buys inventory from more than 200 brand partners and resells it to consumers as an authorised third-party seller on more than 70 marketplaces, Amazon above all, running listings, advertising, pricing, forecasting and logistics. It also sells software, fulfilment and services to brands and a programme for brands selling first-party to marketplaces.
C07facthigh confidence
Amazon brought 93% of 2025 revenue: $2,147.2M from Amazon.com and $170.8M from its other countries. Pattern sells under click-through terms it cannot negotiate, and names account suspensions, fee increases and changed payment terms among past events.
C05facthigh confidence
Q2 2026 revenue was $876.8M, up 46.6%; operating income $35.5M, 4.1% of revenue; net income $27.5M, or $0.15 a diluted share; adjusted EBITDA $53.8M, up 54%.
C15facthigh confidence
Net revenue retention was 124% in 2025 against 116% in 2024, then 127% in Q1 2026 and 129% in Q2. Existing partners brought 89% of 2025 revenue and partners of more than five years over 53%; existing-partner revenue grew 41.9% to $2,219.0M while new-partner revenue grew 21.8% to $282.3M.
C08facthigh confidence
Two health and wellness brand partners supplied 17% and 17% of Pattern's 2025 inventory purchases, against 17% and 11% in 2024; health and wellness was 69% of purchases. Pattern does not name either brand.
C12inferencemedium confidence
Thorne is probably one of the two health and wellness brands that each supplied 17% of Pattern's 2025 inventory: it is a supplement brand, Pattern has been its exclusive online reseller since at least 2019, and an analyst asked about it first on the Q2 call.
derivedC08, C10, C11 and the Q2 2026 call (S05); Pattern names neither brand
against this
- Pattern never names the two brands, and health and wellness is 69% of purchases, so other supplement brands could fill both slots (S01).
- Thorne's last public figure is from 2023, and its sales mix may have shifted since it went private (S10).
C13facthigh confidence
Procter & Gamble agreed on 4 August 2026 to buy Thorne for $3.8B, expecting to close in its fiscal second quarter of 2027, October to December 2026, subject to regulatory approval.
C29estimatemedium confidence
To justify today's company value at 12 times profit after stock pay in 2029, discounted at 10%, Pattern needs about $303M of that profit; at 4.8% of revenue, today's adjusted EBITDA margin less stock pay, that is about $6.3B of revenue, 22% growth a year from the 2026 guide.
derivedcompany value from C28 grown at 10% for three years is $3.63B; divided by 12 gives $303M; the 2026 guide midpoint margin is 6.2% and Q2 stock pay was 1.35% of revenue, leaving 4.8%; $303M divided by 0.048 is $6.3B; ($6.3B / $3.44B) to the power one third is 1.22. The 12 times and the flat margin are judgements, set out as A02 and A03
against this
- Revenue is guided up 37% to 38% in 2026 and retention is 129%, so 22% a year is below the current pace (C16, C15).
- Q3 is guided to slow to 31% to 34% and retention to fall five points, and the largest partner may change hands (C16, C13).
C42estimatemedium confidence
The 2026 guide midpoints imply an adjusted EBITDA margin of about 6.2%, $212M on $3.44B, against 6.1% in 2025 and 6.1% in Q2 2026.
derivedC16 guide midpoints; C04 and C18 for 2025's $152.9M on $2,501.3M; C05 for Q2's $53.8M on $876.8M
against this
The Q3 guide implies adjusted EBITDA growth of 25% to 29% against revenue up 31% to 34%, so the margin dips in Q3 (S04).
The company
A brand that wants to sell on Amazon can open its own seller account and hire a team for listings, ads, pricing and shipping. Pattern does that job instead: it buys the brand's goods and resells them as the brand's only authorised seller on Amazon and more than 70 other marketplaces.
More than 200 brands use it. Thorne, a supplement maker, made Pattern its exclusive online reseller, and in 2023 Pattern was 29.1% of Thorne's sales.
The evidence under this - 5 claims
C01facthigh confidence
Pattern buys inventory from more than 200 brand partners and resells it to consumers as an authorised third-party seller on more than 70 marketplaces, Amazon above all, running listings, advertising, pricing, forecasting and logistics. It also sells software, fulfilment and services to brands and a programme for brands selling first-party to marketplaces.
C02management claimmedium confidence
Pattern says its platform draws on more than 66 trillion data points, built by about 480 engineers and data scientists; it owned one issued patent and 30 pending applications at the end of 2025.
against this
One issued patent is thin protection for a data and software business, and the data-point count is the company's own unaudited figure (S01).
C03management claimmedium confidence
Pattern reports inventory write-offs below 0.2% of revenue over three years, inventory turnover of 5.0 in 2025, a 98% North American in-stock rate, a 4.9 of 5 seller rating, and over 90% of US units shipped in full truckloads.
against this
Inventory rose to $318.3M at 30 June 2026 against payables of $300.3M, so the turnover claim rests on suppliers funding the stock (S03).
C10facthigh confidence
Thorne's own filings show it appointed Pattern its exclusive authorised online reseller on named marketplaces under agreements of 25 November 2019 and 18 April 2022, with Pattern committing to annual purchase minimums, a term to 2022 extendable to the end of 2024, and assignment allowed to a buyer of Thorne's business; the two have worked together since 2015.
C11facthigh confidence
Pattern was 29.1% of Thorne's net sales in Q2 2023 (33.2% a year earlier) and 39.3% of its receivables, by Thorne's last public 10-Q.
How it makes money
Pattern earns the gap between what it pays a brand and what the shopper pays, after Amazon's fees, advertising and shipping. In 2025 it kept 43.6 cents of each sales dollar after paying for the goods, and about 6 cents as adjusted profit.
Almost all of it is product sales: software and services for brands were $16.7M of Q2 2026's $876.8M. Suppliers wait to be paid, so their credit nearly covers the stock Pattern holds.
The evidence under this - 5 claims
C01facthigh confidence
Pattern buys inventory from more than 200 brand partners and resells it to consumers as an authorised third-party seller on more than 70 marketplaces, Amazon above all, running listings, advertising, pricing, forecasting and logistics. It also sells software, fulfilment and services to brands and a programme for brands selling first-party to marketplaces.
C04facthigh confidence
Revenue was $2,501.3M in 2025, up 39.3%, at a 43.6% gross margin. Operating income fell to $25.4M from $87.2M and net income to $16.2M from $67.9M, after $104.3M of stock pay and related taxes, mostly from IPO awards, and $32.7M of stock-amendment expense.
C06facthigh confidence
In Q2 2026 Amazon.com brought $730.3M, Amazon's other countries $64.3M, other marketplaces $65.5M and software, logistics and other $16.7M, up 123%; international revenue was $110.0M, up 87%.
C42estimatemedium confidence
The 2026 guide midpoints imply an adjusted EBITDA margin of about 6.2%, $212M on $3.44B, against 6.1% in 2025 and 6.1% in Q2 2026.
derivedC16 guide midpoints; C04 and C18 for 2025's $152.9M on $2,501.3M; C05 for Q2's $53.8M on $876.8M
against this
The Q3 guide implies adjusted EBITDA growth of 25% to 29% against revenue up 31% to 34%, so the margin dips in Q3 (S04).
C19facthigh confidence
At 30 June 2026 Pattern held $345.8M of cash, no debt and an undrawn $150M revolver; operating cash flow over the year was $136.2M, capital spending $30.1M and free cash flow $106.1M. Inventory was $318.3M, payables $300.3M and receivables $207.7M, $101.5M of it from Amazon.
Where the money comes from, stream by stream
| Stream | Share of sales (Q2 2026) | How it earns it |
|---|---|---|
| Amazon.com | 83.3% | Brand partners' products bought and resold to US shoppers on Amazon's own site, with Pattern running the listings, ads and logistics. |
| Amazon marketplaces, international | 7.3% | The same resale on Amazon's sites in other countries. |
| Other online marketplaces and channels | 7.5% | The same resale on Walmart, TikTok Shop and more than 70 other marketplaces and channels. |
| SaaS, logistics and other | 1.9% | Software, fulfilment and services sold to brands, including the advertising software bought with ROI Hunter. |
Who runs it
David Wright co-founded Pattern and has run it since 2018; Jason Beesley has run its finances since 2021. Wright and his wife, co-founder Melanie Alder, own over half the company and control most of the votes, so outside shareholders cannot change its direction. There is no yearly bonus, and their new share awards vest just for staying, not for hitting any sales, profit or share-price goal.
The evidence under this - 4 claims
C43facthigh confidence
David Wright, a co-founder, has been chief executive since November 2018 and chairman since September 2025; Jason Beesley, formerly finance chief of NBCUniversal International, has been finance chief since January 2021; co-founder Melanie Alder, Wright's wife, has been chief strategy officer since February 2024 after serving as operating and investment chief.
C44facthigh confidence
At 26 March 2026 directors and executive officers as a group owned 71.0% of the shares and 91.3% of the vote; Wright and Alder, married and co-trustees of two family trusts, shared 96.6M shares, 54.6% of the shares and 86.4% of the vote, and Knox Lane, whose founder sits on the board, held 28.2M, 15.9%.
C45facthigh confidence
Pattern ran no annual bonus plan for its named officers in 2025, paying only a $500,000 discretionary IPO bonus to the finance chief; its long-term awards are restricted units that vest with time, and the March 2026 grants of 375,000 to Wright and 125,000 to Alder vest half after one year and half after two, with no performance condition. A 2025 award of 8.8M units to Wright, vesting on the IPO and on the share price doubling and tripling, was cancelled in August 2025.
C22facthigh confidence
The co-founders, chief executive David Wright and Melanie Alder, hold all Series B shares at 20 votes each and with their trusts control about 86.4% of the vote against 54.7% of the economic interest; Pattern is a controlled company.
Why it wins, and who could beat it
Why customers come back
One team, one set of data and one warehouse network serve more than 200 brands, so each gets a full selling operation it could not afford alone. Brands stay: the ones already signed sold 24% more through Pattern in 2025 and 29% more by Q2 2026.
The pain it removes is real. The FTC says Amazon's fees take close to half of many sellers' revenue. A brand selling through Pattern gets about 56 cents per dollar and pays none of them.
The evidence under this - 5 claims
C38inferencemedium confidence
Brands stay and sell more through Pattern because one data, advertising and logistics stack spread over 200 brands and 70 marketplaces does for each what it could not afford alone; retention of 124% to 129% is that scale showing up.
derivedC15, C03, C10, C11, C01
against this
- New-partner revenue grew 21.8% in 2025 against 41.9% from existing partners, so growth leans on a narrowing base (S01).
- Most brand agreements can be ended on 60 days' notice, and two brands supplied a third of 2025 inventory, so retention rests on a few relationships (S01).
C15facthigh confidence
Net revenue retention was 124% in 2025 against 116% in 2024, then 127% in Q1 2026 and 129% in Q2. Existing partners brought 89% of 2025 revenue and partners of more than five years over 53%; existing-partner revenue grew 41.9% to $2,219.0M while new-partner revenue grew 21.8% to $282.3M.
C39inferencelow confidence
A brand selling through Pattern gets about 56 cents of each retail dollar, Pattern's 2025 cost of goods ratio, with no marketplace fees, advertising or logistics to fund, against fees the FTC says take close to half of many sellers' revenue when they sell on Amazon themselves.
derivedC04 for the 56.4% cost of goods ratio and C31 for the fee burden; the two are not measured on the same brands
against this
- A brand selling direct keeps the margin Pattern earns, 43.6% gross before Pattern's own fees, ads and logistics (S01).
- The FTC figure is an allegation about many sellers, not a measure of brands of Pattern's partners' size (S15).
C31factmedium confidence
The FTC alleged in its 2023 suit against Amazon that its fees, from per-item charges to advertising that has become virtually necessary, force many sellers to pay close to 50% of their total revenues to Amazon.
C03management claimmedium confidence
Pattern reports inventory write-offs below 0.2% of revenue over three years, inventory turnover of 5.0 in 2025, a 98% North American in-stock rate, a 4.9 of 5 seller rating, and over 90% of US units shipped in full truckloads.
against this
Inventory rose to $318.3M at 30 June 2026 against payables of $300.3M, so the turnover claim rests on suppliers funding the stock (S03).
The threat
A brand can do the job itself, or sell wholesale to Amazon, which then sells it as its own. Shoppers can now also buy inside ChatGPT, straight from a brand's website.
The nearest threat is an owner change: P&G is buying Thorne. Pattern says their contract has no clause that ends it on a sale.
The evidence under this - 5 claims
C36facthigh confidence
Pattern's 10-K names its competitors as classes: brands running ecommerce themselves, providers of single pieces such as ads, content, logistics or analytics, marketplaces buying first-party, and other accelerators; it names no company.
C37facthigh confidence
Amazon buys from brands itself and resells them as its own product sales, booking $269.3B in 2025, which is the first-party alternative to a reseller; it books third-party sellers' sales only as its net fee.
C33factmedium confidence
Since September 2025 ChatGPT users in the US can buy inside the chat from Etsy sellers and, Stripe said, over a million Shopify merchants, through Instant Checkout and an open protocol Stripe built with OpenAI; Pattern's 10-K lists AI agents and in-chat checkout as a risk.
C13facthigh confidence
Procter & Gamble agreed on 4 August 2026 to buy Thorne for $3.8B, expecting to close in its fiscal second quarter of 2027, October to December 2026, subject to regulatory approval.
C14management claimlow confidence
Pattern's finance chief said it learned of the Thorne sale with the public, that the agreement has no change-of-control provision, that Pattern already works with other P&G brands, and that the relationship is business as usual.
against this
- No change-of-control clause still leaves the 60 days' notice termination most brand agreements carry, and the filed Thorne agreements allowed assignment to a buyer, so P&G can keep or end it (S01, S11).
- P&G's 10-K describing the deal does not mention Pattern (S13).
The rivals: AMZN, PG, and 3 more that are private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| In-house | Brands' own ecommerce teams selling as their own third-party sellerPriced against it: In-house | Marketplace reselling: buying brands' goods and selling them as a third-party seller | On sale | In-house |
| AMZN | Amazon Vendor, Amazon buying wholesale and reselling first-partyPriced against it: Different product | Marketplace reselling: buying brands' goods and selling them as a third-party seller | On sale | Different product |
| PG | Procter & Gamble, as Thorne's buyerPriced against it: Different product | Marketplace reselling: buying brands' goods and selling them as a third-party seller | Announced | Different product |
| Private | ChatGPT Instant Checkout, built by OpenAI with StripePriced against it: Private | Marketplace reselling: buying brands' goods and selling them as a third-party seller | On sale | Private |
| Private | Advertising, content and analytics software and agencies sold to brandsPriced against it: Private | Software, logistics and services sold to brands | On sale | Private |
How big it could get
How big this could get
Nobody counts how much brands sell through resellers like Pattern. The edges are known: Americans bought $340.2B online in Q2 2026, 12.2% more than a year earlier, and sellers paid Amazon $172.2B in fees in 2025. Pattern sold $2.15B on Amazon's US site, a small slice of either.
The evidence under this - 3 claims
C32facthigh confidence
The Census Bureau estimated US retail e-commerce at $340.2B in Q2 2026, seasonally adjusted, up 12.2% from a year earlier while all retail rose 6.7%, and 17.1% of retail sales.
C30facthigh confidence
Amazon's third-party seller services revenue, the commissions and fulfilment fees sellers pay it, was $172.2B in 2025, up 10.3%, beside $68.6B of advertising and $269.3B of its own first-party online store sales.
C07facthigh confidence
Amazon brought 93% of 2025 revenue: $2,147.2M from Amazon.com and $170.8M from its other countries. Pattern sells under click-through terms it cannot negotiate, and names account suspensions, fee increases and changed payment terms among past events.
The results
The numbers
Is it growing?Fast
Sales grew 44% over the twelve months to Jun 2026, about the same pace as the 39% in the year to Dec 2025.
Is it profitable?Thin
Operating margin is 1.4%, down from 3.9% in the year to Dec 2023.
Does growth pay off?Flat
Running costs take 43¢ of each sales dollar, up from 40¢ in the year to Dec 2023.
Does it earn good returns?Low
Shareholders' money earned 6.6% a year, down from 97% in the year to Dec 2023.
Is it making cash?Thin
It turned 3.5% of sales into free cash, $106M over the last twelve months.
Is profit turning into cash?Real cash
Free cash flow was 4.0 times net income.
Are shares being diluted?Diluting
The share count rose 100% in 2.5 years, and pay in shares costs 3.8% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-04. Fiscal years end in December.
| Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Jun 2026 | |
|---|---|---|---|---|
| Size and growth | ||||
| Sales | $1.37B | $1.80B | $2.50B | $3.01B |
| Sales growth | - | +31% | +39% | +44% |
| Profit | ||||
| Gross margin | 44% | 44% | 44% | 44% |
| Operating margin | 3.9% | 4.9% | 1.0% | 1.4% |
| Net margin | 3.0% | 3.8% | 0.6% | 0.9% |
| What growth costs, per sales dollar | ||||
| Research and development | 1.1% | 1.0% | 1.9% | 1.9% |
| Sales and marketing | 19% | 19% | 20% | 20% |
| General and admin | 20% | 19% | 21% | 21% |
| Pay in shares | −0.0% | 0.0% | 3.9% | 3.8% |
| Capital spending | 1.1% | 1.1% | 0.8% | 1.0% |
| Cash | ||||
| Cash from operations | $41.5M | $70.3M | $99.4M | $136M |
| Free cash flow | $27.0M | $49.9M | $78.9M | $106M |
| Balance sheet | ||||
| Cash and short-term investments | - | $176M | $289M | $346M |
| Returns and shares | ||||
| Return on capital | 91% | 86% | - | - |
| Shares (diluted) | 90.8M | 90.8M | 115M | 181M |
What growth costs
Growing does not make Pattern much more profitable. Most of its costs, the goods themselves, shipping, warehouses and advertising, rise in step with each sale, so the margin has stayed thin as sales grew. The newer cost is share pay since listing, which has pulled reported profit down.
The evidence under this - 3 claims
C47facthigh confidence
Per sales dollar, sales and marketing ran 18.8%, 18.8% and 19.8% in 2023 to 2025 and 19.7% over the year to June 2026; operations, general and administrative, which holds third-party fulfilment and warehousing, 20.2%, 18.8%, 20.9% and 20.9%; research and development 1.1%, 1.0%, 1.9% and 1.9%, the 2025 step including $20.0M of IPO stock pay; cost of goods 56.0%, 56.5%, 56.4% and 56.1%; stock pay nothing, nothing, 3.9% and 3.8%. Operating margin went 3.9%, 4.9%, 1.0% and 1.4%.
C42estimatemedium confidence
The 2026 guide midpoints imply an adjusted EBITDA margin of about 6.2%, $212M on $3.44B, against 6.1% in 2025 and 6.1% in Q2 2026.
derivedC16 guide midpoints; C04 and C18 for 2025's $152.9M on $2,501.3M; C05 for Q2's $53.8M on $876.8M
against this
The Q3 guide implies adjusted EBITDA growth of 25% to 29% against revenue up 31% to 34%, so the margin dips in Q3 (S04).
C20facthigh confidence
Stock pay and related taxes were $104.3M in 2025, mostly IPO-triggered awards, then $9.0M in Q1 and $11.8M in Q2 2026; 9.4M restricted units were outstanding at 30 June with $84.9M of cost still to be recognised over 2.66 years.
The last report (5 Aug)
Quarter ended June 2026, filed figures.
47%
Sales growth
against the same quarter a year earlier
13.3%
Growth from the quarter before
against 7.0% the quarter before that
4¢
Operating profit
per dollar of sales
Q2 2026 revenue rose 46.6% to $876.8M and beat the company's own forecast for the second quarter running. Brands already signed sold 29% more through Pattern than a year before, and sales off Amazon nearly doubled.
Management raised its 2026 revenue forecast again, to $3.42B to $3.46B. But it expects Q3 growth to slow to 31% to 34%, partly because Amazon's Prime Day moved into Q2. The day before, P&G announced it would buy Thorne.
What it did to the thesisThe print showed brands keep selling more through Pattern and that growth is spreading beyond Amazon, but it left open the question the thesis turns on: whether the brand behind much of that growth stays once P&G owns it.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.15 against $0.12 expected; $0.15 as filed, with no adjustments.
The evidence under this - 5 claims
C05facthigh confidence
Q2 2026 revenue was $876.8M, up 46.6%; operating income $35.5M, 4.1% of revenue; net income $27.5M, or $0.15 a diluted share; adjusted EBITDA $53.8M, up 54%.
C06facthigh confidence
In Q2 2026 Amazon.com brought $730.3M, Amazon's other countries $64.3M, other marketplaces $65.5M and software, logistics and other $16.7M, up 123%; international revenue was $110.0M, up 87%.
C15facthigh confidence
Net revenue retention was 124% in 2025 against 116% in 2024, then 127% in Q1 2026 and 129% in Q2. Existing partners brought 89% of 2025 revenue and partners of more than five years over 53%; existing-partner revenue grew 41.9% to $2,219.0M while new-partner revenue grew 21.8% to $282.3M.
C16management claimmedium confidence
The 2026 revenue guide rose from $3.12B to $3.16B in March to $3.29B to $3.33B in May and $3.42B to $3.46B in August, and adjusted EBITDA from $180M to $182M to $211M to $213M. The Q3 guide is $840M to $860M, up 31% to 34%, after about four points moved into Q2 with Prime Day, and retention is expected to end 2026 at 123% to 124% against a long-term 115%.
sourceQ4 and full-year 2025 results release (8-K Exhibit 99.1)primaryQ1 2026 results release (8-K Exhibit 99.1)primaryQ2 2026 results release (8-K Exhibit 99.1)primaryQ2 2026 earnings call transcript (FMP)primary
against this
- The Q3 guide implies growth falling from 46.6% to 31% to 34%, and retention is guided down five points (S04, S05).
- Adjusted EBITDA excludes stock pay of $11.8M in Q2 alone (S04).
C13facthigh confidence
Procter & Gamble agreed on 4 August 2026 to buy Thorne for $3.8B, expecting to close in its fiscal second quarter of 2027, October to December 2026, subject to regulatory approval.
What management did with the money
Pattern holds $345.8M of cash and no debt. It set aside $100M to buy back shares in March and has used $3.7M of it, while share pay now runs at about 1.4% of revenue.
The evidence under this - 3 claims
C21facthigh confidence
Pattern had 155,696,579 Series A and 21,702,510 Series B shares on 4 August 2026, 177.4M in all; Q2 diluted shares were 181.2M. A $100M buyback was authorised on 2 March 2026; 319,531 shares were bought at $11.62, leaving $96.3M.
C19facthigh confidence
At 30 June 2026 Pattern held $345.8M of cash, no debt and an undrawn $150M revolver; operating cash flow over the year was $136.2M, capital spending $30.1M and free cash flow $106.1M. Inventory was $318.3M, payables $300.3M and receivables $207.7M, $101.5M of it from Amazon.
C20facthigh confidence
Stock pay and related taxes were $104.3M in 2025, mostly IPO-triggered awards, then $9.0M in Q1 and $11.8M in Q2 2026; 9.4M restricted units were outstanding at 30 June with $84.9M of cost still to be recognised over 2.66 years.
The price, and where we disagree
In short. Fair. The price pays for growth slowing to about half today's pace, which looks reachable, but it rests on Amazon and two brands.
Share price
$17.33
close,
Company value for each $1 of cash profit
71.6
its 4-year normal 30.7
The shares tripled from February to a high of $29.40 in July, then fell 41%. Knox Lane, the largest outside investor, sold shares at $19.00 in June, and the shares dropped 16.6% in three days in late September with no news behind it.
The Q3 2026 results on 4 November are the first test of the slower growth Pattern expects, and of whether it says anything about Thorne.
The evidence under this - 4 claims
C25facthigh confidence
Pattern listed at $14 in September 2025 and first closed at $15.63; it fell to $9.59 on 24 February 2026, reached $29.40 on 9 July, and closed at $17.33 on 2 October, 41% below that high and 24% above a year earlier.
C40factmedium confidence
The shares fell 16.6% from $20.41 on 22 September to $17.02 on 25 September 2026 with no filing, release or trusted news item behind the move, a week after Knox Lane's lock-up ended.
C23facthigh confidence
KL Pattern Holdings, Knox Lane's vehicle, sold 9.2M shares in an underwritten offering at $19.00 in June 2026, from 28.18M held, with a 90-day lock-up that ended in mid-September; Pattern received nothing and paid the offering costs.
C16management claimmedium confidence
The 2026 revenue guide rose from $3.12B to $3.16B in March to $3.29B to $3.33B in May and $3.42B to $3.46B in August, and adjusted EBITDA from $180M to $182M to $211M to $213M. The Q3 guide is $840M to $860M, up 31% to 34%, after about four points moved into Q2 with Prime Day, and retention is expected to end 2026 at 123% to 124% against a long-term 115%.
sourceQ4 and full-year 2025 results release (8-K Exhibit 99.1)primaryQ1 2026 results release (8-K Exhibit 99.1)primaryQ2 2026 results release (8-K Exhibit 99.1)primaryQ2 2026 earnings call transcript (FMP)primary
against this
- The Q3 guide implies growth falling from 46.6% to 31% to 34%, and retention is guided down five points (S04, S05).
- Adjusted EBITDA excludes stock pay of $11.8M in Q2 alone (S04).
How we read the multiple
The figure above uses reported profit, cut last year by one-off share awards. On adjusted profit buyers pay about 14.2 times. Working back:
- The company is valued at about $2.73B net of cash; grown 10% a year, about $3.63B in 2029.
- At 12 times, a normal price for a mature reseller, that needs about $303M of 2029 profit after share pay.
- At about 4.8 cents of such profit per dollar, today's level, that is $6.3B of sales.
- That is 22% growth a year, against 37% to 38% expected for 2026.
Against its own history. Far above its normal on reported profit because one-off share awards at the listing cut that profit for a year, not because buyers pay more.
The evidence under this - 4 claims
C28estimatemedium confidence
At $17.33 Pattern is worth about $3.07B on 177.4M shares and, net of $345.8M of cash and no debt, about $2.73B as a company: 14.2 times trailing adjusted EBITDA of $191.5M, 12.9 times the $212M midpoint of the 2026 guide, and 0.9 times trailing revenue of $3,013M.
derivedshare count from the 10-Q cover (C21), cash from the balance sheet (C19), trailing adjusted EBITDA from C18, guide from C16; trailing revenue as 2025 revenue less Q1 and Q2 2025's $540.4M and $598.1M plus 2026's $773.7M and $876.8M
against this
- The vendor's market value of $2.69B counts Series A shares only, so its multiples read about 12% low (S07, S03).
- On diluted shares of 181.2M company value is about $2.79B, or 14.6 times (S03).
C29estimatemedium confidence
To justify today's company value at 12 times profit after stock pay in 2029, discounted at 10%, Pattern needs about $303M of that profit; at 4.8% of revenue, today's adjusted EBITDA margin less stock pay, that is about $6.3B of revenue, 22% growth a year from the 2026 guide.
derivedcompany value from C28 grown at 10% for three years is $3.63B; divided by 12 gives $303M; the 2026 guide midpoint margin is 6.2% and Q2 stock pay was 1.35% of revenue, leaving 4.8%; $303M divided by 0.048 is $6.3B; ($6.3B / $3.44B) to the power one third is 1.22. The 12 times and the flat margin are judgements, set out as A02 and A03
against this
- Revenue is guided up 37% to 38% in 2026 and retention is 129%, so 22% a year is below the current pace (C16, C15).
- Q3 is guided to slow to 31% to 34% and retention to fall five points, and the largest partner may change hands (C16, C13).
C42estimatemedium confidence
The 2026 guide midpoints imply an adjusted EBITDA margin of about 6.2%, $212M on $3.44B, against 6.1% in 2025 and 6.1% in Q2 2026.
derivedC16 guide midpoints; C04 and C18 for 2025's $152.9M on $2,501.3M; C05 for Q2's $53.8M on $876.8M
against this
The Q3 guide implies adjusted EBITDA growth of 25% to 29% against revenue up 31% to 34%, so the margin dips in Q3 (S04).
C20facthigh confidence
Stock pay and related taxes were $104.3M in 2025, mostly IPO-triggered awards, then $9.0M in Q1 and $11.8M in Q2 2026; 9.4M restricted units were outstanding at 30 June with $84.9M of cost still to be recognised over 2.66 years.
Priced against its rivals
None of the listed rivals above sells the same thing to the same buyers as a large part of what it does. A price comparison needs at least two, so the price is judged against its own history instead.
Also checked and set aside: Global-E Online (a substitute, not the same product).
Where we disagree with the market
The market believes
A fast-growing Amazon partner that keeps beating its forecasts, as eight of nine analysts rating it a buy say.
We believe
The growth is real and the price asks less than today's pace, but two brands and one marketplace carry it.
Analysts read the 129% figure, how much more existing brands sell each year, as proof the growth will last. We read where it comes from: two brands supplied a third of 2025 inventory, and one is probably changing owner.
We would be wrong if Thorne stays after P&G closes the purchase, growth holds above 30% into the last quarter of 2026, and existing brands still sell 23% or more extra by year-end.
What analysts say, and the evidence
Analysts positive
89%
of 9, 1 Oct
Four months earlier
100%
of 10, 1 Jun
The evidence under this - 5 claims
C26facthigh confidence
Two analysts rate the shares strong buy, six buy and one hold; the positive share was 88.9% of nine on 1 October, against 100.0% of ten in June.
C15facthigh confidence
Net revenue retention was 124% in 2025 against 116% in 2024, then 127% in Q1 2026 and 129% in Q2. Existing partners brought 89% of 2025 revenue and partners of more than five years over 53%; existing-partner revenue grew 41.9% to $2,219.0M while new-partner revenue grew 21.8% to $282.3M.
C08facthigh confidence
Two health and wellness brand partners supplied 17% and 17% of Pattern's 2025 inventory purchases, against 17% and 11% in 2024; health and wellness was 69% of purchases. Pattern does not name either brand.
C12inferencemedium confidence
Thorne is probably one of the two health and wellness brands that each supplied 17% of Pattern's 2025 inventory: it is a supplement brand, Pattern has been its exclusive online reseller since at least 2019, and an analyst asked about it first on the Q2 call.
derivedC08, C10, C11 and the Q2 2026 call (S05); Pattern names neither brand
against this
- Pattern never names the two brands, and health and wellness is 69% of purchases, so other supplement brands could fill both slots (S01).
- Thorne's last public figure is from 2023, and its sales mix may have shifted since it went private (S10).
C13facthigh confidence
Procter & Gamble agreed on 4 August 2026 to buy Thorne for $3.8B, expecting to close in its fiscal second quarter of 2027, October to December 2026, subject to regulatory approval.
What could go wrong, and how we would know
The risks
- One marketplace. Amazon brought 93% of 2025 revenue, on terms Pattern cannot negotiate, and has suspended its accounts and raised fees before.
- Two brands. Two supplement brands supplied a third of 2025 inventory, and most brands can leave on 60 days' notice.
- Thorne's new owner. P&G is buying Thorne and could take its selling in-house once the purchase closes.
- A thin margin. Pattern keeps about 6 cents per dollar, so a one-point rise in Amazon's fees is a sixth of its profit.
- Founders decide. The two co-founders control 86.4% of the vote, so other shareholders cannot change management.
- Shopping moves to chat. Shoppers can now buy inside ChatGPT from brands' own websites, skipping the marketplace.
The evidence under this - 7 claims
C07facthigh confidence
Amazon brought 93% of 2025 revenue: $2,147.2M from Amazon.com and $170.8M from its other countries. Pattern sells under click-through terms it cannot negotiate, and names account suspensions, fee increases and changed payment terms among past events.
C08facthigh confidence
Two health and wellness brand partners supplied 17% and 17% of Pattern's 2025 inventory purchases, against 17% and 11% in 2024; health and wellness was 69% of purchases. Pattern does not name either brand.
C12inferencemedium confidence
Thorne is probably one of the two health and wellness brands that each supplied 17% of Pattern's 2025 inventory: it is a supplement brand, Pattern has been its exclusive online reseller since at least 2019, and an analyst asked about it first on the Q2 call.
derivedC08, C10, C11 and the Q2 2026 call (S05); Pattern names neither brand
against this
- Pattern never names the two brands, and health and wellness is 69% of purchases, so other supplement brands could fill both slots (S01).
- Thorne's last public figure is from 2023, and its sales mix may have shifted since it went private (S10).
C09facthigh confidence
A substantial portion of Pattern's brand agreements let the brand end them for convenience on 60 days' notice; some long-term agreements with significant brands do not.
C42estimatemedium confidence
The 2026 guide midpoints imply an adjusted EBITDA margin of about 6.2%, $212M on $3.44B, against 6.1% in 2025 and 6.1% in Q2 2026.
derivedC16 guide midpoints; C04 and C18 for 2025's $152.9M on $2,501.3M; C05 for Q2's $53.8M on $876.8M
against this
The Q3 guide implies adjusted EBITDA growth of 25% to 29% against revenue up 31% to 34%, so the margin dips in Q3 (S04).
C22facthigh confidence
The co-founders, chief executive David Wright and Melanie Alder, hold all Series B shares at 20 votes each and with their trusts control about 86.4% of the vote against 54.7% of the economic interest; Pattern is a controlled company.
C33factmedium confidence
Since September 2025 ChatGPT users in the US can buy inside the chat from Etsy sellers and, Stripe said, over a million Shopify merchants, through Instant Checkout and an open protocol Stripe built with OpenAI; Pattern's 10-K lists AI agents and in-chat checkout as a risk.
What we still do not know
- Which two brands supplied a third of 2025 inventory. Pattern does not name them.
- Whether Thorne's contract survives P&G. It is not public, and P&G's filing does not mention Pattern.
- How much Amazon's other sellers sell. Amazon reports only the fees it keeps.
- Why the shares fell 16.6% in late September with no news.
The evidence under this - 5 claims
C08facthigh confidence
Two health and wellness brand partners supplied 17% and 17% of Pattern's 2025 inventory purchases, against 17% and 11% in 2024; health and wellness was 69% of purchases. Pattern does not name either brand.
C12inferencemedium confidence
Thorne is probably one of the two health and wellness brands that each supplied 17% of Pattern's 2025 inventory: it is a supplement brand, Pattern has been its exclusive online reseller since at least 2019, and an analyst asked about it first on the Q2 call.
derivedC08, C10, C11 and the Q2 2026 call (S05); Pattern names neither brand
against this
- Pattern never names the two brands, and health and wellness is 69% of purchases, so other supplement brands could fill both slots (S01).
- Thorne's last public figure is from 2023, and its sales mix may have shifted since it went private (S10).
C14management claimlow confidence
Pattern's finance chief said it learned of the Thorne sale with the public, that the agreement has no change-of-control provision, that Pattern already works with other P&G brands, and that the relationship is business as usual.
against this
- No change-of-control clause still leaves the 60 days' notice termination most brand agreements carry, and the filed Thorne agreements allowed assignment to a buyer, so P&G can keep or end it (S01, S11).
- P&G's 10-K describing the deal does not mention Pattern (S13).
C30facthigh confidence
Amazon's third-party seller services revenue, the commissions and fulfilment fees sellers pay it, was $172.2B in 2025, up 10.3%, beside $68.6B of advertising and $269.3B of its own first-party online store sales.
C40factmedium confidence
The shares fell 16.6% from $20.41 on 22 September to $17.02 on 25 September 2026 with no filing, release or trusted news item behind the move, a week after Knox Lane's lock-up ended.
What would change our view
- Neutral→AttractiveA price that survives losing Thorne, with Thorne still a partner
It needs all of:
- ○The shares fall until the company is valued at 10 times its last year's adjusted profit, a price that survives losing Thorne.about ≈$12.20 today, 30% below the last close
- ○Pattern or Thorne confirms Thorne is still a partner after P&G owns it.checked at the next results, due in Nov 2026
- Neutral→UnattractiveA brand leaves, growth slows, or the price outruns it
It needs any of:
- ○Thorne or the other large supplement brand ends its contract with Pattern.watched as it happens
- ○Pattern cuts the bottom of its 2026 revenue forecast below $3.30B.checked at the next results, due in Nov 2026
- ○The shares rise until the company is valued at 20 times its last year's adjusted profit, needing about 37% growth a year.about ≈$24.41 today, 41% above the last close
We would also be wrong if
- Existing brands sell less than 15% extra through Pattern in a year.
- Amazon raises fees enough to push the share kept after paying for goods below 40% for two quarters.
What is coming
- 4 November 2026 Q3 2026 results: Revenue against the $840M to $860M guide, adjusted EBITDA against $51M to $53M, retention against the 123% to 124% year-end guide, and what is said about Thorne.
Every dated event ahead
- 4 November 2026 Q3 2026 results: Revenue against the $840M to $860M guide, adjusted EBITDA against $51M to $53M, retention against the 123% to 124% year-end guide, and what is said about Thorne.
- December 2026 Procter & Gamble's purchase of Thorne closes: Whether a brand likely supplying a sixth of Pattern's inventory keeps its exclusive reseller under a new owner that already sells to Amazon direct.
- March 2027 Q4 2026 results and the 2026 10-K: Whether the year lands at the raised $3.42B to $3.46B guide, Amazon's share of revenue falls from 93%, and the two largest suppliers' shares of purchases.
- April 2027 2027 proxy statement: Whether the board adds a bonus or performance-vesting awards tied to profit or cash, and how far insiders' holdings fell after Knox Lane's sale.
Since we wrote this
Written
3 Oct
Price the thesis read
$17.33
2 Oct
- 5 OctThesis reviewThe long case now sits under the verdictAfter the five-name pilot, the owner asked for the long case on every thesis.
- 4 OctThesis reviewOwner's checklist: revenue streams, cost of growth, management, catalystsThe owner's checklist found the method silent on who runs the company, what growth costs, where the money comes from and what is dated ahead; this pass fills those four blocks from the proxy and filings.
- 3 OctThesis writtenNeutral, medium convictionWritten two months after the Q2 2026 print and P&G's Thorne deal, with the shares 41% below their July high.
Sources 18
Where this came from
Sources - 18
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-06Item 1 business, platform, brand partners, competition classes; Amazon at 93% of revenue; two brands at 17% each of purchases; 60-day termination; click-through marketplace terms; dual-class control; 2025 results; NRR; headcountbacksC01C02C03C04C07C08C09C15C20C22C25C33C36C41C46C47
- S02primarycompany release2026-03-052025 adjusted EBITDA of $152.9M, the first 2026 guide of $3.12B to $3.16B and $180M to $182MbacksC04C16C17C18
- S03primarycompany filing2026-08-06revenue by channel, balance sheet, cash flow, stock pay, RSUs, share count at 4 August, buyback, revolver, ROI Hunter purchase, secondary offering costsbacksC01C05C06C19C20C21C23C34C46C47
- S04primarycompany release2026-08-05Q2 results, NRR of 129%, adjusted EBITDA reconciliation, the Q3 and raised 2026 guide, free cash flowbacksC05C06C15C16C17C18C19C20
- S05primarytranscript2026-08-05Q2 2026 earnings call transcript (FMP)data/cache/transcripts/PTRN-2026Q2.json (FMP earning-call-transcript, quarter label 2026Q2, call held 2026-08-05)management on Thorne and P&G, Prime Day timing, NRR outlook, Walmart and TikTok Shop, the $505B target list, agentic commerce plans; questions from BMO and others
there is no change of control provision in our agreement
backsC14C16C34C35 - S06primarycompany release2026-05-06Q1 revenue of $773.7M and adjusted EBITDA of $53.7M against $33.9M, the second 2026 guidebacksC16C17C18C20
- S07secondaryvendor data2026-10-03Research pack (FMP market tier, FINRA short interest, daily closes, SEC XBRL statements)the 2 October close, daily price history, analyst split and its drift, short interest settled 15 September, earnings history against estimates, headcountbacksC17C25C26C27C40C41
- S08primarycompany filing2026-06-178.0M shares plus a 1.2M option sold by Knox Lane at $19.00, its holding before the sale, the 90-day lock-upbacksC23C40
- S09primarycompany filing2026-10-03Pattern Group Form 4 filings, October 2025 to September 2026, read by insider_fetch.pyKnox Lane's 9.2M-share sale, two director sales, grants and withholding; no purchasesbacksC23C24
- S10primarycompany filing2023-08-09Thorne HealthTech Form 10-Q, quarter ended June 30, 2023 Thorne HealthTech, Inc.Pattern as 29.1% of Thorne's net sales and 39.3% of its receivablesbacksC11
- S11primarycompany filing2021-07-16Thorne HealthTech S-1, Exhibit 10.24, Authorized Reseller Agreement with Pattern Inc. (2019) Thorne HealthTech, Inc.Pattern appointed exclusive authorised online reseller, purchase minimums, termination and assignment termsbacksC10
- S12primarycompany filing2022-05-12Thorne HealthTech 10-Q, Exhibit 10.4, amended reseller agreement with Pattern Inc. (2022) Thorne HealthTech, Inc.the 2022 renewal, term extendable to the end of 2024, relationship dating to 2015backsC10
- S13primarycompany filing2026-08-04Procter & Gamble Form 10-K, fiscal year ended June 30, 2026 The Procter & Gamble Companythe agreement to buy Thorne for $3.8B, closing expected in P&G's fiscal second quarter of 2027backsC13
- S14primarycompany filing2026-02-06Amazon.com Form 10-K, fiscal year ended December 31, 2025 Amazon.com, Inc.third-party seller services of $172.2B, advertising $68.6B, online stores $269.3B; revenue policy for first-party against third-party salesbacksC30C37
- S15primaryregulator2023-09-26the regulator's account of what Amazon's fees cost sellers
Combined, all of these fees force many sellers to pay close to 50% of their total revenues to Amazon.
backsC31 - S16primarygovernment data2026-08-18US e-commerce of $340.2B in Q2 2026, up 12.2%, 17.1% of retail
the estimate of U.S. retail e-commerce sales for the second quarter of 2026, adjusted for seasonal variation, but not for price changes, was $340.2 billion
backsC32 - S17primaryother2025-09-29the launch of in-chat checkout and the protocol behind it
ChatGPT users in the United States can buy from Etsy merchants (and, soon, from Shopify merchants) in the chat using checkout powered by Stripe.
backsC33 - S18primarycompany filing2026-04-01executive officers and tenure; beneficial ownership at 26 March 2026; the CD&A: no annual bonus plan, time-vesting RSUs, the cancelled milestone award; related-party leasebacksC24C43C44C45