ptrn-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-42852

___________________________________

Pattern Group Inc.

(Exact Name of Registrant as Specified in Its Charter)

___________________________________


Delaware						83-2556861
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1441 West Innovation Way, Suite 500 Lehi, UT						84043
(Address of Principal Executive Offices)						(Zip Code)

(866) 765-1355

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Series A common stock, par value $0.001 per share

PTRN

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o No x

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The registrant had outstanding 154,522,413 shares of Series A common stock, par value $0.001 per share, and 21,702,510 shares of Series B common stock, par value $0.001 per share, as of November 3, 2025.

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		Page

	Special Note Regarding Forward-Looking Statements	ii

	PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26

	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults Upon Senior Securities	28
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	29
Signatures		31

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the heading “Risk Factors” included in this Quarterly Report on Form 10‑Q and those included within our final prospectus dated September 18, 2025, as filed with the Securities and Exchange Commission (“SEC”) on September 19, 2025 (“Prospectus”) under the Securities Act of 1933, as amended (the “Securities Act”). Forward-looking statements contained in this Quarterly Report on Form 10‑Q may include, but are not limited to, statements about:

•our expectations regarding our revenue, costs and other operating results;

•the estimated size of our addressable market opportunity;

•the growth rate of the markets in which we compete;

•our ability to grow existing and attract new brand partners;

•our ability to expand and enhance our platform;

•our ability to launch and monetize incremental solutions;

•our ability to expand into global geographies;

•our ability to utilize AI successfully in our current and future solutions and to participate effectively in evolving AI-driven commerce ecosystems;

•our anticipated capital expenditures and our estimates regarding our capital requirements;

•investments in our selling and marketing efforts;

•our ability to compete effectively with existing competitors and new market entrants;

•our reliance on our senior management and our ability to identify, recruit and integrate strategic personnel hires;

•our ability to effectively manage our growth;

•our ability to provide a quality purchasing experience for our consumers;

•our ability to purchase products from our brand partners (including expanding product selection);

•our ability to enhance and innovate our technology;

•investments in technology;

•our ability to expand into global geographies and marketplaces;

•industry trends and other macroeconomic factors, such as fluctuating interest rates and rising inflation, including the impact on consumer spending; and

•the impact of general, business and geopolitical conditions worldwide on our industry, business and results of operations.

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We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on management’s current beliefs and our current expectations and projections about future events and trends that we believe may affect our business, results of operations, financial condition and prospects. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10‑Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and you are cautioned not to unduly rely upon these statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10‑Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10‑Q to reflect events or circumstances after the date of this Quarterly Report on Form 10‑Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In this document, unless otherwise indicated or unless the context requires otherwise, all references in this document to “Pattern”, “the Company”, “we”, “us”, “our” or similar references are to Pattern Group Inc. and its consolidated subsidiaries.

iii

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Pattern Group Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, expect per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2025		2024		2025
Revenues	$	439,395	$	639,655	$	1,280,696	$	1,778,211
Operating expenses:
Cost of goods sold	248,959		356,132		719,845		1,002,065
Operations, general and administrative	86,124		177,936		243,668		381,704
Sales and marketing	82,587		141,182		240,425		358,402
Research and development	4,071		24,584		12,700		36,682
Total operating expenses	421,741		699,834		1,216,638		1,778,853
Operating income (loss)	17,654		(60,179)		64,058		(642)
Stock amendment expense (Note 7)	—		(32,676)		—		(32,676)
Interest income, net	1,714		1,855		4,530		5,060
Other expense, net	(8)		(291)		(1,605)		(420)
Income (loss) before income taxes	19,360		(91,291)		66,983		(28,678)
Provision (benefit) for income taxes	5,164		(32,232)		17,330		(16,202)
Net income (loss)	$	14,196	$	(59,059)	$	49,653	$	(12,476)




Adjustments to net income (loss) attributable to common stockholders (Note 2)	$	5,953	$	163,931	$	18,820	$	172,853
Net income (loss) attributable to common stockholders	$	8,243	$	(222,990)	$	30,833	$	(185,329)

Net earnings (loss) per share attributable to common stockholders (Note 2):


Basic and Diluted	$	0.09	$	(2.19)	$	0.34	$	(1.96)

Weighted-average common shares outstanding:


Basic and Diluted	90,773		101,747		90,773		94,350

See accompanying notes to condensed consolidated financial statements.

Pattern Group Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(in thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2025		2024		2025
Net income (loss)	$	14,196	$	(59,059)	$	49,653	$	(12,476)
Other comprehensive income (loss):

Unrealized gain (loss) on foreign currency translation	305		102		1,642		(127)
Total other comprehensive income (loss)	305		102		1,642		(127)
Comprehensive income (loss)	$	14,501	$	(58,957)	$	51,295	$	(12,603)

See accompanying notes to condensed consolidated financial statements.

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Pattern Group Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)


	Nine Months Ended September 30,
	2024		2025
Cash flows from operating activities:
Net income (loss)	$	49,653	$	(12,476)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	10,864		12,547
Stock-based compensation	—		84,700
Stock amendment expense	—		32,676
Deferred income taxes	—		(15,958)



Other	—		1,751
Changes in operating assets and liabilities:
Accounts receivable, net of allowance	8,924		787
Inventory	(25,327)		(4,789)
Prepaid expenses and other current assets	(991)		(18,814)
Other non-current assets	(2,011)		(1,121)
Operating leases, net	(57)		167
Accounts payable	27,738		6,168
Accrued expenses	3,795		11,342
Other liabilities	(3,701)		(6,067)
Net cash provided by operating activities	68,887		90,913
Cash flows from investing activities:
Purchases of property and equipment	(14,052)		(15,200)

Proceeds from the sale of property and equipment	—		8
Net cash used in investing activities	(14,052)		(15,192)
Cash flows from financing activities:
Proceeds from sale of Common Stock, net of issuance costs	—		135,029
Payment of taxes withheld upon vesting of restricted stock	—		(73,116)



Other	—		(319)
Net cash provided by financing activities	—		61,594
Effect of exchange rates on cash and cash equivalents	1,643		(127)
Net change in cash and cash equivalents	56,478		137,188
Cash and cash equivalents at beginning of the period	127,233		175,615
Cash and cash equivalents at end of the period	$	183,711	$	312,803

Supplemental disclosure of cash flow information:
Cash paid for interest	$	76	$	142
Cash paid for income taxes	$	16,726	$	17,980
Supplemental disclosure of non-cash financing activities:
Series A common stock issued upon conversion of Series A Preferred Stock	$	—	$	52,073
Series A common stock issued upon redemption of Series B Preferred Stock, net of cumulative undeclared dividends previously reported and deemed dividend recognized in additional paid-in capital (Note 6)	$	—	$	312,907

Deemed dividend for Series B Preferred Stock recognized in retained earnings	$	—	$	(94,379)

See accompanying notes to condensed consolidated financial statements.

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Pattern Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, expect per share data)


	December 31, 2024		September 30, 2025
Assets
Current Assets:
Cash and cash equivalents	$	175,615	$	312,803
Accounts receivable, net of allowance	106,926		106,139
Inventory	264,103		268,892
Prepaid expenses and other current assets	11,438		30,251
Total current assets	558,082		718,085
Property and equipment, net	35,035		39,320
Intangible assets, net	6,906		3,509
Goodwill	25,938		25,938
Operating lease right-of-use assets	27,877		28,598
Other non-current assets	10,584		27,659
Total assets	$	664,422	$	843,109
Liabilities, Convertible Preferred Stock and Stockholders' Equity
Current Liabilities:
Accounts payable	$	211,558	$	217,404
Accrued expenses	37,845		49,187
Operating lease liabilities, current	8,030		9,649
Other current liabilities	266		2,782
Total current liabilities	257,699		279,022
Operating lease liabilities, non-current	22,095		21,363
Other non-current liabilities	5,303		1,351
Total liabilities	285,097		301,736
Commitments and contingencies (Note 10)
Convertible Preferred stock, $0.001 par value: 28,972 and no shares authorized; 28,966 and no shares issued and outstanding, respectively; refer to Note 6 for aggregate liquidation preference	270,601		—
Stockholders' equity:
Series A Common stock, $0.001 par value: no and 2,200,000 shares authorized, respectively; no and 154,416 shares issued and outstanding, respectively	—		154
Series B Common stock, $0.001 par value: no and 100,000 shares authorized, respectively; no and 21,703 shares issued and outstanding, respectively	—		22
Common stock, $0.001 par value: 140,287 and no shares authorized, respectively; 3,799 and no shares issued and outstanding, respectively	4		—
Preferred stock, $

SEC Form 10-Q filed by Pattern Group Inc.