PTRN

Pattern is a high-velocity ecommerce reseller: it buys brand inventory at fixed prices and resells across 70+ marketplaces, generating real topline momentum — revenue grew 39.3% to $2.50B in FY2025, NRR was 124%, and operating cash flow rose 41.3% to $99.4M against just $20.5M of capex (~$79M free cash flow). The balance sheet is genuinely strong post-IPO: $289M cash, equity up 434% to $581M, and only 0.63x liabilities/equity. That is the bull case, and it is not trivial.

But the profit picture is the problem, and it is deteriorating fast. Despite 39% revenue growth, net income fell 76.1% to $16.2M and operating income fell 70.9% to $25.4M, leaving a 1.0% operating margin and 0.6% net margin. Net income peaked in FY2024 ($67.9M) and then collapsed in FY2025 — the exact opposite of the scale-economics story management tells in the MD&A ('global economies of scale to optimize costs'). Diluted EPS was actually -$1.36 (preferred/IPO-related charges to common holders), so per-share economics for new public investors are negative. R&D jumped 157% to $46.3M, signaling the margin pressure is structural, not one-off, as it spends to defend the platform.