PTRN filing — read by section

Item 8. Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 
 
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 
 
 Page 
 Report of Independent Registered Public Accounting Fir m (PCAOB ID: 34 ) 
 64 
 
 Consolidated Statements of Operations 
 66 
 
 Consolidated Statements of Comprehensive Income 
 67 
 
 Consolidated Statements of Cash Flows 
 68 
 
 Consolidated Balance Sheets 
 70 
 
 Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity 
 71 
 
 Notes to Consolidated Financial Statements 
 72 
 

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 Report of Independent Registered Public Accounting Firm 
 To the shareholders and the Board of Directors of Pattern Group Inc. 
 Opinion on the Financial Statements 
 We have audited the accompanying consolidated balance sheets of Pattern Group Inc. and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, cash flows, and changes in convertible preferred stock and stockholders’ equity, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. 
 Basis for Opinion 
 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 
 Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 
 Critical Audit Matter 
 The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 
 Inventories – Inventory Reserve — Refer to Note 2 to the Financial Statements 
 Critical Audit Matter Description 
 Inventories represent finished good products that are available for sale. Inventory is accounted for using the average cost method and is stated at the lower of cost or net realizable value. The Company periodically evaluates the composition of inventory and recognizes adjustments when the cost of inventory is not expected to be fully recoverable. The market value of inventory is estimated by considering current and anticipated demand based on historical sales, buying trends and the method of disposal for aged inventory, such as through sales to individual customers, returns to brand partners, liquidations and expected recoverable values of each disposition category. 
 We identified the inventory reserve as a critical audit matter due to the challenging, subjective, and complex judgments required by management related to estimating the current and anticipated demand based on historical sales, buying trends and method of disposal necessary in determining the inventory reserve. This required a higher degree of auditor judgment and an increased extent of audit effort. 
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 How the Critical Audit Matter Was Addressed in the Audit 
 We addressed the inventory reserve as follows: 
 • We performed procedures to evaluate the reasonableness of management’s methods, assumptions, and judgments used in developing their estimate of the valuation of the inventory reserve, through consideration of historical sales trends including evaluation of information obtained from supply chain employees and appropriateness of whether to increase/decrease the reserve based on estimated disposal method. 
 • We tested the accuracy and completeness of the underlying data used in the Company’s calculations of the inventory reserve, including historical sales, quantities on hand, and cost. 
 • We evaluated management’s ability to accurately estimate the valuation of the inventory reserve by comparing actual results with reserves from previous years. 
 • We tested the mathematical accuracy of the Company’s calculations of reserved inventories. 
 /s/ Deloitte & Touche LLP 
 Salt Lake City, Utah 
 March 5, 2026 
 We have served as the Company's auditor since 2021. 
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 Pattern Group Inc. and Subsidiaries 
 Consolidated Statements of Operations 
 (in thousands, expect per share data) 

 
 Year Ended December 31, 
 2023 2024 2025 
 Revenues $ 1,366,417 $ 1,796,161 $ 2,501,315 
 Operating expenses: 
 Cost of goods sold 765,203 1,014,812 1,410,869 
 Operations, general and administrative 276,272 338,508 523,060 
 Sales and marketing 257,513 337,672 495,687 
 Research and development 14,644 17,987 46,293 
 Total operating expenses 1,313,632 1,708,979 2,475,909 
 Operating income 52,785 87,182 25,406 
 Stock amendment expense (Note 11) 
 — — ( 32,676 ) 
 Interest income 2,882 6,164 7,653 
 Interest expense ( 33 ) ( 98 ) ( 231 ) 
 
 Other income (expense), net 707 ( 2,013 ) ( 946 ) 
 Income (loss) before income taxes 56,341 91,235 ( 794 ) 
 Provision (benefit) for income taxes 15,077 23,379 ( 17,040 ) 
 Net income $ 41,264 $ 67,856 $ 16,246 
 Adjustments to net income attributable to common stockholders (Note 2) $ 21,433 $ 25,365 $ 172,853 
 Net income (loss) attributable to common stockholders $ 19,831 $ 42,491 $ ( 156,607 ) 
 
 Net earnings (loss) per share attributable to common stockholders (Note 2): 
 
 
 Basic and Diluted $ 0.22 $ 0.47 $ ( 1.36 ) 
 
 Weighted-average common shares outstanding: 
 
 
 Basic and Diluted 90,767 90,769 114,998 

 See accompanying notes to consolidated financial statements. 
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 Pattern Group Inc. and Subsidiaries 
 Consolidated Statements of Comprehensive Income 
 (in thousands) 

 
 Year Ended December 31, 
 2023 2024 2025 
 Net income $ 41,264 $ 67,856 $ 16,246 
 Other comprehensive income: 
 
 Unrealized gain on foreign currency translation 1,025 1,369 1,433 
 Total other comprehensive income 1,025 1,369 1,433 
 Comprehensive income $ 42,289 $ 69,225 $ 17,679 

 See accompanying notes to consolidated financial statements. 
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 Pattern Group Inc. and Subsidiaries 
 Consolidated Statements of Cash Flows 
 (in thousands, expect per share data) 

 
 Year Ended December 31, 
 2023 2024 2025 
 Cash flows from operating activities: 
 Net income $ 41,264 $ 67,856 $ 16,246 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 Depreciation and amortization 12,102 14,811 16,800 
 Stock-based compensation ( 206 ) — 97,288 
 Stock amendment expense — — 32,676 
 Deferred income taxes ( 74 ) ( 1,279 ) ( 18,792 ) 
 
 
 Contingent consideration benefit ( 1,220 ) — — 
 Other — 32 1,750 
 Changes in operating assets and liabilities: 
 Accounts receivable, net of allowance ( 1,537 ) ( 30,811 ) ( 67,715 ) 
 Inventory ( 30,892 ) ( 73,219 ) ( 29,034 ) 
 Prepaid expenses and other current assets ( 2,116 ) ( 726 ) ( 19,874 ) 
 Other non-current assets ( 85 ) ( 2,223 ) ( 1,525 ) 
 Operating leases, net 80 158 424 
 Accounts payable 28,096 86,471 62,382 
 Accrued expenses ( 4,721 ) 12,180 12,110 
 Other liabilities 785 ( 2,903 ) ( 3,330 ) 
 Net cash provided by operating activities 41,476 70,347 99,406 
 Cash flows from investing activities: 
 
 Purchases of property and equipment ( 14,498 ) ( 20,450 ) ( 20,482 ) 
 Acquisition of businesses, net of cash acquired — — ( 19,296 ) 
 Proceeds from the sale of property and equipment — 12 8 
 Net cash used in investing activities ( 14,498 ) ( 20,438 ) ( 39,770 ) 
 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 — — ( 80,999 ) 
 
 Repurchases of common stock — ( 2,901 ) — 
 
 Other — — ( 319 ) 
 Net cash provided by (used in) financing activities — ( 2,901 ) 53,711 
 Effect of exchange rates on cash and cash equivalents 1,077 1,374 87 
 Net change in cash and cash equivalents 28,055 48,382 113,434 
 Cash and cash equivalents at beginning of the period 99,178 127,233 175,615 
 Cash and cash equivalents at end of the period $ 127,233 $ 175,615 $ 289,049 
 
 Continued on the following page 
 

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 Pattern Group Inc. and Subsidiaries 
 Consolidated Statements of Cash Flows 
 (in thousands, expect per share data) 

 
 Year Ended December 31, 
 2023 2024 2025 
 Supplemental disclosure of cash flow information: 
 
 
 Cash paid for income taxes $ 18,861 $ 21,345 $ 18,468 
 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 10) 
 $ — $ — $ 312,907 
 
 Deemed dividend for Series B Preferred Stock recognized in retained earnings $ — $ — $ ( 94,379 ) 
 

 See accompanying notes to consolidated financial statements. 
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 Pattern Group Inc. and Subsidiaries 
 Consolidated Balance Sheets 
 (in thousands, expect per share data) 

 
 
 December 31, 
 2024 2025 
 Assets 
 Current Assets: 
 Cash and cash equivalents $ 175,615 $ 289,049 
 Accounts receivable, net of allowance 106,926 177,214 
 Inventory 264,103 294,737 
 Prepaid expenses and other current assets 11,438 31,575 
 Total current assets 558,082 792,575 
 Property and equipment, net 35,035 41,087 
 Intangible assets, net 6,906 16,694 
 Goodwill 25,938 37,769 
 Operating lease right-of-use assets 27,877 28,164 
 Other non-current assets 10,584 31,350 
 Total assets $ 664,422 $ 947,639 
 Liabilities, Convertible Preferred Stock and Stockholders' Equity 
 Current Liabilities: 
 Accounts payable $ 211,558 $ 274,977 
 Accrued expenses 37,845 53,818 
 Operating lease liabilities, current 8,030 8,826 
 Other current liabilities 266 921 
 Total current liabilities 257,699 338,542 
 Operating lease liabilities, non-current 22,095 22,009 
 Other non-current liabilities 5,303 6,093 
 Total liabilities 285,097 366,644 
 Commitments and contingencies (Note 14) 
 
 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 10 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 154,691 shares issued and outstanding, respectively 
 — 155 
 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, $ 0.001 par value: 88,869 and 200,000 shares authorized; 86,792 and no shares issued and outstanding, respectively 
 86 — 
 Additional paid-in capital 2,764 551,648 
 Accumulated other comprehensive loss ( 985 ) 448 
 Retained earnings 106,855 28,722 
 Total stockholders' equity 108,724 580,995 
 Total liabilities, convertible preferred stock and stockholders' equity $ 664,422 $ 947,639 

 See accompanying notes to consolidated financial statements. 
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 Pattern Group Inc. and Subsidiaries 
 Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity 
 (in thousands, expect per share data) 

 
 Convertible Preferred Series A Common Stock Series B Common Stock Preferred Stock Additional Paid-in Capital Accumulated Other Comprehensive (Loss) Income Retained Earnings Total Stockholders' Equity 
 Shares Issued Amount Shares Issued Amount Shares Issued Amount Shares Issued Amount 
 Balance, December 31, 2022 28,966 $ 270,601 3,358 $ 4 — $ — 87,400 $ 87 $ 5,564 $ ( 3,379 ) $ ( 2,265 ) $ 11 
 Net income — — — — — — — — — — 41,264 41,264 
 Other comprehensive income — — — — — — — — — 1,025 — 1,025 
 Issuance of common stock to settle contingently consideration — — 15 — — — — — 100 — — 100 
 
 
 
 
 Balance, December 31, 2023 28,966 $ 270,601 3,373 $ 4 — $ — 87,400 $ 87 $ 5,664 $ ( 2,354 ) $ 38,999 $ 42,400 
 Net income — — — — — — — — — — 67,856 67,856 
 Other comprehensive income — — — — — — — — — 1,369 — 1,369 
 
 Converted preferred to common shares — — 608 1 — — ( 608 ) ( 1 ) — — — — 
 Repurchase of common stock — — ( 182 ) ( 1 ) — — — — ( 2,900 ) — — ( 2,901 ) 
 
 
 
 
 
 
 
 
 Balance, December 31, 2024 28,966 270,601 3,799 4 — — 86,792 86 2,764 ( 985 ) 106,855 108,724 
 Net income — — — — — — — — — — 16,246 16,246 
 Other comprehensive income — — — — — — — — — 1,433 — 1,433 
 Stock-based compensation expense — — — — — — — — 97,285 — — 97,285 
 Issuance of Series A common stock upon vesting of RSUs — — 8,167 8 — — — — ( 8 ) — — — 
 Shares withheld for employee taxes upon vesting of RSUs — — — — — — — — ( 80,999 ) — — ( 80,999 ) 
 Founder Preferred Stock Amendment — — — — — — — — 32,676 — — 32,676 
 Series A common stock issued upon conversion of Series A Preferred Stock ( 15,750 ) ( 52,073 ) 15,750 16 — — — — 52,057 — — 52,073 
 Series A common stock issued upon redemption of Series B Preferred Stock ( 13,216 ) ( 218,528 ) 32,129 32 — — — — 312,875 — ( 94,379 ) 218,528 
 Series A common stock issued upon reclassification of Founder Non-Voting Preferred Stock — — 84,131 84 — — ( 68,994 ) ( 69 ) ( 15 ) — — — 
 Series B common stock issued upon reclassification of Founder Voting Preferred Stock — — — — 21,703 22 ( 17,798 ) ( 17 ) ( 5 ) — — — 
 Issuance of Series A common stock, net of underwriters' discounts and offering expenses — — 10,715 11 — — — — 135,018 — — 135,029 
 
 Balance, December 31, 2025 — $ — 154,691 $ 155 21,703 $ 22 — $ — $ 551,648 $ 448 $ 28,722 $ 580,995 

 See accompanying notes to consolidated financial statements. 
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 Pattern Group Inc. and Subsidiaries 
 Notes to Consolidated Financial Statements 

 
 
 1. Organization and Description of Business 
 Description of Business 
 Pattern Inc. was incorporated in Utah in January 2013. Pattern Group Inc. (“Pattern” or the “Company”) was incorporated in Utah in January 2019, and subsequently converted to a Delaware corporation in May 2020. Following the Company’s incorporation, the stockholders of Pattern Inc. contributed all shares of Pattern Inc. to the Company in exchange for shares in the Company, and Pattern Inc. continued as a wholly-owned subsidiary of the Company. 
 Pattern, an ecommerce accelerator, uses its technology platform, data science and a team of global experts to drive growth for brands. The Company acquires inventory from brand partners to sell to consumers, enabling full control over content, pricing, logistics and customer service. Brand partners that contract with the Company operate in various industries, including health and wellness, beauty and personal care, home and lifestyle, pet, sports and outdoors and consumer electronics. 
 Completion of Initial Public Offering 
 In September 2025, the Company completed its initial public offering (“IPO”) of shares of Series A common stock. Immediately prior to the completion of the IPO, all the Company’s then-outstanding shares of Series A Preferred Stock and Series B Preferred Stock were converted and reclassified into shares of Series A common stock (see Note 10—Convertible Preferred Stock for more information). In addition, all the Company’s then-outstanding shares of Founder Voting Preferred Stock and Founder Non-Voting Preferred Stock were reclassified and converted into shares of Series A common stock and Series B common stock, as applicable (see Note 11—Stockholders’ Equity for more information). 
 
 2. Summary of Significant Accounting Policies 
 Basis of Presentation 
 The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. 
 Use of Estimates 
 The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions in the Company’s consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments. 
 Estimates are used for, but not limited to, determining the net realizable value and demand for inventory, allowance for sales returns, allowance for doubtful accounts, valuation allowances with respect to deferred tax assets, fair value of reporting units used in evaluation of goodwill impairment, the fair value of assets acquired and liabilities assumed in business combinations, the valuation of stock-based awards, the fair value of common stock and the incremental borrowing rate (“IBR”) used to measure operating lease liabilities. The Company bases these estimates on historical and anticipated results, trends and various other assumptions that it believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ from these estimates and any such differences may be material to the Company’s consolidated financial statements. 
 Revenue 
 The Company recognizes revenue primarily from product sales through domestic and international online marketplaces. Revenue is recognized on a gross basis as the Company is (i) the entity primarily responsible for fulfilling the promise to provide the specified products in the arrangement with the customer, (ii) has inventory risk before the products have been transferred to a customer and (iii) has discretion in establishing the price for the products sold on the online marketplaces. 
 The Company evaluated principal versus agent considerations to determine whether it is appropriate to record seller fees paid by the Company to the marketplaces as an expense or as a reduction of revenue. Seller fees charged by third-party marketplaces are not recorded as a reduction of revenue as the Company owns and controls all goods before they are transferred to the end customer. The Company is responsible for ensuring the goods promised to the end consumer are 
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 delivered. The Company establishes the price of its products, determines who fulfills the goods to the customer (third-party online marketplaces or the Company) and can limit quantities or stop selling the goods at any time. Revenues are presented net of customer returns. Based on these considerations, the Company is the principal in these arrangements. 
 A contract is created at the time the order is placed by the customer, which creates a single performance obligation to deliver the product to the customer. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the product and is recognized at the time control of the product passes to the customer, which is at the time of shipment. Taxes collected from customers for remittance to governmental bodies are excluded from revenues. 
 The following table presents the Company’s revenues disaggregated by source of revenue: 
 
 Year Ended December 31, 
 (in thousands) 2023 2024 2025 
 Amazon.com $ 1,209,267 $ 1,579,056 $ 2,147,186 
 Amazon marketplaces, international 59,744 102,396 170,758 
 Other online marketplaces and channels 78,384 94,197 151,012 
 SaaS, logistics and other revenue 19,022 20,512 32,359 
 Revenues $ 1,366,417 $ 1,796,161 $ 2,501,315 

 The following table presents the Company’s revenues disaggregated by geography: 
 
 Year Ended December 31, 
 (in thousands) 2023 2024 2025 
 U.S. $ 1,249,433 $ 1,632,923 $ 2,235,545 
 International 116,984 163,238 265,770 
 Revenues $ 1,366,417 $ 1,796,161 $ 2,501,315 

 During the year ended December 31, 2025, the Company updated its methodology for determining the geographic classification of revenue to better align with the country the marketplace is domiciled and how management evaluates regional performance. As a result, the Company has recast the prior period revenue by geographic region to conform to the current period presentation. This change affected only the allocation of revenue between geographic regions and did not impact total consolidated revenues, operating results, or cash flows for any period presented. 
 The U.S. was the only individual country accounting for more than 10% of total revenue. 
 Sales Return Allowances 
 The Company generally accepts returns related to sales in accordance with the various online marketplaces’ return policy. At the time of sale, a reserve is established for returns, based on historical experience and expected future returns, which is recorded as a reduction of sales and cost of goods sold. The following table summarizes the additions and deductions to the Company’s sales return allowance: 
 
 December 31, 
 (in thousands) 2024 2025 
 Balance, beginning of period $ 4,679 $ 6,344 
 Increases to sales allowance 74,831 89,632 
 Customer returns ( 73,166 ) ( 91,318 ) 
 Balance, end of period $ 6,344 $ 4,658 

 The Company includes within inventory an asset, totaling $ 1.6 million and $ 1.0 million as of December 31, 2024 and 2025, respectively, associated with the right to recover product from customers related to the Company’s liabilities for return allowances. 
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 Cost of Goods Sold 
 Cost of goods sold primarily consists of the purchase price of inventory sold to customers. Shipping costs to receive products from the Company’s brand partners and costs to ship products to third-party fulfillment centers are included in the Company’s inventory and recognized as cost of goods sold upon sale of the products to customers. 
 Operations, General and Administrative 
 Operations, general and administrative expenses consist of third-party fulfillment costs; payroll and related expenses; warehousing costs; facilities and equipment, including depreciation and amortization, rent and other occupancy expenses; professional and legal fees; as well as costs associated with other general costs for corporate functions, including accounting, finance and human resources. 
 Fulfillment costs represent those costs incurred from third-party fulfillment centers and in operating and staffing the Company’s fulfillment centers, including costs related to buying, receiving, inspecting and warehousing inventories, picking, packaging and preparing customer orders for shipment. Fulfillment costs are included within operations, general and administrative in the consolidated statements of operations and were $ 217.0 million, $ 272.3 million and $ 374.3 million for the years ended December 31, 2023, 2024 and 2025, respectively. 
 Sales and Marketing 
 Sales and marketing expenses consist of third-party online marketplace commission fees, targeted online advertising and other marketing expenses, payroll and related expenses for personnel engaged in marketing and selling activities. 
 Advertising and other marketing expenses were $ 16.4 million, $ 20.9 million and $ 37.2 million for the years ended December 31, 2023, 2024 and 2025 respectively. 
 Brand Partner Contracts 
 The Company has agreements with brand partners that provide reimbursement for certain advertising, cooperative marketing efforts and promotions. The Company generally accounts for such consideration from brand partners as a reduction of the related expense. 
 Research and Development 
 Research and development costs include payroll and related expenses for employees involved in the research and development of Pattern’s technology, development and design of Company websites and curation and display of products available on third-party marketplaces. 
 Stock-Based Compensation 
 The Company records compensation expense for all equity-classified stock-based awards, including restricted stock units (“RSUs”) and those issued under the Company’s employee stock purchase plan (“ESPP”), based on the grant date fair value of the awards. The Company’s RSUs granted prior to the Company’s IPO generally have both a service-based and performance-based vesting condition with expense recognized using the accelerated method. No stock-based compensation expense was recognized for these awards prior to the Company’s IPO as the performance condition was determined as not probable of being met. The Company’s RSUs granted following the Company’s IPO generally have only a service-based vesting condition with expense recognized ratably over the service period. Additionally, we have stock-based compensation awards that are expected to settle in cash. These liability-classified awards are remeasured to fair value at the end of each reporting period until settlement or expiration. The Company has elected to account for forfeitures of awards as they occur. See Note 12—Stock-Based Compensation for more information. 
 The fair value of the ESPP purchase rights is estimated on the grant date using the Black-Scholes option pricing model. The determination of fair value incorporates the Company’s stock price and assumptions regarding expected stock price volatility, expected term, risk-free interest rate and expected dividends, which requires the use of judgment. The Company recognizes compensation expense related to the ESPP on a straight-line basis over the offering period, which is the requisite service period. See Note 12—Stock-Based Compensation for more information. 
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 Earnings per share 
 Basic and diluted earnings per share (“EPS”) are calculated using the Company’s weighted-average shares outstanding of common stock, Founder Voting Preferred Stock, Founder Non-Voting Preferred Stock, Series A common stock and Series B common stock. The Founder Voting and Founder Non-Voting Preferred Stock are considered to be common stock equivalents for purposes of calculating EPS as they share equally with common stock in the liquidation of the Company’s net assets and do not contain an economic preference. The rights, including the liquidation and dividend rights, of the holders of Series A and Series B common stock are identical, except with respect to voting, conversion and transfer rights. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis to each class of common stock and the resulting basic and diluted net income (loss) per share attributable to common stockholders are the same for both Series A and Series B common stock on both an individual and combined basis. 
 The dilutive effect of Series A Preferred Stock is reflected in diluted earnings per share by application of the more dilutive of the two-class method and if-converted method (two-class method only applies for periods of net income). The dilutive effect of Series B Preferred Stock is reflected in diluted earnings per share under the if-converted method, if dilutive. The if-converted method is calculated by assuming conversion at the beginning of the period or date of issuance, if later; and therefore, no dividend preference would accrue to the Series B Preferred Stock. Restricted stock units (“RSUs”) subject to conditions other than service conditions are considered contingently issuable shares and are included in the computation of dilutive shares only to the extent that the underlying performance condition is satisfied prior to the end of the reporting period or would be considered satisfied if the end of the reporting period were the end of the related contingency period and the results would be dilutive under the treasury stock method (see Note 12—Stock-Based Compensation for more information). 
 The following table sets forth the computation of earnings per share attributable to common stockholders: 
 
 Year Ended December 31, 
 (in thousands, except per share data) 2023 2024 2025 
 Net income $ 41,264 $ 67,856 $ 16,246 
 Income allocable to participating Series A Preferred Stock 3,441 7,373 — 
 Series B Preferred Stock dividend - undeclared 17,992 17,992 8,922 
 Reversal of cumulative Series B Preferred Stock undeclared dividends upon redemption of Series B Preferred Stock — — ( 67,350 ) 
 Deemed dividend for redemption of Series B Preferred Stock — — 231,281 
 Net income (loss) attributable to common stockholders $ 19,831 $ 42,491 $ ( 156,607 ) 
 Weighted-average shares outstanding: 
 
 
 
 
 
 
 
 
 Basic and Diluted 90,767 90,769 114,998 
 Net income (loss) attributable to common stockholders 
 
 
 Basic and Diluted $ 0.22 $ 0.47 $ ( 1.36 ) 

 The following instruments outstanding (prior to consideration of the treasury stock or if-converted methods) as of period end were not reflected in diluted EPS as their effect for the periods presented would be anti-dilutive or the instruments were not exercisable for potential common shares for the periods presented: 
 
 Year Ended December 31, 
 (in thousands) 2023 2024 2025 
 Series B Preferred Stock 
 13,216 13,216 — 
 RSUs 
 15,149 17,589 8,088 
 ESPP 
 — — 159 

 Cash and Cash Equivalents 
 The Company considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. The Company’s cash equivalents are carried at cost, which approximates fair value and are classified as Level 1 in the fair value hierarchy because they are valued using quoted market prices. As of December 31, 2025, the Company did not have any restricted cash balances. 
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 Accounts Receivable, net 
 Accounts receivable, net are comprised of receivables from the various online marketplaces, brand partners and other receivables, including consulting clients and business-to-business sales. Accounts receivable are stated at the invoiced amount and are non-interest-bearing. 
 The following table summarizes the Company’s accounts receivable balance: 
 
 December 31, 
 (in thousands) 2024 2025 
 Amazon.com 
 $ 54,246 $ 85,842 
 Brand partner receivables 
 43,269 73,279 
 Other receivables 
 11,199 21,934 
 Allowance for doubtful accounts 
 ( 1,788 ) ( 3,841 ) 
 Accounts receivable, net 
 $ 106,926 $ 177,214 

 The following table summarizes the additions and deductions to the Company’s allowance for doubtful accounts: 
 
 December 31, 
 (in thousands) 2024 2025 
 Balance, beginning of period 
 $ 2,022 $ 1,788 
 Net change in allowance 
 667 2,542 
 Write-offs 
 ( 901 ) ( 489 ) 
 Balance, end of period 
 $ 1,788 $ 3,841 

 Inventory 
 The Company’s inventories represent finished good products that are available for sale. Inventory is accounted for using the average cost method and is stated at the lower of cost or net realizable value. 
 The Company periodically evaluates the composition of its inventory and recognizes adjustments when the cost of inventory is not expected to be fully recoverable. The market value of inventory is estimated by considering current and anticipated demand based on historical sales, buying trends and the method of disposal for aged inventory, such as through sales to individual customers, returns to brand partners, liquidations and expected recoverable values of each disposition category. 
 An inventory reserve to reduce the value of inventory by $ 7.9 million and $ 8.5 million was recorded within inventory on the consolidated balance sheets as of December 31, 2024 and 2025, respectively. 
 Concentration Risks 
 Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are held at high credit quality financial institutions, which at times may exceed federally insured amounts. 
 The Company primarily generates revenue from customers located in the U.S. and international markets who purchase the Company’s products on third-party online marketplaces. The Company regularly reviews the financial condition of the online marketplaces to ensure their ability to collect funds from customers and remit these funds to the Company. 
 Additionally, the Company has receivables from brand partners and other customers. The Company conducts ongoing evaluations of customers and brand partners financial conditions and may require advance payment to mitigate potential credit risks. 
 No customer accounted for greater than 10% of the Company’s accounts receivable or revenue as of and for the year ended December 31, 2024 and 2025. One online marketplace represented 51 % and 48 % of the Company’s accounts receivable as of December 31, 2024 and 2025, respectively. The same online marketplace accounted for 93 %, 94 % and 93 % of the Company’s revenue for the years ended December 31, 2023, 2024 and 2025 respectively. 
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 The Company relies on brand partners for its inventories. A significant disruption in the operations of certain of these brand partners could impact the Company’s product sales for a substantial period of time, which may have a material adverse effect on the Company’s business, financial condition and results of operations. 
 Two brand partners accounted for 17 % and 11 % of inventory purchases for the year ended December 31, 2024 and 17 % and 17 % for the year ended December 31, 2025. 
 Property and Equipment, net 
 Property and equipment are stated at historical cost less accumulated depreciation and amortization. Repairs and maintenance costs that do not extend the useful life or improve the related asset are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful life of the asset or the remaining lease term, if shorter. The estimated useful lives of property and equipment are as follows: 
 
 Useful life 
 
 Furniture and fixtures 
 5 years 
 
 Machinery and equipment 
 4 - 10 years 
 
 Computer equipment 
 3 years 
 Internal-use software 
 3 years 
 Buildings 30 years 
 Vehicles 
 4 years 

 Leasehold improvements are amortized over the shorter of the term of the related leases or estimated useful lives. 
 Leases 
 Leases arise from contractual obligations that convey the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company determines if an arrangement is, or contains, a lease at contract inception. The Company’s operating leases are included in operating lease right-of-use assets, current portion of operating lease liabilities and operating lease liabilities, non-current in the accompanying consolidated balance sheets. 
 Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the applicable lease term discounted using the Company’s IBR. Operating lease right-of-use assets include any lease payments made or incentives provided by the lessor. As the leases do not provide an implicit rate, the IBR used is estimated based on what the Company would have to pay on a collateralized basis over a similar term as the lease. Lease payments include fixed payments and any variable payments based on an index or rate and are recognized as lease expense on a straight-line basis over the term of the lease. 
 Internal-Use Software 
 Internal-use software costs include costs to develop software to be used to meet internal needs. Development costs are capitalized for these software applications once the preliminary project stage is complete, it is probable that the project will be completed and the software will be used to perform the function intended. Capitalized internal-use software costs, net of accumulated amortization is included in property and equipment, net in the consolidated balance sheets and was $ 13.5 million and $ 15.8 million as of December 31, 2024 and 2025, respectively. 
 Impairment of Long-Lived Assets 
 When there are indicators of potential impairment, the Company evaluates recoverability of the carrying values of property and equipment and right-of-use assets by comparing the carrying amount of the asset to the estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds the estimated undiscounted future cash flows, an impairment charge is recognized based on the amount by which the carrying value of the asset exceeds its fair value. During years ended December 31, 2023, 2024 and 2025, the Company did not identify any indicators of impairment, and no impairment charges were recorded. 
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 Business Combinations 
 The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of the acquisition. Purchase accounting results in assets and liabilities of an acquired business being recorded at their estimated fair values on the acquisition date. Any excess consideration over the fair value of assets acquired and liabilities assumed is recognized as goodwill. Acquisition-related costs incurred by the Company are recognized as an expense in operations, general and administrative expenses within the consolidated statements of operations. 
 The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement within the measurement period. 
 During the measurement period, which may be up to one year from the acquisition date, and to the extent that the value was not previously finalized, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information about facts and circumstance that existed at the date of acquisition and reevaluates these estimates and assumptions and records any adjustments to the Company’s preliminary estimates to goodwill, provided that it is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. 
 Goodwill 
 Goodwill represents the excess of the aggregate purchase consideration over the fair value of net assets acquired in a business combination. The Company performs an impairment analysis annually as of October 1 st , or whenever events or circumstances indicate that the fair value of goodwill has been impaired. The Company performs goodwill impairment tests at the reporting unit level. 
 Acquired Intangible Assets 
 Identifiable acquired intangible assets consist primarily of acquisition-related trademarks, customer relationships and developed technology to enable the Company to serve brand partners more effectively. The appropriate useful life of intangible assets is determined by performing an analysis of expected cash flows of the acquired assets. Intangible assets are recorded at cost and amortized on a straight-line basis over the estimated useful life: 
 
 
 
 Useful life 
 
 Developed Technology 
 3 - 5 years 
 
 Customer relationships 
 1 - 10 years 
 
 Tradename 
 5 - 10 years 
 
 Non-competition agreements 
 2 - 3 years 
 
 Domain name 
 15 years 

 Provision for Income Taxes 
 Income tax expense includes U.S. (federal and state) and foreign income taxes. The Company operates in various tax jurisdictions and is subject to audit by various tax authorities. 
 Deferred income tax balances reflect the anticipated future effects of temporary differences between the carrying amounts of assets and liabilities and their tax basis and are stated at enacted tax rates expected to be in effect when taxes are actually paid or recovered. 
 Deferred tax assets are evaluated for future realization and reduced by a valuation allowance to the extent the Company believes it is more likely than not they will not be realized. The Company considers many factors when assessing the likelihood of future realization of deferred tax assets, including recent cumulative loss experience and expectation of future earnings, the carry-forward periods available for tax reporting purposes, reversal of temporary differences and other relevant factors. 
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 The Company utilizes a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating its tax positions and estimating the related tax benefits, which may require periodic adjustment and which may not accurately forecast actual outcomes. The Company’s policy for recording interest and penalties associated with uncertain tax positions is to record such items as a component of the income tax provision. 
 The Organization for Economic Co-operation and Development (the “OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two. Many aspects of Pillar Two became effective beginning in calendar year 2024 and other aspects will be effective beginning in calendar year 2025. While it is uncertain whether the U.S. will adopt Pillar Two, certain countries in which the Company operates have either adopted legislation or are in the process of introducing legislation to implement Pillar Two. While the Company does not expect Pillar Two to have a material impact on its effective tax rate, the Company’s analysis is ongoing as the OECD releases additional guidance and countries implement additional legislation. 
 The One Big Beautiful Bill Act (“OBBB”) was signed into law on July 4, 2025. The OBBB makes changes to the U.S. corporate income tax, including immediate expensing of domestic research and development costs, with retroactive application beginning January 1, 2025, and reinstating the option to claim 100% accelerated depreciation deductions on qualified property, with retroactive application beginning January 20, 2025. The main impact of OBBB for our company is the timing changes to when certain expenses can be deducted, which does not impact the estimated annual effective tax rate. As such, OBBB does not have a material impact on our estimated annual effective tax rate in 2025. 
 Foreign Currency Translation 
 The reporting currency of the Company is the U.S. dollar. The functional currency for the Company’s subsidiaries is generally the same as the local currency. Foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at exchange rates at the balance sheet date, and foreign currency denominated non-monetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Revenue and expenses are translated at average rates prevailing throughout the period. Realized gains or losses from foreign currency transactions and settlements are included in other income (expense), net in the consolidated statements of operations. Net realized foreign exchange gains and losses were not material for the years ended December 31, 2023, 2024 and 2025. Unrealized gains or losses from foreign currency remeasurement are included in other comprehensive income (loss). 
 Fair Value Measurement 
 The Company measures and reports certain assets and liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. To measure fair value, U.S. GAAP has established a hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs. 
 This hierarchy uses three levels of inputs to measure the fair value of assets and liabilities as follows: 
 Level 1 – Quoted prices in active markets for identical assets or liabilities. 
 Level 2 – Observable inputs other than Level 1 including quoted prices for similar assets or liabilities, quoted prices in less active markets, or other observable inputs that can be corroborated by observable market data. 
 Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. 
 Recently Adopted Accounting Pronouncements 
 In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation. Entities 
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 must also further disaggregate income taxes paid. The standard is intended to benefit stockholders by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. The guidance applies to all entities subject to income taxes and is effective for annual periods beginning after December 15, 2024. The Company adopted the requirement of ASU 2023-09 on a prospective basis for the year ended December 31, 2025 as reflected in Note 13—Provision for Income Taxes. 
 Recent Accounting Pronouncements Not Yet Adopted 
 In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses , which requires disclosure of specific expense categories in the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures. 
 In July 2025, the FASB issued ASU 2025-05, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient for measuring expected credit losses on current trade receivables and contract assets arising from revenue transactions within the scope of ASC 606, Revenue from Contracts with Customers. Under the expedient, an entity may assume that the conditions existing as of the reporting date will not change over the remaining life of the asset when estimating expected credit losses. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, including interim reporting periods within that annual period, with early adoption permitted on a prospective basis. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures but does not expect it to have a material impact. 
 In September 2025, the FASB issued ASU 2025-06, Intangibles — Goodwill and Other (Topic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which modernizes and clarifies guidance for capitalizing costs related to internal-use software development. The amendments remove stage-based terminology and incorporate guidance for website development costs previously included in ASC 350-50. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within that annual period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures. 
 In November 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which clarifies and enhances the guidance related to the form, content and disclosure requirements of interim financial statements. The amendments reorganize and codify certain interim disclosure requirements, incorporate disclosure guidance from other Topics into ASC 270, and establish a disclosure principle requiring entities to provide disclosures about events and transactions occurring after the most recent annual reporting period that materially affect the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted, and the guidance may be applied prospectively or retrospectively, in whole or in part. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and related disclosures. 
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 3. Property and Equipment, net 
 Property and equipment consisted of the following: 
 
 December 31, 
 (in thousands) 
 2024 2025 
 Internal-use software 
 $ 31,353 $ 42,459 
 Machinery and equipment 
 6,394 13,403 
 Computer equipment 
 5,435 7,625 
 Leasehold improvements 
 4,459 6,849 
 Land 
 3,984 3,984 
 Furniture and fixtures 
 2,677 3,501 
 Purchased Software 
 1,296 1,301 
 Assets under construction 
 4,147 503 
 Buildings 334 334 
 Vehicles 
 56 90 
 Total property and equipment 
 60,135 80,049 
 Less: accumulated depreciation and amortization 
 ( 25,100 ) ( 38,962 ) 
 Property and equipment, net 
 $ 35,035 $ 41,087 

 Depreciation and amortization expense related to property and equipment was $ 8.4 million, $ 11.8 million and $ 14.3 million for the year ended December 31, 2023, 2024 and 2025, respectively. 
 
 4. Business Acquisitions 
 On December 1, 2025, the Company completed the acquisition of 100 % of the outstanding stock of ROI Hunter a.s., a Czech joint stock corporation (“ROI Hunter”). The acquisition of ROI Hunter expands the Company’s product offerings and enhances its market presence in the advertising intelligence platform sector. On December 18, 2025, the Company completed the acquisition of 100 % of the outstanding stock of iDesign Technology USA LLC (“iDesign”). The acquisition of iDesign expands the Company’s product offerings and enhances its market presence in the digital media, influencer marketing and content-creation sectors. These transactions are expected to generate synergies through the integration of the acquired proprietary technologies and customer relationships. These acquisitions were accounted for as a business combination in accordance with ASC 805, Business Combinations. 
 The following tables summarize the consideration paid for the acquired entities and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date: 
 
 (in thousands) Amount 
 Cash $ 25,120 
 Deferred acquisition consideration 1,628 
 Fair value of total consideration transferred $ 26,748 

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 (in thousands) Amount 
 Cash and cash equivalents $ 5,824 
 Accounts receivable 2,574 
 Prepaid expenses and other 263 
 Property and equipment 120 
 Intangible assets 13,628 
 Other non-current assets 206 
 Accounts payable ( 931 ) 
 Accrued liabilities ( 3,863 ) 
 Deferred tax liabilities ( 2,904 ) 
 Total identifiable net assets $ 14,917 
 Goodwill 11,831 
 Fair value of total consideration transferred $ 26,748 

 The deferred acquisition consideration represents a liability for indemnification holdbacks that is expected to be paid to the sellers through annual installments ending in December 2028, subject to adjustment under the terms of the agreement. 
 The goodwill acquired represents the excess of the purchase price over the fair value of net identifiable assets acquired and is attributable to expected synergies, assembled workforce and future growth opportunities. The goodwill acquired is not deductible for tax purposes. 
 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives as of the date of acquisition: 
 
 (in thousands, except for years data) Acquisition Date Fair Value 
 Useful Life at Acquisition 
 (in years) 
 
 Developed technology $ 5,425 3 
 Customer relationships 4,391 1 - 5 
 
 Tradenames 1,538 5 
 Non-competition agreements 2,274 3 
 
 Intangible assets, net $ 13,628 

 The fair values of the acquired intangible assets are provisional pending receipt of the final valuations for those assets. The financial results of ROI Hunter and iDesign from their respective acquisition dates through December 31, 2025, were not material to our Consolidated Statements of Operations, nor were they material to our prior period consolidated results on a pro forma basis. Costs related to the ROI Hunter and iDesign acquisitions were not material to our Consolidated Statements of Operations. 
 
 5. Goodwill & Intangible Assets 
 Goodwill 
 The goodwill resulting from the acquisition activity is primarily related to expected improvements in technology performance and functionality, as well as sales growth from future product and service offerings and new customers, together with certain intangible assets that do not qualify for separate recognition. The goodwill resulting from the acquisition activity is generally not deductible for tax purposes. 
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 The following table summarizes our goodwill activity: 
 
 (in thousands) Amount 
 
 Goodwill - December 31, 2023 $ 25,938 
 Acquisition activity — 
 Goodwill - December 31, 2024 25,938 
 Acquisition activity 11,831 
 Goodwill - December 31, 2025 $ 37,769 

 Intangible Assets, net 
 Intangible assets, net consisted of the following: 
 
 December 31, 2024 
 (in thousands, except for years data) Gross Carrying Value 
 Accumulated Amortization 
 Net Book Value 
 Weighted Average Remaining Useful Life (in years) 
 
 Developed technology 
 $ 7,284 $ ( 4,026 ) $ 3,258 2.3 
 Customer relationships 
 3,619 ( 1,893 ) 1,726 3.8 
 Tradenames 
 3,111 ( 1,705 ) 1,406 4.0 
 Non-competition agreements 
 1,907 ( 1,535 ) 372 0.5 
 Domain names 
 234 ( 90 ) 144 9.3 
 Intangible assets, net 
 $ 16,155 $ ( 9,249 ) $ 6,906 

 
 December 31, 2025 
 (in thousands, except for years data) Gross Carrying Value 
 Accumulated Amortization 
 Net Book Value 
 Weighted Average Remaining Useful Life (in years) 
 
 Developed technology 
 $ 12,713 $ ( 5,482 ) $ 7,231 2.5 
 Customer relationships 
 5,036 ( 334 ) 4,702 4.6 
 Tradenames 
 3,964 ( 1,606 ) 2,358 4.4 
 Non-competition agreements 
 4,121 ( 1,847 ) 2,274 3.0 
 Domain names 
 234 ( 105 ) 129 8.0 
 Intangible assets, net 
 $ 26,068 $ ( 9,374 ) $ 16,694 

 Amortization expense recorded for intangible assets was approximately $ 3.7 million, $ 3.1 million and $ 2.5 million for the years ended December 31, 2023, 2024 and 2025, respectively. 
 The expected future amortization expense for intangible assets as of December 31, 2025 is as follows: 
 
 (in thousands) Amount 
 2026 $ 5,660 
 2027 4,583 
 2028 4,031 
 2029 1,194 
 2030 1,178 
 Thereafter 
 48 
 Total amortization expense 
 $ 16,694 

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 6. Other Assets and Liabilities 
 Other Non-Current Assets 
 Other non-current assets consisted of the following: 
 
 December 31, 
 (in thousands) 2024 2025 
 Deferred tax asset, net 
 $ 7,976 $ 27,013 
 Security deposits 2,605 4,337 
 Other assets 
 3 — 
 Other non-current assets 
 $ 10,584 $ 31,350 

 Other Non-Current Liabilities 
 Other non-current liabilities consisted of the following: 
 
 December 31, 
 (in thousands) 2024 2025 
 Tax liabilities $ 418 $ 3,567 
 Deferred acquisition consideration — 1,628 
 Payroll liabilities 
 4,885 — 
 Other liabilities 
 — 898 
 Other non-current liabilities 
 $ 5,303 $ 6,093 

 
 7. Operating Leases 
 The Company has entered into various non-cancelable operating lease agreements, primarily for the use of office and warehouse space, expiring at various dates through 2037. The Company’s right-of-use assets and lease liability include options to extend or terminate the lease when it is reasonably certain they will be exercised. The Company considers these options in determining the lease term on a lease-by-lease basis. The Company separately accounts for lease components and non-lease components. None of the Company’s lease agreements contain material non-lease components, residual value guarantees or restrictive covenants. The Company has elected an accounting policy to not recognize short-term leases, which have a lease term of twelve months or less, on the consolidated balance sheets. The Company does not have any material short-term lease cost or leases with variable lease costs. Lease expense primarily related to operating lease costs and were included within operations, general and administrative and sales and marketing expenses in the consolidated statements of operations. The Company recorded lease expense of $ 5.6 million, $ 7.1 million and $ 9.3 million for the years ended December 31, 2023, 2024 and 2025, respectively. 
 Lease Term and Discount Rate 
 The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows: 
 
 December 31, 
 2024 2025 
 Weighted-average remaining lease term 7.8 years 6.0 years 
 Weighted-average discount rate 6.13 % 6.44 % 

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 Maturity of Lease Liabilities 
 The future minimum lease payments under the Company’s operating lease liabilities as of December 31, 2025 is as follows: 
 
 (in thousands) Amount 
 2026 $ 10,498 
 2027 6,601 
 2028 4,787 
 2029 3,773 
 2030 2,097 
 Thereafter 10,761 
 Total undiscounted lease payments 38,517 
 Less: imputed interest 7,682 
 Present value of lease liabilities 30,835 
 Less: operating lease liabilities, current ( 8,826 ) 
 Operating lease liabilities, non-current $ 22,009 

 The following table provides a summary of supplemental cash flow information related to our operating leases: 
 
 Year Ended December 31, 
 (in thousands) 2023 2024 2025 
 Cash payments included in operating cash flows for lease arrangements $ 6,119 $ 7,410 $ 9,102 
 Right-of-use assets obtained in exchange for new operating lease liabilities $ 1,013 $ 17,372 $ 9,420 

 
 8. Credit Facilities 
 The Company is party to a revolving credit facility with JPMorgan Chase Bank, N.A. and other lenders pursuant to the Credit Agreement, dated September 4, 2025. The outstanding balance under the Company’s revolving line of credit facility was zero as of December 31, 2025 and the amount available to draw to was $ 150.0 million as of December 31, 2025. The revolving line of credit has a maturity date in September 2030 and will bear interest at a variable base rate plus an applicable margin ranging from 0.50 % to 2.00 %. The commitment fees on the unused portion range from 0.20 % to 0.25 %. 
 The Company’s credit agreement contains various financial, affirmative and negative covenants. As of December 31, 2025, the Company was in compliance with all covenants outlined in the agreement. 
 
 9. Fair Value Measurements 
 The following table summarizes by level, within the fair value hierarchy, the Company’s assets and liabilities measured at fair value on a recurring basis: 
 
 December 31, 2024 
 (in thousands) Level 1 Level 2 Level 3 
 Assets: 
 Cash equivalents 
 $ 139,500 $ — $ — 

 
 December 31, 2025 
 (in thousands) Level 1 Level 2 Level 3 
 Assets: 
 Cash equivalents 
 $ 243,663 $ — $ — 

 The Company’s remaining liabilities measured at fair value on a recurring basis were immaterial for the periods presented. 
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 10. Convertible Preferred Stock 
 In September 2025, the Company completed its IPO of shares of Series A common stock. Immediately prior to the completion of the IPO, 15,750,477 shares of Series A Preferred Stock were converted into an aggregate of 15,750,477 shares of Series A common stock in accordance with the original fixed-price conversion feature of the Series A Preferred Stock. Accordingly, the conversion of the Series A Preferred Stock was accounted for as a conversion with no gain, loss or deemed dividend recognized. 
 In addition, immediately prior to the completion of the IPO, 13,215,614 shares of Series B Preferred Stock were converted into an aggregate of 32,129,232 shares of Series A common stock in accordance with the original fixed-percentage conversion feature based on the IPO price, after giving effect to the Series B conversion rights. Under the Series B conversion rights, each share of Series B Preferred Stock converted into a number of shares of Series A common stock determined by dividing the original issue price of such share by the lesser of (a) the original issue price of such share (subject to certain anti-dilution adjustments) and (b) the IPO price per share discounted by 50.0 % (the “Series B Preferred Special Conversion Ratio”). Accordingly, the conversion of the Series B Preferred Stock was accounted for as a redemption. As a result of this redemption feature, the fair value of the Series A common stock issued exceeded the carrying amount of the Series B Preferred Stock redeemed, resulting in a non-cash deemed dividend of $ 163.9 million during the year ended December 31, 2025, inclusive of a $ 67.4 million adjustment for cumulative undeclared dividends previously reported through June 30, 2025. The deemed dividend reduced earnings available to common shareholders in EPS and reduced retained earnings by $ 94.4 million as of December 31, 2025 with the residual amount charged against additional paid-in capital as the Company did not have sufficient retained earnings to absorb the full amount of the deemed dividend at the time of redemption. 
 The holders of the Company’s Series A Preferred Stock and Series B Preferred Stock (collectively, “Convertible Preferred Stock”) had certain voting, dividend and redemption rights, as well as liquidation preferences and conversion privileges, in respect of the Convertible Preferred Stock. All of such rights, preferences and privileges associated with the Convertible Preferred Stock were terminated at the time of the Company’s IPO in conjunction with the conversion and redemption mentioned above. 
 The following table summarizes redeemable Convertible Preferred Stock prior to the conversion into common stock upon completion of the IPO: 
 
 
 (in thousands, except per share data) Original Issuance Date Shares authorized Shares issued and outstanding Issuance price per share Aggregate liquidation preference Net carrying value 
 Series A Preferred Stock May 2020 15,750 15,750 $ 7.44 $ 117,184 $ 52,073 
 Series B Preferred Stock September 2021 13,222 13,216 17.01 292,255 218,528 
 Total 28,972 28,966 $ 409,439 $ 270,601 

 Dividends 
 The holders of Series B Preferred Stock were entitled to cumulative dividends at a rate of 8.0 % of the original issue price, or $ 17.01 per share, if and when declared by the Company’s board of directors. The holders of Series B Preferred Stock were entitled to receive dividends on a pari passu basis, prior to and in preference to any dividends to common stockholders. After the IPO and conversion, these dividend rights ceased, and there were no accrued and unpaid dividends as of December 31, 2025. 
 There were no dividends declared or paid during the years ended December 31, 2024 and 2025. 
 
 11. Stockholders’ Equity 
 Common Stock 
 In September 2025, the Company completed its IPO of shares of Series A common stock and all of the Company’s then-outstanding shares of common stock were reclassified into shares of Series A common stock. The Company sold 10,714,286 shares of its Series A common stock in connection with the IPO and has recognized $ 135.0 million in proceeds, after deducting $ 10.5 million of underwriting discounts and commissions and $ 4.5 million of offering costs. 
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 The Company has two series of common stock: Series A common stock with a par value of $ 0.001 per share and Series B common stock with a par value of $ 0.001 per share. The rights of the holders of Series A common stock and Series B common stock are identical, except with respect to voting and conversion rights. Each share of Series A common stock is entitled to one vote. Each share of Series B common stock is entitled to 20 votes and is convertible at any time into one share of Series A common stock. Holders of common stock are entitled to receive any dividends as may be declared by the board of directors. 
 Preferred Stock 
 In connection with the completion of the IPO, 17,797,821 shares of Founder Voting Preferred Stock, $ 0.001 par value per share, were reclassified and converted into an aggregate of 21,702,510 shares of Series B common stock, and 68,994,553 shares of Founder Non-Voting Preferred Stock, $ 0.001 par value per share, were reclassified and converted into an aggregate of 84,131,370 shares of Series A common stock, based on the IPO price, after giving effect to Founder Preferred Stock Amendment, as described below, and to certain transfers by the co-founder trusts to the co-founders. 
 Founder Preferred Stock Amendment 
 In August 2025, the Company, following approval by its board of directors, amended its Certificate of Incorporation to revise the conversion terms of the Founder Voting Preferred Stock and Founder Non-Voting Preferred Stock (collectively, the “Founder Preferred Stock”) (the “Founder Preferred Stock Amendment”). The revised terms provided that upon completion of an IPO, the Founder Preferred Stock would convert into Series B common stock or Series A common stock, as applicable, at a ratio that would limit the dilution impact on the holders of such stock to 3.33 %, as a result of the special conversion ratio applicable to the Series B Preferred Stock in connection with an IPO, provided, no adjustment will be made for any incremental dilution that exceeds 9.00 % (see Note 10—Convertible Preferred Stock for additional information on the Series B Preferred Stock conversion rights). If an IPO was not completed by December 31, 2025, the Founder Preferred Stock would have reverted to its original 1 :1 conversion ratio into Series B common stock or Series A common stock, as applicable. The Founder Preferred Stock were considered to be common stock equivalents for purposes of calculating EPS given that they share equally with common stock in the liquidation of the Company’s net assets. Accordingly, the amended terms represented a non-pro rata distribution to the holders of the Founder Preferred Stock (“the Founder Preferred Stockholders”) and, as a result, the Company recognized a non-cash expense of $ 32.7 million for the incremental fair value associated with the modified terms within the caption stock amendment expense on our consolidated statement of operations. The conversion of the Founder Preferred Stock under the amended conversion rights was accounted for as an equity conversion with no gain, loss or deemed dividend recognized. 
 Common Stock Authorized, Issued and Reserved 
 The Company has reserved the following shares of common stock for future issuance: 
 
 (in thousands) December 31,
2025 
 
 
 Shares available under the 2019 and 2025 Equity Incentive Plans 25,270 
 Shares available under the 2025 Employee Stock Purchase Plan 3,086 
 Total shares of common stock reserved 28,356 
 Common shares outstanding 176,394 
 Authorized but not reserved 2,095,250 
 Total common shares authorized 2,300,000 

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 12. Stock-Based Compensation 
 Stock-based compensation expense is classified within the corresponding operating expense categories in the consolidated statements of operations as follows: 
 
 Year Ended December 31, 
 (in thousands) 2023 2024 2025 
 Operations, general and administrative $ ( 206 ) $ — $ 52,530 
 Sales and marketing — — 24,716 
 Research and development — — 20,042 
 Total stock-based compensation $ ( 206 ) $ — $ 97,288 

 Compensation expense associated with cash-settled restricted stock units was $ 2.3 million for the year ended December 31, 2025 and was included in operations, general and administrative in the consolidated statements of operations. 
 Stock Award Plans 
 In January 2019, Pattern Group Inc. adopted the 2019 Equity Incentive Plan (as amended, the “2019 Plan”). Under the 2019 Plan, the board of directors may grant stock options, restricted stock, RSUs, stock appreciation rights or a dividend equivalent to eligible employees, officers, non-employee directors and consultants. Under the 2019 Plan, these RSUs granted to employees and directors included both service-based and performance-based vesting conditions. The performance-based vesting condition was satisfied by the IPO. 
 In connection with the IPO, the board of directors adopted the 2025 Equity Incentive Plan (the “2025 Plan”), which became effective upon the date immediately preceding the date on which the registration statement was declared effective by the SEC. Under the 2025 Plan, the board of directors may grant stock options, restricted shares, RSUs, stock appreciation rights, dividend equivalent rights and cash bonuses to eligible employees, officers, non-employee directors and consultants. Following the IPO, outstanding RSUs under both the 2019 Plan and 2025 Plan include only a service-based vesting condition. The service-based vesting condition is generally satisfied by rendering continuous service, generally for 4 years, during which time a quarter of the award vests annually. 
 Restricted Stock Units 
 The following table summarizes the RSU activity (excluding the executive incentive agreement described below): 
 
 (in thousands, except per share fair values) 
 RSUs 
 
 
 Weighted-Average Grant Date Fair Value 
 
 Outstanding at December 31, 2022 
 12,801 $ 2.16 
 Granted 
 3,100 $ 7.67 
 Vested — $ — 
 Cancelled/Forfeited 
 ( 752 ) $ 2.85 
 Outstanding at December 31, 2023 
 15,149 $ 3.26 
 
 Granted 
 3,399 $ 12.94 
 Vested — $ — 
 Cancelled/Forfeited 
 ( 959 ) $ 7.72 
 Outstanding at December 31, 2024 
 17,589 $ 4.88 
 
 Granted 
 5,393 $ 16.30 
 Vested ( 14,092 ) $ 3.65 
 Cancelled/Forfeited 
 ( 720 ) $ 12.43 
 Outstanding at December 31, 2025 
 8,170 $ 13.89 

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 Under the 2019 Plan, the Company records stock-based compensation expense in connection with RSUs based on the fair market value of its common stock (as described further below) on the grant date using the accelerated attribution method when it is probable the performance-based vesting condition will be achieved. Under the 2025 Plan, the Company records stock-based compensation expense in connection with RSUs based on the fair market value of its common stock (as quoted on the Nasdaq Global Select Market) on the grant date, ratably over the requisite service period of the award. Upon vesting of RSUs, the Company withholds shares from employees to satisfy the employee portion of payroll tax obligations (“net share settlement”) which are classified as a financing activity in the consolidated statement of cash flows. 
 The valuation of RSUs granted under the 2019 Plan, was determined in accordance with the guidance provided by the American Institute of American Institute of Certified Public Accountants in its Accounting & Valuation Guide. An equity value was estimated using a weighted average of the guideline public company method and the backsolve method (market approaches). These methods considered information from a selection of comparable publicly traded companies and the Company’s historical Series A and Series B Preferred Stock transactions. For the public company method, valuation multiples were calculated from selected company operating data to provide an indication of how much a current investor in the marketplace would be willing to pay for a company with characteristics similar to the Company. These valuation multiples were evaluated and adjusted based on the strengths and weaknesses of the Company relative to those of the selected guideline companies. The multiples are applied to the Company’s operating data to arrive at a relative indication of fair value. Enterprise value was next allocated to differing security holders in the capitalization schedule using the Option Pricing Method (the “OPM”). The OPM utilized breakpoints based on various terms of the stockholder agreements upon liquidation of the enterprise, the level of seniority among the securities, dividend policy, conversion ratios and cash allocations. Estimated volatility ranged from 55 % to 60 % and the discount for lack of marketability ranged from 14.8 % to 20.0 %. 
 Application of the valuation procedures for RSUs granted under the 2019 Plan involved the use of estimates, judgment and assumptions that are highly complex and subjective, such as those regarding expected future revenue and EBITDA, market multiples, the selection of comparable companies, the lack of marketability of the Company’s common stock, precedent transactions involving the Company’s shares, market performance of comparable publicly traded companies, U.S. and global capital market conditions and the probability of possible future events. Changes in any or all of these estimates and assumptions or the relationships between those assumptions impact the valuations as of each valuation date and may have a material impact on the valuation of the Company’s common stock. 
 The total unrecognized stock-based compensation expense related to these awards was $ 66.8 million as of December 31, 2025 and the weighted-average remaining requisite service period is 2.98 years. 
 In February 2025, the board of directors approved a stand-alone restricted stock unit agreement for the Company’s Chief Executive Officer (“CEO”) subject to certain performance and market conditions. In August 2025, the stand-alone restricted stock unit agreement for the Company’s CEO was cancelled. No expense was recognized upon cancellation of the award in August 2025 as the performance and market conditions had not occurred. 
 Employee Stock Purchase Plan 
 The 2025 Employee Stock Purchase Plan (“ESPP”) was adopted by the board of directors on September 9, 2025, was approved by the Company’s stockholders on September 9, 2025, and became effective on the date immediately preceding the date on which the registration statement was declared effective by the SEC. The ESPP initially reserves and authorizes the issuance of up to a total of 3,086,351 shares of Series A common stock to participating employees. Each employee who is a participant in the ESPP will be able to purchase shares by authorizing payroll deductions of up to 15 % of his or her eligible compensation during an offering period. The ESPP provides for a 6-month offering periods beginning December 1 and June 1 of each year, beginning on December 1, 2025. 
 Unless the participating employee has previously withdrawn from the offering, his or her accumulated payroll deductions will be used to purchase shares of Series A common stock on the last business day of the offering period at a price equal to 85 % of the fair market value of the shares on the first business day or the last business day of the offering period, whichever is lower, provided that no more than a number of shares of Series A common stock determined by dividing $ 25,000 by the fair market value of the Series A common stock on the first day of the offering may be purchased by any one employee during any offering period. Under applicable tax rules, an employee may purchase no more than $ 25,000 worth of shares of Series A common stock, valued at the start of the purchase period, under the ESPP in any calendar year. An employee’s rights under the ESPP will terminate upon voluntary withdrawal from the plan or when the 
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 employee ceases employment with the Company for any reason. The ESPP may be terminated or amended by the board of directors at any time. 
 There were $ 0.3 million of contributions into the ESPP during the year ended December 31, 2025 and no shares purchased under the ESPP during the year ended December 31, 2025. Stock-based compensation expense associated with the ESPP is included in the stock-based compensation expense table above. Stock-based compensation expense associated with the ESPP recognized during year ended December 31, 2025 and unrecognized stock-based compensation expense at December 31, 2025 was not material. 
 Each of the 2025 Plan and the ESPP provide for annual automatic increases in the number of shares of Series A common stock reserved thereunder, and the 2025 Plan provides for increases to the number of shares of Series A common stock that may be granted thereunder based on shares underlying any awards under the 2025 Plan and the 2019 Plan that are forfeited, cancelled or are otherwise terminated. 
 
 13. Provision for Income Taxes 
 Income tax provision (benefit) consisted of the following: 
 
 
 
 Year Ended December 31, 
 (in thousands) 
 2023 2024 2025 
 Current: 
 
 
 
 
 
 
 
 U.S. Federal 
 $ 11,640 $ 19,279 $ 702 
 U.S. State 
 3,381 4,993 291 
 International 
 307 378 1,265 
 Total current provision 
 15,328 
 
 24,650 2,258 
 Deferred: 
 
 
 
 
 
 
 
 U.S. Federal 
 ( 37 ) ( 921 ) ( 17,454 ) 
 U.S. State 
 ( 112 ) ( 95 ) ( 2,133 ) 
 International 
 ( 102 ) ( 255 ) 289 
 Total deferred benefit 
 ( 251 ) 
 
 ( 1,271 ) ( 19,298 ) 
 Provision (benefit) for income taxes $ 15,077 
 
 $ 23,379 $ ( 17,040 ) 

 U.S. and international components of income before income taxes are as follows: 
 
 
 
 Year Ended December 31, 
 (in thousands) 
 2023 2024 2025 
 U.S. Federal & State 
 $ 62,229 $ 98,640 $ 12,513 
 International 
 ( 5,888 ) ( 7,405 ) ( 13,307 ) 
 Income (loss) before income taxes $ 56,341 $ 91,235 $ ( 794 ) 

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 Below is a tabular rate reconciliation pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025. The individual tax effect of foreign jurisdictions were not material for purposes of disaggregation for the year ended December 31, 2025: 
 
 
 
 Year Ended December 31, 2025 
 (in thousands) 
 Amount Percent 
 Income taxes computed at the federal statutory rate $ ( 167 ) 21.0 % 
 State taxes, net of federal benefits (1) 
 ( 1,913 ) 240.9 % 
 Foreign tax effects 4,348 ( 547.6 ) % 
 Tax Credits 
 Research and development credits (net of UTBs) ( 3,409 ) 429.3 % 
 Stock-based compensation tax benefit ( 26,356 ) 3,319.4 % 
 Other 253 ( 31.9 ) % 
 Non-taxable or non-deductible items: 
 Stock amendment expense 6,862 ( 864.2 ) % 
 162(m) limitation 3,342 ( 420.9 ) % 
 Benefit for income taxes $ ( 17,040 ) 2,146.1 % 

 __________ 
 (1) State taxes and local taxes in California, New York, Illinois, and Florida comprise the majority of this category. 
 The items accounting for differences between income taxes computed at the federal statutory rate and the provision recorded for income taxes are as follows for the year ended December 31, 2023 and 2024: 
 
 
 
 Year Ended December 31, 
 (in thousands) 
 2023 2024 
 Income taxes computed at the federal statutory rate 
 $ 11,819 $ 19,160 
 Effect of: 
 
 
 
 
 
 Tax impact of foreign earnings 
 ( 236 ) ( 490 ) 
 State taxes, net of federal benefits 
 2,566 3,822 
 Permanent differences 
 ( 61 ) ( 554 ) 
 Change in valuation allowance 
 1,828 2,092 
 Uncertain tax positions 
 184 ( 15 ) 
 Research & development tax credit 
 ( 663 ) ( 608 ) 
 Provision to return adjustments 
 ( 360 ) ( 28 ) 
 Provision for income taxes 
 $ 15,077 $ 23,379 

 Below is a summary of income taxes paid by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025: 
 
 
 (in thousands) 
 Year Ended December 31, 2025 
 U.S. Federal $ 13,500 
 U.S. State and local 3,716 
 Foreign: 
 India 1,115 
 Other 137 
 Cash paid for income taxes $ 18,468 

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 Deferred income tax assets consisted of the following as of: 
 
 December 31, 
 (in thousands) 
 2024 2025 
 Deferred tax assets: 
 
 
 
 Net operating losses 
 $ 7,303 $ 22,048 
 Stock-based compensation — 10,862 
 Research & development credits 
 710 5,134 
 Inventory (UNICAP) 
 4,248 5,011 
 Operating lease liabilities 
 5,387 4,529 
 Accrued liabilities 
 3,132 2,439 
 Capitalized research costs 
 4,929 — 
 Other 10 23 
 Valuation allowance 
 ( 7,505 ) ( 13,972 ) 
 Deferred tax assets 
 18,214 36,074 
 Deferred tax liabilities: 
 
 
 
 Depreciation and amortization 
 ( 5,046 ) ( 5,727 ) 
 Operating lease right-of-use asset 
 ( 5,048 ) ( 4,118 ) 
 Capitalized research costs — ( 1,482 ) 
 Prepaid expenses and other 
 ( 175 ) ( 395 ) 
 Deferred tax liabilities 
 ( 10,269 ) ( 11,722 ) 
 Net deferred tax assets 
 $ 7,945 $ 24,352 

 The Company recorded a valuation allowance of $ 7.5 million and $ 14.0 million as of December 31, 2024 and 2025, respectively, to reduce its deferred tax assets related to foreign net operating losses and Utah state research and development tax credits to their net realizable value. The Company has determined that as a result of uncertainty related to the usability of the net operating loss and research and development benefits a valuation allowance was required. Changes in the valuation allowance are detailed in the table below: 
 
 December 31, 
 (in thousands) 
 2024 2025 
 Valuation allowance, beginning of period 
 $ 5,090 $ 7,505 
 Additions to valuation allowance 
 2,415 6,673 
 Reduction to valuation allowance 
 — ( 206 ) 
 Valuation allowance, ending balance 
 $ 7,505 $ 13,972 

 The Company has net operating loss carryovers by jurisdiction as follows: 
 
 December 31, 2025 
 (in thousands) 
 Amount 
 Expiration (year) 
 
 Federal $ 40,457 N/A 
 U.S. State 
 $ 26,968 Various 
 Australia $ 1,562 N/A 
 China 
 $ 4,002 2026 
 Czech Republic $ 3,047 2026 
 Germany 
 $ 15,236 N/A 
 Singapore 
 $ 3,491 N/A 
 United Kingdom 
 $ 15,135 N/A 
 
 
 Other 
 $ 369 Various 

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 The Company has the following tax credit carryover amounts: 
 
 December 31, 2025 
 (in thousands) 
 Amount 
 
 
 Expiration (year) 
 
 Federal research & development 
 $ 3,409 2045 
 Utah research & development 
 $ 2,569 2033 

 The Company recognizes tax benefits from uncertain tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. The following table summarizes the activity related to unrecognized tax benefits: 
 
 December 31, 
 (in thousands) 
 2024 2025 
 Unrecognized tax benefits, beginning of period 
 $ 505 $ 513 
 Increase (decrease) to unrecognized tax benefits taken in prior years 
 24 65 
 Increase to unrecognized tax benefits related to the current year 
 116 684 
 Decrease due to lapse of statute of limitations 
 ( 132 ) ( 68 ) 
 Unrecognized tax benefits, end of period 
 $ 513 $ 1,194 

 The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate were $ 0.5 million, $ 0.5 million and $ 1.2 million for the years ended December 31, 2023, 2024 and 2025, respectively. The Company records interest and penalties associated with unrecognized tax benefits as a component of income tax expense. The amount of accrued penalties and interest included in the total balance of unrecognized tax benefits is insignificant in 2024 and 2025. The Company is generally no longer subject to income tax examinations by federal jurisdictions for years before 2022, state and local years before 2021 and foreign years before 2020. 
 
 14. Commitments and Contingencies 
 Purchase Commitments 
 As of December 31, 2025, the Company did not have any material future payments under non-cancelable purchase obligations. 
 Legal Matters 
 From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. Loss contingencies are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Accounting for contingencies requires the use of judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. 
 As of December 31, 2025, the Company was not involved in any legal proceedings, individually or in the aggregate, that the Company believes are probably or reasonably possible to have a material adverse effect on its business, results of operations, financial condition or cash flows. 
 Indemnification 
 In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, brand partners, lessors, investors, directors, officers, employees and other parties with respect to certain matters. Indemnification may include losses from the breach of such agreements, services the Company provides or third-party intellectual property infringement claims. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap. 
 
 15. Benefit Plan 
 The Company has an employee retirement benefit plan (the “Plan”) under Section 401(k) of the Internal Revenue Code. The Plan covers employees who are U.S. citizens, are at least 21 years of age and have been employed by the Company longer than 90 days. The Company contributes a safe harbor match in an amount equal to employee contributions up to 3 % of the participating employee’s compensation and matches an amount equal to half of the employee 
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 contributions between 3 % and 5 %. These contributions are subject to ERISA requirements. Total contributions by the Company to the Plan were $ 2.0 million, $ 2.5 million and $ 2.7 million during the years ended December 31, 2023, 2024 and 2025, respectively. 
 
 16. Related-Party Lease Agreement 
 iServe Investments, LLC 
 The Company leases certain office and warehouse space from a related party, iServe Investments, LLC, which is wholly owned by two majority stockholders. Total lease cost and related expenses for the lease was not material for the years ended December 31, 2023, 2024 and 2025. 
 
 17. Segment Information 
 The Company manages its business on a consolidated basis and operates as a single operating and reportable segment. The Company primarily derives its revenue in the United States by selling products to customers via online marketplaces. 
 The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer, who reviews financial information on a consolidated basis. The CODM uses consolidated net income to assess financial performance and allocate resources. Net income is used by the CODM to make key operating decisions by comparing actual net income to historical results and previously forecasted financial information. The CODM does not review assets in evaluating the results of the reportable segment. 
 The following table presents selected financial information with respect to the Company’s single operating and reportable segment: 
 
 Year Ended December 31, 
 (in thousands) 2023 2024 2025 
 Revenues $ 1,366,417 $ 1,796,161 $ 2,501,315 
 Significant expenses: 
 Cost of goods sold 765,203 1,014,812 1,410,869 
 Fulfillment (1) 
 217,003 272,288 374,345 
 Marketplace commissions (2) 
 194,753 257,915 357,257 
 Sales, general and administrative (3) 
 116,574 138,345 194,045 
 Technology (4) 
 20,305 25,619 35,044 
 Share-based compensation and related taxes (5) 
 ( 206 ) — 104,349 
 Stock amendment expense — — 32,676 
 Interest income, net ( 2,849 ) ( 6,066 ) ( 7,422 ) 
 Other (income) expense, net ( 707 ) 2,013 946 
 Provision (benefit) for income taxes 15,077 23,379 ( 17,040 ) 
 Net income $ 41,264 $ 67,856 $ 16,246 

 __________ 
 (1) Fulfillment include costs incurred from third-party fulfillment centers and cost to operate and staff the Company’s fulfillment centers, excluding share-based compensation and related taxes. 
 (2) Marketplace commissions includes referral fees charged by the various online marketplaces. 
 (3) Sales, general and administrative relate to employee headcount, excluding share-based compensation and related taxes, and other selling and general administrative costs. 
 (4) Technology represents items included in research in development within the consolidated statement of operations, excluding share-based compensation and related taxes, and the amortization of capitalized internally developed software costs. 
 (5) Share-based compensation and related taxes include compensation expense for both stock and cash settled restricted stock units and the related employer taxes. 
 See Note 2—Summary of Significant Accounting Policies for additional information about revenue disaggregation. 
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 The Company's long-lived tangible assets, as well as the Company's operating lease right-of-use assets recognized on the consolidated balance sheets were located as follows: 
 
 December 31, 
 (in thousands) 2024 2025 
 U.S. $ 53,399 $ 54,596 
 International 9,513 14,655 
 

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 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures 
 None.
Pattern Group Inc. 10-K

Item 8. Financial Statements and Supplementary Data
