Pattern (PTRN) 2026 年第三季法說會：營收成長 38%，調升全年展望

重點摘要

• Pattern 公布 2026 年第三季營收達 8.86 億美元，年增 38%。若經電商平台促銷活動時點調整後，成長率約為 42%。
• 調整後 EBITDA 成長 40% 至 5,700 萬美元，調整後 EBITDA 利潤率則升至 6.5%，高於去年同期的 6.4%。淨利為 3,200 萬美元。
• 淨營收留存率達到 127%，高於去年同期的 122%，主要受惠於技術導向的最佳化、拓展新地理區域以及更多元的商品選擇。
• 非亞馬遜營收成長 86%，約占總營收的 10%。國際市場營收成長 56%，達 1.06 億美元，約占總營收的 12%。
• 管理階層將 2026 年展望上調至營收約 35 億美元，以及 調整後 EBITDA 約 2.2 億美元，預估成長率分別約為 40% 與 44%。
• Pattern 第三季簽約的大型品牌數量，已追平其歷史最佳全年的簽約總數。平均合約金額較 2025 年第三季成長 41%。

關鍵財務數據

Pattern 回購了 1,800 萬美元的 A 系列股票，此為第三季依據其 1 億美元股票回購計畫所執行。

業務與營運表現

現有品牌的成長仍是最大貢獻來源，這反映在 127% 的 NRR。管理階層將此表現主要歸功於技術最佳化，同時拓展新地理區域與電商平台亦帶來額外貢獻。

Pattern Intelligence（簡稱 Pi）結合數據與技術，貫穿四大電商核心槓桿：流量、轉換率、價格與供貨狀況。Pattern 表示，Pi 每天代表品牌執行 3,825 萬次操作。該公司還指出，第三季轉換率較去年同期提升了 2 個百分點。

Pattern 管理跨各大電商平台與管道達 每年 18 億美元的廣告支出，涵蓋 Meta、Google、TikTok 與 ChatGPT 等。管理階層表示，大部分支出均在亞馬遜之外，並強調跨平台與 AI 輔助產品探索所帶來的商機。

該公司研發費用年增 105%（不計股權獎勵支出及相關稅費）。管理階層表示，這些投資重點在於數據基礎設施、AI 能力及代理型商務 (Agentic commerce)，同時公司在其他領域持續發揮營運槓桿效益。

Pattern 的物流網絡包括遍布美國、加拿大、歐洲與亞洲的八座專用配送中心。管理階層表示，相同的基礎設施同時支援其核心庫存模式與 Pattern 履約服務，隨著物流量擴大，可有效抑制額外的資本支出。

管理階層財測

管理階層預估全年期末 NRR 約為 124% 至 125%。該公司仍將 115% 視為長期 NRR 目標，同時指出技術進展加快或代理型商務 (Agentic commerce) 普及度提高，皆可能影響此發展軌跡。

風險與關注領域

由於電商平台促銷活動時點的影響，約四個百分點的營收從第三季轉移至第二季，對季度間的比較造成影響。

管理階層指出，受活動時點、歐洲市場較高的比較基期，以及前一年在酷澎 (Coupang) 從零開始上線等因素影響，國際市場成長出現波動。

該公司將代理型商務 (Agentic commerce) 規劃中的「信任層」（包括配送可靠度、退貨、防詐欺保護及直接 API 存取）視為早期商機。消費者的接受度與營運標準仍存在不確定性。

亞馬遜持續推動履約最佳化，可能為品牌帶來額外的複雜度，儘管工具與數據的改良能提供部分緩衝。Pattern 亦承認整體總體經濟存在不確定性，但管理階層表示自家營運成果中尚未見到消費者疲軟跡象。

分析師問答重點

• 代理型商務 (Agentic commerce)： 管理階層預期商品探索與履約配送將是近期最大的商機。該公司認為 Pi 能將 SEO 數據轉化為語意意圖，並針對 AI 驅動的購物介面最佳化內容。
• 新品牌成長： Pattern 在銷售洽談早期即導入數據，並運用代理型工具加速客戶入駐流程。管理階層表示，目前的新客戶儲備管線為公司史上最強勁之一，在健康保健、美妝、寵物、居家與廚房等領域均具備成長動能。
• 通路多元化： 非亞馬遜營收的成長速度快於亞馬遜本身營收。管理階層表示，拓展通路主要是受消費者支出模式與品牌成長機會所驅動，而非單純追求多元化。
• 國際市場拓展空間： 根據管理階層說法，數位消費者的商品交易總額 (GMV) 有超過半數來自美國境外，但國際營收僅占 Pattern 第三季總營收的 12%。該公司將此差距視為長期的擴張機會。
• Thorne 與寶僑 (P&G)： 管理階層表示，該公司與 Thorne 及寶僑 (P&G) 的合作關係依然良好，並表示收購後業務維持正常運作。
• 利潤率走勢： 管理階層預期數據、技術與物流的規模效益將帶動營運槓桿。隨著利潤率較高的 SaaS、物流及其他營收類別成長，長遠來看亦可望有所貢獻。

完整法說會逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Hello, and thank you for standing by. My name is Demi, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Pattern's Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Hamish Chang, VP of Finance. You may begin.

Hamish Chung

Thank you, operator. Good afternoon, and thank you for joining Pattern's earnings call for the third quarter 2026.

Before we begin, I'd like to remind everyone that today's discussion may contain forward-looking statements based on our current expectations, assumptions and forecasts about future events. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected. Please refer to our latest filings with the Securities and Exchange Commission for more information on these risks and uncertainties.

We may also refer to certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in our earnings release. We'll focus our remarks today on the key highlights and drivers. Additional detail is available in the earnings release.

Joining us today are Dave Wright, our Co-Founder and Chief Executive Officer; and Jason Beesley, our Chief Financial Officer. Today's earnings call is being webcast, and a replay will be available on our Investor Relations website following the call. Following our prepared remarks, we will open the call to questions.

I'll now turn the call over to our CEO, Dave Wright. Dave, please go ahead.

David Wright

Thanks, Hamish, and good afternoon, everyone. We delivered another record quarter and raised our full year outlook. Third quarter revenue reached $886 million, up 38% year-over-year and more than double where we were 2 years ago. Adjusting for the timing of promotional marketplace events, revenue growth was approximately 42% in both Q2 and Q3. Adjusted EBITDA increased 40% to $57 million. We also delivered net income of $32 million. Net revenue retention, a key benchmark of how well our model is working for brands was 127%, up from 122% a year ago. We delivered our largest quarter on record for new brand partnerships. In Q3 alone, we signed as many large brands as we did in our strongest full year on record. We also continue to expand across channels and geographies. Non-Amazon revenue grew 86%, reaching approximately 10% of total revenue and international revenue increased 56%. This momentum and our year-to-date performance support our increased full year outlook, which Jason will walk you through the details.

Let me take a step back. The technology landscape is evolving quickly, and I'm excited about the opportunities that pace of change creates for Pattern. The decisions we make today will shape our competitive advantage for years to come. We have a phenomenal team, and we're making excellent progress as we accelerate Pattern Intelligence, or Pi. Pi is the intelligence layer that brings together our technology, which are the 4 levers of the e-commerce equation, traffic, conversion, price and availability, which I've mentioned before. Drawing on 13 years of execution and more than 100 trillion data points, we help brands improve performance wherever consumers shop. As new capabilities emerge across marketplaces, social commerce, direct-to-consumer and AI platforms, we incorporate these advances into how we serve brands. We are confident in our advantage across the formula, underpinned by our data, technology, inventory management and logistics infrastructure.

As a quick example, Pattern annually executes $1.8 billion in total ad spend through ad signals, destiny and other tools across marketplaces and channels, including Meta, Google, TikTok and ChatGPT. What differentiates our patented approach in advertising is that, we optimize paid advertising to improve organic rank over time. The objective is to turn paid investment into lasting organic traffic and sales, helping brands grow without depending on continually higher advertising spend.

As another example, our logistics capabilities compound that momentum. We've expanded across prep, middle mile and last mile, supported by 8 dedicated distribution centers across U.S., Canada, Europe and Asia. That infrastructure and related technology supports marketplace and direct-to-consumer orders, including returns. These capabilities matter wherever demand originates in a marketplace, on a brand's website through social commerce or through an AI agent. We're also building more ways for brands to connect our content, logistics and data, including through our offering we refer to as Commerce Infrastructure as a Service, which we discussed last quarter.

Let me give you a few examples of what coordinated execution means and looks like for our brand partners. A leading U.S.-based beauty and home fragrance brand had no Amazon presence before joining us in February. In Q3, the revenue we managed grew 72% from Q2 as the catalog expanded from about 220 to more than 380 products. For a professional grooming tools brand, revenue through Pattern has tripled in 3 years as its business expanded from 6 countries to 11. Our prestige jewelry brand started with us in 2 markets and now sells through 9 marketplaces with international revenue up 85% this year. And the pet brand whose business had been flat for 3 years, has grown revenue with us 43% this year alone across 9 countries plus China, and we're getting recognized for it. Walmart Marketplace named Pattern the Outstanding Seller in consumables at its annual, Let's Grow Seller Summit. TikTok recognized us as a star partner in October and Inc. named us as a power partner for the fifth consecutive year.

Our business model gives us room to invest in technology while maintaining operating leverage. Excluding stock-based compensation and related taxes, R&D expense for Pattern was up 105% year-over-year in Q3, yet we continue to expand our adjusted EBITDA margins. And in the future, we expect those investments to improve efficiency, expand our reach across more geographies and marketplaces and make Pattern an even more attractive partner for our brands.

Over the trailing 12 months, we generated approximately $106 million of free cash flow, up 50% year-over-year, allowing us to invest for growth and return value to shareholders. We have the people, partners, technology and balance sheet to continue building. Our focus remains delivering growth for our brands, investing with discipline and creating long-term value for our shareholders.

Jason, over to you.

Jason Beesley

Thanks, Dave, and good afternoon, everyone. Q3 was another exciting quarter for Pattern on many fronts. We continue to see broad-based strength across brand partners, geographies and marketplaces and delivered $886 million of revenue, up 38% year-over-year. Adjusted EBITDA grew 40%, reflecting our disciplined approach to investing for growth while maintaining effective cost management. As a reminder, these results reflect approximately 4 points of revenue shift from Q3 into Q2 due to the timing of marketplace promotional events, which we talked about last quarter. Adjusting for that timing shift, Q3 revenue grew approximately 42% year-over-year.

We are pleased that our year-to-date performance, robust tech platform and ongoing business momentum is enabling us to raise our full year outlook on both the top and bottom line. In Q3, we delivered a strong NRR of 127% for our brand partners. That's up from 122% a year ago and was driven by technology-driven optimizations, new marketplaces and geographies and expanding product selection.

A few revenue highlights from the quarter. First, we saw strong new brand partner revenue growth in Q3, reflecting the momentum Dave highlighted in our new partner relationships. For the full year, we expect new brand partner revenue to grow at roughly twice the rate it grew in 2025.

Second, while still a smaller portion of our business, we are continuing to gain traction in SaaS, logistics and other monetization revenue, which grew sequentially from Q2 and increased 136% year-over-year to $18 million. We are pleased with the momentum we have seen, which is largely being driven by transaction-based business models.

Turning to operating expenses and profitability. Adjusted EBITDA was $57 million in Q3, up 40% year-over-year, representing a 6.5% margin, up from 6.4% a year ago. Excluding stock-based compensation and related taxes, R&D expense was up 105% year-over-year. We continue to invest ahead of revenue in our data infrastructure and AI capability while improving cost leverage in other areas such as sales G&A, where growth in labor costs was slower than revenue. Our variable cost components, cost of goods sold, fulfillment and marketplace commissions grew in line with revenue.

Moving now to the balance sheet and cash flow. We ended Q3 with $352 million in cash and cash equivalents, no outstanding debt and $150 million of borrowing capacity. For the trailing 12 months ended in September 30, we generated $106 million of free cash flow, up 50% year-over-year. Our robust cash flow and capital-light model is enabling us to continue to invest for growth while returning value to shareholders. During Q3, we bought back $18 million of Series A shares under our $100 million share repurchase program.

Turning to our outlook. We now expect full year revenue to be approximately $3.5 billion, representing approximately 40% growth year-over-year. This implies over $1 billion of incremental revenue compared to 2025. That's an exciting milestone for us at Pattern. What matters even more is what we deliver for brands. We are extremely pleased with our NRR performance of 127% and our updated outlook implies that the ending point of our NRR this year will be approximately 124% to 125%. We are raising our full year adjusted EBITDA outlook to approximately $220 million, representing 44% growth year-over-year. For the fourth quarter, we expect revenue in the range of $965 million to $985 million, representing 34% to 36% growth year-over-year. We expect Q4 adjusted EBITDA in the range of $54 million to $55 million, representing 27% to 29% growth year-over-year.

In closing, as we reflect on 1 full year as a public company, we are more optimistic than ever. We believe the power of our model, brand partners and team, combined with our balance sheet strength are advantages that will continue to compound, driving durable growth and long-term shareholder value.

With that, I'll turn it back to Dave before we open up the call for questions.

David Wright

Thanks, Jason. We remain focused on leveraging our technology and data to optimize the 4 levers of the e-commerce equation for our brand partners, which are traffic conversion, price and availability. We enter Q4 with that focus and with momentum we feel great about. We will continue to provide what I believe to be the most compelling e-commerce infrastructure on the market. This is a very exciting time for Pattern and our future.

Thank you for your continued support. We'll now open the call for questions.

Operator

[Operator Instructions] Our first question comes from the line of Justin Patterson with KeyBanc Capital Markets.

分析師問答

Justin Patterson

Dave, I was hoping you could talk about just the rise of assistance like news and instinct. These are really some of the first instances where we've seen more meaningful use cases of shopping starting to pop up. So I'm curious how that changes your channel opportunity and how you think that could look across the market over the next couple of months?

And then secondly, I would love to hear a little bit more about just how you're thinking about product investment as we head into 2027. What do you see as really the next big area to unlock value for merchants?

David Wright

Thanks, Justin. Great question. Yes, it's very exciting to watch. I think we've all been pretty engaged with AI in terms of research, and we're now seeing that start to shift into actual product discovery leading to purchases. I think news was a great example of that. I think the on-platform or on marketplace agents have had some level of traction previous to this, but news is unique that way or has been a unique highlight. So I think for Pattern, the key -- the way we think about it is, there's probably -- the biggest opportunities, if you think about which way we face, which is towards the brand. Every day we wake up, we say ourselves, "Okay, how do we serve brands better? What do they need?" Now -- and if you're sitting in a brand seat running e-commerce, the landscape is more complex. So every method or channel or way that people used to shop still exists. And now we're just adding some -- and in some cases, we're adding channels every month, every week in some cases. So if you're sitting in the seat of a brand, Pattern becomes uniquely helpful with our data moat and technology.

So the key areas are probably discovery and then overall fulfillment. And maybe I think we're going to start talking more and more about what I might refer to as a trust layer, how often people will trust an overall system and decide to execute a purchase there, and I think Pattern can influence that. So in the discovery area, I think we have possibly the best data advantage that I know of, which is a robust set of data where we can essentially concatenate SEO into semantic intent and understand, "Okay, by volume, mathematically, what matters, what does not matter in terms of content, what is the brand missing?" And then we're able to A/B test all of those outcomes. As an example, today, we run 38.25 million actions a day, actual actions that do something on behalf of brands through Pi. So if you think of that, I don't know of any brand who can even contemplate or probably even measure what actions they're taking. But because we know that number, we can actually measure the outcome. So that will go to discoverability. And then you start getting into fulfillment, logistics, what influences why a consumer picks one brand over another. And that is not just unique to marketplaces. That will expand to all of the Agentic platforms. So we're very excited about the future there. We think we're positioned very well to help brands gain traction in those markets.

And then I guess, secondly, in terms of product investment, well, you've seen probably our R&D numbers. We have -- there's never been a year in the history of Pattern where we've increased R&D investment like we have, excluding stock-based comp, you see the number 105%, technology, 84% increase. We're really -- the unique thing is, while we're doing that, we are also increasing our margins. So our business model is allowing us to invest in a major way in technology, take advantage of the opportunities we have there as well as maintain margins. And then I talk about some of those outputs of our Pattern Intelligence layer. I think we're first to market in many ways there. But in terms of scale, I don't know anyone who's executing in the realm of millions and millions of actions daily on behalf of brand. So, I mean, it is a very exciting opportunity for us for the future.

Operator

Our next question comes from the line of Ralph Schackart with William Blair.

Ralph Schackart

Two, please. Maybe at a high level, if you could walk us through the drivers of the business that continue to drive your outperformance as we think about levers such as technology, geographic expansion, increasing brands and selection. Some color would be helpful just to better understand your continued strong growth.

And then another question, just on the P&G earnings call, there was a question whether Thorne may continue to run separate from Procter's core operations and P&G may not be integrating Thorne as it does with other brands. Just curious if you could add some perspective on this. What are the potential implications for Pattern overall, how is this relationship progress for Pattern?

Jason Beesley

Thanks, Ralph. In terms of drivers of growth, we're really happy with how Q3 turned out, and that's why we raised our outlook. And if I start first with the biggest part with existing brand revenue and the NRR around that of 127%, that continues to be -- the majority of it is driven by the technology optimizations. The geographic expansion was strong as well. And expanding products was a little bit less strong this quarter because we knew we'd be lapping a pretty strong quarter in Q3 last year on that specific vector of growth there.

The other highlight that Dave mentioned and I mentioned in the prepared remarks is new brand partner revenue. And we're really finding that as the world gets more complex, as Dave mentioned in the first question, across the e-commerce formula and different surfaces and different optimizations that need to happen that the pattern solution in a simple place where we take care of so much on behalf of the brand is resonating even more. And we're signing bigger brands, and we've got lots of good momentum there. So those will be the key drivers in terms of the growth.

Specifically on the -- your kind of quote the P&G earnings call, we continue to be confident in all our great relationships with Thorne leadership and the many brands that we work with in P&G. All indications continue to be positive and focused on growth, and it's really just business as usual.

Operator

Our next question comes from the line of Eric Sheridan with Goldman Sachs.

Eric Sheridan

I want to talk a little bit about the key areas of investment priorities for the company. And how should we be thinking about different outcomes in terms of bands of margin for the business when you look out across the second half of this year, but then maybe a broader philosophical question as you go over the longer term, that would be really helpful.

David Wright

Yes. I think the core thing that every company that will be successful long-term has to be focused on is who they serve. So for us, it's a brand. So every day, it's really a question of what will move the needle more for a brand. And we have a development road map that just follows that. And of course, you know it goes across revenue for our brand, is traffic, conversion, price and availability. And we have to deliver that at a price point that we believe they cannot match, and I believe we're there. So as we invest and as we -- in different areas, we do get operating leverage. We're continuing to see that. We expect that to continue. We also expect to continue to offer better and better pricing to a brand. So I think every company -- the successful long-term has to tackle both. How do I offer the best solution at the best price as well as continue to provide operating leverage for shareholders? And I think we're uniquely positioned simply because of both scale and logistics, scale on data, scale of technology, we don't have to rebuild it for every brand, every geography, every marketplace, every surface area. The concepts stay the same, which allows us to just get really quite significant operating leverage.

And then I know you're probably familiar with one thing that we highlighted is our SaaS, logistics and other bucket grew 136%, which down to $18.1 million. That is a great business. Now that's -- and that's a quarterly number. When we first started those numbers were quite insignificant. So we're continuing to see momentum there. That's a higher-margin business in general and we'll track a little bit closer to our progress on the Agentic side. So, I mean, we're excited on the operating leverage we see for the future.

Operator

Next question comes from the line of Colin Sebastian with Baird.

Colin Sebastian

Dave, as brands adopt and ramp up their usage of Pi, I'm curious what you're learning about the capabilities they value the most, maybe where you have opportunities to expand the product there?

And then my second question is just looking across international and non-Amazon channels where you're seeing the most durable momentum and sort of what maybe explains some of the changes in the growth rates there this quarter?

David Wright

I guess whenever you ask a question about Pi, I'm going to talk about largely what happens to be on my mind at the time, which almost changes daily because we have such a robust road map there. But one of the unique advantages that we're looking at that we have with Pi is we cross all the marketplaces and surfaces, including Agentic surfaces. And we don't have -- our incentives are perfectly aligned with brand. So if you think of ad spend, which we now spend on behalf of brands, $1.8 billion, and we don't do a take rate on ad spend, which is unique across -- because you know our model is largely -- we take inventory, we sell inventory. So when you see a revenue number show up for us, it shows up for a brand somewhere.

What you might not know is, of that $1.8 billion, the majority is actually not on Amazon. We have a significant investment there. But cross-platform, that's where we are continuing to see some great momentum. Discoverability is moving and widening. So that's where our tools and opportunity and Pi, I think, have the biggest near-term opportunity that we're focused on right now.

Okay. So now if we talk on the international side, I think I'll turn that question to Jason, who will provide some insight there.

Jason Beesley

Yes, Colin. In terms of thinking about both international and marketplace growth, international, we're very excited about another quarter over $100 million, this time, $106 million. There is some variability in the growth rate this quarter due to some of those marketplace event shifts as well as lapping some tougher comps in Europe. And you'll remember this time last year, we launched Coupang from 0. Long term, we love the international opportunity because you just take a step back and you say, "Okay, consumer GMV on digital is over half outside the U.S." And currently, even this quarter, our international revenue was only 12% of the total. So that's just a testament to the long runway we have to take brands that are working with us in the U.S. to international markets, to sign brands in the international markets and help them be successful there.

On the marketplace side, 86% growth of all of our non-Amazon revenue, still very strong, still much greater than our Amazon-specific revenue there. And that concentration continues to improve. This time last year, it was 7% of the business. Now it's 10%. Again, long term, it's a similar hypothesis that we have is, we will follow how consumer GMV evolves over time. In certain countries, it's quite specific to particular marketplaces. It's specific to Amazon. But that is spreading. Our capabilities are spreading, and it's just a matter of time. It's not driven -- neither of those are driven by the need to diversify for diversification's sake. They're driven by the need to help brands grow and to follow where consumers are spending. So we really like how we're positioned across all, and we believe that over the long term, these things will just continue to happen as we focus on growing for brands.

Operator

Next question comes from the line of Bernie McTernan with Needham & Company.

Bernard McTernan

Great. Just wanted to follow-up on the answer to Justin's question about the services and products that you're providing brands in an Agentic shopping world. And I think at least I understand the discovery fulfillment piece, but can you talk about what you can provide brands on a trust layer because I think that's -- I think it's really interesting implications. I just would love to have you maybe expand upon the opportunity more.

David Wright

We're very early days on the concept of a trust layer. And there's multiple potential components. I don't know if you saw the -- when a merchant partners with, say, a Visa or Mastercard, there are limits on, say, a fraudulent charge, generally 2.2%. I think they lowered it to 1.5%. So in an Agentic world, if there's a fraudulent charge, what might a merchant be able to do to provide a guarantee so that an agent chooses 1 merchant or brand over another. There's some interesting trust layer components there.

And then things like what is your track record. I believe that in the long run, there will be a concept of a brand or service agent and likely a buyer's agent. So your buyer would know you very well. It would understand what you like, what you don't like, what your parameters are, what your delivery time lines are. And if a brand or a merchant doesn't consistently meet those expectations, and they're quite vast. You have your forward fulfillment, all of your delivery expectations, then you have customer service expectations. How obsessed are you going to be about maintaining your track record for agents? Will you provide a direct API so an agent can actually process some basics of return or report that you got the wrong size without having a human in the loop? How easy are you going to make it? And what are the different levers where you can increase trust with that end consumer, whether it be commitment on delivery, you meet consistently, whether it be the returns process, how easy it is, whether it be that you're willing to guarantee or provide some layer when there's a fraudulent charge? There's a lot of opportunity that we're discussing on that trust layer.

I think that both consumers, brands and everyone, the top track will start to move to trust quite quickly because capabilities, I think, are there, and I think that will be the next vector.

Operator

Next question comes from the line of Mark Mahaney with Evercore.

Mark Stephen Mahaney

Okay. Let me try a couple of questions, please. Any update on the Thorne relationship? And I just -- or just speak broadly about companies that you've worked with that have gone through acquisitions and their stickiness with the Pattern platform. And then any change at all in terms of the long-term NRR goal for the company?

And then finally, just on the complexity of the Amazon marketplace. And I think that the complexity has been something of a selling point for Pattern. Anything in particular strike you as unusual over the last 3 to 6 months in terms of new initiatives there that have made your value proposition stronger or even weaker on Amazon's marketplace to your customers?

David Wright

Thanks, Mark. A lot to unpack there. Let's start with the Thorne relationship. Jason mentioned it briefly. So far, just everything we hear from Thorne, we have great relationships with Thorne, a phenomenal brand. I think that Procter & Gamble will be thrilled with the acquisition over the long run. I think they have some incredible runway. All relationships at all levels are, I think, fantastic and every indicator is positive. And as you mentioned, we've had similar acquisitions with some brands into these large CPGs. One of them, I think, is 7, 8 years now. So -- and same business is as usual, which we expect with Thorne.

Okay. Then on NRR, Jason and I have -- we repeatedly say that we believe the long-term target for NRR is 115%. And the reason why we think that -- I mean, we could adjust our thinking, but the reason why we think it is we essentially say, "Okay, if e-commerce growth in general is, say, 7% to 9%, if we double that, that would be somewhere around 14% to 18%." And then you take out a little bit of attrition. So some brands will attrit for whatever reason. In order to maintain an NRR of 115%, you have to operate at what we believe to be an extraordinary level. Now we do continue to beat all of those expectations. But if you think long term, now we're talking -- when we say long term, we mean long term. We think that might normalize at 115%. And our guidance for the rest of the year is what Jason mentioned, 124%, 125% for the year.

Now the thing that could change that to the upside, of course, is we continue to improve technology faster than we expect. We also -- Agentic commerce, there's quite -- there is some talk track that it might increase overall e-com spend or e-com adoption by consumers by, say, 11%, 12%. I mean, if that happens, who knows? So those are the, I guess, the main points on NRR. But our numbers right there, I think, are almost unprecedented. We're really happy with them.

But largely, anything that is NRR means our machine is working and a brand is happy. So that's why we track it. We don't really track it for -- on the investor side other than to try to communicate, "Hey, this is an investment that is very sound, and we can prove it with the numbers."

Okay. So now on the complexity of Amazon, I mean, Amazon continues to make certain things easier, but large companies, every large company continues to add vectors of optimization. So any time Amazon works to optimize, say, fulfillment, they want -- and right now, I think they just announced they did 1.5 billion same-day units in the last year. So from a consumer perspective, that's amazing. We've all experienced that. But if you're on our end or a brand's end, Amazon is saying, "Hey, get the product closer to the consumer when you send it in, and we're going to optimize our supply chain so that we can make that cost less and Amazon continues to talk about their cost to serve. They continue to reduce it." So as they continue to optimize that, it usually provides complexity for brands and ourselves. But at the same time, they have -- their tools get better and better. We get more visibility into data. We're able to understand the ecosystem better. So those are somewhat offsetting.

But as any good company does like ourselves, we just keep finding different ways to optimize the -- and at our scale, if we can save 10 basis points, like we just improved overall conversion by 2 full points again over Q3 of last year. Now 2 points doesn't sound like a lot, but that is an incredible number in aggregate for the amount of business we manage. So underneath the covers there is just incredible complexity. So I think we just continue to have those offsets for quite some time. I can't see a change there. And then, of course, we mentioned earlier all the new surface areas that brands have to manage where we're a great fit for.

Operator

Next question comes from the line of Doug Anmuth with JPMorgan.

Douglas Anmuth

I wanted to talk or ask you just a little bit about the new brand partner strength. I know things can be lumpy quarter-to-quarter. But is there anything that you guys are doing differently in terms of go-to-market or anything that's kind of working or strength you're seeing in certain verticals? And I guess related to that, how are some of the network effects that you've had in health and wellness kind of spilling over into some new categories?

And Dave, since you just mentioned the overall conversion increasing by 2 full points, which is obviously very significant relative to last year. Can you just talk a little bit about the drivers there that you're seeing, if there's anything specific to call out?

Jason Beesley

Thanks, Doug. I'll take the first part, and then I'll throw it over to Dave for the second question. We're really pleased with how we're bringing on more brand partnerships and bigger brand partnerships. And really fundamentally, at its core, it's about providing data earlier in those discussions to demonstrate how the brand can improve the e-commerce equation across many different marketplaces. And we've built better tools for our sales team to do that. We're continuing to incorporate those. We'll continue to innovate on those. So that's one thing I would point to.

The other one is, you've noticed we're spending more on Agentic tools, and we're using those Agentic tools to onboard the brands faster. There's quite a lot of complexity that comes when you bring a brand into our model, and we're able to do that on a quicker, higher quality basis, which then, not only improves the brand experience, but allows us to get to new brand partner revenue in a quicker way. All of those things feel like sustainable changes that will continue to improve in the future. Specifically on the reputational cycle, we do find generally that kind of the professionals in any one category tend to stick with that category, but it is fun when there are health and wellness professionals that move to another category and help us gain more strength there. We're really focused on building that trust cycle in the categories themselves. And as I mentioned, beauty, pet and others like home and kitchen are all areas where we've seen better fruits there this year than we have in prior years.

David Wright

Yes, Doug, thanks for the question on conversion. It's such a significant milestone for us. If you think about it, the vector has become so fun right now because, of course, you understand our technology is optimized for organic in the past. And you have a set of data or SEO or keywords, keyword phrases that a consumer might type in to solve some problem. And you have multiple sets of lists that you might understand that would be organic ranking. Well, now those lists, there's almost an infinite amount of metrics to measure now, but the biggest driver right now is Alexa or Agentic discovery that is coming into the picture. It's converting at a much higher rate. So now the optimization moves over to the Agentic side. And we find that in many cases, what might show up as, say, a top 10, top 20 result is nonexistent on the Agentic side, and it's a new set of solutions or brands or products that are served up.

So now the data that you need to provide, but remember, on most platforms, there's only a limited set of content that they will land on from all of those different vectors of shopping or discoverability. And you have to mathematically figure out which content will resonate. And now the variables have gone up. And so it becomes just a much more fun problem for our teams. And so these 2 points are just incredible results for brands and really significant milestone for us.

Operator

Next question comes from the line of John Colantuoni with Jefferies.

Christopher Suchecki

This is Chris on for John. I'm curious, fulfillment has been an area of investment in recent quarters. Can you talk about your philosophy regarding kind of balancing further scaling fulfillment capabilities versus delivering leverage on fixed fulfillment costs over the long term? And as part of that, if you can remind us what the timing considerations are regarding new facility launches that might have implications for how fulfillment expense trends in the coming quarters, that would be super helpful.

Jason Beesley

Thanks for the question, Chris. Yes, we're really excited about the Pattern fulfillment business. It's growing very fast. It's in that overall 136% growth bucket of our SaaS logistics and other. And I think the key thing to think about here when you think about investment in this is, we are leveraging a logistics infrastructure that we already built for our core business model, okay? And so the warehouses that are doing Pattern fulfillment for brands or sellers are the same warehouses that are doing our core business model where we buy and sell the inventory. And even interesting stat, the trucks themselves on a cubic foot basis that go into these various marketplaces have more non-Pattern-owned volume than they do Pattern. So you get this economies of scale that comes with leveraging the infrastructure we're already building for the core, which is growing nice and fast, getting higher density and higher frequency on the shipping, which then benefits both of those areas, both Pattern fulfillment and Pattern core, right, and getting more touch points with brands as an entry point to the Pattern experience.

On top of that, it's helping us build out the infrastructure that's going to be necessary in the future as we roll out our Commerce Infrastructure as a Service further off the back of the Pattern fulfillment in the Agentic world. So that's how it all works. And we're able to work our general CapEx trends of growing that Pattern fulfillment business within our overall core business without a lot of incremental CapEx.

Operator

And our final question comes from the line of Brian Pitz with BMO Capital Markets.

Brian Pitz

Maybe first more broadly, any insights on the broader consumer concerns in the K-shaped economy? I know it sounds like your outlook is pretty strong. But how are you think about exposure to your brands with respect to discretionary expenses versus nondiscretionary? And then if you look out a bit, can you talk about the potential pipeline of opportunities on the new brand acquisition side compared with your historical [ VMS ] footprint? I know you've got some new brands, but where are you really targeting in the future?

David Wright

Yes. Thanks, Brian. Yes, great questions. We get the macro question quite a bit. And it would be overstating probably for us to give any real guidance that you could rely on there. But for one, I don't know if anyone knows exactly, but we're also quite insulated because if our brands are winning. I mean, you see our NRR numbers. So every time I get this question, like seems great from our vantage point. But we're also attacking the problem in a very unique way, and we have some really strong brands. So I think I'll probably leave the overall question on where that's headed to people who are deep in that space. We feel very good about it. We aren't seeing any weakness. We're seeing strength. And I think as you look at the other retailers, they're reporting good numbers as well. So, I guess, we'll see how that plays out.

And then in terms of brand partnerships concentration, Jason, do you want to take that one?

Jason Beesley

Yes. I mean, I mentioned before, Brian, that we really like the results that we've seen in our new brand partnerships this quarter with a lot of large deals more than we've ever had and our average deal size going up. That's across many categories. It doesn't mean that we're not signing brands in health and wellness. We still feel that there's lots of room in that space to sign great brands and help them grow. But there's lots of room in other categories. And over the long term, it's just a matter of time that we will diversify, but in the immediate -- our immediate strategy is just sign great brands wherever they are. And so that's kind of how we're thinking about it and how the pipeline is going. It's really robust and feeling really good about the future there.

David Wright

Yes. The pipeline, maybe I'll just close with the pipeline is as strong as probably we've ever seen. The results, as I mentioned, we measure one concept where we say, "Okay, in terms of large brands, which we define as $20 million or above, we signed more -- well, equal to any year in history in the quarter." So phenomenal result there. Our average deal size is up 41% from Q3 of last year. So overall, phenomenal pipeline, new brand traction and growth. And then you see some of our metrics on NRR conversion. So the machine continues to work. The landscape is getting ever more complicated, which benefits us.

And then scale in terms of cost to serve and what we can deliver at a certain price point to a brand continues to scale. So, I guess, right now, the way we look at it is things look pretty green across our metrics. We're pretty excited about the future. And thanks, everyone, for joining the call, and we'll talk to you next quarter.

Operator

Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.