System1 Announces Second Quarter 2024 Financial Results Above High-End of Guidance
System1 (NYSE: SST) announced its second quarter 2024 financial results, surpassing the high-end of its guidance. Revenue increased by $9.7 million to $94.6 million, while gross profit rose 40% to $26.1 million. Adjusted gross profit saw a 24% increase, reaching $38.8 million. However, GAAP net loss grew by 152% to $34.8 million. Adjusted EBITDA improved by $9.5 million to $9.9 million.
The company renewed a key monetization partnership with Google. CouponFollow.com showed a 36% year-over-year increase in organic traffic, and Startpage's new Private Browser app surpassed 50,000 downloads. MapQuest reported a 10% increase in organic visits.
For the third quarter of 2024, System1 expects revenue between $86 million and $88 million, gross profit between $23 million and $25 million, and adjusted EBITDA between $8 million and $10 million.
System1 (NYSE: SST) ha annunciato i risultati finanziari del secondo trimestre 2024, superando la parte alta delle proprie previsioni. I ricavi sono aumentati di 9,7 milioni di dollari, raggiungendo i 94,6 milioni di dollari, mentre il profitto lordo è aumentato del 40%, toccando i 26,1 milioni di dollari. Il profitto lordo rettificato ha visto un incremento del 24%, arrivando a 38,8 milioni di dollari. Tuttavia, la perdita netta secondo i principi contabili GAAP è cresciuta del 152%, arrivando a 34,8 milioni di dollari. L'EBITDA rettificato è migliorato di 9,5 milioni di dollari, raggiungendo i 9,9 milioni di dollari.
La società ha rinnovato una partnership strategica di monetizzazione con Google. CouponFollow.com ha mostrato un aumento del 36% nel traffico organico rispetto all'anno precedente, e la nuova app Private Browser di Startpage ha superato i 50.000 download. MapQuest ha registrato un aumento del 10% nelle visite organiche.
Per il terzo trimestre del 2024, System1 prevede ricavi tra 86 milioni e 88 milioni di dollari, profitto lordo tra 23 milioni e 25 milioni di dollari, e un EBITDA rettificato tra 8 milioni e 10 milioni di dollari.
System1 (NYSE: SST) ha anunciado sus resultados financieros del segundo trimestre de 2024, superando la parte alta de sus previsiones. Los ingresos aumentaron en 9,7 millones de dólares, alcanzando los 94,6 millones de dólares, mientras que el beneficio bruto creció un 40%, alcanzando los 26,1 millones de dólares. El beneficio bruto ajustado experimentó un incremento del 24%, llegando a 38,8 millones de dólares. Sin embargo, la pérdida neta GAAP creció un 152% hasta los 34,8 millones de dólares. El EBITDA ajustado mejoró en 9,5 millones de dólares, alcanzando los 9,9 millones de dólares.
La compañía renovó una asociación clave de monetización con Google. CouponFollow.com mostró un aumento del 36% en el tráfico orgánico interanual, y la nueva aplicación de navegador privado de Startpage superó las 50,000 descargas. MapQuest reportó un aumento del 10% en visitas orgánicas.
Para el tercer trimestre de 2024, System1 espera ingresos de entre 86 millones y 88 millones de dólares, beneficio bruto entre 23 millones y 25 millones de dólares, y EBITDA ajustado entre 8 millones y 10 millones de dólares.
System1 (NYSE: SST)는 2024년 2분기 재무 실적을 발표하며 예상을 초과 달성했습니다. 수익은 970만 달러 증가하여 9460만 달러에 달했고, 총 이익은 40% 증가하여 2610만 달러에 이르렀습니다. 조정된 총 이익은 24% 증가하여 3880만 달러에 도달했습니다. 그러나 GAAP 기준 순손실은 152% 증가하여 3480만 달러에 달했습니다. 조정된 EBITDA는 950만 달러 상승하여 990만 달러에 이르렀습니다.
회사는 Google과의 주요 monetization 파트너십을 갱신했습니다. CouponFollow.com은 전년 대비 유기적 트래픽이 36% 증가했습니다. Startpage의 새로운 개인 브라우저 앱은 50,000회 이상의 다운로드를 기록했습니다. MapQuest는 유기적 방문자가 10% 증가했다고 보고했습니다.
2024년 3분기 동안 System1은 수익을 8600만~8800만 달러로, 총 이익을 2300만~2500만 달러로, 조정된 EBITDA를 800만~1000만 달러로 예상하고 있습니다.
System1 (NYSE: SST) a annoncé ses résultats financiers du deuxième trimestre 2024, dépassant la partie haute de ses prévisions. Les revenus ont augmenté de 9,7 millions de dollars, atteignant 94,6 millions de dollars, tandis que le bénéfice brut a augmenté de 40%, atteignant 26,1 millions de dollars. Le bénéfice brut ajusté a connu une augmentation de 24%, atteignant 38,8 millions de dollars. Cependant, la perte nette selon les normes GAAP a augmenté de 152%, atteignant 34,8 millions de dollars. L'EBITDA ajusté a progressé de 9,5 millions de dollars, atteignant 9,9 millions de dollars.
L'entreprise a renouvelé un partenariat clé de monétisation avec Google. CouponFollow.com a montré une augmentation de 36% du trafic organique par rapport à l'année précédente, et la nouvelle application Navigateur Privé de Startpage a dépassé les 50 000 téléchargements. MapQuest a rapporté une augmentation de 10% des visites organiques.
Pour le troisième trimestre 2024, System1 s'attend à des revenus compris entre 86 millions et 88 millions de dollars, un bénéfice brut compris entre 23 millions et 25 millions de dollars, et un EBITDA ajusté compris entre 8 millions et 10 millions de dollars.
System1 (NYSE: SST) hat die Finanzzahlen für das zweite Quartal 2024 bekannt gegeben und die obere Grenze der Prognose übertroffen. Der Umsatz stieg um 9,7 Millionen Dollar auf 94,6 Millionen Dollar, während der Bruttogewinn um 40% auf 26,1 Millionen Dollar anstieg. Der angepasste Bruttogewinn verzeichnete einen Anstieg von 24% und erreichte 38,8 Millionen Dollar. Allerdings wuchs der GAAP-Nettoverlust um 152% auf 34,8 Millionen Dollar. Das angepasste EBITDA verbesserte sich um 9,5 Millionen Dollar auf 9,9 Millionen Dollar.
Das Unternehmen hat eine wichtige Monetarisierungspartnerschaft mit Google erneuert. CouponFollow.com verzeichnete einen Anstieg des organischen Traffics um 36% im Jahresvergleich, und die neue Private Browser-App von Startpage übertraf 50.000 Downloads. MapQuest berichtete von einem Anstieg der organischen Besuche um 10%.
Für das dritte Quartal 2024 erwartet System1 einen Umsatz zwischen 86 Millionen und 88 Millionen Dollar, einen Bruttogewinn zwischen 23 Millionen und 25 Millionen Dollar sowie ein angepasstes EBITDA zwischen 8 Millionen und 10 Millionen Dollar.
- Revenue increased by $9.7 million to $94.6 million.
- Gross profit increased by 40% to $26.1 million.
- Adjusted gross profit increased by 24% to $38.8 million.
- Adjusted EBITDA increased by $9.5 million to $9.9 million.
- Renewed key monetization relationship with Google.
- CouponFollow.com experienced a 36% year-over-year increase in organic visitors.
- Startpage's Private Browser app surpassed 50,000 downloads.
- GAAP net loss increased by 152% to $34.8 million.
Insights
System1's Q2 2024 results demonstrate a significant improvement over the previous quarter, with all key metrics exceeding guidance. Revenue increased by
The renewal of a primary monetization relationship with Google is a positive sign for future revenue stability. The company's diversified portfolio, including CouponFollow.com and MapQuest, shows promising growth. However, the Q3 guidance suggests a slight sequential decline in revenue and Adjusted EBITDA, which may indicate some challenges ahead.
Investors should monitor the widening GAAP Net Loss and assess whether the company can translate its top-line growth and adjusted metrics into actual profitability in the coming quarters.
System1's Q2 results reflect a stabilizing advertising market, which bodes well for the company's omnichannel customer acquisition platform. The
The launch of Startpage's Private Browser app and its positive reception (over 2,000 five-star ratings) suggest a growing demand for privacy-focused browsing solutions. This aligns with broader market trends towards increased data privacy awareness.
MapQuest's
All Key Financial Results Above the High-End of Guidance Range
-
Revenue Increased
Over Prior Quarter to$9.7 Million $94.6 Million
-
Gross Profit Increased
40% Over Prior Quarter to$26.1 Million
-
Adjusted Gross Profit Increased
24% Over Prior Quarter to$38.8 Million
-
GAAP Net Loss Increased
152% Over Prior Quarter to$34.8 Million
-
Adjusted EBITDA Increased
Over Prior Quarter to$9.5 Million $9.9 Million
-
Company Provides Third Quarter Guidance of:
to$86 Million of Revenue and$88 Million to$8 Million of Adjusted EBITDA$10 Million
"We are pleased to report a strong quarter reflecting solid sequential growth in which all of our key financial metrics significantly exceeded our guidance for the period," commented Michael Blend, System1’s Co-Founder & Chief Executive Officer. "Strong execution by our team and continued investment in our RAMP platform leave System1 well-positioned to take advantage of a stabilizing advertising market going forward."
Tridivesh Kidambi, Chief Financial Officer of System1, commented, "We are pleased with our second quarter financial results that exceeded the top end of our guidance ranges. We exited the quarter with significant momentum across our businesses, and we expect this positive momentum to deliver year-over-year increases in financial results for the remainder of the year."
Note: Adjusted Gross Profit and Adjusted EBITDA are non-GAAP metrics that are defined and reconciled at the end of this release.
Second Quarter 2024 Highlights
- The Company renewed one of its primary monetization relationships with Google.
-
CouponFollow.com experienced a
36% year-over-year increase in organic visitors to its site, and its savings-focused browser extensions surpassed 15 million monthly active users.
- Startpage launched its Private Browser app and has seen over 50,000 downloads with significantly positive user feedback, including over 2,000 five-star ratings to date across the iOS and Android app stores.
-
MapQuest saw
10% year-over-year growth in organic visits to its site in the second quarter as a result of the Company’s investments in new content, faster page load speed and improved data quality. MapQuest also launched a custom "Mini Takes the States" mobile navigation application in partnership with BMW in conjunction with its bi-annual "Mini Takes the States" road trip rally event.
Third Quarter 2024 Guidance
The Company expects for the third quarter of 2024:
-
Revenue between
and$86 million .$88 million
-
Gross Profit between
and$23 million .$25 million
-
Adjusted Gross Profit between
and$36 million .$38 million
-
Adjusted EBITDA between
and$8 million .$10 million
In reliance on the unreasonable efforts exception for forward-looking information provided under Regulation S-K, the Company is not reasonably able to provide a quantitative reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP financial measures without unreasonable effort due to uncertainties regarding purchase accounting, stock-based compensation, taxes and other potential adjustments. The difference between Gross Profit and Adjusted Gross Profit is primarily depreciation and amortization related to the cost of revenues, which are estimated to be approximately
The Company’s achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in its filings with the
About System1, Inc.
System1 combines best-in-class technology & data science to operate its advanced Responsive Acquisition Marketing Platform (RAMP). System1’s RAMP is omnichannel and omnivertical, and built for a privacy-centric world. RAMP enables the building of powerful brands across multiple consumer verticals, the development & growth of a suite of privacy-focused products, and the delivery of high-intent customers to advertising partners. For more information, visit www.system1.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995, particularly any statements or materials regarding System1’s future results. Forward-looking statements include, but are not limited to, statements regarding System1 or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause System1’s actual financial results or operating performance to be materially different from those expressed or implied by these forward-looking statements. Readers or users of this press release should evaluate the risk factors summarized below, which summary list is not exclusive. Readers or users of this press release should also carefully review the "Risk Factors" and other information included in our Annual Report on Form 10-K for the fiscal year ending December 31, 2023, as well as our registration statement on Form S-1 filed with the Securities and Exchange Commission (the "SEC"), as well as System1’s Form 10-Qs, Form 8-Ks and other reports filed with the SEC from time to time. Please refer to these SEC filings for additional information regarding the risks and other factors that may impact System1’s business, prospects, financial results and operating performance.
Such risks, uncertainties and assumptions include, but are not limited to: (1) our ability to maintain our key relationships with network partners and advertisers, including our monetization arrangements; (2) our ability to collect, process, effectively utilize and safely store the first party data that we obtain through our services; (3) the performance of our responsive acquisition marketing platform, or RAMP; (4) changes in customer demand for our services and our ability to quickly adapt to such changes; (5) our ability to maintain and attract consumers and advertisers in the face of changing economic or competitive conditions; (6) our ability to improve and maintain adequate internal control over financial reporting and remediate identified material weaknesses; (7) our ability to successfully source and complete acquisitions and to integrate the operations of companies System1 acquires; (8) our ability to raise financing in the future as and when needed or on market terms; (9) our ability to compete with existing competitors and the entry of new competitors in the market; (10) changes in applicable laws or regulations impacting the business which we operate and our ability to maintain compliance with the various laws that our business and operations are subject to; (11) our ability to protect our intellectual property rights; and (12) other risks and uncertainties indicated from time to time in our filings with the SEC. The foregoing list of factors is not exclusive.
Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from any forward-looking statements contained in this press release. System1’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the forward-looking statements for the purpose of their inclusion in this press release, and accordingly, do not express an opinion or provide any other form of assurance with respect thereto for the purpose of this press release. System1 will not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that such trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.
Non-GAAP Measures: Adjusted Gross Profit and Adjusted EBITDA
Adjusted Gross Profit and Adjusted EBITDA are non-GAAP financial measures and represent key metrics used by System1’s management and board of directors to measure the operational strength and performance of its business, to establish budgets, and to develop operational goals for managing its business. Adjusted Gross Profit (Loss) is defined as gross profit plus depreciation and amortization related to cost of revenues. Adjusted EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation and amortization expense, stock-based compensation expenses, deferred compensation, management fees, minority interest expense, restructuring charges, impairment and certain discrete items impacting a particular segment’s results in a particular period.
System1 believes Adjusted Gross Profit and Adjusted EBITDA are relevant and useful metrics for investors because it allows investors to view performance in a manner similar to the method used by management. There are limitations on the use of Adjusted Gross Profit and Adjusted EBITDA and it may not be comparable to similarly titled measures of other companies. Other companies, including companies in System1’s industry, may calculate non-GAAP financial measures differently than System1 does, limiting the usefulness of those measures for comparative purposes.
Adjusted Gross Profit should not be considered a substitute for revenue or gross profit. Adjusted EBITDA should not be considered a substitute for income (loss) from operations, net income (loss), or net income (loss) attributable to System1 on a consolidated basis that System1 reports in accordance with GAAP. Although System1 uses Adjusted Gross Profit and Adjusted EBITDA as financial measures to assess the performance of its business, such use is limited because it does not include certain costs necessary to operate System1’s business. System1’s presentation of Adjusted Gross Profit and Adjusted EBITDA should not be construed as indications that its future results will be unaffected by unusual or nonrecurring items.
Unaudited Condensed Statements of Operations (In thousands) |
|||||||
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
94,581 |
|
|
$ |
96,914 |
|
Operating expenses: |
|
|
|
||||
Cost of revenue (excluding depreciation and amortization) |
|
55,798 |
|
|
|
56,657 |
|
Salaries and benefits |
|
33,937 |
|
|
|
27,054 |
|
Selling, general, and administrative |
|
13,989 |
|
|
|
15,340 |
|
Depreciation and amortization |
|
19,943 |
|
|
|
19,688 |
|
Total operating expenses |
|
123,667 |
|
|
|
118,739 |
|
Operating loss |
|
(29,086 |
) |
|
|
(21,825 |
) |
Other expense (income): |
|
|
|
||||
Interest expense, net |
|
7,871 |
|
|
|
12,334 |
|
Gain from debt extinguishment |
|
(433 |
) |
|
|
— |
|
Change in fair value of warrant liabilities |
|
(1,501 |
) |
|
|
2,018 |
|
Total other expense (income), net |
|
5,937 |
|
|
|
14,352 |
|
Loss before income tax |
|
(35,023 |
) |
|
|
(36,177 |
) |
Income tax benefit |
|
(178 |
) |
|
|
(6,670 |
) |
Net loss from continuing operations |
|
(34,845 |
) |
|
|
(29,507 |
) |
Net loss from discontinued operations, net of tax |
|
— |
|
|
|
(13,484 |
) |
Net loss |
|
(34,845 |
) |
|
|
(42,991 |
) |
Less: Net loss from continuing operations attributable to non-controlling interest |
|
(8,472 |
) |
|
|
(6,165 |
) |
Less: Net loss from discontinued operations attributable to non-controlling interest |
|
— |
|
|
|
(2,525 |
) |
Net loss attributable to System1, Inc. |
$ |
(26,373 |
) |
|
$ |
(34,301 |
) |
Unaudited Condensed Balance Sheets (In thousands, except for par values) |
|||||||
|
June 30,
|
|
December 31,
|
||||
ASSETS |
|
|
|
||||
|
|
|
|
||||
Current assets: |
|
|
|
||||
Cash and cash equivalents |
$ |
75,651 |
|
|
$ |
135,343 |
|
Restricted cash, current |
|
4,253 |
|
|
|
3,813 |
|
Accounts receivable, net |
|
61,915 |
|
|
|
56,093 |
|
Prepaid expenses and other current assets |
|
6,805 |
|
|
|
6,754 |
|
Total current assets |
|
148,624 |
|
|
|
202,003 |
|
Restricted cash, non-current |
|
371 |
|
|
|
4,294 |
|
Property and equipment, net |
|
2,613 |
|
|
|
3,084 |
|
Internal-use software development costs, net |
|
13,447 |
|
|
|
11,425 |
|
Intangible assets, net |
|
259,671 |
|
|
|
297,001 |
|
Goodwill |
|
82,407 |
|
|
|
82,407 |
|
Operating lease right-of-use assets |
|
3,759 |
|
|
|
4,732 |
|
Other non-current assets |
|
444 |
|
|
|
524 |
|
Total assets |
|
511,336 |
|
|
|
605,470 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
Current liabilities: |
|
|
|
||||
Accounts payable |
|
6,248 |
|
|
|
9,499 |
|
Accrued expenses and other current liabilities |
|
76,817 |
|
|
|
59,314 |
|
Operating lease liabilities, current |
|
2,385 |
|
|
|
2,333 |
|
Debt, net |
|
16,272 |
|
|
|
15,271 |
|
Total current liabilities |
|
101,722 |
|
|
|
86,417 |
|
Operating lease liabilities, non-current |
|
2,339 |
|
|
|
3,582 |
|
Long-term debt, net |
|
263,338 |
|
|
|
334,232 |
|
Warrant liability |
|
936 |
|
|
|
2,688 |
|
Deferred tax liability |
|
7,042 |
|
|
|
8,307 |
|
Other non-current liabilities |
|
6,680 |
|
|
|
929 |
|
Total liabilities |
|
382,057 |
|
|
|
436,155 |
|
Stockholders' equity: |
|
|
|
||||
Class A common stock - |
|
7 |
|
|
|
7 |
|
Class C common stock - |
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
854,270 |
|
|
|
843,112 |
|
Accumulated deficit |
|
(744,572 |
) |
|
|
(707,662 |
) |
Accumulated other comprehensive loss |
|
(295 |
) |
|
|
(181 |
) |
Total stockholders' equity attributable to System1, Inc. |
|
109,412 |
|
|
|
135,278 |
|
Non-controlling interest |
|
19,867 |
|
|
|
34,037 |
|
Total stockholders' equity |
|
129,279 |
|
|
|
169,315 |
|
Total liabilities and stockholders' equity |
$ |
511,336 |
|
|
$ |
605,470 |
|
The following table reconciles net loss to Adjusted EBITDA for the periods presented (in millions):
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Net loss from continuing operations |
$ |
(34.8 |
) |
|
$ |
(29.5 |
) |
Plus: |
|
|
|
||||
Income tax benefit |
|
(0.2 |
) |
|
|
(6.7 |
) |
Interest expense |
|
7.9 |
|
|
|
12.3 |
|
Depreciation and amortization |
|
19.9 |
|
|
|
19.7 |
|
Other expense |
|
— |
|
|
|
0.3 |
|
Stock-based compensation & distributions to members |
|
3.4 |
|
|
|
4.3 |
|
Gain on extinguishment of debt |
|
(0.4 |
) |
|
|
— |
|
Non-cash revaluation of warrant liability |
|
(1.5 |
) |
|
|
2.0 |
|
Acquisition and restructuring costs |
|
15.6 |
|
|
|
3.7 |
|
Adjusted EBITDA |
$ |
9.9 |
|
|
$ |
6.1 |
|
The following table reconciles Revenue to Gross Profit and Adjusted Gross Profit for the periods presented (in millions):
|
Three Months Ended June 30, |
||||||
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
94.6 |
|
|
$ |
96.9 |
|
Less: Cost of revenue (excluding depreciation and amortization) |
|
(55.8 |
) |
|
|
(56.7 |
) |
Less: Depreciation and amortization related to cost of revenue |
|
(12.7 |
) |
|
|
(12.4 |
) |
Gross profit |
|
26.1 |
|
|
|
27.8 |
|
Add: Depreciation and amortization related to cost of revenue |
|
12.7 |
|
|
|
12.4 |
|
Adjusted Gross Profit |
$ |
38.8 |
|
|
$ |
40.2 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808710166/en/
Investors:
Brett Milotte
ICR, Inc.
Brett.Milotte@icrinc.com
Source: System1, Inc.
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