System1 (NYSE: SST) posts Q1 2026 loss with $36.8M goodwill impairment
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
System1, Inc. furnished supplemental financial information for the quarter ended March 31, 2026, including detailed GAAP and non-GAAP results. The company generated revenue of $37,234 thousand and recorded an operating loss of $51,037 thousand, driven in part by a $36,822 thousand goodwill impairment.
Net income (loss) from continuing operations was $(57,591) thousand, while adjusted EBITDA, which removes items such as depreciation, amortization, stock-based compensation and the goodwill impairment, was $2,716 thousand. Marketing revenue was $18,391 thousand and products revenue was $18,843 thousand, supported by 653,681 sessions and RPS of $0.03.
Positive
- None.
Negative
- Large goodwill impairment and continuing losses: Q1 2026 results include a $36,822 thousand goodwill impairment, contributing to an operating loss of $51,037 thousand and a net loss from continuing operations of $(57,591) thousand, signaling significant ongoing profitability challenges.
Insights
System1 shows heavy Q1 loss with goodwill impairment, modest adjusted EBITDA.
System1 reported Q1 2026 revenue of $37,234 thousand and an operating loss of $51,037 thousand, including a sizeable goodwill impairment of $36,822 thousand. Net loss from continuing operations reached $(57,591) thousand, indicating continued pressure on profitability.
Despite the GAAP loss, adjusted EBITDA was positive at $2,716 thousand, reflecting add-backs such as depreciation, amortization and restructuring and legal costs. Marketing revenue was $18,391 thousand and products revenue $18,843 thousand, with 653,681 sessions and RPS of $0.03, underscoring the scale but relatively low monetization per session.
Investors may focus on how often large non-cash items like the $36,822 thousand goodwill impairment recur and whether adjusted EBITDA can grow from the Q1 2026 level in subsequent quarterly disclosures, given the current revenue base and cost structure.
8-K Event Classification
2 items: 7.01, 9.01
2 items
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 Revenue: $37,234 thousand
Operating loss: $51,037 thousand
Goodwill impairment: $36,822 thousand
+5 more
8 metrics
Q1 2026 Revenue
$37,234 thousand
Quarter ended March 31, 2026
Operating loss
$51,037 thousand
Quarter ended March 31, 2026
Goodwill impairment
$36,822 thousand
Recorded in Q1 2026 operating expenses
Net loss from continuing operations
$(57,591) thousand
Quarter ended March 31, 2026
Adjusted EBITDA
$2,716 thousand
Non-GAAP metric for quarter ended March 31, 2026
Marketing revenue
$18,391 thousand
Q1 2026 non-financial metrics table
Products revenue
$18,843 thousand
Q1 2026 non-financial metrics table
Sessions
653,681
Q1 2026 monetizable user visits to products websites
Key Terms
Adjusted EBITDA, Impairment of goodwill, Non-GAAP Financials, Stock-based compensation, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA 2,716$ 8,170$ 9,882$ 11,722$ 12,085$"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Impairment of goodwill financial
"Impairment of goodwill 36,822 - - - - - - - -"
An impairment of goodwill happens when the extra value a company recorded for purchases like brands, customer lists or reputation turns out to be worth less than originally thought, so accountants reduce that value on the books. It matters to investors because it signals that past acquisitions are not delivering expected benefits, like discovering a purchased car is less reliable than advertised, and can lower reported earnings and the company's perceived future cash-generating power.
Non-GAAP Financials financial
"System1, Inc Non-GAAP Financials (in thousands)"
Stock-based compensation financial
"Stock-based compensation and distributions to Members (2) 1,264 1,286"
Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.
Realized tax receivable agreement financial
"Realized tax receivable agreement - (5,253) - - - - - - -"
RPS financial
"RPS (4) $0.03 $0.04 $0.04 $0.05"
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 12, 2026
(Exact name of registrant as specified in its charter)
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(Registrant's telephone number, including area code)
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(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Section 7 - Regulation FD
Item 7.01 - Regulation FD Disclosure
Supplemental Financial Information
On May 12, 2026 , System1, Inc. (the "Company") posted supplemental financial information for its quarter ended March 31, 2026 on the Company’s website at https://ir.system1.com. A copy of the supplemental financial information is furnished herewith as Exhibit 99.1.
The Company’s website and the information contained on, or that can be accessed through, the Company’s website will not be deemed to be incorporated by reference in, and are not considered part of, this Current Report.
In accordance with General Instruction B.2 of Form 8-K, the foregoing supplemental financial information and related information (including the exhibit set forth in Item 9.01 hereto) in this Item 7.01 is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended regardless of any general incorporation language in such filing, except as expressly set forth by specific reference in such a filing. This Current Report will not be deemed an admission as to the materiality of any information in this Current Report that is required to be disclosed solely by Regulation FD.
Section 9 - Financial Statements and Exhibits
Item 9.01 - Financial Statements and Exhibits
(d) Exhibits.
Exhibit No. | Description | ||||
99.1 | First Quarter 2026 Supplemental Financial Information | ||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
System1, Inc. | |||||||||||
Date: | By: | /s/ Tridivesh Kidambi | |||||||||
Name: | Tridivesh Kidambi | ||||||||||
Title: | Chief Financial Officer | ||||||||||
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System1, Inc. Unaudited Statements of Operations (in thousands) QTD QTD QTD QTD QTD QTD QTD QTD QTD YTD YTD YTD YTD YTD YTD 31-Mar-26 31-Dec-25 30-Sep-25 30-Jun-25 31-Mar-25 31-Dec-24 30-Sep-24 30-Jun-24 31-Mar-24 31-Dec-25 30-Sep-25 30-Jun-25 31-Dec-24 30-Sep-24 30-Jun-24 Revenue 37,234 51,940 61,561 78,116 74,513 75,594 88,832 94,581 84,917 266,129 214,189 152,628 343,925 268,330 179,498 Operating cost and expenses: Cost of revenues 13,860 30,626 38,818 50,213 46,077 43,777 63,999 68,507 66,319 165,734 135,108 96,290 242,602 198,825 134,826 Salaries, commissions, and benefits 20,800 20,108 21,354 26,297 24,988 25,915 29,177 33,937 24,483 92,747 72,639 51,285 113,512 87,597 58,420 Selling, general, and administrative 16,789 18,651 16,953 17,510 16,574 17,806 17,472 21,223 19,911 69,688 51,038 34,085 76,411 58,606 41,134 Impairment of goodwill 36,822 - - - - - - - - - - - - - - Total operating costs and expenses 88,271 69,385 77,125 94,020 87,639 87,498 110,648 123,667 110,712 328,169 258,785 181,659 432,525 345,028 234,379 Operating income (51,037) (17,445) (15,565) (15,904) (13,127) (11,903) (21,816) (29,086) (25,795) (62,040) (44,596) (29,031) (88,601) (76,698) (54,881) Loss (gain) on fair value of warrants - (304) (71) 68 32 (915) 281 (1,501) (251) (275) 29 100 (2,386) (1,471) (1,752) Loss on extinguishment of related-party debt - - - - - - - (433) (19,676) - - - (20,109) (20,109) (20,109) Realized tax benefit - (5,253) (5,253) - - - - - Interest expense 6,628 6,304 7,052 7,116 7,085 7,764 7,957 7,871 7,970 27,557 21,253 14,201 31,562 23,799 15,841 Income (loss) from continuing operations before income tax (57,666) (18,191) (22,547) (23,087) (20,244) (18,752) (30,054) (35,023) (13,839) (84,069) (65,878) (43,331) (97,668) (78,916) (48,862) Income tax expense (75) (398) (543) (1,547) (387) (729) 585 (178) (48) (2,875) (2,477) (1,934) (370) 359 (226) Net income (loss) from continuing operations (57,591) (17,793) (22,004) (21,540) (19,857) (18,023) (30,639) (34,845) (13,791) (81,193) (63,400) (41,397) (97,298) (79,275) (48,636) Net Income (Loss) Attributable to Noncontrolling Interest (10,524) (4,309) (3,487) (4,079) (3,973) (3,862) (7,037) (8,472) (3,254) (15,848) (11,539) (8,052) (22,625) (18,763) (11,726) Net income (47,067) (13,484) (18,517) (17,461) (15,884) (14,161) (23,602) (26,373) (10,537) (65,345) (51,861) (33,345) (74,673) (60,512) (36,910) Deprecation and amortization expense in Cost of revenues and Selling, general, and administrative: Cost of Revenues - D&A 4,909 13,557 13,343 13,091 13,050 12,884 12,828 12,709 12,620 53,041 39,484 26,141 51,041 38,157 25,329 SG&A - D&A 7,237 7,473 7,446 7,475 7,427 7,348 7,300 7,234 7,183 29,821 22,348 14,902 29,065 21,717 14,418 Total Depreciation & Amortization 12,146 21,030 20,789 20,566 20,477 20,232 20,128 19,943 19,804 82,862 61,832 41,042 80,107 59,875 39,747
System1, Inc Non-GAAP Financials (in thousands) QTD QTD QTD QTD QTD QTD QTD QTD QTD YTD YTD YTD YTD YTD YTD 31-Mar-26 31-Dec-25 30-Sep-25 30-Jun-25 31-Mar-25 31-Dec-24 30-Sep-24 30-Jun-24 31-Mar-24 31-Dec-25 30-Sep-25 30-Jun-25 31-Dec-24 30-Sep-24 30-Jun-24 Net income (loss) from continuing operations (57,591)$ (17,793)$ (22,004)$ (21,540)$ (19,857)$ (18,023)$ (30,639)$ (34,845)$ (13,791)$ (81,193)$ (63,401)$ (41,397)$ (97,298)$ (79,275)$ (48,636)$ Income tax expense (75) (398) (543) (1,547) (387) (729) 585 (178) (48) (2,875) (2,477) (1,934) (370) 359 (226) Interest expense 6,628 6,304 7,052 7,116 7,085 7,764 7,957 7,871 7,970 27,557 21,253 14,201 31,562 23,799 15,841 Depreciation & amortization 12,146 21,030 20,789 20,566 20,477 20,232 20,128 19,943 19,804 82,862 61,832 41,042 80,107 59,875 39,747 Impairment of goodwill 36,822 - - - - - - - - Other income/expense (1) (196) 86 (209) 246 (39) (111) 127 (36) (97) 84 (2) 207 (117) (6) (133) Stock-based compensation and distributions to Members (2) 1,264 1,286 2,833 4,542 2,651 4,567 3,783 3,442 3,971 11,312 10,025 7,193 15,763 11,197 7,413 Revaluation of non-cash warrant liability - (304) (71) 68 32 (915) 281 (1,501) (251) (275) 29 100 (2,386) (1,471) (1,752) Loss on Extinguishment of related-party debt - - - - - - - (433) (19,676) - - - (20,109) (20,109) (20,109) Realized tax receivable agreement - (5,253) - - - - - - - (5,253) - - - - - Costs related to acquisitions/business combinations 225 1,384 955 715 1,034 3,028 7,441 11,854 2,244 4,087 2,704 1,749 24,567 21,539 14,098 Other costs, including restructuring and legal settlements 3,492 1,828 1,079 1,557 1,091 2,067 683 3,810 297 5,554 3,727 2,648 6,857 4,790 4,107 Adjusted EBITDA 2,716$ 8,170$ 9,882$ 11,722$ 12,085$ 17,880$ 10,346$ 9,927$ 423$ 41,859$ 33,689$ 23,807$ 38,577$ 20,697$ 10,350$ (1) Non-cash adjustments related to foreign exchange and asset disposals (2) Comprised of distributions to equity holders and non-cash stock-based compensation
Non-Financial Metrcis (In thousands except ratios) QTD QTD QTD QTD QTD QTD QTD QTD QTD QTD YTD YTD YTD YTD YTD YTD 31-Mar-26 31-Dec-25 30-Sep-25 30-Jun-25 31-Mar-25 31-Dec-24 30-Sep-24 30-Jun-24 31-Mar-24 31-Dec-23 31-Dec-25 30-Sep-25 30-Jun-25 31-Dec-24 30-Sep-24 30-Jun-24 Marketing Marketing Revenue 18,391$ 27,432$ 39,064$ 54,143$ 52,250$ 48,520$ 68,083$ 76,654$ 70,131$ 79,204$ 172,889$ 145,457$ 106,392$ 263,388$ 214,868$ 146,785$ Owned & Operated Marketing Revenue 6,836$ 17,167$ 25,730$ 36,314$ 35,658$ 37,631$ 50,049$ 59,470$ 54,243$ 62,506$ 114,869$ 97,702$ 71,972$ 201,393$ 163,762$ 113,713$ Partner Marketing Revenue 11,555$ 10,265$ 13,334$ 17,828$ 16,592$ 10,889$ 18,035$ 17,184$ 15,888$ 16,698$ 58,019$ 47,754$ 34,420$ 61,995$ 51,106$ 33,072$ Active Marketing Partners (1) 56 70 108 133 149 179 165 164 146 149 125 144 156 164 157 157 Revenue per Active Marketing Partner (2) 206$ 147$ 123$ 134$ 111$ 61$ 109$ 105$ 109$ 112$ 466$ 333$ 221$ 378$ 326$ 211$ Products Revenue 18,843$ 24,508$ 22,496$ 23,973$ 22,263$ 27,074$ 20,749$ 17,927$ 14,787$ 16,916$ 93,241$ 68,732$ 46,236$ 80,536$ 53,462$ 32,713$ Sessions (3) 653,681 590,316 584,651 522,452 475,741 520,015 473,428 464,929 435,850 405,872 2,173,160 1,582,844 998,193 1,894,221 1,374,206 900,779 RPS (4) $0.03 $0.04 $0.04 $0.05 $0.05 $0.05 $0.04 $0.04 $0.03 $0.04 $0.04 $0.04 $0.05 $0.04 $0.04 $0.04 (1) Active Marketing Partners are partners who monetize user traffic on our platform and generate at least $5,000 in revenue per quarter. Averages are used for YTD metrics (2) Revenue per Active Marketing Partner is Revenue from Marketing Partners divided by Active Marketing Partners. (3) Sessions are the total number of monetizable user visits to Products websites (4) RPS is Revenue divided by Sessions
FAQ
What were System1 (SST) revenues in the quarter ended March 31, 2026?
System1 reported revenue of $37,234 thousand for the quarter ended March 31, 2026. This figure comes from its unaudited statements of operations and reflects total company revenue across marketing and products for the period.
Did System1 (SST) report a profit or loss for Q1 2026?
System1 reported a net income (loss) from continuing operations of $(57,591) thousand for Q1 2026. After noncontrolling interests, overall net income was $(47,067) thousand, indicating the company remained unprofitable in the period.
What was System1 (SST) adjusted EBITDA for Q1 2026?
System1 reported adjusted EBITDA of $2,716 thousand for the quarter ended March 31, 2026. This non-GAAP metric adds back items such as depreciation, amortization, stock-based compensation, goodwill impairment, and other costs to highlight underlying operating performance.
How large was System1 (SST) goodwill impairment in Q1 2026?
System1 recorded an impairment of goodwill of $36,822 thousand in Q1 2026. This non-cash charge significantly increased total operating costs and contributed to the operating loss of $51,037 thousand for the quarter.
What were System1 (SST) marketing and products revenues in Q1 2026?
In Q1 2026, System1 reported marketing revenue of $18,391 thousand and products revenue of $18,843 thousand. Together, these segments represent the company’s primary revenue streams within its reported total revenue for the quarter.
How many sessions and what RPS did System1 (SST) report for Q1 2026?
System1 reported 653,681 sessions and an RPS of $0.03 in Q1 2026. Sessions represent monetizable user visits to products websites, and RPS is revenue divided by sessions, showing monetization per visit.