System1 (SST) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $74.5 million, down 12% year-over-year, but exceeded guidance, with adjusted gross profit at $41.5 million, up 33%, and adjusted EBITDA at $12.1 million, a significant increase from $400,000 last year; net loss was $19.9 million.

• Owned and operated products, including CouponFollow and MapQuest, showed strong performance, with CouponFollow sessions up over 160% and MapQuest Naming Generator driving 180,000 app downloads.

• AI-powered automation and agentic coding adoption drove substantial productivity gains and accelerated product development across the company.

• Marketing-driven businesses faced headwinds from Google-related product changes, resulting in a 34% annual revenue decline in non-core, low-margin segments, but margins improved.

• The company operates a leading omnichannel marketing platform leveraging proprietary RAMP technology, with over 1 billion monthly sessions and 1.9 billion+ daily first-party data rows.

Financial highlights

• Q1 2025 revenue was $74.5 million, down 12% year-over-year; adjusted gross profit was $41.5 million, up 33%; adjusted EBITDA reached $12.1 million, up from $400,000 in the prior year quarter; net loss was $19.9 million.

• GAAP gross profit rose 53% to $28.4 million; gross margin improved to 38.1% from 21.9% year-over-year.

• Owned and operated advertising revenue was $57.9 million, down 16% year-over-year; partner network revenue was $16.6 million, up 4% year-over-year, aided by a contra-revenue charge reversal.

• Cash and cash equivalents at quarter-end were $43.9 million, with $50 million available on the revolving credit facility; term loan principal outstanding was $275 million.

• Operating loss narrowed to $13.1 million from $25.8 million in Q1 2024, driven by cost reductions and lower professional fees.

Outlook and guidance

• No financial guidance provided for Q2 2025 or the remainder of the year due to uncertainty from Google’s AdSense for Domains changes and broader market volatility.

• Management remains cautiously optimistic, citing strong fundamentals in owned and operated products, ongoing cost reduction efforts, and sufficient liquidity for at least the next twelve months.