System1 (SST) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $78.1M, down 17% year-over-year, with adjusted EBITDA up 18% to $11.7M and net loss improved to $17.5M; strong growth in the product segment offset marketing headwinds from Google Partner Network volatility.

• The business operates a leading omnichannel marketing platform with flagship brands in shopping, travel, and search, leveraging proprietary RAMP technology and AI-driven campaign optimization.

• Heavy investment in AI-powered agentic coding and machine learning is driving operational efficiencies and platform modernization, automating 90% of buy-side decisions.

• Corporate reorganization in August 2024 created System1 Holdings, LLC as the new intermediate holding company; a 1-for-10 reverse stock split was effected in June 2025.

• The platform processes over $734M in advertising demand and generates 1B+ monthly sessions across 220+ partners, diversified across multiple verticals and channels.

Financial highlights

• Q2 2025 revenue: $78.1M (down 17% YoY); adjusted gross profit: $41M (up 6% YoY); adjusted EBITDA: $11.7M (up 18% YoY); GAAP net loss: $17.5M, improved from $26.4M YoY.

• For the twelve months ending June 30, 2025: revenue $317M, adjusted gross profit $165M, adjusted EBITDA $52M (32% margin), net loss ($90M).

• Marketing segment Q2 revenue: $54.1M (down 29% YoY); Products segment: $24M (up 34% YoY); Products adjusted gross profit: $22.7M (up 32% YoY).

• Gross margin for Q2 2025: 36%; adjusted gross margin: 52.5%; operating loss: $15.9M, improved from $29.1M YoY.

• Ended Q2 with $63.6M in cash and $270M in term loan debt; leverage ratio covenant not triggered.

Outlook and guidance

• No financial guidance provided for Q3 2025 or full year due to ongoing volatility in the Google marketplace and advertising sector.

• Management expects existing cash and cash flows to be sufficient for at least the next twelve months.

• Focus remains on expanding advertising partners, operational efficiencies, and leveraging agentic coding.

• Expectation that O&O marketing business declines will level off in coming quarters, with positive comps anticipated.