System1(SST) - 2025 Q3 - Quarterly Results

Financial Performance - Revenue decreased 31% year-over-year to $61.6 million[6] - GAAP gross profit decreased 8% year-over-year to $22.8 million[6] - Adjusted gross profit decreased 4% year-over-year to $36.1 million, with adjusted gross profit margin increasing to 59% from 42% year-over-year[6] - GAAP net loss improved 28% year-over-year to $22.0 million[6] - Adjusted EBITDA decreased 4% year-over-year to $9.9 million[6] - For the three months ended September 30, 2025, the net loss was $22.0 million, an improvement from a net loss of $30.6 million in the same period of 2024[20] - Adjusted EBITDA for Q3 2025 was $9.9 million, slightly down from $10.3 million in Q3 2024[20] - The company incurred $2.0 million in acquisition and restructuring costs in Q3 2025, compared to $8.1 million in Q3 2024, indicating a reduction in restructuring expenses[20] - Interest expense decreased to $7.1 million in Q3 2025 from $8.0 million in Q3 2024, reflecting improved debt management[20] - Depreciation and amortization expenses were $20.8 million in Q3 2025, slightly up from $20.1 million in Q3 2024[20] - Stock-based compensation and distributions to members decreased to $2.8 million in Q3 2025 from $3.8 million in Q3 2024, indicating cost control measures[20] - The income tax benefit for Q3 2025 was $(0.5) million, compared to a benefit of $0.6 million in Q3 2024[20] - Non-cash revaluation of warrant liability resulted in a loss of $(0.1) million in Q3 2025, compared to a gain of $0.3 million in Q3 2024[20] - Other expenses were $(0.2) million in Q3 2025, with no other expenses reported in Q3 2024[20] - The company continues to focus on improving its financial metrics and reducing losses while managing operational costs effectively[20] Market Expansion and Product Development - CouponFollow.com expanded into the European market with localized coupon content in Germany, France, and Poland[7] - MapQuest launched redesigned apps on iOS and Android, enhancing user features[7] - Startpage.com released Vanish Private AI Chat, ensuring user privacy with no logging of IP addresses or queries[7] Future Guidance and Uncertainty - System1 does not plan to provide financial guidance for Q4 2025 due to uncertainty with a key advertising partner[5] Asset Management - Total assets decreased to $385.2 million from $459.1 million as of December 31, 2024[18]