System1 Reports 17% Revenue Decline and $21.5 Million Net Loss in Q2 2025

System1, Inc. reported a decline in financial performance for the second quarter of 2025, with revenues totaling $78.1 million, a decrease of 17% from $94.6 million in the same period last year. For the first half of 2025, revenue also fell by 15% to $152.6 million compared to $179.5 million in the prior year. The company experienced a net loss of $21.5 million for the quarter, down from a loss of $34.8 million in Q2 2024, while the net loss for the first half of 2025 was $41.4 million, a reduction from $48.6 million year-over-year. The basic and diluted net loss per share improved to $(2.23) from $(3.80) in the previous year’s quarter.

Operating expenses decreased significantly, totaling $94 million for the second quarter, down 24% from $123.7 million in Q2 2024. This reduction was primarily driven by lower costs associated with revenue generation, which fell by 27% to $50.2 million, and a 23% decrease in salaries and benefits to $26.3 million. The company attributed these changes to a strategic focus on cost management and operational efficiency, which included a reduction in headcount and a decrease in share-based compensation liabilities.

In terms of strategic developments, System1 underwent a corporate reorganization on August 1, 2024, consolidating its assets and operations under a new holding company, System1 Holdings, LLC. This restructuring aims to streamline operations and enhance the management of its marketing and product segments. The company also executed a 1-for-10 reverse stock split on June 12, 2025, to improve its stock price and maintain compliance with exchange listing requirements.

Operationally, System1 reported a significant increase in user engagement within its Products segment, with sessions rising by 34% to 23.9 million in Q2 2025 compared to 17.9 million in Q2 2024. The Products revenue per session also improved, indicating better monetization of user traffic. However, the Marketing segment saw a 29% decline in revenue, reflecting challenges in traffic acquisition costs and overall market conditions. The company continues to rely heavily on key advertising partners, particularly Google and Microsoft, which poses risks related to revenue concentration.

Looking ahead, System1 expects to leverage its existing cash reserves of $63.6 million and available credit of $50 million to support its operational strategies. The company aims to enhance its liquidity and capitalize on growth opportunities within its advertising partnerships while managing costs effectively. Despite the current challenges, System1 remains focused on optimizing its operations and improving financial performance in the coming quarters.