System1, Inc. Reports $74.5 Million Revenue in Q1 2025, Operating Loss Narrows

System1, Inc. reported a revenue of $74.5 million for the first quarter of 2025, a decrease of 12% from $84.9 million in the same period of the previous year. The company's operating loss improved significantly, narrowing to $13.1 million from $25.8 million year-over-year. Despite the decline in revenue, total operating expenses also decreased by 21% to $87.6 million, primarily due to a reduction in the cost of revenue, which fell by 31% to $46.1 million. The net loss attributable to System1, Inc. was $15.9 million, compared to a loss of $10.5 million in the prior year, reflecting a 51% increase in losses.

In terms of operational metrics, System1's Owned and Operated Advertising segment generated $57.9 million in revenue, down 16% from $69.0 million, while the Partner Network segment saw a 4% increase in revenue to $16.6 million. The number of sessions for Owned and Operated Advertising increased to approximately 1.3 billion, up from 1.2 billion, indicating a slight uptick in user engagement. However, the revenue per session for Owned and Operated Advertising decreased to $0.05 from $0.06, reflecting a shift towards lower revenue-generating traffic.

Strategically, System1 underwent a corporate reorganization in August 2024, consolidating its assets and operations under a new holding company, System1 Holdings, LLC. This restructuring aims to streamline operations and enhance the company's focus on its omnichannel customer acquisition platform, RAMP. The company continues to expand its network of owned and operated websites, which now includes approximately 40 sites, such as Startpage and MapQuest.

As of March 31, 2025, System1 reported total assets of $419.2 million, down from $459.1 million at the end of 2024. The company had cash and cash equivalents of $43.9 million and $50 million available under its revolving credit facility. The company’s total liabilities decreased to $351.5 million from $374.1 million, primarily due to a reduction in accrued expenses and other current liabilities. Looking ahead, System1 expects to leverage its existing cash and operational strategies to navigate market conditions and improve profitability, although it acknowledges potential challenges from macroeconomic factors affecting advertising demand.