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System1 (SST)
NYSE:SST
US Market

System1 (SST) AI Stock Analysis

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System1

(NYSE:SST)

Rating:47Neutral
Price Target:
$0.50
▲(38.89%Upside)
System1's stock score is influenced by its financial instability, characterized by declining revenue and high leverage. Technical analysis shows short-term momentum but long-term weakness. The earnings call provided some positive highlights, but the overall revenue decline and uncertainties due to external factors like Google's policy changes contribute to a cautious outlook.

System1 (SST) vs. SPDR S&P 500 ETF (SPY)

System1 Business Overview & Revenue Model

Company DescriptionSystem1, Inc. develops technology and data science to operate responsive acquisition marketing platform. The company also operates a real-time coupon code search engine and directory that offers coupon destinations for online shoppers. It serves customers in the areas of health, subscription, finance, insurance, business and technology, travel, auto, and other direct-to-consumer businesses. The company was founded in 2013 and is based in Los Angeles, California.
How the Company Makes MoneySystem1 generates revenue through a performance marketing model that focuses on acquiring and monetizing user traffic. Its primary revenue streams include search advertising, where they earn by directing traffic to partner websites and receiving a share of the advertising revenue generated. Additionally, System1 engages in affiliate marketing, earning commissions by promoting and driving traffic to third-party products and services. The company's earnings are also bolstered by partnerships with major search engines and digital advertising networks, which facilitate the delivery of targeted advertisements to users. These partnerships, alongside their technology platform, play a crucial role in optimizing ad spend and maximizing return on investment for advertisers.

System1 Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: -2.70%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
System1 demonstrated strong performance in its financial metrics and success in its owned and operated products, offset by challenges in marketing-driven revenue and uncertainties related to Google product changes.
Q1-2025 Updates
Positive Updates
Strong Financial Performance
Q1 revenue was $74.5 million, beating the high end of guidance with a 33% year-over-year increase in adjusted gross profit and a significant rise in adjusted EBITDA to $12.1 million from $400,000 the previous year.
Success of Owned and Operated Products
Owned and operated products saw a 51% year-over-year revenue increase, with CouponFollow user sessions up over 160% and Startpage sessions up 11% year-over-year.
Growth in Partner Network
Partner Network revenue increased by 4% year-over-year, with adjusted gross profit up 37% year-over-year and 4% sequentially.
Expansion in International Markets
International revenue represented 30% of total owned and operated revenue, up from 29% in Q1 2024.
Negative Updates
Decline in Marketing-Driven Revenue
Marketing-driven revenue decreased by 34% year-over-year, primarily due to a decline in a non-core, low-gross-margin business segment.
Challenges with Google Product Changes
Continued volatility related to Google's shift from AFD to RSOC, creating uncertainty and impacting the ability to provide financial guidance for Q2 2025.
Overall Revenue Decline
Total Q1 revenue decreased by 12% year-over-year and 1% sequentially.
Company Guidance
During the first quarter of 2025 earnings call for System1, the company exceeded its guidance range with revenue at approximately $75 million, adjusted gross profit at $41.5 million, and adjusted EBITDA at $12.1 million, marking a 33% year-over-year increase in adjusted gross profit and a substantial rise in EBITDA from $400,000 in the prior year quarter. The owned and operated products, including CouponFollow, Startpage, and MapQuest, showed strong performance with a 51% year-over-year revenue increase, despite a 16% decline in total owned and operated revenue due to a drop in the marketing-driven business. Sessions across owned and operated properties reached 1.3 billion, up 6% year-over-year. The Partner Network also delivered growth with revenue at $70 million and a 37% year-over-year increase in adjusted gross profit. The company is heavily investing in AI-powered automation and Agentic coding, which has significantly increased productivity and accelerated product development. However, due to uncertainties related to Google’s policy changes and broader market volatility, System1 did not provide financial guidance for the second quarter of 2025.

System1 Financial Statement Overview

Summary
System1 is facing significant financial challenges, including declining revenue, persistent losses, and high leverage. Negative margins and cash flows highlight profitability issues, necessitating urgent measures for financial stability and growth.
Income Statement
45
Neutral
System1's revenue has been declining significantly, evidenced by a 14.44% decrease from 2023 to 2024. The company also faces negative net and EBIT margins, indicating operational challenges and poor profitability. Gross profit margin improved in 2024, but the company remains unprofitable overall.
Balance Sheet
35
Negative
The company's balance sheet reflects high leverage, with a total debt of $3.454 million against a modest equity base, resulting in a low debt-to-equity ratio. Equity has decreased significantly over recent years, and the equity ratio is low, posing financial risk.
Cash Flow
40
Negative
System1 shows a negative free cash flow trend, with a slight increase in 2024 but still negative overall. Operating cash flow remains negative, leading to poor cash flow coverage of net income. The company needs to improve cash generation for sustainability.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
343.93M401.97M826.65M688.39M475.98M
Gross Profit
152.36M46.72M305.54M675.06M134.98M
EBIT
-88.60M-85.99M50.83M-13.33M42.62M
EBITDA
14.00M-4.48M-427.61M64.72M52.92M
Net Income Common Stockholders
-74.67M-227.22M33.00M21.03M16.36M
Balance SheetCash, Cash Equivalents and Short-Term Investments
63.61M135.34M24.61M53.15K29.01M
Total Assets
459.13M605.47M1.16B517.62M218.68M
Total Debt
274.98M355.42M422.55M450.00K179.97M
Net Debt
211.37M220.07M397.94M396.85K150.96M
Total Liabilities
374.13M436.15M687.67M60.43M266.91M
Stockholders Equity
80.26M135.28M383.98M457.19M-48.23M
Cash FlowFree Cash Flow
-5.29M-32.70M-17.66M-7.78M40.42M
Operating Cash Flow
-5.25M-24.74M-7.29M-1.24M46.55M
Investing Cash Flow
-6.25M203.18M-454.45M-6.54M68.17M
Financing Cash Flow
-63.96M-74.07M-27.73M450.00K-128.07M

System1 Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.36
Price Trends
50DMA
0.39
Negative
100DMA
0.51
Negative
200DMA
0.79
Negative
Market Momentum
MACD
-0.01
Positive
RSI
43.69
Neutral
STOCH
10.66
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SST, the sentiment is Negative. The current price of 0.36 is below the 20-day moving average (MA) of 0.42, below the 50-day MA of 0.39, and below the 200-day MA of 0.79, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 43.69 is Neutral, neither overbought nor oversold. The STOCH value of 10.66 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SST.

System1 Risk Analysis

System1 disclosed 61 risk factors in its most recent earnings report. System1 reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
There can be no assurance that we will be able to comply with the continued listing standards of the NYSE, which could result in the delisting of our securities, limit investors' ability to make transactions in our securities and subject us to additional trading restrictions. Q4, 2024

System1 Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
$24.50M2.10-11.99%-12.74%751.07%
65
Neutral
$4.45B12.155.28%248.12%4.08%-12.23%
50
Neutral
$28.56M-5.44%8.00%-87.89%-44.93%
48
Neutral
$24.00M
-2.44%
SSSST
47
Neutral
$34.07M-80.45%-19.84%49.40%
SMSMX
$5.86M-352.74%
$3.48M
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SST
System1
0.36
-1.06
-74.65%
OMEX
Odyssey Marine Exploration
0.76
-4.24
-84.80%
SGRP
Spar Group
1.04
-1.13
-52.07%
NTIP
Network-1 Technologies
1.24
-0.38
-23.46%
SMX
SMX Public Limited Company
1.26
-340.74
-99.63%
LICN
Lichen China Ltd. Class A
5.00
-303.00
-98.38%

System1 Corporate Events

Executive/Board Changes
System1 Approves Base Salary for President Ursini
Neutral
May 23, 2025

On May 22, 2025, System1, Inc. announced that its Compensation Committee approved a base salary of $450,000 per annum for Charles Ursini, the company’s President and Chief Operating Officer, effective May 19, 2025. Previously, Mr. Ursini did not receive a base salary for his role, but he will continue to receive the same benefits as other employees, such as medical and dental coverage.

The most recent analyst rating on (SST) stock is a Buy with a $5.00 price target. To see the full list of analyst forecasts on System1 stock, see the SST Stock Forecast page.

Financial Disclosures
System1 Releases Q1 2025 Financial Information
Neutral
May 6, 2025

On May 6, 2025, System1, Inc. released supplemental financial information for the quarter ending March 31, 2025, on its website. The company also made available an investor presentation, which may be used for future investor engagements. This release provides stakeholders with detailed insights into the company’s financial performance and strategic positioning, potentially impacting investor perceptions and market positioning.

Executive/Board Changes
System1 Board Restructures After Director Resignations
Neutral
Apr 18, 2025

On April 15, 2025, Dexter Fowler and Jennifer Prince resigned from the Board of Directors of System1, Inc., with Fowler serving on the Nominating & Corporate Governance Committee and Prince on the Compensation Committee. Their resignations were not due to any disagreements with the company. Following their departure, the Board decided on April 17, 2025, to reduce its size from eleven to nine members and reassigned CEO Michael Blend from a Class III to a Class I director to maintain balance among the board’s classes.

Financial Disclosures
System1 Releases Q4 2024 Financial Information
Neutral
Mar 10, 2025

On March 10, 2025, System1, Inc. released supplemental financial information for the quarter ending December 31, 2024, on its website. The company also made an investor presentation available, which may be used for future investor engagements. These updates provide stakeholders with detailed insights into the company’s financial performance and strategic direction.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.