System1, Inc.

Q2 revenue was $30.2 million, down 61% year over year and down 19% sequentially. Excluding owned-and-operated marketing, revenue would have been $28.6 million, down 32% year over year and 6% sequentially. Products revenue was $19.5 million, down 19% year over year and up 3% sequentially; products revenue per session was down 2% from Q1. Marketing GAAP revenue was $10.7 million, down 80% year over year and 42% sequentially. Adjusted gross profit was $25.5 million, down 38% year over year and 10% sequentially; adjusted EBITDA was $1.9 million, down 83% year over year and 29% sequentially. Management did not provide Q3 or full-year guidance because of continued volatility, but CFO Tridivesh Kidambi said EBITDA is expected to sequentially increase quarter over quarter for the rest of the year.

Michael Blend framed the quarter as one of operational progress offset by Google monetization volatility. He emphasized 31% year-over-year session growth, strength in CouponFollow and MapQuest, and early progress in AI-driven products, first-party data monetization, and agentic commerce. His tone was optimistic but cautious, repeatedly noting that Startpage and the partner network are still constrained by Google’s changes and that the company is working to stabilize monetization and diversify partners.

Tridivesh Kidambi focused on the revenue mix shift, cost discipline, and the impact of the June RSOC downturn. He cited Q2 revenue of $30.2 million, adjusted gross profit of $25.5 million, operating expenses of $23.6 million, and adjusted EBITDA of $1.9 million, and noted that operating expenses were down 20% year over year and 8% sequentially due to cost-saving initiatives. He also highlighted the completed debt exchange, with total debt reduced to $150 million from $302.6 million, June 30 cash at $16.2 million pro forma for the closing payment, and pro forma net leverage of 5.88x.

Analysts focused on whether Startpage’s usage growth was finally translating into revenue, but management said monetization challenges are still more than offsetting session gains. Michael Blend said there are “green shoots” in Startpage monetization and that Google’s broader partner-network cleanup may be nearing the end, while also stressing the need to diversify beyond Google. Questions also centered on active partners, agentic commerce, and first-party data; management said the partner network is becoming more consolidated and System1 may be one of the few scaled Google partners left, and that CouponFollow is the main near-term vehicle for agentic commerce because of its verified promo codes and affiliate relationships. On first-party data, management said it has begun selling IntentStream and is early in discussions with brands and agencies.