$SSTPW

System1, Inc.

CIK:0001805833|SEC Filings

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025	Jun. 30, 2026	Jun. 30, 2025
Income Statement [Abstract]
Revenue	$ 30,200	$ 78,115	$ 67,434	$ 152,628
Operating expenses:
Cost of revenue	5,926	50,212	19,786	96,289
Salaries and benefits	17,113	26,297	37,913	51,285
Selling, general, and administrative	14,541	17,511	31,330	34,085
Impairment of long-lived assets	911	0	37,733	0
Total operating expenses	38,491	94,020	126,762	181,659
Operating loss	(8,291)	(15,905)	(59,328)	(29,031)
Other expense:
Interest expense, net	7,116	7,116	13,745	14,201
Change in fair value of warrant liabilities	0	68	0	100
Total other expense, net	7,116	7,184	13,745	14,301
Loss before income tax	(15,407)	(23,089)	(73,073)	(43,332)
Income tax benefit	(75)	(1,547)	(150)	(1,934)
Net loss	(15,332)	(21,542)	(72,923)	(41,398)
Less: Net loss attributable to non-controlling interest	(2,733)	(4,079)	(13,257)	(8,052)
Net loss attributable to System1, Inc.	$ (12,599)	$ (17,463)	$ (59,666)	$ (33,346)
Basic net loss per share (in dollars per share)	$ (1.54)	$ (2.23)	$ (7.34)	$ (4.37)
Diluted net loss per share (in dollars per share)	$ (1.54)	$ (2.23)	$ (7.34)	$ (4.37)
Weighted average number of shares outstanding - basic (in shares)	8,164	7,820	8,127	7,631
Weighted average number of shares outstanding - diluted (in shares)	8,164	7,820	8,127	7,631

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2026	Jun. 30, 2025
Cash Flows from Operating Activities
Net loss	$ (72,923)	$ (41,398)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	18,951	41,043
Stock-based compensation	2,619	7,193
Impairment of long-lived assets	37,733	0
Amortization of debt issuance costs	1,677	1,816
Noncash lease expense	789	971
Deferred tax benefits	(440)	(984)
Share-based compensation liabilities	0	1,646
Other, net	17	122
Changes in operating assets and liabilities:
Accounts receivable	16,310	(7,302)
Prepaid expenses and other current assets	(3,522)	(2,234)
Accounts payable	(6,876)	18,048
Accrued expenses and other current liabilities	(22,780)	(9,860)
Other non-current liabilities	276	(518)
Net cash (used in) provided by operating activities	(28,169)	8,543
Cash Flows from Investing Activities
Capitalized software development costs	(3,540)	(2,786)
Other, net	0	(321)
Net cash used in investing activities	(3,540)	(3,107)
Cash Flows from Financing Activities
Repayment of term loan	(15,000)	(10,000)
Proceeds from private placement of Class A common stock	0	2,250
Other, net	(237)	(344)
Net cash used in financing activities	(15,237)	(8,094)
Effect of exchange rate changes in cash, cash equivalent and restricted cash	(200)	(21)
Net decrease in cash, cash equivalents and restricted cash	(47,146)	(2,679)
Cash, cash equivalents and restricted cash, beginning of the period	88,509	67,948
Cash, cash equivalents and restricted cash, end of the period	41,363	65,269
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents	40,484	63,648
Restricted cash	879	1,621
Total cash, cash equivalents and restricted cash	41,363	65,269
Supplemental cash flow information:
Cash (refunds) paid for income taxes, net	(91)	56
Cash paid for interest	12,584	10,828
Stock-based compensation included in capitalized software development costs	321	365
Right-of-use assets obtained in exchange for operating lease obligations	$ 0	$ 1,700

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2026	Dec. 31, 2025
Current assets:
Cash and cash equivalents	$ 40,484	$ 86,887
Restricted cash, current	500	1,243
Accounts receivable, net	40,980	57,289
Prepaid expenses and other current assets	7,557	4,061
Total current assets	89,521	149,480
Restricted cash, non-current	379	379
Property and equipment, net	1,358	1,562
Intangible assets, net	96,007	148,089
Goodwill	82,407	82,407
Operating lease right-of-use assets	8,315	9,120
Other non-current assets	287	263
Total assets	291,371	404,972
Current liabilities:
Accounts payable	15,139	22,016
Accrued expenses and other current liabilities	23,367	46,277
Operating lease liabilities, current	1,538	1,427
Debt, net	76,915	76,718
Total current liabilities	116,959	146,438
Operating lease liabilities, non-current	7,312	8,183
Long-term debt, net	214,880	228,399
Deferred tax liability	3,573	4,013
Other non-current liabilities	1,651	520
Total liabilities	344,375	387,553
Commitments and contingencies (Note 7)
Stockholders' equity:
Additional paid-in capital	881,755	878,859
Accumulated deficit	(907,345)	(847,679)
Accumulated other comprehensive loss	(325)	(157)
Treasury stock, at cost - 190 and 137 shares as of June 30, 2026 and December 31, 2025, respectively	(759)	(557)
Total stockholders' equity attributable to System1, Inc.	(26,673)	30,467
Non-controlling interest	(26,331)	(13,048)
Total stockholders' equity	(53,004)	17,419
Total liabilities and stockholders' equity	291,371	404,972
Internal-use software development costs
Current assets:
Internal-use software development costs, net	13,097	13,672
Class A Common Stock
Stockholders' equity:
Common stock value	1	1
Class C Common Stock
Stockholders' equity:
Common stock value	$ 0	$ 0