The following is a summary of the System1, Inc. (SST) Q3 2024 Earnings Call Transcript:

Financial Performance:

• System1 reported $89 million in revenue and $38 million in gross profit for Q3 2024.

• Adjusted EBITDA was $10.3 million, marking a year-over-year increase of 28%.

• Notably, owned and operated products generated $71 million in revenue, up 7% year-over-year but down 9% from last quarter. Adjusted gross profit for these was $26 million, up 11% year-over-year.

• Partner Network revenues were $18 million, down 17% year-over-year but up 5% sequentially. Adjusted gross profit for this segment was $13 million.

Business Progress:

• Continued growth and innovation in owned and operated products like Startpage and MapQuest, with increased user sessions and new private browser app launches.

• Investment in RAMP has improved marketing campaign efficiency and scaling, with AI integration playing a significant role in optimization.

• Despite market volatility, System1 is reducing operating expenses and focusing on operational efficiency.

Opportunities:

• System1 is optimistic about rebounding business relations with Google's Search Partner Network in 2025.

• International market expansions have increased, now comprising 35% of owned and operated revenue.

Risks:

• System1 faces volatility due to its dependence on Google's Search Partner Network, which has underperformed compared to the broader Google business.

• The potential regulatory changes following a shift in administration could impact the digital advertising ecosystem and the antitrust landscape.

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