System1, Inc. · NYSE:SST
System1 — Q4 2022 Earnings Presentation
28 slides from System1's earnings presentation, 2022
Slide 1: Investor Presentation Q4 2022
Investor Presentation Q4 2022
Slide 2: Disclaimer
Disclaimer Safe Harbor Disclaimer for Forward-Looking Statements This presentation has been prepared by management of System1, Inc. (together with its subsidiaries, collectively “System1”) and does not constitute a prospectus, and should under no circumstances be understood as an offer to sell or th
Slide 3: Disclaimer (Continued)
Disclaimer (Continued) Explanatory Note For financial reporting purposes, S1 Holdco has been determined to be the accounting predecessor and therefore its financial results are presented for all periods prior to the Business Combination with Trebia. In order to present comparable financial informati
Slide 4: Company Overview
Company Overview — |
Slide 5: System1 is a leading omnichannel customer acquisition marketing platform
System1 is a leading omnichannel customer acquisition marketing platform, delivering high intent customers to advertisers and to our own subscription products. 4
Slide 6: System1 At a Glance
System1 At a Glance Deliver high $838 Million RAMP is our Flexible and intent customers projected 2022 technological dynamic business at scale revenue advantage model Spend $625M+ Diversified across Proprietary Our platform solution annually (FY22 40+ major Responsive protects against forecast) on d
Slide 7: Key Financial KPIs – 2022 Guidance
Key Financial KPIs – 2022 Guidance $258M $128M 2.3M+ FY 2022 Adjusted Gross FY 2022 Adjusted Paying subscribers across Profit forecast EBITDA forecast Owned & Operated (49.5% margin on subscription products adjusted gross profit) Note: FY 22 Adjusted Gross Profit and Adjusted EBITDA forecast assumes
Slide 8: Fast Growing & Profitable
Fast Growing & Profitable Adjusted Gross Profit Adjusted EBITDA $ in millions $ in millions 43% 42% CAGR CAGR $39 $46 $2581 $128 1 $167 $88 $135 $73 $(7) ($11) 2020 2021 2022E 2020 2021 2022E S1 Holdco / System1 Protected.net S1 Holdco / System1 Protected.net Note: See Appendix for a reconciliation
Slide 9: RAMP Identifies & Generates Customers Across All Major Advertising Categories
RAMP Identifies & Generates Customers Across All Major Advertising Categories & from All Major Traffic Sources Subscription Health Finance Search Business & Technology Network Partners Leisure & Lifestyle Platform Display Platform Platform Advertising Travel & Tourism Native Revenue Revenue by by Re
Slide 10: RAMP is built for scale
180M+ 5B+ rows/day 2 25M+ daily monthly visitors1 generated from first- creative & bidding generating party data informing optimizations2 by our 475M+ our Machine Learning pipelines automated buying engine monthly sessions1 RAMP is built for scale 625M+ 20M+ ~40 O&O internet queries/mo. 1 powering d
Slide 11: RAMP Platform Architecture
RAMP Platform Architecture RAMP Console System1 and Network partner access to the RAMP platform, including campaign management, experimentation tools and reporting dashboards. Application Layer Publishing Search Subscriptions Partner Properties Properties & Apps Properties Acquisition Engagement Mon
Slide 12: How RAMP Works
Identify and unlock consumer intent across 1 2 all major sources of traffic UNLOCK REFINE 40 O&O Websites Refine consumer intent based on actions they take on System1 websites etc. 3 How RAMP MONETIZE Monetize via advertising Works networks or our O&O subscription products 11 display ads
Slide 13: REFINE
Consumer intent is shaped into search intent by REFINE multiple interactions users take on our O&O sites 12
Slide 14: Our Technology Moat Widens as our Business Grows
Our Technology Moat Widens as our Business Grows Highly HighlyEfficient Efficient Customer Customer Acquisition Acquisition Omnichannel More More Closed-Loop Closed-Loop Customer Customer Attribution Attribution Traffic Traffic Vertical Agnostic Privacy Focused 1st Party Data Higher Higher Data-Driv
Slide 15: Growth Strategy
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Slide 16: Advertising Growth Drivers
Advertising Ad Rev. by Acquisition Channel Growth Drivers Search Network Partners Display Native Longer-term Current Continuous advertising & Organic Goal monetization optimizations Social Connected TV that drive margin Other (Amazon, apps) improvement Expand customer acquisition International Rev.
Slide 17: Subscription Growth Drivers
10 Subscription Illustrative Growth of Multiple Subscription Products Growth Drivers 9 8 New Product 7 Continue to test / optimize for increased renewal 6 New Product Subscribers (MM) rates and higher ARPU 5 New Privacy 4 Product Expand customer acquisition efforts via RAMP integration 3 2 Launch &
Slide 18: M&A remains a Core Part of our Growth Strategy
M&A remains a Core Part of our Growth Strategy Growth Plug & Play Focus on proprietary RAMP is built to facilitate “Plug deals & growth synergies & Play” integration of M&A Accelerate Expand Accelerate existing Enter adjacent business lines business markets 17
Slide 19: Strong and Experienced M&A Track Record
Strong and Experienced M&A Track Record Growth Plug and Play Accelerate Expand Answers.com RoadWarrior CouponFollow Protected.net MapQuest Concourse Media Startpage info.com Qool Media InfoSpace 18
Slide 20: A Founder-led Team of Industry Veterans
A Founder-led Team of Industry Veterans MICHAEL BLEND TRIDIVESH KIDAMBI BRIAN COPPOLA CEO & Co-Founder CFO Chief Product Officer JEN ROBINSON BETH SESTANOVICH DANIEL WEINROT CTO Chief People Officer General Counsel 19
Slide 21: Financial Performance
Financial Performance 20
Slide 22: Financial Highlights
A diverse business model Strong and consistent organic generating revenue across growth, our RAMP platform consumer-oriented verticals enables continuous optimizations through advertising and driving operating leverage. subscriptions. Financial Highlights Strong and Experienced M&A Strong shareholde
Slide 23: Fast Growing & Profitable
Fast Growing & Profitable Adjusted Gross Profit Adjusted EBITDA $ in millions $ in millions 43% 42% CAGR CAGR $39 $46 $2581 $128 1 $167 $88 $135 $73 $(7) ($11) 2020 2021 2022E 2020 2021 2022E S1 Holdco / System1 Protected.net S1 Holdco / System1 Protected.net Note: See Appendix for a reconciliation
Slide 24: Investment Highlights
Investment Highlights A fast growing and profitable business. Proprietary RAMP platform provides a strong and sustainable competitive advantage. A highly diversified business across its marketing and monetization capabilities. Proven M&A capabilities with a strong track record. Strong, industry-expe
Slide 25: Thank you
24 SYSTEM Thank you
Slide 26: Appendix
Appendix 25
Slide 27: Reconciliation of Net Income to Adjusted EBITDA – FY 2020 and FY 2021
Reconciliation of Net Income to Adjusted EBITDA – FY 2020 and FY 2021 $ in millions 2020 2021 $ $ in in millions millions S1 Holdco Net Income (Loss) $16 $33 Plus: Income Tax Expense $2 $1 Interest Expense $24 $17 Depreciation & Amortization $14 $14 Other Expense $0 $0 Stock-Based Compensation & Dis
Slide 28: Reconciliation of Revenue to Adjusted Gross Profit – FY 2020 and FY 2021
Reconciliation of Revenue to Adjusted Gross Profit – FY 2020 and FY 2021 $ in millions 2020 2021 $ in millions S1 Holdco Revenue $ in millions $476 $688 $ in millions Less: Cost of Revenue (exclusive of depreciation and amortization) ($341) ($521) S1 Holdco Adjusted Gross Profit $135 $167 Unaudited