System1, Inc. · NYSE:SST
System1 — Investor Presentation (November 2022)
28 slides from System1's investor presentation, Nov 10, 2022
Slide 1: Q4 2022 Investor Presentation
Q4 2022Investor Presentation
Slide 2: Disclaimer
Disclaimer 1 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
Slide 3: Disclaimer (Continued)
Disclaimer (Continued) 2 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 informa
Slide 4: Company Overview
Company Overview 3
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
Deliver high intent customers at scale Spend $625M+ annually (FY22 forecast) on digital advertising across all major sources of customer traffic $838 Million projected 2022 revenue Diversified across 40+ major advertising categories, and 2mm+ paying subscribers to our digital subscription products R
Slide 7: Key Financial KPIs – 2022 Guidance
Key Financial KPIs – 2022 Guidance 6 2.3M+ Paying subscribers across Owned & Operated subscription products $258M FY 2022 Adjusted EBITDA forecast (49.5% margin on adjusted gross profit) $128M FY 2022 Adjusted Gross Profit forecast Note: FY 22 Adjusted Gross Profit and Adjusted EBITDA forecast assum
Slide 8: Fast Growing & Profitable
$73 $88 $128 ($11) $39 2 0 2 0 2 0 2 1 2 0 2 2E S1 Holdco / System1 Protected.net Fast Growing & Profitable 7 $135 $167 $258 $(7) $46 2 0 2 0 2 0 2 1 2 0 2 2E S1 Holdco / System1 Protected.net Adjusted Gross Profit $ in millions 42% CAGR Adjusted EBITDA $ in millions 1 43% CAGR Note: See Appendix fo
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 8 Platform Revenue by Vertical Note: All metrics shown are for the twelve months ended September 30, 2022 and reflect the combined results of S1 Holdco LLC and Protected.net Subscription He
Slide 10: RAMP is built for scale
180M+ monthly visitors1 generating 475M+ monthly sessions1 5B+ rows/day2 generated from first- party data informing our Machine Learning pipelines 25M+ daily creative & bidding optimizations2 by our automated buying engine 625M+ queries/mo. 1 powering our search stack processes across O+O and partne
Slide 11: RAMP Platform Architecture
RAMP Platform Architecture 10 Application Layer RAMP Console System1 and Network partner access to the RAMP platform, including campaign management, experimentation tools and reporting dashboards. Platform Layer Data Layer Acquisition Paid and organic traffic acquisition services & APIs. Engagement
Slide 12: How RAMP Works
How RAMP Works Identify and unlock consumer intent across all major sources of traffic 11 UNLOCK REFINE 2 MONETIZE 3 1 Refine consumer intent based on actions they take on System1 websites Monetize via advertising networks or our O&O subscription products etc. display ads 40 O&O Websites
Slide 13: REFINE
REFINE 12 Consumer intent is shaped into search intent by multiple interactions users take on our O&O sites
Slide 14: Our Technology Moat Widens as our Business Grows
Our Technology Moat Widens as our Business Grows 13 Omnichannel Vertical Agnostic Privacy Focused 1st Party Data End-to-End Tech Stack Plug & Play M&A Highly Efficient Customer Acquisition More Customer Traffic Data-Driven Optimization Better Conversion Higher Monetization & Profits Closed-Loop Attr
Slide 15: Growth Strategy
Growth Strategy 14
Slide 16: Advertising Growth Drivers
Advertising Growth Drivers 15 Continuous advertising & monetization optimizations that drive margin improvement Expand customer acquisition efforts into under indexed and new acquisition channels Grow & expand international business, currently less than 20% of platform advertising revenue Ad Rev. by
Slide 17: Subscription Growth Drivers
Su b sc ri b er s (M M ) New Privacy Product New Product New Product 0 1 2 3 4 5 6 7 8 9 10 2018 2019 2020 2021 Subscription Growth Drivers 16 Continue to test / optimize for increased renewal rates and higher ARPU Expand customer acquisition efforts via RAMP integration Launch & grow new subscripti
Slide 18: M&A remains a Core Part of our Growth Strategy
M&A remains a Core Part of our Growth Strategy 17 Growth Focus on proprietary deals & growth synergies Accelerate Accelerate existing business lines Plug & Play RAMP is built to facilitate “Plug & Play” integration of M&A Expand Enter adjacent business markets
Slide 19: Strong and Experienced M&A Track Record
Strong and Experienced M&A Track Record 18 Growth Plug and Play Accelerate Expand Answers.com RoadWarrior CouponFollow Protected.net MapQuest Concourse Media Startpage info.com Qool Media InfoSpace
Slide 20: A Founder-led Team of Industry Veterans
A Founder-led Team of Industry Veterans 19 MICHAEL BLEND CEO & Co-Founder TRIDIVESH KIDAMBI CFO BETH SESTANOVICH Chief People Officer JEN ROBINSON CTO BRIAN COPPOLA Chief Product Officer DANIEL WEINROT General Counsel
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Slide 22: Financial Highlights
Financial Highlights 21 A diverse business model generating revenue across consumer-oriented verticals through advertising and subscriptions. Strong and consistent organic growth, our RAMP platform enables continuous optimizations driving operating leverage. Strong and Experienced M&A track record,
Slide 23: Fast Growing & Profitable
$73 $88 $128 ($11) $39 2 0 2 0 2 0 2 1 2 0 2 2E S1 Holdco / System1 Protected.net Fast Growing & Profitable 22 $135 $167 $258 $(7) $46 2 0 2 0 2 0 2 1 2 0 2 2E S1 Holdco / System1 Protected.net Adjusted Gross Profit $ in millions 42% CAGR Adjusted EBITDA $ in millions 1 43% CAGR Note: See Appendix f
Slide 24: Investment Highlights
Investment Highlights 23 A fast growing and profitable business. Proven M&A capabilities with a strong track record. Proprietary RAMP platform provides a strong and sustainable competitive advantage. A highly diversified business across its marketing and monetization capabilities. Strong, industry-e
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 26 $ in millions$ in illions $ in millions i illi 2020 2021 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 Compensati
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 27 $ in millions $ in millions $ in millions $ in millions 2020 2021 S1 Holdco Revenue $476 $688 Less: Cost of Revenue (exclusive of depreciation and amortization) ($341) ($521) S1 Holdco Adjusted Gross Profit $135 $167 Unaudit