SST - Earnings call transcript Q2 2024

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Operator

Thank you for standing by. My name is Joe, and I will be your conference operator today. At this time, I would like to welcome everyone to the System1 Second Quarter 2020 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. now Vice turn President would to conference I Ostgaard, Kyle of Instructions] like the to over [Operator Finance.

You may begin.

Kyle Ostgaard

Thank to the for by, and XXXX standing Call SystemX. you Conference Second for Quarter welcome

discuss statements markets cause are statements and We implied those In particular, regulatory may subject uncertainties actual described that SystemX's Michael unpredictability this Investor unknown economy from factors operating Recording during our Relations our on CEO, take this certain our also of Joining me conference and as has call. today projected financial our report for business XX-K the this Form financial ended. opportunity as our XXXX long-term you overall prospects. our uncertainty March fiscal in strategy, that will generally. materially results year will includes and current to make Co-Founder matters. Blend; and in or on to I'd growth Tridivesh results differ business, Officer, guidance, call, the filed like Financial after make future our the those remind forward-looking the well call risks website compliance These global could statements to during we annual business, on included and risk call the and relating regarding Chief this known performance future This XX statements. shortly and in and and are to Kidambi. results the or available to of be to

as call SystemX obligation the by that beliefs future law. of we our date management's assumptions of except statements and not required to forward-looking forward-looking rely hereof, are on events. on predictions should as You statements, any any and based statements make update disclaims on this as All forward-looking

financial during for profit. or not adjusted discussion measures EBITDA substitute include from our GAAP from to Investor our as measures These non-GAAP historical our measures regarding in found in performance addition and measures, to and call Executive now to conference be will like SystemX's website. gross on comparable over Chief non-GAAP Blend. including turn would reconciliation considered may Our and I Information the GAAP estimates exclude of Officer, security. non-GAAP a Relations results. today including Historical this financial be measures, our results provided financial to our most non-GAAP financial Michael adjusted isolation should future call total Co-Founder, a

Michael Blend

joining and afternoon, Good for Kyle. QX everyone, on Thanks, Earnings our SystemX us Call. thanks XXXX

guidance on driven you of the our progress very RAMP profit. that for range. high happy results, tight delivered significant a operated our SystemX of which higher of the focus metrics. our announce and continued SystemX Adjusted million $X.X returns owned was $XX the from end by platform, strong in strong and growth, products the were reducing million results which XX% positive our was guidance EBITDA than These of investment OpEx. financial gross key update positive in international million, I'm today. a financial to $XX have and delivered exceeded We high revenue end across

flat XX% Let's million, $XX want quarter. year-over-year. revenue operated XX% gross from flat and year-over-year up financial our up get operated last some last to was from Total owned quarter and the I profit with of owned was million, details. $XX into and business. start Adjusted and

increase. international as X was year-over-year. XX% in rates well Spread on naturally owned States. billion States from shift XX% a a cost per well Revenue have X% in United revenue United spend per session in advertising monetization driven the down XX% Our in towards approximately decline click nearly sessions operated rates and properties, operated the by quarter-over-quarter was lower which products. We was as was generated as session. $X.XXX driven sequential XXX% over our quarterly owned uptick and growth markets, bigger a and as growth year-over-year our by per mix increase The lower quarter-over-quarter

growth revenue from up XX% owned This and approximately of international highlight representing Now first international operated revenue. to with XX% a in continues quarter. be is the

Our of use efficiently and growth international very languages. creatives create AI of continued to demonstrates content power the advertising multiple in RAMP's

For the or very can capitalize example, in opportunity. in like when India to engineering U.K., accounts we're seeing jobs on move we an opportunity quickly checking the

coupon index organic both spamming long benefited from sites. not full change, codes consumers coupon-related for was most Google and becoming one favorable aimed of Search copycat content owned useful as a websites, In was welcome and had was CouponFollow overdue Google Google websites the with polluted CouponFollow strong great and coupon boost. of MapQuest. promo but Google a thoroughly Our The eliminating with a results. gave the products and on promo from positive also CouponFollow and vetted quarter May, update original at appropriately operated another search traffic is only CouponFollow and continued trends update. algorithm This

As a coupon And nearly site the year-over-year. were on most in the site a world. in significant result, increase XX% and organic days, revenue. some corresponding saw sessions up traffic June CouponFollow is traffic CouponFollow

Startpage, app very over feedback, app X,XXX with user revenue. our engine over private our been downloads and we're While focused the positive that ratings QX launched MapQuest increased seen productive to users also customer X-star both MapQuest with XX,XXX it's dividends quarter. and and in and although saw CouponFollow, paying our dramatic. gratifying not across to and see have a including Android year-over-year. significantly browser search story, users. private organic on visits similar up a We've date We experience iOS had were very XX% as improving

able coming hopes and for users, profitably we users hope high be for loyal in browsers to to Startpage also them new the quarters. have to market our We the

continue partners X% sequentially. Network was but but and RPS Now pricing decreased continued million were market. United up to continue operated sessions our lower we decreased profit XX a line driven scale to States million. network. up. revenue, business, XX% in saw bigger as solid our and and profit higher year-over-year partners with year-over-year the Network sequentially. the same Network to the our to Partner up this XXX% lower gross and in show business. the owned X% and Average up we Adjusted let's The gross In move to in At XX% we was total Partner sequentially decreased per Revenue the Despite sequentially business decline and by mix from quarter-over-quarter. from markets. demand new of was Partner XXX shift XX% Network quarter. international declined QX, XX% QX, active by grew the Partner revenue partners RPS in as first had the on the first our quarter XX% adjusted onboarded sessions quarter trends scale revenue almost to partners. partners billion, that partner $XX was $XX XX% X% to end year-over-year, add $X up were Total year-over-year

partner are $XX,XXX As revenue a at reminder, we on of per consider least a RAMP. quarter a when platform be they customer generating scale to

I over to drive off wanted SystemX's Before that hand expect few things next initiatives to Tridi, growth we years. key outline the I to our

by invest X AI, key to and to continuing in third in driven Buy-side platform launching RAMP is our capabilities efficiency areas. products. are buy-side up our is partners; our new second we is opening First,

each in walk Let of more these me through take this opportunity detail. to you

talk First, AI. about let's

for capabilities is buying It limitations. buy-side strategy it expect in enabled algorithms couple work on they partners the greater past. difficult AI platform. have for very product do. buy to associated hard rely sophisticated advertising they team works our does. advertising as team enough well This RAMP last requires far typically at many engineering in the I optimizations and while owned large traffic don't at for to AI SystemX into technology order enable enables but adding of learning scale to size to capabilities traffic. laser-focused a have after the up speed. in integrating campaigns content machine business to magnitude own quarters, create scale has at a partners, put, a they and we currently By capabilities buy companies out traffic, certain least site RAMP. a reach sell-side This could what traffic, we optimization monetization. requires SystemX As constantly a improvement just our our we've And have our improved certain than other monetize SystemX and match. beyond buy-side on Maintaining in purchase AI partners and skilled and on They a of at combined to and point. Partners the our at Traditionally, a handful with been level, partners to a buy-side size us cap platform Network their SystemX are their scale, rely operated only beyond who bidding typically of mentioned scale, large and can opening scale of solely integration, them Simply certain highly many hit network that own to and

follows addition build also monetization products product We pattern. into we how and partners. to our out, once we figure teams out product. the it up to we new a are RAMP. buying integrating these team into have similar and of enhancement In all owned to own scale our better RAMP. a properties to opened the capabilities, feature utilize Each products operated worked We or And

Google-related on our on been into and launching to a year, advertising This content. search setting product integrated traffic directly product been the Over by content. specific high-quality very advertising the to last scaling focus Google requires offering verticals. has tailored highly content has new

new new now quality. SystemX and scale the and have to maintaining is from figures X revenue products we very to but the the the technology in partners. technology are while While now took where monthly rolling this we're the some to us product, to out scale It of is we processes Google-related pleased with worked similar generating requires the we we ensure with the of very SystemX high develop at product time, product. it point in process place it results, past, in new have are could over confident, we to Google

do, not consumer and what are then use owned and of our scaled. capabilities scale are shopping offer currently planning products. are new a X partners. explore these The done where we've operated in our market to new we to we So are under-indexed, to and scale segments we huge then we subscription areas next and invest always X currently areas are markets Both our

slightly have them. different approaches of for We each

with approach being will current For shopping, large we networks, shopping to similar advertising Google partner focused of with Yahoo!. partnering our likely in

subscription are we scale a approach with successful have networks operate commerce. the exploring million better to out already these option know a is We network still X revenue. We our a advertising believe own with than we different build products partnering hundreds in in direct attempting we of subscription. partnerships, take the subscription We but of with that shown associated into dollars MapQuest, past had and might

also engines, some subscription. categories for right already operate be have browsers in that that We we consumer operate huge We we could search run. businesses

big big also have in and mapping We services, shopping. we're

building to talking products ability 'XX, with our to scale traditionally our and pretty flexible our by So but parts few good earnings it want purchasing products. in in a while support we also overall We we products RAMP on will and capabilities out scale The be also OpEx very plugging efforts buy-side volatility. have cause of businesses, supporting is R&D. exploring partnering about business minimal to our marketing-driven RAMP existing we will that drive saw fast take in marketing and will own new as comments can consider sell-side increase XXXX minutes built straightforward. specifically. also our these and business, in our and these with new be businesses organic focused are our very can traffic. subscription only in or I thing We've The

seek comprised Now consumers of and day. every use out our are businesses in contrast, product that utilities

off RoadWarrior CouponFollow example, over mapping users or preferred RoadWarrior that save Google drop helps And enables helps more by usage, be find Startpage primary are privacy. ways. For provides it who Because browser on whether not marketing private of is X products, apps. in to is drivers and they're codes for money to one of which from and marketing-driven Maps, do browsers distinct mobile our delivery Apple people Starpage each related simply require promo efficiently. supported people MapQuest generate packages products business its extension, or MapQuest when part search CouponFollow, shopping. them they web the these properties our these our the

First, and market. shifts more less to tied their consistent digital revenues the in are advertising overall

with lines marketing percentage change revenues independently Second, different them. are I The and detail these about in Tridi am reporting plan margin them a go in they to second remarks. businesses from businesses. more we our dynamics are of much as product performance quarter. into very this presenting pleased spend much we enough begin higher our lower his marketing of Overall, will our the that

Our show up very the over SystemX executing has and in to financial execution been it's last starting performance. to see well gratifying team year that our

yet shareholder group in overwhelming section once management where we to and hitting but direction. of like our targets. would largest very to again plan are in remind is SystemX tied equity hit our support highly the We the those new to I yours. close your EBITDA with my you of To are interests aren't and We our to moving be, we that things aligned targets, want right appreciate intend call,

I'll to Tridi things you our guidance. our results quarterly mode, ride. Take growth we're now well As discuss for along detail to Tridi. as our hand as QX back into business in to it away, the excited off gets have more

Tridivesh Kidambi

Michael. Thanks,

We highlighted quarter growth are million $XXX,XXX and pleased performance with and of EBITDA quarter-over-quarter gross versus by growth in our QX. of adjusted $X.X profit sequential adjusted second trends XX%

declines While several with from we of in initiatives financial by to year-over-year demand downs metrics was year, we significantly last driven saw expenses key advertising EBITDA, step quarters QX and adjusted going year-over-year. the down remain grew QX the which sequential cost-cutting narrowed past due operating metrics to XX% year-over-year challenged even over the our overall our across

of revenue decline was million, Now million in XX%. guidance $X.X sequential revenue revenue sequentially. end QX. the advertising segment We our Adjusted XX% of operated but guidance less gross sequentially up on $XX.X and $XX.X our prior significantly session by XX% fees $XX.X was which sequentially. session year-over-year X% the $X.XX, profit sequentially. to narrowed million. year-over-year Revenue down decline, operated above and specific X% per our top Revenue and Owned to that $X.XX of down $X.X above less XX% XX% both year-over-year was but cost $XX.X year-over-year QX the and a May. versus $XX.X million end million, XX% revenue increase million, operating per for operated $X.XX up spend and was respectively. was our gross flat in QX and to we up Network advertising quarter. million agency high $XX.X profit revenue results. grew revenue to was provided XX% X% owned up and year-over-year, Owned were sequentially down Network million, Adjusted was was representing

by was On billion, the sessions quarter per $X.XX year-over-year. XXX% in Most RAMP $X.XX Network session. processed XX% Advertising and total most was Business, sequentially RPS the recent importantly, up

advertising revenue during referrals here traffic were in traffic, remarks, sources. to and instead take navigation, businesses. RPS mentioned Startpage today growth wanted paid on and as rely driven these CPM are MapQuest I trends organic on primarily Michael international focus and and they dependent A is time lower traffic which such CouponFollow, key As some composed by drive on direct to RPS engines. products, primarily all to and CPS primarily our our to operated owned are of unpaid that search of these not businesses feature and his

some in profit. result, significant portion a operated they XX% gross XX% revenue, QX, diversification it. while and gross revenue more operated of is and comprise paid total and adjusted that a revenue of of they profit profit our portion business owned XX% QX. As gross a owned in XX% versus and they the make total advertising adjusted up of our smaller comes provide nice of with our of volatility Also,

businesses XX-Q and and in report million gross performance gross up our add-backs today in XX%. restructuring. reorganized performance QX, businesses, year-over-year our of provide revenue was recently EBITDA. of XX% information our up expenses almost results, expenses was and Please these adjusted information profit earlier historical In down easily structure We was these Sequentially, year-over-year. net the revenue quarter-over-quarter businesses. more up up was the financials. more overall down $XX.X with and products we starting for operating was QX. $X on to this On million, Also, and profit to QX For corporate XX% supplemental XX% XX% of the current will filed our operating on review

the versus We the outstanding million And the beyond. and even structure and operating loan at respect above our rationalize have year. agreement. of the EBITDA back been of our in half under security of year-to-date, Adjusted liquidity, million expense end with drive of we expect we've in the more of versus million. the following savings EBITDA ended hard $X.X expenses on on by sale balance cost quarter million cash to $X.X XXXX reduced last basis working to heading QX range year. year an annualized term balance to the an last high our $XXX With million operating of and unrestricted total we million end already Adjusted XXXX, sheet came into by was guidance $X.X $XX.X debt credit $XX

basis quarter Our net a leverage at on approximately was consolidated X.Xx. end

been we have the we uncertainty of operate. much haven't advertising saw in earlier well quite environment there volatility we seen as online as in Although bit the which is in executing still a year, and

QX the So we expect relatively historically, that has down benefited is QX well. worth been provide seasonal as typically we noting flat this year guidance. to from has to versus will trends, quarterly It same to QX, continue see while and

flat in and year-over-year between roughly $XX We the are $XX at million estimating midpoint. come QX revenue million, to

against We estimate and $XX at million, bps profit come also the year-over-year QX expansion gross gross to with midpoint. XXX adjusted adjusted focused to EBITDA estimating us are in remain flat also and about but We of midpoint, the remain between between in $XX and joining opportunities the $XX come at million near margin and up outer at bullish execution. ability to year-over-year on midpoint. We that our million financial today. for execute million, reflect Thank delivering results that both $X you XX%

Michael Blend

Tridi. you, Thank

are going open now to We for questions. the some line

Operator

floor question Thank of now from open is Company. line Your first Benchmark Kurnos for Daniel you. questions. comes the The Instructions] [Operator of

Daniel Kurnos

kind seasonality. lot pause There's around guidance? And up to marketplace be year what Tridi simplistic 'XX, all a you your this of guys as outlined, framework ask how you just the seeing we help actually giving time some get whether new of that frame, unpack just some Nice us the progress. that's to contributing Michael, what into you maybe of but back here, you initiatives, P&L. following historical the of or the questions half at it's on commentary should contribution and in forward we'll over start anything with about towards the of given just you're expecting thinking look Are the least initiatives

Tridivesh Kidambi

Dan, this is Tridi.

I get question there. the yes, easy So

first is short So to answer no your question.

was what line in be. QX we thought So with would it

QX I'll would that anything to kind seeing I give week any commentary through behave been first on to them May behave forâ€¦ advertising expect And across back think and us specific of the with kind maybe would news we coming in anything that's turn were of the seen in it part of that or knocking pause over mentioned kind so. of the last even Michael haven't QX our macro And we or around off here. we markets the last as that held QX given or of verticals in we sequentially

Michael Blend

Yes. Thanks, Dan.

expecting initiatives, our so uptick about contribution first contribution of Tridi when guidance any in very QX, and would of talks the de terms new QX all, efforts. that from anticipate the also no new seasonal in minimis or of So our

improvement -- we first buy confident in buy-side significant we're modeling our an now. for any the to not we that the of to let terms over them XXXX, scale them, they that's where opening our are platform In but in most now. And of really right and of we'll beyond are up partners, contribution substantially if ongoing highly is all on our side speak. We're going partners kind not as partners, lighting start of

do our in results. partners really, again, new scale the For QX, some market have side us. second kind shopping, market into least commerce anticipating of product QX. on anticipate we early half do it having We're are If in unanticipated one really, at the we not the really kind of would see just one of for there upside getting then be that in of on year. we and with that And subscription, in

is to Again, we to One not market testing. any -- substantial X modeling all of complete these, back ready reiterate, for a pretty being contributions the close of on year. but them in one our those first just the in any of of half be in initiatives and will

Daniel Kurnos

That a cookies decided that I Maybe probably more relief. at Michael. just place helpful guess, like really up of in third-party industry, whole comprehensive. not I bit It Google and feels I'll alternative solution that. and now sigh breathes follow super deprecate they fun appreciate quickly. question, has to It's is this a But point. a the have no of anymore

kind So you've just going sandbox I'm hold it reactions you kind now privacy for what think that will of forward, future? anything is curious foreseeable CPMs of on sort changes seen the impact that of how if

Michael Blend

Yes.

So solutions. some monetization competitive up pretty starting with to Google we the to the happen we're hadn't going What of in market. QX, to surprised hearing technically fully is just be for see to change. the starting past, testing we on that really you take I able will and been of current a that talked testing come in solution think But that being show to a stance It's are come I Dan, We and know weren't competitive they were with was that the be delay up that the We've the fairly to get had and of to the with out is lot not is replacement was volatile I things. way Obviously, this people of Google complex market. I've they talked a anticipating the been that indefinitely done that's hearing pretty and they simply cookie kind cookie about going of hearing now. a in side. what that expecting really lot deprecation implement. rumblings about has been if much rolled had not

So like, the what lot a really sigh effects again, stance people that probably our of were letting I I'm and more industry do We do. they're as relief. a think I to whole, doesn't breathing on guess, think like bit is think, business were, they our about the and we affect a of sure going concerned it a

Daniel Kurnos

for ask the Last Michael, me always about it's come, I'll international, it always me, I step aside. you you highlighted tell and on you this quarter.

So just love think GEOS, been should had to to to will you've in where And particular much the factor be hear in if accelerating able 'XX? growth international contributing success. there's how verticals that you've what particular be target you a

Michael Blend

it on Pengo South their in international that's had with quarters. we're seeing in We're international. We're pretty Asia, attached up, programmatic success TikTok programmatic bit in scaling now TikTok last Pengo. and well. right We've network markets of a is particular, Europe across been in to couple bullish seeing of almost over markets. a America, relationship the our all lot overall that the as business. And We've

of I those see continue, going continue contribution more down. if right to I overall particularly ask we've a of But say So figured you things business, that tuning things rapid think ahead growth growth really to to take international current more overall programmatic to think a of have kick And been already. us, of don't going revenue. platform lot got those market, the and to we and our There's if continuing our are attack We've me, trends it's slow out, our starting to do we would to to trends lot to we're internationally. international. in see idiosyncratic in pretty you and a now, more focus

the anymore. actually on We're comp seeing not So it.

Operator

are time. this to further There will for closing I Blend questions the conference remarks. at back no Michael now over turn

Michael Blend

for us Okay. everybody, joining today. Great. Well, thanks,

we to clear today, SystemX. move is here As our the Overall, team remarks in executing well. really really things in make to at starting tried right our direction are

market, also the what side here both our over And years. pleased digital seeing last customers been X.X stability side. looking are on we've major partner our we're revenue is in and for for advertising some Our the overall, decent on which

to for join looking And some news good. We're things looking have you good you report again some forward hoping we out definitely for then QX earnings, are pretty as are well. to and us

for thank you joining. So

Operator

This conference call. concludes today's

may You disconnect. now

System1 (SST) 8 Aug 242024 Q2 Earnings call transcript