REG - System1 Group PLC - Trading Update

System1Announcement

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RNS Number : 2593Q  System1 Group PLC  09 July 2025

 

                   9 July 2025

 

 

System1 Group PLC (AIM: SYS1)

 ("System1", or "the Company", or "the Group")

 

First Quarter Trading Update

 

 

Alongside today's FY25 Final Results announcement, System1, the marketing
decision-making platform www.system1group.com (http://www.system1group.com)
issues an update on trading for the first quarter of the financial year ending
31 March 2026 (Q1 FY26).

 Revenue £ million - unaudited        Q1    Q1    Q1
                                      FY26  FY25  % YoY
 Predict Your (data)                  6.8   6.8   0%
 Improve Your (data-led consultancy)  1.5   1.8   -13%
 Platform Revenue                     8.3   8.6   -3%
 Other consultancy (non-platform)     0.5   0.9   -47%
 Total Revenue                        8.8   9.5   -7%

 

Total Q1 FY26 Revenue of £8.8m was 7% below the equivalent quarter last year,
with Platform Revenue down 3% to £8.3m and non-platform consultancy falling
as expected by 47% to £0.5m.  The overall revenue performance, similar to Q4
FY25, reflects the caution we have seen from certain clients, particularly in
Europe with automotive and premium drinks brands, following the announcement
of the US trade tariffs.  It should also be noted that currency movements
impacted the Q1-on-Q1 revenue comparisons by approximately 4% with the change
in USD being of particular note.

 

We believe these tariff effects to be temporary and can also point to several
positive results from Q1 FY26.

 

Total Innovation revenue increased by 19% v Q1 FY25 reflecting System1's
increased investment and focus on this market and providing an encouraging
signpost for future growth in this significant product space. We expect
Innovation revenue to grow increasingly as we progress through FY26.

 

Platform Revenue comprised 95% of Total Revenue in Q1 FY26 (Q1 FY25: 90%).

 

New business performance was strong, despite the wider economic conditions,
with over 80 new client wins in Q1 driving over £1m of revenue. These wins
added to our significant base of clients who use the Platform and provide a
material growth opportunity as revenue builds from this expanded client base.
New wins included a global mass media and entertainment business, one of the
world's two largest ice cream companies, and a global top 3 video gaming
brand.

 

US revenue performance was particularly strong, pushing US Platform revenue to
a record quarterly figure, 16% higher than Q1 FY25 in GBP despite a 7% weaker
US dollar compared to Q1 FY25.

 

System1 published groundbreaking thought leadership
(https://system1group.com/creative-effectiveness-tiktok) in partnership with
TikTok and Effies, launched to great effect at Cannes Lions Advertising
Festival in June. At the same time the business launched a new Test Your Ad
Social product, targeting digital advertising, the fastest growing ad spend
area.

 

We achieved an 86% gross profit margin in Q1 FY26, ahead of our 85% benchmark
and 1% below Q1 FY25.

 

Net cash at the end of Q1 was a healthy £11.7m (Q1FY25: £8.1m). This is
after planned tax and bonus payments.

 

Outlook for FY 26

 

Based on strength in our US and UK businesses together with a slower recovery
in Europe the Board expects the following for FY 26

-     Overall revenue to grow at approximately 15% year on year

-     H2 revenue expected to be seasonally stronger than H1, in line with
historic trends

-     Profits expected to be in line with Board expectations based on
prudent cost controls and continued investments as previously noted in US
growth, innovation and go to market

 

Commenting on the results and outlook, CEO James Gregory said:

 

"We are confident that the business remains on track to achieve its
medium-term objectives. I am greatly encouraged by the progress already made
this year in our key target areas, specifically the US market and the
Innovation product space.  New business growth remains strong, however
existing client spending has tightened in the past few months in response to
US tariffs, as we said it might in April, and exchange rates have worked
against us by reducing the Sterling value of our top line.  We believe these
are relatively short-term effects and remain focused on winning for our
clients and shareholders over the medium and long term. In the near term we
are focused on continuing to deliver strong growth in FY26."

 

Further information on the Company can be found at www.system1group.com
(http://www.system1group.com) .

 

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.

 

For further information, please contact:

 System1 Group PLC                                           Tel: +44 (0)20 7043 1000
 James Gregory, Chief Executive Officer
 Chris Willford, Chief Financial Officer
 Canaccord Genuity Limited (Nominated Adviser & Broker)      Tel: +44 (0)20 7523 8000
 Simon Bridges / Andrew Potts / Harry Rees

 

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