System1 (SST) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue declined 61% year-over-year to $30.2 million, primarily due to reduced marketing activities and the termination of a key Google monetization agreement.

• Net loss attributable to shareholders was $12.6 million, with a GAAP net loss of $15.3 million for the quarter.

• Adjusted EBITDA was $1.9 million, down sharply from the prior year.

• Management raised substantial doubt about the ability to continue as a going concern due to negative net working capital and declining cash flows.

• Launched new AI-driven products, including MapQuest MCP server, Dogpile Fetch, and IntentStream, and completed a major debt exchange reducing gross debt by half.

Financial highlights

• Q2 2026 revenue was $30.2 million, down from $78.1 million in Q2 2025.

• Adjusted gross profit was $25.5 million (85% margin), down from $41.0 million in Q2 2025.

• Operating expenses (net of ad backs) were $23.6 million, down 20% year-over-year and 8% sequentially.

• Cash and cash equivalents at June 30, 2026, were $40.5 million, down from $86.9 million at year-end 2025.

• Stockholders’ equity turned negative at $(53.0) million as of June 30, 2026.

Outlook and guidance

• Management is focused on cost reduction, operational efficiency, and investing in AI-driven products, but cannot conclude these plans will mitigate going concern risks.

• Revenue is expected to remain pressured due to dependency on key advertising partners and macroeconomic headwinds.

• No Q3 or full-year guidance provided due to ongoing market volatility.