Exhibit 99.1

 

System1 Announces Fourth Quarter & Full-Year 2021 Financial Results

Full-Year Revenue Up 47% Year-Over-Year to $833 Million, with Fourth

Quarter 2021 Revenue Up 48% Company Increases Guidance for 2022

LOS ANGELES, CA – April 4, 2022 – System1, Inc. (NYSE: SST) (“System1”), an omnichannel customer acquisition marketing platform, announced its results for the fourth quarter and full-year 2021, which represents the combined results of S1 Holdco, LLC (“S1 Holdco”) and Protected.net Group Limited (“Protected.net”) on a pro forma basis.

Michael Blend, Co-Founder & Chief Executive Officer of System1, commented, “We are excited to report our fourth quarter and full year 2021 results, which demonstrate the increasing value of our RAMP technology platform, while we continue to focus on growing our advertising and subscription businesses. For 2022, we see numerous opportunities to expand our business and will continue to invest in and innovate on our RAMP technology platform. As a new public company, we welcome our new shareholders who are joining us as we solidify our position as a leading privacy-centric digital marketer.”

Note

In January 2022, S1 Holdco and Protected.net combined with Trebia Acquisition Corp. (“Trebia”). The 2021 results of Trebia are excluded from this discussion of 2021 financial results, but the separately audited 2021 financial statements of Trebia, S1 Holdco and Protected.net are included in System1’s filings with the SEC. Refer to the tables at the end of this release to reconcile the pro forma results as presented herein to the individual financial results of S1 Holdco and Protected.net.

Fourth Quarter 2021 Financial Highlights

 

•

Revenue increased 48% year-over-year to $239 million compared to $161 million in the prior year.

 

•

Net income was $31 million compared to $7 million in the prior year.

 

•

Adjusted EBITDA increased 65% year-over-year to $37 million compared to $23 million in the prior year.

Full-Year 2021 Financial Highlights

 

•

Revenue increased 47% to $833 million compared to $567 million in the prior year.

 

•

Net income was $77 million compared $3 million in the prior year..

 

•

Adjusted EBITDA increased 103% to $127 million compared to $63 million in the prior year.

 

Full-Year 2022 Guidance

 

•

The Company expects revenue of $1.0 billion, up 20% year-over-year and Adjusted EBITDA of $174 million, up 37% year-over-year, respectively, for the full year 2022.

 

•

The guidance presented above includes the contribution of the RoadWarrior and CouponFollow acquisitions completed in Q1 2022, with such acquisitions accounting for $25 million of revenue and $15 million of Adjusted EBITDA reflected in the full year 2022 guidance.

Business Highlights

 

•

On January 28, 2022, System1, Inc. started trading on the New York Stock Exchange under the ticker symbol “SST.”

 

•

On February 10, 2022, the Company completed the acquisition of RoadWarrior, a subscription app focused on route planning for today’s ever-growing gig economy drivers.

 

•

On February 11, 2022, the Company announced that it has been named Microsoft Advertising’s 2021 Supply Partner of the Year Americas. This highly coveted award is given to the supply partner who has shown excellence in partnership with Microsoft Advertising across the board.

 

•

On March 4, 2022, the Company acquired CouponFollow, one of the largest coupon destinations for online shoppers.

About System1

System1 combines best-in-class technology & data science to operate its advanced Responsive Acquisition Marketing Platform (RAMP). System1’s RAMP is omnichannel and omnivertical, and built for a privacy-centric world. RAMP enables the building of powerful brands across multiple consumer verticals, the development & growth of a suite of privacy-focused products, and the delivery of high-intent customers to advertising partners. For more information, visit www.system1.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes “forward-looking statements “ within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, particularly any statements or materials regarding System1’s future results or “guidance” for fiscal year 2022. Forward-looking statements include, but are not limited to, statements regarding System1 or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause System1’s actual financial results or operating performance to be materially different from those expressed or implied by these forward-looking statements. Readers or users of this press release should evaluate the risk factors summarized below, which summary list is not exclusive. Readers or users of this press release should also carefully review the “Risk Factors” and other information included in our registration statements on Form S-4 (including the related proxy statement/prospectus) with respect to the business combination with Trebia Acquisition Corp. and on Form S-1 filed with the Securities and Exchange Commission (the “SEC ”), as well as System1’s Form 10-K, Form 8-K and other reports filed with the SEC from time to time. Please refer to the SEC filings for additional information regarding the risks and other factors that may impact System1’s business, prospects, financial results and operating performance following completion of the business combination.

Such risks, uncertainties and assumptions include, but are not limited to: (1) our ability to grow and manage growth profitably, and retain its key employees; (2) our ability to acquire businesses on acceptable terms and to successfully integrate and recognize anticipated synergies from acquired businesses; (3) use of cash and other available liquidity to grow and invest in our businesses; (4) continued growth of our digital media and subscription offerings; (5) international growth; (6) our ability to develop or introduce new products, services, features and technologies; (7) our liquidity and our ability to repay or refinance our outstanding indebtedness; (8) technology, platform and infrastructure systems capacity, coverage, reliability and security; (9) changes in or recent developments related to applicable laws or regulations (including those concerning data security, consumer privacy and/or information sharing); (10) the possibility that we may be adversely affected by other economic, business, and/or competitive factors; and (11) the impact of Covid-19 and other political or societal developments. The foregoing list of factors is not exclusive.

Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from any forward-looking statements contained in this press release. System1’s independent auditors have not audited, reviewed, compiled or performed any procedures with respect to the forward-looking statements for the purpose of their inclusion in this press release, and accordingly, do not express an opinion or provide any other form of assurance with respect thereto for the purpose of this press release. System1 will not undertake any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that such trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.

Non-GAAP Measure Adjusted EBITDA

Adjusted EBITDA is a non-GAAP financial measure and represents a key metric used by System1’s management and board of directors to measure the operational strength and performance of its business, to establish budgets, and to develop operational goals for managing its business. Adjusted EBITDA is defined as net income (loss) before interest expense, income taxes, depreciation and amortization expense, deferred compensation, management fees, minority interest expense, restructuring charges, impairment and certain discrete items impacting a particular segment’s results in a particular period.

System1 believes Adjusted EBITDA is relevant and useful information for investors because it allows investors to view performance in a manner similar to the method used by management. There are limitations on the use of Adjusted EBITDA and it may not be comparable to similarly titled measures of other companies. Other companies, including companies in System1’s industry, may calculate non-GAAP financial measures differently than System1 does, limiting the usefulness of those measures for comparative purposes.

Adjusted EBITDA should not be considered a substitute for income (loss) from operations, net income (loss), or net income (loss) attributable to System1 on a consolidated basis that System1 reports in accordance with GAAP. Although System1 uses Adjusted EBITDA as a financial measure to assess the performance of its business, such use is limited because it does not include certain costs necessary to operate System1’s business. System1’s presentation of Adjusted EBITDA should not be construed as indications that its future results will be unaffected by unusual or nonrecurring items.

The Company is not able to reasonably reconcile Adjusted EBITDA to net income, its nearest GAAP metric, in its guidance for future periods due to uncertainties regarding purchase accounting, stock-based compensation, taxes and other potential adjustments

The following tables reconcile net income (loss) to Adjusted EBITDA for the periods presented for S1 Holdco and Protected.net:

 

		3 mos ended Dec 31								12 mos ended Dec 31
S1 Holdco, LLC		2020				2021				2020				2021
($ in millions)
Net Income		$	7.0			$	3.1			$	16.4			$	33.0
Plus:
Income Tax Expense			1.5				0.3				1.9				1.0
Interest Expense			5.8				4.2				24.4				16.9
Depreciation & Amortization			3.1				3.6				13.8				13.9
Other Expense			0.2				0.1				0.4				0.1
Stock-Based Compensation			3.4				3.5				9.5				9.6
Terminated Product Lines			—				—				0.6				—
Acquisition & Restructuring Costs			1.3				8.0				3.8				13.7
Acquisition Earnout			0.1				0.0				2.7				0.2
Adjusted EBITDA		$	22.2			$	22.7			$	73.4			$	88.3
		3 mos ended Dec 31								12 mos ended Dec 31
Protected.net Group Ltd.		2020				2021				2020				2021
($ in millions)
Net Income (Loss)		$	(0.4	)		$	27.7			$	(13.3	)		$	43.6
Plus:
Income Tax Expense			—				(16.1	)			—				(15.2	)
Interest Expense			0.1				(0.1	)			0.4				(0.4	)
Depreciation & Amortization			0.0				0.1				0.1				0.2
Other Expense			0.4				2.1				3.0				8.8
Stock-Based Compensation			—				—				—				—
Terminated Product Lines			(0.3	)			(0.0	)			(1.8	)			0.1
Acquisition & Restructuring Costs			0.5				0.7				0.5				1.7
Acquisition Earnout			—				—				—				—
Adjusted EBITDA		$	0.3			$	14.3			$	(10.9	)		$	38.9

 

		3 mos ended Dec 31								12 mos ended Dec 31
Net Income		2020				2021				2020				2021
($ in millions)
S1 Holdco, LLC		$	7.0			$	3.1			$	16.4			$	33.0
Protected.net Group Ltd.			(0.4	)			27.7				(13.3	)			43.6
Net Income		$	6.6			$	30.8			$	3.1			$	76.5
		3 mos ended Dec 31								12 mos ended Dec 31
Adjusted EBITDA		2020				2021				2020				2021
($ in millions)
S1 Holdco, LLC		$	22.2			$	22.7			$	73.4			$	88.3
Protected.net Group Ltd.			0.3				14.3				(10.9	)			38.9
Adjusted EBITDA		$	22.5			$	37.0			$	62.5			$	127.1

 

The following tables reconcile consolidated Revenue for the periods presented for S1 Holdco and Protected.net:

 

		3 mos ended Dec 31								12 mos ended Dec 31
Revenue		2020				2021				2020				2021
($ in millions)
S1 Holdco, LLC		$	135.8			$	199.8			$	476.0			$	688.4
Protected.net Group Ltd.			25.1				39.1				90.9				144.5
Revenue		$	160.9			$	238.9			$	566.9			$	832.9

Contacts:

Investors

Ashley DeSimone

ICR, Inc.

Ashley.desimone@icrinc.com

Brett Milotte

ICR, Inc.

Brett.milotte@icrinc.com

S1 Holdco

Unaudited Statements of Operations

(in thousands)

 

		QTD				QTD				QTD				QTD				QTD				QTD				QTD				QTD				YTD				YTD				YTD				YTD				YTD				YTD
		31-Dec-21				30-Sep-21				30-Jun-21				31-Mar-21				31-Dec-20				30-Sep-20				30-Jun-20				31-Mar-20				31-Dec-21				30-Sep-21				30-Jun-21				31-Dec-20				30-Sep-20				30-Jun-20
Revenue			199,803				171,446				169,579				147,561				135,755				117,268				100,019				122,935				688,389				488,586				317,140				475,977				340,222				222,954
Operating cost and expenses:
Cost of revenues			155,276				128,885				126,167				110,785				96,635				83,892				73,937				86,532				521,113				365,837				236,952				340,996				244,361				160,469
Salaries, commissions, and benefits			18,715				15,139				17,698				15,195				15,915				13,120				13,183				13,330				66,747				48,032				32,893				55,548				39,633				26,513
Selling, general, and administrative			14,650				7,936				6,277				6,950				5,863				7,095				4,879				5,142				35,813				21,163				13,227				22,979				17,116				10,021
Depreciation and amortization			3,625				3,459				3,112				3,689				3,082				3,331				3,889				3,530				13,885				10,260				6,801				13,832				10,750				7,419
Total operating costs and expenses			192,266				155,419				153,254				136,619				121,495				107,438				95,888				108,534				637,558				445,292				289,873				433,355				311,860				204,422
Operating income			7,537				16,027				16,325				10,942				14,260				9,830				4,131				14,401				50,831				43,294				27,267				42,622				28,362				18,532
Interest expense			4,162				4,184				4,476				4,048				5,781				5,741				6,332				6,497				16,870				12,708				8,524				24,351				18,570				12,829
Income (loss) from continuing operations before income tax			3,375				11,843				11,849				6,894				8,479				4,089				(2,201	)			7,904				33,961				30,586				18,743				18,271				9,792				5,703
Income tax expense			262				475				77				151				1,527				198				(173	)			355				965				703				228				1,907				380				182
Net income (loss) from continuing operations			3,113				11,368				11,772				6,743				6,952				3,891				(2,028	)			7,549				32,996				29,883				18,515				16,364				9,412				5,521
Gain (loss) from discontinued operations, net of taxes			—				—				—				—				55,315				99				(4,460	)			(3,557	)			—				—				—				47,397				(7,918	)			(8,017	)
Net income			3,113				11,368				11,772				6,743				62,267				3,990				(6,488	)			3,992				32,996				29,883				18,515				63,761				1,494				(2,496	)

S1 Holdco

Unaudited Condensed Balance Sheet

(in thousands)

 

		31-Dec-21				30-Sep-21				30-Jun-21				31-Mar-21				31-Dec-20				30-Sep-20				30-Jun-20				31-Mar-20
ASSETS
Current Assets:
Cash and cash equivalents		$	47,896			$	36,209			$	34,567			$	30,853			$	29,013			$	37,657			$	33,985			$	55,763
Accounts receivable, net of allowance for doubtful accounts			90,203				85,588				79,446				75,610				71,140				58,404				53,662				66,331
Prepaid expenses and other current assets			7,689				7,236				4,870				3,996				3,016				4,012				4,825				5,739
Assets of discontinued operations			—				—				—				—				—				20,602				13,936				13,229
Total current assets			145,788				129,033				118,883				110,459				103,169				120,675				106,408				141,062
Restricted Cash		$	743			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Property and equipment, net			830				836				916				976				1,057				1,137				1,139				1,243
Internal-use software development costs, net			11,213				11,012				10,578				9,764				9,660				10,079				9,414				9,045
Intangible assets, net			50,368				52,534				54,698				56,740				59,009				60,829				52,638				54,764
Goodwill			44,820				44,820				44,820				44,820				44,820				44,820				54,566				54,898
Due from related party			2,469				2,469				2,453				1,222				969				969				—				—
Other assets			680				529				—				—				—				—				—				—
Assets of discontinued operations			—				—				—				—				—				67,714				69,138				70,101
Total Assets		$	256,911			$	241,233			$	232,348			$	223,981			$	218,684			$	306,223			$	293,304			$	331,114
LIABILITIES AND MEMBERS’ DEFICIT
Current Liabilities:
Accounts payable		$	72,846			$	64,625			$	60,659			$	57,410			$	52,104			$	40,690			$	34,058			$	42,476
Accrued expenses and other current liabilities			33,255				22,419				21,197				12,041				19,039				18,714				16,764				20,048
Notes payable, current			170,453				171,780				4,739				9,374				9,374				19,347				24,347				44,237
Liabilities of discontinued operations			—				—				—				—				—				62,523				56,303				47,141
Total current liabilities			276,554				258,824				86,595				78,825				80,517				141,274				131,473				153,902
Notes payable, non-current		$	—			$	—			$	168,226			$	169,411			$	170,595			$	226,417			$	228,469			$	229,432
Other long-term liabilities			8,758				9,368				9,051				16,497				15,801				12,935				11,821				13,208
Liabilities of discontinued operations			—				—				—				—				—				—				—				—
Total liabilities		$	285,312			$	268,192			$	263,872			$	264,733			$	266,913			$	380,626			$	371,763			$	396,543
Commitments and contingencies (Note 8)
Members’ deficit:
Members’ deficit in S1 Holdco			(28,829	)			(27,182	)			(31,646	)			(40,850	)			(47,886	)			(74,078	)			(78,017	)			(64,753	)
Accumulated other comprehensive income			428				223				122				98				(343	)			(325	)			(443	)			(675	)
Total members’ deficit			(28,401	)			(26,959	)			(31,524	)			(40,752	)			(48,229	)			(74,403	)			(78,460	)			(65,428	)
Total Liabilities And Members’ Deficit		$	256,911			$	241,233			$	232,348			$	223,981			$	218,684			$	306,223			$	293,303			$	331,115

S1 Holdco

Unaudited Condensed Statements of Cash Flow

(in thousands)

 

		QTD				QTD				QTD				QTD				QTD				QTD				QTD				QTD				YTD				YTD				YTD				YTD				YTD				YTD
		31-Dec-21				30-Sep-21				30-Jun-21				31-Mar-21				31-Dec-20				30-Sep-20				30-Jun-20				31-Mar-20				31-Dec-21				30-Sep-21				30-Jun-21				31-Dec-20				30-Sep-20				30-Jun-20
Cash Flows From Operating Activities:
Net cash provided by operating activities of continuing operations			21,336				12,056				17,185				10,128				15,714				12,971				9,122				14,600				60,705				39,369				27,313				52,407				36,693				23,722
Net cash used for operating activities of discontinued operations			—				—				—				—				(1,917	)			1,979				(390	)			(5,532	)			—				—				—				(5,860	)			(3,943	)			(5,922	)
Net cash provided by operating activities			21,336				12,056				17,185				10,128				13,797				14,950				8,732				9,068				60,705				39,369				27,313				46,547				32,750				17,800
Cash Flows From Investing Activities:
Purchases of property and equipment			(49	)			—												(11	)			(8	)											(49	)			—				—				(19	)			(8	)			—
Proceeds from sale of Protected			—				—												74,544				—												—				—				—				74,544				—
Expenditures for internal-use software development costs			(1,585	)			(1,668	)			(1,793	)			(1,440	)			(617	)			(1,632	)			(1,970	)			(1,893	)			(6,486	)			(4,901	)			(3,233	)			(6,112	)			(5,495	)			(3,863	)
Net cash provided by (used in) investing activities of continuing operations			(1,634	)			(1,668	)			(1,793	)			(1,440	)			73,916				(1,640	)			(1,970	)			(1,893	)			(6,535	)			(4,901	)			(3,233	)			68,413				(5,503	)			(3,863	)
Net cash provided by (used in) investing activities of discontinued operations			—				—				—				—				(142	)			(79	)			144				(170	)			—				—				—				(247	)			(105	)			(26	)
Net cash provided by (used in) investing activities			(1,634	)			(1,668	)			(1,793	)			(1,440	)			73,774				(1,719	)			(1,826	)			(2,063	)			(6,535	)			(4,901	)			(3,233	)			68,166				(5,608	)			(3,889	)
Cash Flows From Financing Activities:
Proceeds from line of credit			—				—				—				—				—				—				—				20,000				—				—				—				20,000				20,000				20,000
Repayment of line of credit			—				—												(34,862	)			—												—				—				—				(34,862	)			—
Repayment of term loan			(1,750	)			(1,750	)			(6,386	)			(1,750	)			(32,231	)			(7,715	)			(21,727	)			(1,750	)			(11,636	)			(9,886	)			(8,136	)			(63,423	)			(31,192	)			(23,477	)
Payments for deferred financing cost			(382	)			—				—				—				—				—				—				—				(382	)			—				—				—				—				—
Member capital contributions			(32	)			109				3				147				206				551				747				751				227				259				150				2,255				2,049				1,498
Payments on contingent consideration			—				—				(1,715	)			(5,000	)			—				—				(5,038	)			(462	)			(6,715	)			(6,715	)			(6,715	)			(5,500	)			(5,500	)			(5,500	)
Related party loan			—				—				(1,500	)			—				—				—				—				—				(1,500	)			(1,500	)			(1,500	)			—				—				—
Distributions to members from sale of Protected			—				—												(28,765	)			—												—				—				—				(28,765	)			—
Distributions to members			(4,786	)			(7,102	)			(2,691	)			—				(12,575	)			(1,146	)			(3,558	)			(501	)			(14,579	)			(9,793	)			(2,691	)			(17,780	)			(5,205	)			(4,059	)
Net cash provided by financing activities			(6,950	)			(8,743	)			(12,289	)			(6,603	)			(108,227	)			(8,310	)			(29,576	)			18,038				(34,585	)			(27,635	)			(18,892	)			(128,075	)			(19,848	)			(11,538	)
Effect of exchange rate changes in cash, cash equivalents and restricted cash			(322	)			(3	)			611				(245	)			120				35				130				(735	)			41				363				366				(450	)			(570	)			(605	)
Net Increase In Cash			12,430				1,642				3,714				1,840				(20,536	)			4,956				(22,540	)			24,308				19,626				7,196				5,554				(13,812	)			6,724				1,768
Cash and restricted cash:
Beginning of period			36,209				34,567				30,853				29,013				49,549				44,593				67,133				42,825				29,013				29,013				29,013				42,825				42,825				42,825
End of period		$	48,639			$	36,209			$	34,567			$	30,853			$	29,013			$	49,549			$	44,593			$	67,133			$	48,639			$	36,209			$	34,567			$	29,013			$	49,549			$	44,593

S1 Holdco

Non-GAAP Financials

(in thousands)

 

		QTD				QTD				QTD				QTD				QTD				QTD				QTD				QTD				YTD				YTD				YTD				YTD				YTD				YTD
		31-Dec-21				30-Sep-21				30-Jun-21				31-Mar-21				31-Dec-20				30-Sep-20				30-Jun-20				31-Mar-20				31-Dec-21				30-Sep-21				30-Jun-21				31-Dec-20				30-Sep-20				30-Jun-20
Net Income		$	3,113			$	11,368			$	11,772			$	6,743			$	6,952			$	3,891			$	(2,029	)		$	7,549			$	32,996			$	29,883			$	18,515			$	16,364			$	9,412			$	5,520
Income tax expense			262				475				77				151				1,527				198				(173	)			355				965				703				228				1,907				380				183
Interest expense			4,162				4,185				4,237				4,286				5,781				5,741				6,332				6,497				16,870				12,708				8,524				24,351				18,570				12,829
Depreciation & amortization			3,625				3,458				3,113				3,689				3,082				3,331				3,889				3,530				13,884				10,259				6,801				13,832				10,750				7,419
Other income/expense (1)			70				(25	)			256				(154	)			196				294				138				(229	)			147				77				102				399				202				(91	)
Stock-based compensation and distributions to Members (2)			3,458				673				3,342				2,118				3,362				1,817				2,288				2,008				9,591				6,133				5,460				9,474				6,113				4,295
Terminated product lines (3)			—				—				—				—				—				—				(2	)			559				—				—				—				556				556				556
Costs related to acquisitions/business combinations			7,970				2,755				623				1,484				1,033				222				71				1,032				12,833				4,862				2,108				2,358				1,325				1,103
Acquisition earnout			32				31				32				63				62				2,278				373				—				158				126				95				2,713				2,651				373
Severance costs			3				118				164				330				121				393				545				21				615				612				494				1,080				960				567
Other costs, including restructuring			0				8				98				99				101				11				185				98				206				205				197				396				294				283
Adjusted EBITDA		$	22,696			$	23,046			$	23,715			$	18,809			$	22,217			$	18,177			$	11,616			$	21,420			$	88,265			$	65,570			$	42,524			$	73,430			$	51,214			$	33,036

 

(1)	Non-cash adjustments related to foreign exchange and asset disposals

(2)	Comprised of distributions to equity holders and non-cash stock-based compensation

(3)	In 2020, S1 Holdco terminated its Social Publishing product line, where it created quiz content primarily for the purpose of display advertising monetization. S1 Holdco has excluded revenue and direct costs associated with this product line for all presented periods