System1 reports sharply lower first-half profits
By Josh White
Date: Tuesday 02 Dec 2025
(Sharecast News) - System1 reported sharply lower profits for the first half as reduced spending by major clients and higher operating costs offset modest growth in several overseas markets.
The AIM-traded marketing analytics business recorded a 7% decline in revenue to £17.1m for the six months to 30 September, driven by a 3% fall in platform sales and a 46% drop in non-platform income.
Profit before tax slid 90% to £0.3m, while profit for the period fell 94% to £0.1m, and diluted earnings per share dropped to 0.9p.
The firm said many of its largest customers cut back on market research budgets due to macroeconomic uncertainty, although it continued to add new business, securing £3.4m of revenue from new clients.
Regional performance was mixed, with sales rising 3% in the United States and 11% in Asia-Pacific, but falling 9% in the UK and 5% in Latin America.
Currency movements reduced reported revenue by around two percentage points.
Platform revenue accounted for 95% of total sales, up from 91% in the prior year, as the group continued its strategic pivot toward scalable subscription services.
Innovation revenue grew 26%, but ad testing, historically a key component of demand, fell 10%.
Gross margins remained resilient at 87%, though operating expenses rose 7% to £14.6m due to investment in growth initiatives, partially offset by lower variable compensation.
Adjusted profit before tax, which excludes share-based payments, was £0.3m compared with £2.4m a year earlier.
The company ended the period with £10.8m in cash, down from £12.9m at the end of March, following £2.1m of free cash outflow linked to bonus payments from the previous financial year.
Chief executive James Gregory said the firm had made progress in priority areas despite the tougher backdrop.
"We have made good progress in the focus areas of Innovation, the US and winning with the world's largest brands - and this in the face of reduced market research spend by a number of our large clients," he said.
He added that bookings in October and November had been stronger than in the first half and that System1 continued to trade in line with guidance for full-year revenue to be broadly flat and adjusted profit before tax of £2m to £2.5m.
At 1505 GMT, shares in System1 Group were down 2.35% at 208p.
Reporting by Josh White for Sharecast.com.
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