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

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 presentation 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:

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

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