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Thank you for standing by, and welcome to the Second Quarter 2025 Earnings Conference Call for System1. Joining me today to discuss System1's business and financial results are our Co-Founder and Chief Executive Officer, Michael Blend; and Chief Financial Officer, Tridivesh Kidambi. A recording of this conference call will be available on our Investor Relations website shortly after this call has ended. I'd like to take this opportunity to remind you that during the call, we will be making certain forward-looking statements. This includes statements relating to the operating performance of our business, future financial results and guidance, strategy, long-term growth and overall future prospects. We may also make statements regarding regulatory or compliance matters. These statements are subject to known and unknown risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call, in particular, those described in our risk factors included in our annual report on Form 10-K for fiscal year 2024 filed on March 10 as well as the current uncertainty and unpredictability in our business, the markets and the global economy generally. You should not rely on our forward-looking statements as predictions of future events. All forward-looking statements that we make on this call are based on management's assumptions and beliefs as of the date hereof, and System1 disclaims any obligation to update any forward-looking statements, except as required by law. Our discussion today will include non-GAAP financial measures, including adjusted EBITDA and adjusted gross profit. These non- GAAP measures should be considered in addition to and not as a substitute for or in isolation from our GAAP results. Information regarding our non-GAAP financial measures, including a reconciliation of our non-GAAP financial measures to our most comparable historical GAAP financial measures may be found on our Investor Relations website. I would now like to turn the conference call over to System1's Co-Founder and Chief Executive Officer, Michael Blend.

Thanks, Kyle. Good afternoon, everyone, and thank you for joining System1 on our Q2 earnings call. I'm happy to report Q2 was a very solid quarter for System1 with solid execution driven by our company-wide adoption of Agentic coding. Our adjusted EBITDA came in at $11.7 million, up 18% year-over-year. Second quarter revenue was approximately $78 million and adjusted gross profit was $41 million, representing a 6% year-over-year increase. Our Owned & Operated products continue to perform well and had a particularly strong Q2. Revenue increased 34% year-over-year and 8% sequentially. We saw great performance from each of our major products, which includes Startpage, our private search engine, MapQuest, our mapping solution and CouponFollow, our leading promo code service. We have strong momentum across the entire product portfolio. Our teams are rolling out regular product improvements and in turn, consumers are responding very favorably. In our marketing business lines, we continue to see volatility at our largest revenue source, which is Google. While the overall Google advertising market is relatively stable, the Google Partner Network we work with is going through significant changes. And while our team is doing a nice job navigating the Google volatility, our marketing businesses are not yet back in growth mode. On the technology front, our heavy investment in AI-powered Agentic coding is paying off. We set an ambitious road map for product development and platform expansion in 2025, and we've been executing ahead of schedule on everything. We believe that our investments are going to drive revenue growth while at the same time improving margins. I want to talk briefly about the skill set we have developed around Agentic coding. While many companies talk about engineering efficiencies gained from Agentic coding, System1 is one of the few that is using it to rebuild a sophisticated legacy technology platform. Now this is a very complex project as we have to essentially keep our trains running while rebuilding the engine and tracks at the same time. Looking forward, I think there's a real opportunity to leverage our early adopter Agentic coding skill set to help other companies in a similar way. There are literally thousands of legacy technology platforms that can benefit from this skill set, and there are several ways System1 can participate in the upside of modernizing their platforms. We intend to pursue this opportunity pretty aggressively in the future. Now let's get into more details on our products segment, which, as I mentioned, is on a strong run. We feel it is really important for investors to understand our products business as management believes this segment alone is worth significantly more than investors currently value our entire company. Products revenue was $24 million, up 34% year-over-year and 8% sequentially. Adjusted gross profit was $22.7 million, up 32% year-over-year and up 8% sequentially. This segment is performing very well and is well positioned to sustain this momentum going forward. I'd like to spend some time on each of our major product lines as I know many of our investors have been focused on our marketing segment and may not be as familiar with our product segment. Let's start first with CouponFollow, our promo code and couponing service. CouponFollow is comprised of 3 major product segments. First, we have our CouponFollow website, which is a leading couponing and promo code service in Google's organic rankings. Consumers visit our CouponFollow website when they're looking to find a promo code as they are completing online purchases. In addition to our website, we also have our [ Sinley ] browser extension, which is a patent protected solution that automatically inserts promo codes at checkout when shoppers are on a shopping site. [ Sinley ] operates under its own brand and also powers B2B promo code solutions for third-party web browsers. And finally, CouponFollow offers a nascent cashback shopping business that consumers use to obtain cash rebates when they shop online. Combined, all these businesses are on a roll and Coupon user sessions are up over 40% year-over-year. Now let's talk about Startpage, our private search engine that competes with DuckDuckGo. Startpage offers a search solution that enables consumers to search the Internet while maintaining their privacy. Our Startpage search technology is a sophisticated combination of search results from Google and Bing, proprietary search widgets like mapping and a privacy solution that protects our users' online identity and search history. Similar to CouponFollow, Startpage comprises several business lines. We have our core Startpage search engine, desktop browser extensions and a suite of private mobile browsers that integrate our search engine and maintain users' privacy while they're browsing the Internet. Startpage is growing very quickly, and our users are up 30% year-over-year. In addition to our core search engine, we recently introduced 2 new products in the search and AI space. First, we just launched a new AI privacy product called Vanish Private AI by Startpage. Vanish is a mobile app that allows people to maintain their user privacy while using a variety of popular AI chat bots like ChatGPT. We also recently leveraged our Startpage search engine technology to launch ONE.org, our new charitable search engine. ONE.org lets users support charitable causes like hunger relief and animal welfare just by searching the web. While we don't expect Vanish to displace ChatGPT or ONE.org to overtake Google, the search market is so huge and profitable that a small market share translates into meaningful high-margin revenue. We have shown that with Startpage, and we look to replicate our success with our newer offerings. Our last major product line is MapQuest, the OG of online mapping that I'm sure many of you have fond memories of. We acquired MapQuest several years ago from Verizon, and frankly, the brand was in significant decline when we acquired it. I'm really pleased that we've been able to turn around MapQuest and get it back into growth mode. MapQuest is made up of several complementary businesses. The most well known is our original MapQuest consumer-facing service, which includes both our website and a suite of mobile apps. MapQuest also offers a B2B mapping service where we power mapping for other companies and get paid a usage-based license fee. And finally, we operate a subscription-based mobile app called RoadWarrior, where we help delivery drivers more efficiently plan their driving routes. Like our other products, MapQuest usage is surging and visits from Google are up over 40% annually. Overall, our products business is doing really well. If you're a current System1 investor or considering investing in our company, it's very important that you understand this business segment. Our products business requires low CapEx and low OpEx, and as a result, it is highly cash generative. On a stand-alone basis, and this is important, we believe our combined product businesses are worth significantly more than the current enterprise value of the entire company. An investor in our current market price, you effectively are buying our products segment at a significant discount while holding an option on the upside as our marketing business rebounds. You should also remember that as a result of a corporate reorganization we did last summer, our products business segment is not collateral securing our credit agreement. Overall, we think that the market does not appreciate the true value of our product segment, particularly when you understand our overall corporate and capital structure. All right. Now let's go on into more detail on our marketing segment, which includes both our Owned & operated and partner marketing businesses. As you know, marketing has been going through a rough patch, but remains a significant profit generator. Overall revenue came in at $54 million, reflecting a 29% year-over-year decline, but we did see a 4% increase sequentially. The annual decline primarily was driven by a 36% decrease in our advertising spend. Adjusted gross profit was $20 million, down 17% year-over-year and down 10% sequentially. The sequential decline was driven by a lower return on TAC, or traffic acquisition costs, driven by volatility from the O&O businesses. Advertising spend was up 13% from Q1, but our return on spend decreased significantly. The decline in our marketing segment is solely related to issues in our O&O marketing business that we attribute to volatility in the Google Search Partner Network. O&O revenue has been a significant decline over the past couple of years with both revenue and gross profit down significantly year- over-year. While the decline in this business line has masked our success in our products group, we anticipate the recent declines in our O&O marketing business will begin leveling off over the next couple of quarters, and we're going to have some positive comps going forward. On a positive note, our partner marketing business has been performing quite well throughout the volatility. In our partner business, we work with Google Bing and Yahoo!, and that diversification has helped us weather the Google storm. The partner business continues to remain focused on moving partners to Google's new RSOC product, and we're seeing really good success with that migration effort. In Q2, average revenue per partner increased 29% sequentially, and we had approximately 220 active partners in Q2. While we wait for the Google volatility to stabilize, we've been busy using Agentic coding to re-architect and scale our proprietary marketing platform. These efforts are working. We have connected RAMP into more buy-side networks, and we continue to make large strides on advertising campaign automation. In Q2, we launched over 82,000 marketing campaigns, up 100% from Q1. This marketing campaign automation is going to be a critical part of going forward when we look to start scaling our O&O marketing business again. We are well positioned to capitalize once the Google volatility stabilizes over the next couple of quarters. Looking ahead to the rest of 2025, we remain cautiously optimistic. Our Owned & Operated products continue to show strong fundamentals, and we've been making large strides with our Agentic coding efforts. Our biggest challenge over the next couple of quarters is related to continued volatility with Google, which remains our largest revenue partner. That said, we're putting ourselves in a good position to capitalize on the marketing side as we see stability from Google. Overall, I believe System1 is really well positioned for the medium and long term. As I mentioned earlier, our product segment is growing, high margin and generates a lot of cash. As a result, we believe that segment alone is worth more than the value the market currently places on all of System1. And as the O&O marketing business stabilizes and starts growing again, I'm confident smart investors will realize how undervalued our business is. System1's leadership team remains fully aligned with our shareholders and as a group, we remain one of the company's largest stakeholders. Last quarter, I significantly added to my family's ownership stake in System1, and I continue to believe our equity is significantly undervalued. As System1 continues our transition back to growth mode, we appreciate your continued support and look forward to delivering long-term value. With that, I'll hand it over to Tridi to go over our financials. Take it away, Tridi.

Thanks, Michael. First off, I'd like to spend a little bit of time discussing the change in our segment reporting, starting with this quarter. Going forward, we are reporting our business across 2 segments: marketing and products. Our marketing business segment consists of our paid acquisition business lines, where we either deploy advertising spend directly to buy-side networks to acquire traffic to our Owned & Operated websites to monetize or we have network partners who acquire the traffic in exchange for a revenue share. This is a business we previously called our Partner Network. Through our marketing platform, we manage our acquisition channels holistically between our direct buy-side relationships as well as via the traffic sourced by our network partners. And so we believe it is more helpful to present these businesses on a combined basis. Our key drivers for this business are TAC or traffic acquisition costs, which we define as a combination of our direct advertising spend and the revenue share we pay to our partners. In essence, this is the total cost to acquire traffic to our platform. And the way we measure the efficiency of our TAC is our second driver, RTAC or return on traffic acquisition spend. This is defined as marketing platform revenue divided by TAC. Marketing platform revenue is defined as marketing GAAP revenue plus partner revenue share and represents the total revenue that flows through our proprietary platform from our advertising partners. Our product segment consists of our flagship consumer products, CouponFollow, MapQuest and Startpage. These products generate traffic primarily through organic means. And our key metrics here will remain the same as before, total sessions to the site and RPS or revenue per session. Shortly after this call concludes, we will be posting an updated supplemental financial information file on our Investor Relations website, which will include these updated metrics for the current period as well as historical information back to Q1 of 2024. Now let's move on to the financial results for the quarter. We had mixed results in the second quarter as volatility in the Owned & Operated portion of our marketing business offset some solid growth in the other business lines. Despite that volatility, we delivered good year-over-year growth in key financial metrics, including an increase of 18% on adjusted EBITDA. Unfortunately, Owned & Operated marketing volatility is impacting sequential trends and the overall progress we are making. Let's get into the details. Q2 revenue was $78.1 million, representing a 17% year-over-year decrease, but a sequential increase of 5%. Marketing GAAP revenue was $54.1 million, down 29% year-over-year, but up 4% sequentially. Products revenue was $24 million, representing a 34% year-over-year increase and a sequential increase of 8%. This growth shows the tremendous progress we have made over the last year and the overall strength of the businesses within this segment. Adjusted gross profit was $41 million, up 6% year-over-year and down 1% sequentially. Marketing segment profit was $19.6 million, down 17% year-over-year and down 10% sequentially. The year-over-year decline was driven by a 4% year-over-year decrease in TAC as well as a slight year-over-year decrease in our return on TAC or RTAC from 120% to 117%. As a result, total platform revenue for the marketing business was down 6% year-over-year, all driven by increased volatility and declines in the Owned & Operated marketing businesses. Offsetting this O&O volatility, we've seen real momentum in our Partner Network business in driving the marketing segment sequentially. While return on TAC dropped 8 bps from Q1 of '25, total TAC increased 34% for the first quarter, driven primarily by increased volume from the partner businesses. Marketing platform revenue also grew 25% sequentially. Products segment profit was $22.7 million, up 34% year-over-year and up 8% sequentially. This is driven both by a year-over-year increase in sessions of 12% as well as a year-over-year increase in RPS from $0.04 to $0.05. Products segment profit represents 54% of total segment profit, up from 42% in the second quarter of 2024. On to operating expenses and adjusted EBITDA. In Q2, operating expenses net of add-backs were $29.3 million, up 1% year-over- year and in line with Q1. Reducing costs in order to create greater operating leverage continues to be a focus, and we expect OpEx to decline in the second half of the year by roughly 5% versus the first half of 2025. Adjusted EBITDA was $11.7 million in Q2, up 18% year-over-year and down 3% from last quarter. With respect to liquidity, we ended the quarter with $63.6 million of unrestricted cash on our balance sheet, which is an increase of approximately $20 million compared to Q1. Although the cash balance increased, working capital declined, largely driven by a buildup in short-term liabilities. As of June 30, we had an outstanding balance of $270 million of term loan debt under our credit agreement, and our net consolidated leverage at quarter end was approximately 4x. We also have $50 million of availability under our revolver as of the end of Q2 '25, which is currently undrawn. Based on the volatility we saw in Q2 in the marketing segment and the ongoing changes in the Google Marketplace, we will not be providing guidance for Q3 of '25 or for the full year. We believe it is prudent to continue to wait for greater clarity on these items before offering guidance. While we acknowledge the current volatility has created some near-term challenges, particularly in driving sustainable growth within the marketing segment, we remain confident in the strength of our platform and the ability to leverage new technologies for our marketing initiatives. The products segment continues to perform well, and we are focused on driving operational efficiencies. All in all, we are confident in the fundamental resilience of our business and remain committed to executing our strategic priorities to position the company for long-term growth. Thank you for joining us today.

[Operator Instructions] Your first question comes from the line of Tom Forte with Maxim Group.

So Michael and Tridi, congrats on the quarter and the progress you're making in a challenging environment. I had 3 questions. I'll go one at a time. On the product side, I definitely think you have underappreciated, undervalued, nice portfolio there. How should investors think about the KPIs we should focus on such as for CouponFollow and MapQuest? Is it traffic, sales trends? What are the KPIs we should focus on?

Yes. Thanks, Tom, for the question. Thanks for joining. I appreciate your compliments on the product side, which we agree. We think we've got a great portfolio, which is underappreciated. And really each of those business segments is doing really well. Tridi, maybe you can talk a little bit about the KPIs.

Yes. Thanks for the question, Tom. Good to hear from you. So yes, I mean, you nailed it, and it's the KPIs you would traditionally think about for these types of kind of flagship online brands. So specifically, we think about traffic and we think about the rate at which we monetize that traffic. And so both of those are the metrics that we will be disclosing going forward. So sessions in terms of measuring traffic and then revenue per session in terms of measuring that monetization rate.

Excellent. And then for my second question, recognizing you're not providing guidance, can you at least provide high-level comments on the following. To the extent you're able to talk about the second half of this year, should investors think about the comparison of lapping last year's presidential election? I would think to the extent that you're both a buyer and seller of digital advertising, lapping the election will be favorable for you.

I think -- yes, I think you're right there, Tom. So as some of the political spending dies off, which has a tendency to drive pricing across all online marketplaces, we should be able to step in and get a bit lower pricing than what we would have seen last year. I would say that on the O&O marketing side, as we mentioned, a lot of that is not -- our issues are not really related to what's going on in the overall advertising market. It's much more specific to volatility in the Google Search Partner Network. So in the O&O segment on marketing specifically, we would expect as that volatility lessens and the Google product that we -- products that we work with there start maturing a bit more, that's really where we're going to see really sustained growth. We do expect that to happen over the next couple of quarters.

Great. All right. The last one for me. Historically, you've been able to engage in strategic M&A to advance your efforts, often buying things at just unbelievably great valuations. What are your thoughts on strategic M&A and your ability to access capital if necessary to take advantage of opportunities?

Yes. I appreciate you asking. You're correct. We've done, I think, 12 or 13 deals in our history. The vast majority of those have been pretty good deals that we ended up buying at effective low multiples, and we're able to put some substantial growth behind them. And I think you're seeing that with the 3 big products that we talked about, Startpage, MapQuest and CouponFollow, each of those good deals. We were able to layer marketing on top of them, rebuild their platforms and kind of go forward. So we think there's a pretty big opportunity for us on the M&A front going forward. Not only do we have the historical ability to buy companies, retool their platforms and get them growing again. The stuff that we're doing with Agentic coding, I talked about it briefly in my remarks, but I'll talk about a little bit more here. We were pretty much early adopters in terms of using Agentic coding to rebuild our technology platform. And while I talked about it for a couple of sentences in my prepared remarks, I'll riff a little bit here. It's really hard to take an existing technology platform and rebuild it on the fly. I've been doing this for, I think, 25 years, and we've tried to do it several times, and it's just always more challenging than you think and going to take longer than you would expect. With our Agentic coding skills, we've actually been able to do it really successfully already. We're doing it ahead of schedule. And I estimated about 25% of the time it would have taken us previously. And so specifically on the M&A front, what we're going to be looking to do going forward is really find those companies that have legacy platforms that could benefit from a real makeover of their platform, make those technology platforms more efficient, a lot more cost effective, reduce OpEx, a lot of the stuff we've been doing internally. And as I said, there's thousands of legacy digital companies out there, both on the digital publishing side, on the software side, everywhere. And so we think that within those thousands of companies, we're going to find some pretty good opportunities for us. As far as accessing capital, we do think on a go-forward basis, as our numbers are improving, and we're starting to show the business going, get some momentum behind it, we'll have fairly straightforward access to capital to do those deals. And Tridi, do you want to follow up on anything there?

No, I think you captured it. Again, I think for the right deal, we're confident that we'll be able to access the capital we need to execute on it. So to Michael's point, we're being very judicious about how we're approaching it, but we do think opportunities will be out there.

Your next question comes from the line of Dan Kurnos with Benchmark.

Nice continued progress here. Let's -- maybe I'll go a little bit in reverse, Michael, just in terms of what you just mentioned on Agentic coding, I mean, you kind of alluded to helping optimize others' coding platforms. I mean, are you going to white label an Agentic coding product? Are you planning on providing kind of back-end services to help optimize maybe some of the, I don't know, pick your vertical, SMB market, however you want to attack it, Michael. It just -- it's a super interesting opportunity since it's worked for you, and there's plenty of companies out there with all the vibe coders and everyone else that are trying to help advance this marketplace. So maybe just give us your thoughts on that on the [indiscernible] off base.

Sure. Thanks for dialing in, Dan. Good to chat with you. So I don't right now see us releasing a stand-alone Agentic coding product to help people redo their platforms. I guess that's a possibility in the future. But right now, our current strategy that we'd be looking at would be to partner with companies that don't have as much experience as we have kind of going through this process and really work with them so that they could probably keep their core teams operating on maintaining their existing platform and then bring in kind of a -- think of it as an Agentic coding SWAT team that can come in and rebuild that entire platform. And at the end of that process, you basically shift all of your business over to the new platform, which is essentially what we're doing here at System1. And so think of us almost as consultants coming in. But in the case of M&A, we're doing that on our own behalf. So we acquire a company, kind of rebuild their platform, rip out the old legacy platform and kind of go on with that business. We don't have to do it via M&A. So there's a few different models that we've been thinking about that don't require us putting our own capital to use. Instead, we participate in the upside that we bring to the companies. But in general, it's bringing our team in to help companies that don't have the experience that we have.

Yes, that makes sense, Michael. You just throw a big help button up on MapQuest. I'll come to you. The next question I have for you is, look, obviously, products has been on a great trajectory right now, really good in Q2. The SEO environment is a mess, as you well know. And given that -- given what Google is doing, and I'll get to Partner Network in a second, discoverability is just getting a little bit harder. Like how are you optimizing kind of your brand footprint? And how do you expect to continue optimizing it as kind of AI and Agentic browsing starts cropping up more and more?

Yes, we've been -- good question. We've been pretty fortunate in that the main products that we have are not the type of how to or informational products that typically are getting displaced by anything happening on the Google side. So for instance, Startpage has no SEO exposure. So Startpage is our search engine, which people are just coming directly to use it. MapQuest, in large part, that business, we've got an enterprise business in there, and we've got a direct consumer base, which is using our apps and websites. We do have some Google exposure where we do get placement in Google and same with CouponFollow as well. CouponFollow has got a lot of Google placements. But the nice thing about those 2 particular categories, both mapping and promo codes, they're not the kind of categories where Google can just provide a single answer. So when you look at what ChatGPT and obviously, the Google competitive products are, what they're really good at is you ask a question and it just gives you an answer. Mapping really isn't that kind of question. So if you're looking -- or driving directions to a place, you really need a mapping service behind that. And same with couponing. In couponing and promo codes, users are looking for a wide variety of promo codes that are working. They're not just looking for a single one. So it's a little bit harder to displace those products. So in some ways, we've been fortunate that the categories that we're in and those products we acquired were all kind of search and browsing related. So we just don't have -- we don't see ourselves as having the big exposure that a lot of knowledge-based companies have.

Yes. That resonates, Michael. I guess maybe the flip side is to the extent that e-com and other kind of pairing start taking place, I mean you guys are clearly savvy enough on the AI side to create whatever API is necessary or to work maybe with the Agentic guys to sort of help them learn on how to maybe attach some products to if they're sponsored results or things like that. I don't know if that's a crazy statement, Michael, since nothing has been developed yet, but just a thought.

Yes. No, we love -- I mean, we'd love to work with any of the platforms to integrate our mapping technology and our mapping expertise, our promo code technology. I don't think the search or Startpage search technology is something that would necessarily pop into those, but we do have like a lot of people coming to us to try to work with us on the search engine side as well.

And then just lastly, on the Google Partner Network stuff, I mean, yes, obviously, kind of sloppy over there right now. I mean the return on TAC was still pretty impressive in Q2. I assume that that's probably continuing to attrit. I mean, should we think of you pulling back on the O&O side in the near term until you get more favorable return again? Or are you going to kind of just weather the storm? And is it really -- how much of it is platform change? How much of it is just query volume? How much of it is data analytics? Just any additional color would be super helpful.

Sure. So what -- there are several questions in there. I don't see us pulling back. So what we're going to do -- essentially, what's happened just to kind of talk about a little bit higher level is Google has rolled out a new product that their Partner Network is shifting towards. It's called RSOC, which is an acronym for related search on content. And the idea behind that product is Google wants to ensure that there's a high quality of traffic going through that system and ultimately converting when those consumers get to the advertisers and sort of advertising through Google. This is a pretty dramatic change for Google to shift from their old -- their old partner advertising network called AFD over to RSOC. And it's just been a little bit rocky. A lot of that is Google figuring out the ecosystem. It's a new product that they're rolling out. And it's just kind of fine-tuning that product such that there's not volatility in it. So we don't anticipate pulling back in that business. What we would anticipate, though, is as Google is working the kinks out of its RSOC product, we do see continued volatility. And so what we are hoping and we are in close contact with Google is that over the next couple of quarters, that volatility is going to go away, at which point, we're going to be quite well positioned to get that business growing again. So that's kind of a long-winded answer, Dan. I don't know if I addressed everything in there and happy to answer any follow-ups on it.

No, it's fine. I mean so much for opt-in, right? We'll see how it plays out, Michael. I appreciate the color, and I was trying to keep it a little higher level without getting too much in the weeds, but that's really helpful color for me and we can also follow up offline.

I will now turn the call back to Michael Blend, CEO and Co-Founder, for closing remarks.

Well, thanks, everyone, for joining us on our Q2 earnings call. It was nice to be able to report another good quarter. We are banging away at the business. We feel like we've got a good opportunity ahead of us. And if you are a current investor or thinking about taking a position in us, please feel free to reach out to us for more color. We'll talk to you next quarter. Thank you very much.