System1, Inc.

Ladies and gentlemen, thank you for joining us and welcome to the System 1 Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star 9 to raise your hand and star 6 to unmute. I will now hand the conference over to Kyle Ostgaard, Senior Vice President of Finance. Please go ahead.

Thank you for standing by and welcome to the second quarter 2026 earnings conference call for System 1. Joining me today to discuss System 1'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. Thank you for joining us. We may also make statements regarding regulatory 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 and implied during this call. In particular, those described in our risk factors included in our annual report on Form 10-K for fiscal year 2025, filed on March 11th, 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 System 1 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 System 1's co-founder and chief executive officer, Michael Blend.

Thanks, Kyle. Good afternoon, everyone, and thank you for joining System 1 on our Q2 earnings call. Before diving into the corridor, I would first like to thank all of System 1's stakeholders, including our lenders and shareholders, for the approval of the debt exchange that was finalized last month. This took a lot of hard work by everyone involved. I am appreciative of our lenders' support and welcome them as preferred shareholders. The debt exchange was an important step in putting our company in a position to achieve our strategic goals, and we look forward to delivering on our vision and creating long-term shareholder value. Now on the operating front, we made encouraging progress across our products portfolio during the quarter as we focused on audience growth and deepening user engagement. Total sessions to our owned and operated product sites increased 31% year over year and 5% sequentially from Q1. Our sessions growth comes as many other digital publishers are seeing traffic declines from AI usage, and it's the result of both hard work from our team and the utility nature of our products. Unlike news sites or basic informational sites that are more prone to being supplanted by AI chatbots, our core products are in search, mapping, and shopping. Some of these usage gains were offset by weaker monetization from Google, both at our start page search engine and in our partner marketing business. We continue to see volatile monetization from Google, with payouts and advertising coverage moving up and down as Google works to improve the overall quality of its partner network. Now moving on to our shopping vertical, Coupon Follow delivered a strong quarter. The business saw a strong rebound in Google SEO, helping organic sessions grow 11% versus Q1. Coupon Follow is now the number two coupon site by organic traffic behind only Reddit. The business saw continued success in paid acquisition, with gross profit from paid traffic acquisition up 37% year over year. CouponFollow also keeps advancing and sharpening its internal AI capabilities, delivering meaningful improvements across content quality, advertising campaign management, coupon data verification, and revenue optimization tools. Looking ahead, CouponFollow is actively pursuing opportunities in the AI and agenda commerce ecosystems. CouponFollow has high-quality proprietary promo code data, as well as strong affiliate relationships with our merchants. We believe our data sets can be highly valuable to a wide range of consumer apps. We expect to introduce new AI-abled commerce solutions in the near future that will further enhance the value we deliver to consumers and partners. Moving on to our geolocation vertical, the MapQuest team continues to deliver. Our display advertising performance remains strong, supported by healthy CPMs driven by our high-intent audience, the enduring trust of the MapQuest brand, and the value of our first-party data. User engagement also continued to improve, with total sessions increasing 25% year-over-year during the first half of 2026. Beyond our core navigation platform, we are expanding the MapQuest ecosystem through adjacent products, including Lighthouse, a family safety app that recently soft launched. MapQuest is also making meaningful investments in AI. Our MapQuest MCP server is launching this week, enabling MapQuest navigation and location data to integrate directly with AI agents and applications. We believe we will be able to leverage our existing B2B partners on the MapQuest platform as a sales channel to accelerate growth and adoption of these products. Additionally, in Q2, we completely revamped our Road Warrior delivery app, which allows us to better support the needs of the drivers and small businesses that rely on the app for their day-to-day operations. and moving on to our start page private search engine, we continue to benefit from long-term tailwinds around consumer privacy. We saw continued growth in search queries during the quarter with 11% sequential growth in user sessions quarter over quarter. We saw particularly strong momentum on mobile where the number of mobile app sessions increased 63% year over year. We're also seeing more and more web browsers and other entry points to the web electing a feature start page as a private search engine. Unfortunately, as I mentioned above, Startpage user growth was more than offset by declining monetization from Google. The majority of our Startpage revenue comes from users clicking on advertising we syndicate from Google. And simply put, Google has been showing fewer ads when users search on Startpage and paying us less for each search query. This has limited our ability to fully translate usage growth into revenue. Resolving the Google monetization issue is a big priority for us, although it is worth noting that we believe this is an industry-wide problem affecting all search engines that work with Google. Beyond our established products, we're also encouraged by the early progress within our emerging products division, where we're focused on AI-driven subscription businesses. While these products remain relatively small today, we're seeing exceptional velocity in both product development and marketing experimentation. Our pace of learning has been significantly faster than we've experienced in prior product initiatives, giving us confidence that this portfolio will become an increasingly meaningful contributor over time. We've also started to make headway around monetization or a large amount of first-party data. In Q2, we entered the market with our audience data product, which we call IntentStream. IntentStream collects, enriches, and packages our non-private first-party data to provide brands with real-time pre-purchase intent signals. One thing to notice is dataset does not include any data from our start page search engine where privacy remains paramount. We're in the early stages of going to market with IntentStream. We started bringing on our first customers, and we look forward to reporting more on our progress here. Now, turning to our partner network business, Q2 was a tale of two halves. During April and May, the partner network business was performing quite well and generating over $100,000 per day in net revenue. At the end of May and early June, Google pushed a partner network-wide change that caused our monetization to drop more than 30%. Lower monetization in turn led to a significant drop in spreads between revenue and traffic acquisition costs, which in turn caused a significant drop to our net revenue per day. By the end of June, we recovered about 50% of the daily net revenue, but the negative impact on Q2 was significant. We are working hard to fully stabilize the partner network business and get back to the levels we were at prior to the tuning event. At the same time, we have also remained intensely focused on diversifying our network partners, improving traffic quality, and expanding monetization diversity to reduce our Google concentration risk going forward. As we look to the second half of the year, our strategic priorities are clear. First, we will continue investing in the development and growth of our products portfolio with particular emphasis on opportunities emerging around search, commerce, location, and AI-driven consumer experiences. Second, we remain focused on diversifying our partner network business and getting our daily gross profit back up to our prior levels. And finally, we will continue operating as efficiently as possible while concentrating investment behind our highest return growth opportunities. and as our overall business starts growing again, we intend to return to the M&A efforts that have proven very successful for us in the past. Without, I handed over to Tridi to go over our financials. Take it away, Tridi.