LONDON - Marketing decision-making platform System1 has reported notable growth in its second quarter and half-year revenues, particularly in the United States, according to a recent trading update. The company, which is preparing to announce its interim results on December 3, 2024, has seen a 35% increase in platform revenue to £8.2 million in the quarter ended September 30, 2024.
This growth was primarily driven by a 32% rise in data sales and a 53% surge in data-led consultancy compared to the same period last year. Platform revenue now constitutes 92% of total group revenue, up from 85% in the previous year's quarter. Despite a slight decline in non-platform revenues, total revenue for the quarter reached £8.9 million, marking a 25% increase from the second quarter of the previous fiscal year.
Over the first half of the fiscal year, System1 has acquired over 160 new platform clients, including notable names in the short-form video hosting, global automotive, and international food delivery sectors. The company's platform revenue for the half-year rose by 53% to £16.7 million, with total revenue for the period reaching £18.3 million, a 38% increase from the previous year. The US market was a significant contributor to this growth, with platform revenue more than doubling compared to the first half of the previous fiscal year.
Gross profit for the half-year stood at £16.0 million, maintaining a high margin of 87.3%. Operating expenditure rose by 23%, which the company attributes to investments in staff, product development, and marketing aimed at expanding growth. The unaudited management accounts indicate an expected statutory pre-tax profit of approximately £2.5 million for the half-year, including a £0.1 million credit to share-based payments.
Free cash flow for the half-year was in line with the company's plans, despite a £0.3 million outflow primarily due to the payout of performance bonuses from the previous fiscal year. Currency fluctuations, notably a weaker US dollar against the Sterling in September, impacted the converted value of non-Sterling bank balances, resulting in a cash balance of £8.9 million as of September 30, 2024.
CEO James Gregory commented on the update, expressing satisfaction with the company's performance in the US and indicating plans for increased investment to strengthen System1's position in the American market and enhance its Innovation proposition.
This trading update is based on a press release statement from System1.
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