FY25 results are consistent with a previous update and confirm a strong performance, as revenue and PBT grew +25% and +68% y/y. System1 has however seen trading soften in FY26 YTD (due to US tariff and USD’s depreciation against GBP) leading to sales -7% y/y in Q1 and for this reason we have trimmed our sales/EBITDA/EPS forecasts for both FY26&27. Despite this caution, we also point out encouraging progress, for example SYS1 added 80 new clients in Q1, including a top 2 ice cream company and a top 3 video gaming brand, while adjacent to this, leads grew 7x y/y, helped by a successful Cannes Advertising Festival. Stepping back, while we recognise today’s news (and its impact to forecasts) we don’t think it derails SYS1’s long-term growth potential in the US or of SYS1’s nascent Innovation Testing product (which both grew in Q1). Reflecting our downgrades, we decrease our TP to 600p (20x FY26 P/E, 14x FY27).
