System1 Wins More than 250 New Clients in FY24

System1, the marketing decision-making platform today issues an update on trading for the quarter (Q4) and financial year ended 31st March 2024 (FY24).

*All numbers in this announcement are unaudited and therefore may be subject to change.

Q4 Revenue of £8.7m was 30% higher than the equivalent quarter last year, lifting FY24 Revenue to £30.0m, up 28% year on year. Platform Revenue growth remained strong (+37% in Q4; +42% for the year) buoyed by the successful H2 launch of TYA Pro+ and more than 50% Platform Revenue growth in Q4 in the US where Revenue grew quarter on prior quarter throughout FY24. Platform Revenue comprised 87% of Revenue in Q4 and 82% for the year as a whole (FY23:74%). New business performance was strong throughout the year, with over 250 new clients – including leading pharmaceutical, retail, FMCG and auto companies - providing just over a quarter of total Revenue. All geographic regions achieved substantial double-digit Revenue growth for the year. The Communications product group (Test Your Ad) delivered the majority of the Revenue growth in FY24, with gains in Innovation offsetting a reduction in Brand following the end of a non-platform multi-year contract.

Following an exceptional H1, gross profit margins returned to expected levels in H2, achieving 87.0% for the year as a whole (FY23: 84.2%), ahead of our 85% benchmark.

Net cash increased by £3.3m in H2 FY24 and £3.9m across the year, resulting in year-end net cash of £9.6m (FY23: £5.7m).

Based on the unaudited management accounts, Profit before Taxation for the year ended 31 March 2024 is expected to amount to £2.8m, up £2.1m on FY23 and ahead of market expectations[1]. This Profit before Taxation figure includes the release of £0.4m of provisions related to a now-closed sabbatical scheme. The adjusted EBITDA margin for the year is expected to exceed 14% (FY23: 8%), representing good progress towards the Group’s at-scale goal of 30%.

Marking its confidence in the Group’s cash generation and continuing profitable growth, the Board intends to resume paying dividends, starting with a final dividend for FY24 which will be detailed in the annual results and formally proposed to shareholders at September’s AGM.

Commenting on the results, CEO James Gregory said, “Our first full year post the 2022 Strategic Review has surpassed our expectations. We have delivered £30m of Revenue, up 28% year on year, growing quarter on prior quarter throughout the year. This is underpinned by over 250 new client wins, Platform Revenue up by over 40% and Profit before Taxation up by 300% on the previous year. In the coming year we will step up investment in attracting, winning and retaining customers in order to continue our growth trajectory”. 

For the purpose of this announcement, the Group believes market consensus for FY24 to be revenue of £29.1m, and profit before tax of £2.4m.