Forensic Analysis · Technology / Software · as of Oct 19, 2026
System1, Inc. (SST)
A forensic read on System1, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
F · Poor — capital at risk
Forensic grade
Distress
Financial health
-7.7
Distress distance
Clean
Earnings quality
4
Forensic signals
-214.5%
ROE
-22.6%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
System1, Inc. earns an F (Poor — capital at risk) forensic quality grade, and its balance-sheet distress test reads -7.7, placing it in the Distress zone. 4 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-24.3%
FY2025
Return on invested capital.Return on invested capital is -24.3% in the latest fiscal year and slipping across FY2023–FY2025 from -16.8%. After-tax operating profit was ($68M) in FY2023 and ($49M) in FY2025, with operating income at -21.4% of revenue in FY2023, -25.8% in FY2024 and -23.3% in FY2025. The capital base behind it came down -50% across FY2023–FY2025, from $404M to $202M, so this return is struck on a smaller base than it started on.
FCF ($11M)
FY2025
Shareholder returns.Returned $589,000 to shareholders (buybacks + dividends) in FY2025, but free cash flow was ($11M) after capex — there was no free cash flow to fund the payout from at all, and operating cash flow itself was negative or zero that year too. The entire return is coming from debt or cash reserves, not cash the business itself generated — a harder case than returns merely running ahead of free cash flow, since here there was none to run ahead of.
79d DSO
FY2024→FY2025
Receivables vs revenue.Days sales outstanding moved from 67 to 79 days FY2024→FY2025 (receivables -9% vs revenue -23%). Receivables are creeping up relative to sales. Across FY2023–FY2025 the day count ran 51 → 67 → 79 days — the latest step continues a climb that was already under way, which is the persistence that separates a collection problem from a busy quarter. Measured against the same quarter twelve months earlier — like-for-like on the calendar, so an ordinary seasonal build cannot produce it — receivables took longer to collect in 7 consecutive quarters (Dec 2024 +23, Mar 2025 +18, Jun 2025 +22, Sep 2025 +22, Dec 2025 +25, Mar 2026 +54, Jun 2026 +42 days). In the latest of them the receivable balance grew -42% against sales -61%, so more of a quarter's billings were still outstanding at the period end than a year earlier — money the company has recognized and not yet been paid. Both figures are measured on period-end balances rather than the beginning-plus-ending average, because averaging needs the balance a year before every reading — FY2024's opening balance is on file, but across the 3 fiscal years read here (FY2023–FY2025) the average yields only 2 day counts (1 step), too few to tell a climb from one year's move.
4% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 4% of revenue in FY2025 — about $1.44 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 12.9% a year across FY2024–FY2025, above the level at which the count is a material claim on a stake, and only one year's change is on file — enough to state what a holder gave up, not enough to say whether the rate is climbing or coming down. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
Key fundamentals
Latest Revenue$266.1M
Revenue Growth YoY-22.6%
Revenue CAGR (2yr)-18.6%
Net Margin-24.6%
Free Cash Flow-$10.6M
Return on Equity-214.5%
Debt / Equity8.48x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from System1, Inc.'s actual 10-K/10-Q/8-K filings?