Release Date: March 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Skillz Inc (SKLZ, Financial) announced a $75 million Developer Accelerator Program to drive game innovation and expand platform offerings.
- The company is actively pursuing legal actions to protect its business interests and ensure fair play in the gaming industry.
- Skillz Inc (SKLZ) has a strong balance sheet with $282 million in cash and cash equivalents, providing financial flexibility.
- The company reported a sequential growth in paying monthly active users (MAU) from November through February.
- Skillz Inc (SKLZ) achieved a 9% improvement in adjusted EBITDA loss excluding litigation expenses compared to 2023.
Negative Points
- Revenue for the fourth quarter was $20 million, down 17% sequentially and 35% year over year.
- The company experienced a decline in both paying MAU and overall MAU quarter over quarter.
- Sales and marketing expenses were high, accounting for 86% of Q4 revenue excluding stock-based compensation.
- General and administrative expenses increased by 11% year over year, representing 75% of Q4 revenue excluding stock-based compensation.
- Skillz Inc (SKLZ) reported a net loss of $26 million for the fourth quarter.
Q & A Highlights
Q: Can you provide an update on the fair play initiative and the litigation matters Skillz is involved in?
A: Andrew Paradise, CEO, explained that Skillz is actively working to ensure fair competition in the gaming industry by addressing the use of bots by some companies, which deceive players. Skillz has filed lawsuits against companies like Papaya and Voodoo in the Southern District of New York and is advocating for enhanced regulatory oversight to protect consumers from fraud.
Q: What are the key pillars Skillz is focusing on to return to consistent growth and profitability?
A: Andrew Paradise, CEO, outlined four key pillars: enhancing the platform for better consumer and developer engagement, scaling the organization, optimizing go-to-market strategies, and demonstrating a clear path to profitability. These efforts are supported by a strong balance sheet and financial position.
Q: Can you elaborate on the Developer Accelerator Program?
A: Andrew Paradise, CEO, announced a $75 million Developer Accelerator Program aimed at driving game innovation and expanding platform offerings. The program will provide developers with working capital, marketing, and operational support to create new games, with a goal to support at least 25 high-potential games.
Q: How did Skillz perform financially in the fourth quarter?
A: Gaetano Franceschi, CFO, reported that revenue was $20 million, down 17% sequentially and 35% year over year. The paid user conversion rate increased slightly to 14.6%. Operating expenses, excluding litigation, improved by $3 million compared to the previous quarter. The net loss was $26 million, an improvement from the $60 million loss in Q4 2023.
Q: What is the current cash position and debt status of Skillz?
A: Gaetano Franceschi, CFO, stated that Skillz ended the year with $282 million in cash, including $272 million in cash and cash equivalents and $10 million in restricted cash. The company has $129.7 million in outstanding debt and expects to receive $7.5 million from AviaGames as part of a settlement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
