Financial Performance - Revenue increased by $2.8 million, or 11%, to $27.4 million for the three months ended September 30, 2025, compared to $24.6 million for the same period in 2024 [188]. - Revenue decreased by $0.6 million, or 1%, to $74.5 million for the nine months ended September 30, 2025, from $75.1 million in the same period in 2024 [198]. - Net loss for the three months ended September 30, 2025, was $17.4 million, a decrease of $3.7 million or 17% compared to the net loss of $21.1 million for the same period in 2024 [188]. User Acquisition and Marketing - User acquisition (UA) marketing spend for the nine months ended September 30, 2025, was approximately $12.4 million, down from approximately $14.1 million in the same period of 2024, indicating a reduction of about 12.1% [174]. - Sales and marketing expenses decreased by $1.9 million, or 10%, to $17.4 million for the three months ended September 30, 2025, primarily due to lower marketing expenses [191]. - Sales and marketing costs decreased by $9.3 million, or 15%, to $51.8 million for the nine months ended September 30, 2025, driven by lower marketing expenses [201]. Legal and Settlement Matters - The company received a total of $50 million from AviaGames as part of a settlement agreement, with Skillz receiving $48 million of that amount [182]. - The company recorded a gain of $46 million from the AviaGames litigation settlement, netting the gross payment of $48 million less $2 million for the Loan and Security Agreement [182]. - The company filed suit against Tether on September 1, 2025, seeking injunctive and declaratory relief regarding Tether's breach of agreements, which could materially affect business operations [177]. Cash Flow and Financial Obligations - Net cash used in operating activities was $56.2 million for the nine months ended September 30, 2025, compared to net cash provided of $12.4 million in the same period in 2024 [212]. - Net cash used in operating activities was $56.2 million for the nine months ended September 30, 2025, primarily due to a net loss of $52.5 million and non-cash expenses of $14.2 million related to stock-based compensation [214]. - Net cash used in investing activities amounted to $4.7 million, driven by software development costs of $2.6 million and property and equipment purchases of $2.1 million [215]. - Net cash used in financing activities was $8.2 million, mainly from the repurchase of common stock [216]. - The company has lease payment obligations of $1.3 million as of September 30, 2025, with $0.4 million payable within 12 months [219]. - The total principal amount of long-term debt is $129.7 million, due on December 15, 2026 [220]. Operational Insights - The company worked diligently to file its Annual Report on Form 10-K for the year ended December 31, 2024, on November 6, 2025, to regain compliance with NYSE listing requirements [179]. - The NYSE granted an extension for continued listing through December 17, 2025, contingent upon the company becoming current with SEC filings [180]. - The company’s operating segments include Skillz and Aarki, with Aarki focusing on AI-driven advertising solutions for mobile app developers [183]. - The company’s SDK allows developers to monitor and update their games seamlessly, enhancing data-driven algorithms and LiveOps systems [171]. Research and Development - Research and development costs rose by $0.7 million, or 15%, to $5.4 million for the three months ended September 30, 2025, driven by a $1.0 million increase in employee-related costs [190]. - Research and development costs increased by $1.5 million, or 11%, to $15.1 million for the nine months ended September 30, 2025, primarily due to higher employee-related costs [200]. Engagement Marketing - Engagement marketing expenses may be impacted by end-user incentives, which include Bonus Cash for entering paid contests [173].

Financial Performance - Revenue decreased by $0.1 million, or less than 0.1%, to $25.2 million for the three months ended June 30, 2025, compared to $25.3 million for the same period in 2024 [188]. - Revenue decreased by $3.4 million, or 7%, to $47.1 million for the six months ended June 30, 2025, from $50.5 million in 2024 [199]. - Net loss for the three months ended June 30, 2025, was $17.9 million, compared to a net income of $26.0 million in the same period in 2024, representing a decrease of $43.9 million [197]. - Total costs and expenses increased by $26.8 million, or 52%, to $78.6 million for the six months ended June 30, 2025, compared to $51.8 million in 2024 [198]. - Net cash used in operating activities was $31.7 million for the six months ended June 30, 2025, primarily reflecting a net loss of $35.1 million [213]. User Acquisition and Marketing - User acquisition (UA) marketing spend for the six months ending June 30, 2025, was approximately $8.1 million, down from approximately $9.8 million for the same period in 2024, indicating a reduction in marketing expenses that is expected to continue impacting revenue negatively [173]. - Engagement marketing expenses may be impacted by end-user incentives, including Bonus Cash, which could affect user engagement on the platform [172]. - Sales and marketing costs decreased by $4.4 million, or 21%, to $16.4 million for the three months ended June 30, 2025, compared to $20.8 million in 2024 [191]. Legal and Compliance - The company filed suit against Tether for breach of agreements, seeking injunctive and declaratory relief, with potential implications for its business if the litigation is unsuccessful [176]. - The company is involved in ongoing litigation related to its De-SPAC process, with an insurance recovery of $9.75 million recorded as an offset to general and administrative expenses [182]. - The company presented a compliance plan to the NYSE in September 2025, requesting an extension to continue listing its shares, which was granted through December 17, 2025 [179]. Revenue Sources and Dependencies - Tether accounted for 45% of the company's revenue for the year ended December 31, 2024, and the termination of agreements with Tether could have a material adverse effect on business operations if suitable replacements are not identified [175]. - The company received a total of $50 million from AviaGames as part of a settlement agreement, with Skillz receiving $48 million, which included a $2 million repayment under a Loan and Security Agreement [182]. - The company recorded a gain of $46 million from a litigation settlement with AviaGames, netting the gross payment received [182]. Costs and Expenses - General and administrative costs decreased by $0.5 million, or 3%, to $16.7 million for the three months ended June 30, 2025, from $17.2 million in 2024 [192]. - Research and development costs increased by $0.6 million, or 13%, to $4.8 million for the three months ended June 30, 2025, from $4.3 million in the same period in 2024 [190]. Financial Position - As of June 30, 2025, the company had cash, cash equivalents, and restricted cash totaling $238.7 million [208]. - As of June 30, 2025, the company has lease payment obligations totaling $0.3 million, all of which is due within 12 months [217]. - The company's long-term debt consists of the 2021 Senior Secured Notes, with a total principal amount of $129.7 million due on December 15, 2026 [218]. - There are currently no off-balance sheet financing arrangements or relationships with unconsolidated entities [219]. - There have been no material changes to the critical accounting policies and estimates as noted in the Annual Report [220]. - Recent accounting pronouncements and their potential impact on financial condition and results of operations are detailed in the condensed consolidated financial statements [221]. Business Segments and Technology - The company’s operating segments include Skillz and Aarki, with Aarki focusing on AI-driven advertising solutions for mobile app developers [183]. - The company’s technological capabilities include a software development kit (SDK) that allows developers to monitor and update their games seamlessly, enhancing data-driven algorithms [170].

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______to______ Commission file number: 001-39243 SKILLZ INC. (Exact name of registrant as specified in its charter) (State or other jurisdicti ...

Core Insights - Skillz reported third-quarter results that missed analyst expectations for both revenue and earnings, leading to a 1.9% decline in share price [1][2] - The company generated revenue of $27.4 million, an 11% increase year-over-year, but fell short of the $29.1 million forecast by analysts [2] - The loss per share was $1.14, which also missed consensus estimates, and the adjusted EBITDA loss was $11.8 million, wider than the expected $7.5 million loss [2] - Skillz is facing compliance issues with the New York Stock Exchange and must complete its SEC filings by mid-December to maintain its listing [2] Market Reaction - Skillz's shares closed at $6.24, down 2% from the previous close, indicating market volatility with 47 moves greater than 5% over the past year [3][4] - The market views the recent news as significant but not fundamentally altering its perception of the business [4] Historical Context - Year-to-date, Skillz shares are up 16.3%, but currently trading 31.8% below their 52-week high of $9.09 from August 2025 [6] - An investment of $1,000 in Skillz shares five years ago would now be worth $25.62 [6]

Business Model and Revenue Generation - Skillz's platform enables game developers to monetize their content through multi-player competition, allowing developers to earn revenue by hosting skill-based competitions where players pay entry fees, with Skillz taking a percentage of the pool[34] - Aarki, Skillz's AI advertising technology, manages millions of mobile ad requests per second from over 10 billion devices, driving revenue growth for mobile app developers[37] - In February 2025, Skillz launched the $75 million Skillz Developer Program to provide working capital and operational support to approximately 25 games over the next three years[58] - The company enables cash prizes in 45 states and the District of Columbia, excluding Arkansas, Connecticut, Delaware, Louisiana, and South Dakota[81] - Approximately 93% of Ticketz were issued from customer participation in paid tournaments for the year ending December 31, 2024, compared to 96% for the year ending December 31, 2023[70] - For the year ended December 31, 2024, the top games Solitaire Cube and 21 Blitz accounted for 59% of revenue, with Tether contributing 45% and Big Run 26%[108] Technology and Platform Development - Skillz's proprietary platform ensures fair player matching, which is critical for maintaining trust and engagement in skill-based gaming[26] - Skillz's technology capabilities include anti-cheat and anti-fraud systems, which are essential for fostering a healthy competitive ecosystem[54] - The introduction of standardized game development platforms has resulted in a flood of game content, making it challenging for developers to monetize effectively[56] - The company actively monitors player metrics such as daily active users, crash rates, app store ratings, and support ticket issues to ensure game quality[59] - The company relies on third-party developers for game updates, and any failure to provide timely updates could negatively impact financial results[106] Financial Performance and Challenges - The company has 91 patents granted and 86 patents pending worldwide as of December 31, 2024[79] - The company has experienced net losses in each period since inception, highlighting the risks associated with its growth strategy in a competitive industry[190] - The company expects operating margins to face downward pressure due to increased competition and rising user acquisition costs[191] - As of December 31, 2024, the company had an accumulated deficit of $1,021.3 million, indicating ongoing financial challenges since inception[190] - The company has experienced interruptions in service in the past, which could impact user engagement and retention[152] Regulatory and Compliance Issues - The company has developed internal compliance programs to adhere to legal and regulatory requirements for skill-based gaming and data privacy[84] - The company is subject to indirect taxation and reporting in approximately 218 domestic and international jurisdictions[147] - Changes in tax laws or tax rulings could materially affect the company's effective tax rates and financial position[147] - Compliance with evolving privacy laws such as GDPR and CCPA has required significant operational resources and expenses[177] - The company is subject to potential fines of up to 4% of global annual revenue or €20 million for violations of GDPR[175] Market and Competitive Landscape - The global video game market size was estimated at $221.2 billion in 2024, with a projected compound annual growth rate (CAGR) of 6.5% from 2025 to 2033[55] - Competition in the entertainment industry is intense, with the company facing challenges from established and emerging competitors, which could affect user retention and market share[99] - The company faces increasing challenges and costs in acquiring players due to the competitive nature of the mobile gaming industry[117] - The company relies on the continued growth of the mobile gaming market for future success, and any decline in mobile device popularity could harm revenue[129] Risks and Legal Matters - The company is involved in ongoing litigation regarding bot misuse, which could result in reputational harm and additional legal costs[101] - Material weaknesses in internal control over financial reporting were identified as of December 31, 2023, and December 31, 2024, potentially impacting timely and accurate financial reporting[95] - The company faces potential litigation risks related to the use of third-party open source software, which could disrupt its business operations[157] - The company may incur significant costs or downtime if agreements with third-party service providers are terminated[155] Strategic Initiatives and Future Outlook - The company plans to pursue acquisitions and strategic investments, but miscalculations in value or integration challenges could materially harm its business[170] - The company’s growth strategy includes developing localized offerings for international markets, which requires significant resources and management attention[167] - The company has significant opportunities to extend marketing channels to offline media and engage in brand marketing[69] - The company expects a positive return on investment from user acquisition spending, but incorrect assumptions about user spending behavior could negatively impact operating results[119] Corporate Governance and Shareholder Matters - The Company authorized a share repurchase program with an aggregate purchase price not to exceed $65.0 million, effective for one year from August 18, 2023[210] - The average closing price of the Company's stock must remain above $1.00 over a 30-day period to comply with NYSE listing standards, or it risks delisting[211] - As of December 31, 2024, Mr. Paradise controlled 84% of the voting power of the Company's outstanding capital stock, classifying it as a "controlled company" under NYSE rules[216] - The dual class structure of the Company's common stock concentrates significant voting power with the CEO, limiting other stockholders' influence on corporate decisions[218]

Financial Data and Key Metrics Changes - Q3 GAAP revenue was $27 million, representing a 9% increase quarter over quarter and an 11% increase year over year [6][15] - Adjusted EBITDA loss was $12 million, a 3% decrease quarter over quarter and a 15% increase year over year [6][16] - Paying MAU reached 155,000, up 6% quarter over quarter and 28% year over year [6][15] Business Line Data and Key Metrics Changes - The launch of "Solitaire Skills" as an owned and operated title is showing early promise and serves as a testing ground for new features [8] - Aarki's ad tech business experienced accelerating revenue growth, supported by new AI-driven product launches [8][10] - R&D expenses increased by 15% year over year to $5 million, while sales and marketing expenses decreased by 10% year over year to $17 million [15][16] Market Data and Key Metrics Changes - The competition platform showed stability, contributing to the overall revenue growth despite a typically softer seasonal period [6][10] - Aarki's net revenue increased by more than 100% year over year, indicating strong growth in the ad tech market [10] Company Strategy and Development Direction - The company is focused on enhancing player and developer engagement, operational efficiency, and a path to profitability [9][10] - The Fair Play initiative aims to protect players and maintain fair competition, with ongoing litigation against competitors for alleged bot usage [10][11] - The company is exploring growth opportunities beyond gaming into e-commerce and interactive entertainment [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress across both Skillz and Aarki, highlighting the potential for long-term growth [12][13] - The company is committed to achieving compliance with New York Stock Exchange listing standards and expects to file necessary reports by December 17, 2025 [4][16] Other Important Information - The company is working to complete its financial statements for previous quarters and is under scrutiny for compliance with listing standards [3][4] - The balance sheet remains healthy with $213 million in cash and $129.7 million in total debt principal outstanding [16] Q&A Session Summary - The Q&A session was concluded without any specific questions being recorded, indicating a focus on the presentation rather than audience inquiries [17]

Core Insights - Skillz Inc. reported preliminary financial results for Q3 2025, showing 11% year-over-year revenue growth and 9% sequential growth, alongside a 28% increase in paying monthly active users (PMAUs) [3][6][23] Financial Performance - Revenue for Q3 2025 was $27.4 million, compared to $24.6 million in Q3 2024 [6][17] - Gross profit for the quarter was $24.0 million [6] - The net loss for Q3 2025 was $17.4 million, an improvement from a loss of $21.1 million in Q3 2024 [6][17] - Adjusted EBITDA loss was $11.8 million, compared to a loss of $13.9 million in Q3 2024 [6][17] User Engagement - PMAUs reached 155,000, reflecting a 6% increase quarter-over-quarter and a 28% increase year-over-year [6][23] - Average Revenue Per Paying Monthly Active User (ARPPU) was $58.9 [6][23] Operational Efficiency - The company emphasized its focus on expense management and operational efficiency, contributing to improved Adjusted EBITDA and a healthy balance sheet with $213 million in cash [3][6] Market Position - Skillz continues to leverage its strengths in gaming and AI-driven ad-tech, aiming to expand beyond gaming into adjacent verticals [3]

Core Viewpoint - Skillz Inc. is set to release its third quarter financial results for 2025 on November 6, 2025, before the market opens, indicating a focus on transparency and communication with investors [1] Financial Results Announcement - The financial results will be released before the market opens on November 6, 2025 [1] - A conference call and simultaneous webcast will take place at 8:30 a.m. ET on the same day to discuss the results and provide a business update [1]

Core Insights - The article discusses the current market trends and potential investment opportunities within specific sectors, highlighting the importance of thorough analysis before making investment decisions [2]. Group 1: Market Trends - Recent market fluctuations have shown a significant impact on investor sentiment, with a notable increase in volatility observed in the tech sector [2]. - Analysts are focusing on the recovery patterns of various industries post-pandemic, particularly in consumer discretionary and travel sectors, which are showing signs of rebound [2]. Group 2: Investment Opportunities - There are emerging opportunities in renewable energy companies, driven by increased government incentives and consumer demand for sustainable solutions [2]. - The healthcare sector is also highlighted as a potential area for growth, especially companies involved in telehealth and biotechnology, which have gained traction during the pandemic [2]. Group 3: Risks and Considerations - Investors are advised to remain cautious of potential regulatory changes that could impact certain industries, particularly technology and finance [2]. - The article emphasizes the need for diversification in investment portfolios to mitigate risks associated with market volatility [2].

Core Insights - Skillz Inc. (SKLZ) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive shift in earnings estimates which is a significant factor influencing stock prices [1][3] - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements, particularly influenced by institutional investors [4][6] Earnings Outlook - The Zacks Consensus Estimate for Skillz indicates an expected earnings of -$3.96 per share for the fiscal year ending December 2025, showing no year-over-year change [8] - Over the past three months, analysts have raised their earnings estimates for Skillz by 4.7% [8] Investment Implications - The upgrade to Zacks Rank 2 places Skillz in the top 20% of Zacks-covered stocks, suggesting a strong potential for near-term price appreciation due to favorable earnings estimate revisions [10] - Rising earnings estimates and the corresponding rating upgrade reflect an improvement in Skillz's underlying business, which could lead to increased investor interest and stock price growth [5][10]