Financial Data and Key Metrics Changes - Revenue for Q1 was $22 million, up 21% sequentially but down 11% year over year. Excluding a $1.6 million life-to-date incentive adjustment in Q4, revenue grew 12% sequentially [18] - The net loss for the quarter was $15 million, compared to a net loss of $27 million in the prior year [19] - Adjusted EBITDA loss in Q1 was $50 million, compared to an adjusted EBITDA loss of $90 million in Q4 [19] - The company ended Q1 with $264 million in cash, including $254 million in cash and cash equivalents and $10 million in restricted cash [20] Business Line Data and Key Metrics Changes - The paid user conversion rate was 16.2% in Q1, up from 14.6% in Q4 [18] - Paying monthly active users (MAU) increased to 123,000 in Q1 from 110,000 in Q4 [14] Market Data and Key Metrics Changes - The company is actively addressing industry-wide issues related to fairness and integrity, particularly concerning the use of bots by competitors [7][8] - Ongoing litigation against companies like Papaya and Voodoo aims to protect the business interests and integrity of the industry [9][10] Company Strategy and Development Direction - The company is focused on four key pillars: enhancing the platform, up-leveling the organization, improving go-to-market strategies, and demonstrating a clear path to profitability [11] - An accelerator program was launched to drive innovation and expand offerings, with plans to deploy up to $75 million over the next three years to support at least 25 high-potential games [12][13] - The company aims to optimize customer acquisition costs (CAC) and grow lifetime value (LTV) while managing expenses [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to compete against legitimate skill-based gaming providers and emphasized the importance of building trust within the industry [8][10] - The company is committed to returning to consistent top-line growth and positive adjusted EBITDA, supported by a strong balance sheet [11][16] Other Important Information - The company is working to comply with NYSE listing standards and expects to file necessary financial reports within the granted six-month period [5][20] - The cash position includes a $7.5 million payment received from AviGames as part of a settlement, which is the first of four annual payments [20] Q&A Session Summary - No questions were registered during the Q&A session, leading to the conclusion of the call [21]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $22 million, representing a 21% sequential increase but an 11% year-over-year decline [17] - Adjusted EBITDA loss for Q1 was $50 million, an improvement from a loss of $90 million in Q4 2024 [18] - Net loss for Q1 was $15 million, compared to a net loss of $27 million in the prior year [18] - Cash position at the end of Q1 was $264 million, including $254 million in cash and cash equivalents [18] Business Line Data and Key Metrics Changes - Paid Monthly Active Users (MAU) increased to 123,000 in Q1 from 110,000 in Q4 2024, indicating growth in user engagement [13] - The paid user conversion rate rose to 16.2% in Q1 from 14.6% in Q4 2024 [17] Market Data and Key Metrics Changes - The company is actively involved in litigation against international competitors, alleging unfair practices that harm its business [7][9] - The ongoing legal actions are aimed at protecting consumer interests and ensuring fair competition in the skill-based gaming industry [6][10] Company Strategy and Development Direction - The company is focusing on enhancing its platform to improve consumer and developer engagement, with a commitment to invest up to $75 million over the next three years to support new game development [11] - The strategy includes expanding beyond casual skill games into new genres to broaden competitive gaming offerings [12] - The company aims to achieve positive adjusted EBITDA and sustainable growth while managing expenses [15] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of building trust in the industry and protecting players from deceptive practices [6][10] - The company remains confident in its ability to compete against legitimate skill-based gaming providers and is focused on returning to consistent top-line growth [10][15] Other Important Information - The company is working to comply with NYSE listing standards after receiving a notice of non-compliance [3][4] - The company has received a $7.5 million payment from AviGames as part of a settlement, contributing to its cash position [19] Q&A Session Summary - No questions were registered during the Q&A session, leading to the conclusion of the call [20]

Skillz Preliminary First Quarter 2025 Results [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlights progress towards top-line growth and positive Adjusted EBITDA, driven by increased PMAU, disciplined expense management, and a strong cash position - CEO Andrew Paradise noted a quarter-over-quarter increase in **paying monthly active users (PMAU)**, with a focus on improving player retention and spending[4](index=4&type=chunk) - A **$75 million** accelerator program is underway to broaden the company's skill-based mobile game offerings[4](index=4&type=chunk) - CFO Gaetano Franceschi stated that disciplined operating expense management is improving the **Adjusted EBITDA loss** year-over-year[4](index=4&type=chunk) - The company maintains a strong balance sheet with over **$264 million** in cash and restricted cash, providing financial flexibility for strategic initiatives[4](index=4&type=chunk) [Preliminary First Quarter Financial Update](index=1&type=section&id=Preliminary%20First%20Quarter%20Financial%20Update) Preliminary Q1 2025 results show revenue of **$22.4 million**, a net loss of **$14.9 million**, and an Adjusted EBITDA loss of **$15.1 million**, with **124,000 PMAU** Q1 2025 Preliminary Financial & Operational Metrics | Metric | Value | | :--- | :--- | | Revenue | $22.4 million | | Net Loss | $14.9 million | | Adjusted EBITDA | $(15.1) million | | Paying Monthly Active Users (PMAU) | 124,000 | | Average Revenue Per Paying Monthly Active User (ARPPU) | $62.2 | | Total Operating Expenses (Non-GAAP) | $34.7 million | [Filing Status and Preliminary Nature of Results](index=2&type=section&id=Filing%20Status%20and%20Preliminary%20Nature%20of%20Results) Preliminary Q1 2025 results are subject to change, with the company addressing a NYSE non-compliance notice for its delayed 2024 Form 10-K filing and a six-month grace period - The **Q1 2025 results are preliminary** and may differ from final figures upon completion of internal review and audit[13](index=13&type=chunk) - The company has **delayed the filing of its Annual Report on Form 10-K** for the year ended December 31, 2024[14](index=14&type=chunk) - Skillz received a **non-compliance notice from the NYSE** for the late filing, with a **six-month period from March 17, 2025**, to regain compliance by filing its Form 10-K[15](index=15&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) Preliminary Q1 2025 financial statements show decreased revenue but improved net loss due to a litigation settlement, alongside reduced cash and total assets, and increased negative operating cash flow [Consolidated Statements of Operations](index=4&type=section&id=Preliminary%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q1 2025 vs Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 (Thousands) | Q1 2024 (Thousands) | | :--- | :--- | :--- | | Revenue | $22,413 | $25,235 | | Total Costs and Expenses | $35,678 | $52,106 | | Gain from litigation settlement | $(7,500) | $— | | Loss from Operations | $(13,265) | $(26,871) | | Net Loss | $(14,931) | $(26,723) | | Basic and Diluted EPS | $(0.92) | $(1.45) | [Consolidated Balance Sheets](index=5&type=section&id=Preliminary%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (Thousands) | December 31, 2024 (Thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $254,341 | $271,923 | | Total Current Assets | $275,897 | $292,408 | | Total Assets | $346,973 | $362,176 | | Total Liabilities | $189,741 | $190,927 | | Total Stockholders' Equity | $157,232 | $171,249 | [Consolidated Statement of Cash Flows](index=6&type=section&id=Preliminary%20Consolidated%20Statement%20of%20Cash%20Flows) Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Activity | Q1 2025 (Thousands) | Q1 2024 (Thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(10,767) | $(4,396) | | Net cash provided by (used in) investing activities | $(1,891) | $169 | | Net cash used in financing activities | $(4,924) | $(7,200) | | **Net change in cash** | **$(17,582)** | **$(11,427)** | | **Cash, cash equivalents and restricted cash – end of period** | **$264,341** | **$300,601** | [Non-GAAP Financial Measures](index=7&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA loss improved to **$15.1 million** in Q1 2025 from **$17.7 million** in Q1 2024, driven by reduced operating expenses, with a **$7.5 million** litigation settlement gain excluded [Reconciliation of GAAP Net Loss to Adjusted EBITDA](index=7&type=section&id=Preliminary%20Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Adjusted%20EBITDA) Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 (Thousands) | Q1 2024 (Thousands) | | :--- | :--- | :--- | | Net loss | $(14,931) | $(26,723) | | Stock-based compensation | $5,536 | $8,740 | | Gain from litigation settlement | $(7,500) | $— | | **Adjusted EBITDA** | **$(15,062)** | **$(17,736)** | [Reconciliation of GAAP to Non-GAAP Operating Expenses](index=8&type=section&id=Preliminary%20Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Operating%20Expenses) Non-GAAP Operating Expenses (in thousands) | Expense Category | Q1 2025 (Thousands) | Q1 2024 (Thousands) | | :--- | :--- | :--- | | Non-GAAP research and development | $4,563 | $4,477 | | Non-GAAP sales and marketing | $17,891 | $18,983 | | Non-GAAP general and administrative | $12,226 | $16,457 | [Key Operating Metrics](index=9&type=section&id=Preliminary%20Supplemental%20Financial%20Information) Key operating metrics for Q1 2025 show mixed results, with increased **PMAUs** but decreased **GMV** and **MAUs**, leading to lower average revenue per user, though the **PMAU to MAU ratio improved to 16%** Key Operating Metrics (YoY Comparison) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross marketplace volume (GMV) (000s) | $126,485 | $161,269 | 🔽 | | Paying monthly active users (PMAUs) (000s) | 124 | 121 | 🔼 | | Monthly active users (MAUs) (000s) | 764 | 860 | 🔽 | | Average revenue per paying monthly active user (ARPPU) | $62.2 | $69.8 | 🔽 | | Paying MAU to MAU ratio | 16% | 14% | 🔼 |

Core Insights - Skillz reported a challenging fourth quarter with earnings missing expectations, highlighting ongoing difficulties in revenue and user retention [1][2] Financial Performance - Q4 2024 revenue was $20.4 million, down 34.5% from $31.1 million in Q4 2023, and below the FactSet estimate of $25 million [2][3] - The net loss for the quarter was $26.4 million, resulting in a GAAP EPS of ($1.50), missing the expected ($1.13) by 32.7% [2][6] - Paying Monthly Active Users (PMAU) decreased to 110,000 from 137,000, a decline of 19.7% [3][7] - Average Revenue Per Paying Monthly Active User (ARPPU) fell to $68.1 from $73.3, a decrease of 7.1% [3][8] - Adjusted EBITDA was $(18.5) million, worsening from $(7.3) million in the previous year [3] Business Model and Strategy - Skillz operates a platform for mobile gaming competitions, focusing on fair play and providing developers with tools for multiplayer capabilities [4] - The company is implementing a $75 million developer accelerator to enhance game innovation and user engagement [5] - Despite cost control efforts, operating expenses excluding revenue costs were $43.2 million, down 10.4% year-over-year [8] Recent Developments - A legal victory against AviaGames strengthened Skillz's market position, crucial for maintaining fair competition [9] - Management reported sequential increases in user counts from November 2024 through February 2025, indicating potential recovery [7] Future Outlook - Management aims for positive adjusted EBITDA by 2025, focusing on user acquisition, retention strategies, and operational enhancements [10][11] - The emphasis on fair play technologies is central to Skillz's competitive differentiation [11] - Future guidance will be critical for investors, with a focus on revenue generation improvements and cost efficiencies [11]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $20 million, down 17% sequentially and down 35% year over year [25] - Adjusted EBITDA loss in Q4 was $19 million, with a full-year adjusted EBITDA loss of $63 million compared to $69 million in 2023 [28] - Net loss for Q4 was $26 million, an improvement from a net loss of $60 million in Q4 2023 [27] - Cash at the end of the year was $282 million, consisting of $272 million in cash and cash equivalents and $10 million in restricted cash [28] Business Line Data and Key Metrics Changes - Paying MAU in Q4 was 110,000, down from 121,000 in Q3, but increased to 123,000 by the end of February [20] - Paid user conversion rate was 14.6% in Q4, up from 14.3% in Q3 [25] - User acquisition (UA) marketing spend was $5 million, while engagement marketing was $10 million in Q4 [26] Market Data and Key Metrics Changes - The company is actively pursuing legal actions against competitors using deceptive practices, which it believes defraud players of billions [10][12] - Class action lawsuits have been filed against Avia Games and Papaya Gaming, indicating ongoing market challenges [12] Company Strategy and Development Direction - The company is focusing on four key pillars to return to consistent top-line growth and positive adjusted EBITDA, including enhancing the platform, up-leveling the organization, optimizing go-to-market strategies, and demonstrating a clear path to profitability [15][22] - A $75 million developer accelerator program has been announced to support game developers and expand offerings on the platform [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in competing against other skill-based gaming providers without engaging in deceptive practices [14] - The company is focused on improving consumer and developer engagement and retention through its platform enhancements [16] Other Important Information - The company expects to receive $7.5 million from Avia Games as part of a settlement, which is the first of four annual payments [29] - Total principal due on outstanding debt at the end of Q4 was $129.7 million [29] Q&A Session Summary - There were no questions registered during the Q&A session, leading to the conclusion of the conference call [31]

Financial Data and Key Metrics Changes - Revenue for Q4 was $20 million, down 17% sequentially and down 35% year over year [25] - Net loss for Q4 was $26 million, compared to a net loss of $60 million in Q4 2023 [27] - Adjusted EBITDA loss in Q4 was $19 million, with a full-year adjusted EBITDA loss of $63 million, an improvement from $69 million in 2023 [28] Business Line Data and Key Metrics Changes - Paying MAU in Q4 was 110,000, down from 121,000 in Q3, but increased to 123,000 by the end of February [20] - Paid user conversion rate was 14.6% in Q4, up from 14.3% in Q3 [25] - User acquisition (UA) marketing spend in Q4 was $5 million, while engagement marketing was $10 million [26] Market Data and Key Metrics Changes - The company is actively pursuing legal actions against competitors using deceptive practices, which it believes are harming its market position [11][12] - The company emphasizes the importance of fair competition in the gaming industry to ensure its survival and growth [8][14] Company Strategy and Development Direction - The company is focusing on four key pillars to return to consistent top-line growth and positive adjusted EBITDA, including enhancing its platform and up-leveling the organization [16][19] - A $75 million developer accelerator program has been announced to support game developers and expand offerings on its platform [17][18] - The company aims to optimize customer acquisition cost (CAC) and grow lifetime value (LTV) [21] Management's Comments on Operating Environment and Future Outlook - Management is confident in the company's ability to compete against other skill-based gaming providers without engaging in deceptive practices [14] - The company is focused on improving its cash burn and has a strong balance sheet to support its growth initiatives [23][28] Other Important Information - The company expects to receive $7.5 million from Avia Games as part of a settlement, which is the first of four annual payments [29] - Total principal due on outstanding debt at the end of Q4 was $129.7 million [29] Q&A Session Summary - There were no questions registered during the Q&A session, and the conference call concluded without any inquiries [31]

Core Insights - Skillz Inc. reported a quarterly loss of $1.50 per share, which was worse than the Zacks Consensus Estimate of a loss of $1.07, marking a 40.19% earnings surprise [1] - The company's revenues for the quarter ended December 2024 were $20.37 million, missing the Zacks Consensus Estimate by 19.80% and down from $29.14 million a year ago [2] - Skillz has only surpassed consensus EPS estimates once in the last four quarters and has consistently missed revenue estimates during the same period [2] Financial Performance - The company experienced a loss of $1.04 per share in the same quarter last year, indicating a deterioration in performance year-over-year [1] - The current consensus EPS estimate for the upcoming quarter is -$0.70 on revenues of $26 million, and for the current fiscal year, it is -$3.62 on revenues of $111.05 million [7] Market Position - Despite the poor earnings report, Skillz shares have increased by approximately 7.2% since the beginning of the year, contrasting with a -4.8% decline in the S&P 500 [3] - The Zacks Rank for Skillz is currently 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Industry Context - The Gaming industry, to which Skillz belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating a challenging environment [8] - The performance of Skillz's stock may be influenced by the overall outlook for the gaming industry, as historical data shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Revenue Performance - Revenue for Q4 2024 was $20.4 million, a decrease from $31.1 million in Q4 2023, representing a decline of 34.7%[6] - Full year 2024 revenue totaled $95.5 million, down from $152.1 million in 2023, reflecting a decrease of 37.1%[6] - Gross marketplace volume (GMV) for the twelve months ended December 31, 2024, was $608,248,000, down from $963,580,000 in 2023, a decrease of approximately 37%[28] User Metrics - The number of Paying Monthly Active Users (PMAUs) in Q4 2024 was 110,000, a slight decrease from 118,000 in Q4 2023[6] - Monthly active users (MAUs) decreased from 1,045,000 in 2023 to 816,000 in 2024, a decline of about 22%[28] - Paying monthly active users (PMAUs) dropped from 179,000 in 2023 to 118,000 in 2024, a decrease of approximately 34%[28] Financial Losses - Skillz ended 2024 with a net loss of $48.2 million, compared to a net loss of $101.4 million in 2023[6] - Net loss for the twelve months ended December 31, 2024, was $48,231,000, significantly improved from a net loss of $101,360,000 in 2023, representing a reduction of about 52%[21] Operating Expenses - Adjusted EBITDA for Q4 2024 was $(18.5) million, compared to $(63.0) million for the full year 2024[6] - Total operating expenses for Q4 2024 were $43.2 million, down from $51.6 million in Q4 2023[6] Cash and Assets - Cash, cash equivalents, and restricted cash as of December 31, 2024, were $282 million, providing flexibility for future investments[4] - Cash and cash equivalents decreased from $302,028,000 in 2023 to $271,923,000 in 2024, a reduction of approximately 10%[19] - Total assets decreased from $395,826,000 in 2023 to $364,173,000 in 2024, a decline of approximately 8%[19] Debt and Liabilities - Total outstanding debt as of December 31, 2024, was $129.7 million[6] - Total current liabilities increased from $49,858,000 in 2023 to $57,253,000 in 2024, an increase of about 15%[19] Equity and Investment - Stockholders' equity decreased from $210,489,000 in 2023 to $171,595,000 in 2024, a decline of approximately 18%[19] - The company announced a $75 million developer accelerator program to enhance game innovation and expand platform offerings[4] Revenue Per User - Average Revenue Per Paying Monthly Active User (ARPPU) was $68.1 in Q4 2024, compared to $68.7 in Q4 2023[6] - Average revenue per paying monthly active user (ARPPU) decreased from $70.00 in 2023 to $68.70 in 2024, a decline of about 1.9%[28] Cash Flow Improvement - Net cash used in operating activities improved from $71,758,000 in 2023 to $7,193,000 in 2024, a reduction of about 90%[21]

Core Viewpoint - Skillz Inc. is expected to report a loss per share of $1.07 for Q4 2024, with revenues projected at $25.4 million, reflecting a year-over-year decline of 12.8% [2][3] Group 1: Financial Performance Expectations - The Zacks Consensus Estimate for Skillz's Q4 2024 indicates a loss per share of $1.07, unchanged over the past 60 days, compared to an adjusted loss of $1.04 in the same quarter last year [2] - Revenue expectations for the quarter are set at $25.4 million, representing a 12.8% decrease year-over-year [2] Group 2: Factors Impacting Performance - The anticipated decline in Q4 revenue is attributed to a decrease in monthly active users (MAU) and paying MAU, alongside lower traffic levels, influenced by softening economic conditions in the consumer discretionary sector [3] - Rising costs and expenses, particularly related to user acquisition and disruptions from Identifier for Advertisers, are expected to pressure margins [4] Group 3: Strategic Initiatives - Skillz's focus on four strategic pillars—strengthening the platform, optimizing organizational structure, enhancing go-to-market efficiency, and establishing a clear path to profitability—may have positively influenced its performance [5] Group 4: Earnings Prediction Model - The current model does not predict an earnings beat for Skillz, as it lacks a positive Earnings ESP and holds a Zacks Rank of 3 (Hold) [6][7]

User Engagement and Activity - For the nine months ended September 30, 2024, Skillz had over 0.8 million monthly active users (MAUs) and hosted an average of over 1.1 million daily tournaments, offering over $43.5 million in prizes each month[156]. - The number of paying monthly active users (PMAUs) for the three months ended September 30, 2024, was 121,000, down from 168,000 in the same period of 2023, a decrease of approximately 28%[161]. - The average GMV per paying monthly active user for the three months ended September 30, 2024, was $435.9, compared to $478.8 in the same period of 2023, a decline of approximately 8%[161]. - The average revenue per paying monthly active user (ARPPU) for the three months ended September 30, 2024, was $67.6, down from $72.3 in the same period of 2023, a decrease of approximately 10%[161]. - The average revenue per monthly active user (ARPU) for the three months ended September 30, 2024, was $9.7, compared to $11.7 in the same period of 2023, a decline of approximately 17%[161]. Financial Performance - Revenue decreased by $11.9 million, or 33%, to $24.6 million for the three months ended September 30, 2024, compared to $36.4 million for the same period in 2023, primarily due to a 19% decrease in monthly active users[182]. - Revenue decreased by $45.9 million, or 38%, to $75.1 million for the nine months ended September 30, 2024, primarily due to a 23% decrease in monthly active users[191]. - Skillz segment revenue decreased by $12.0 million, or 35.8%, to $21.5 million for the three months ended September 30, 2024, primarily due to a decrease in player base[211]. - Skillz Segment Revenue for the nine months ended September 30, 2024, was $66.6 million, a decrease of $43.2 million (39.3%) from $109.8 million in the same period of 2023, primarily due to a 23% decrease in monthly active users[218]. - Consolidated Revenue for the nine months ended September 30, 2024, was $75.1 million, a decrease of $45.9 million (37.9%) from $121.0 million in the same period of 2023[217]. Cost Management - Cost of revenue decreased by $0.3 million, or 9%, to $3.4 million for the three months ended September 30, 2024, driven by reductions in payment processing and customer support personnel costs[183]. - Research and development costs decreased by $3.1 million, or 40%, to $4.7 million for the three months ended September 30, 2024, primarily due to a $2.3 million reduction in employee-related costs[184]. - Sales and marketing costs decreased by $12.6 million, or 40%, to $19.3 million for the three months ended September 30, 2024, driven by decreases in UA and engagement marketing spend[186]. - General and administrative costs decreased by $6.2 million, or 26%, to $18.1 million for the three months ended September 30, 2024, primarily due to a $3.5 million decrease in legal fees[187]. - Research and development costs decreased by $11.1 million, or 45%, to $13.6 million, mainly due to an $8.9 million reduction in employee-related costs[193]. - Sales and marketing costs decreased by $38.4 million, or 39%, to $61.1 million, reflecting a strategic decision to prioritize profitability over revenue growth[194]. - General and administrative costs decreased by $19.7 million, or 25%, to $58.4 million, primarily due to a decrease in legal fees and reliance on contractors[195]. Loss and Improvement - The loss from operations improved by $10.4 million, or 33%, to $(20.99) million for the three months ended September 30, 2024, compared to $(31.43) million for the same period in 2023[181]. - Net loss decreased by $12.4 million, or 37%, to $(21.12) million for the three months ended September 30, 2024, from $(33.55) million in the same period in 2023[181]. - Net loss for the nine months ended September 30, 2024, was $21.8 million, a decrease of $64.1 million or 75% compared to the net loss of $85.8 million in 2023[190]. - Total segment adjusted EBITDA loss improved by $4.6 million, or 25.0%, to $(13.9) million for the three months ended September 30, 2024[211]. - Total Segment Adjusted EBITDA loss for the nine months ended September 30, 2024, was $44.2 million, an improvement of $13.6 million (23.6%) from a loss of $57.8 million in the same period of 2023[217]. Cash and Debt Management - As of September 30, 2024, the company had cash and cash equivalents of $301.4 million, primarily invested in money market funds and marketable securities[221]. - The company has long-term debt of $129.7 million from senior secured notes due December 15, 2026, with compliance to all covenants as of September 30, 2024[223]. - Interest income was $0.2 million for the three months ended September 30, 2024, compared to interest expense of $2.3 million for the same period in 2023, reflecting a decrease of $2.5 million in interest expense due to debt repurchase[188]. - Interest income was $0.7 million for the nine months ended September 30, 2024, compared to interest expense of $7.5 million in the same period of 2023[198]. - The company reported a net cash used in financing activities of $12.8 million for the nine months ended September 30, 2024, primarily due to common stock repurchases[229]. Strategic Focus - Engagement marketing expenses decreased, which may lead to lower revenue as paying users may not receive end-user incentives[162]. - Skillz's financial model aims to drive higher player engagement and retention, monetizing users at higher rates than traditional models[165]. - The company is focusing on optimizing user acquisition marketing spend to improve efficiency and drive organic traffic[164]. - User acquisition (UA) marketing spend decreased by 43%, and engagement marketing spend decreased by 40%, reflecting a strategic shift to prioritize profitability over revenue growth[182]. - The company plans to continue investing in personnel and external consultants to address identified material weaknesses in internal controls over financial reporting[245]. - The company may use proceeds from its senior secured notes for potential acquisitions of other companies, products, or technologies in the future[223]. - The gain from litigation settlement was $46.0 million, related to the settlement with AviaGames[196].