Skillz Inc. (NYSE:SKLZ) Q2 2023 Earnings Conference Call August 2, 2023 4:30 PM ET Company Participants James Leahy - Investor Relations Andrew Paradise - Chief Executive Officer Jason Roswig - President & Chief Financial Officer Casey Chafkin - Chief Strategy Officer Conference Call Participants Jason Tilchen - Canaccord Genuity Operator Hello and welcome to today's Skillz Inc. 2023 Second Quarter Results Call. My name is Bailey and I'll be your moderator for today. [Operator Instructions] I would now like ...

Skillz Inc. (NYSE:SKLZ) Q1 2023 Earnings Conference Call May 9, 2023 4:30 AM ET Company Participants Susan Swanson - Communications Director Andrew Paradise - CEO Jason Roswig - President and CFO Casey Chafkin - CSO Conference Call Participants Jason Tilchen - Canaccord Genuity Operator Good afternoon. Welcome to Skillz First Quarter 2023 Conference Call. I will now turn the call over to Susan Swanson for opening remarks. Please go ahead. Susan Swanson Good afternoon, and welcome to the Skillz First Quarter ...

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, 2023 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) Delaware 84-4478274 (State ...

Skillz Inc. (NYSE:SKLZ) Q4 2022 Earnings Conference Call March 30, 2023 4:30 PM ET Company Participants Andrew Paradise - CEO Jason Roswig - President Casey Chafkin - CRO Alvin Lobo - CFO Conference Call Participants Jason Tilchen - Canaccord Genuity Operator Good afternoon. Thank you for attending today's Skillz Fourth Quarter 2022 Earnings Call. My name is Francis, and I'll be your moderator today. [Operator Instructions] I would now like to pass the conference over to our host, Taylor Giles. Unidentifie ...

TABLE OF CONTENTS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 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) Delaware 84-4478274 (State or ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for the quarter ended September 30, 2022, detailing financial position, operations, cash flows, and related accounting notes Balance Sheet Highlights | Financial Statement | Key Metric | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | :--- | | **Balance Sheet** | Total Assets | $772.4 million | $1,022.8 million | | | Total Liabilities | $340.1 million | $399.1 million | | | Total Stockholders' Equity | $432.3 million | $623.7 million | Income Statement Highlights (Q3) | Income Statement (Q3) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | | | Revenue | $60.3 million | $102.1 million | | | Loss from Operations | $(75.3) million | $(81.6) million | | | Net (Loss) / Income | $(78.5) million | $50.8 million | | | Diluted EPS | $(0.19) | $(0.16) | Cash Flow Statement Highlights | Cash Flow Statement | Metric | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | | | Net cash used in operating activities | $(166.8) million | $(103.3) million | | | Net cash provided by (used in) investing activities | $176.0 million | $(140.8) million | | | Net cash (used in) / provided by financing activities | $(10.7) million | $521.7 million | - In Q3 2022, the company recorded a non-cash intangible asset impairment charge of **$47.6 million**, primarily related to developed technology and customer relationships from the Aarki acquisition[96](index=96&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies and significant financial events, including revenue concentration, intangible asset impairment, restructuring charges, and accelerated stock-based compensation - Revenue is **highly concentrated**, with games from two developer partners each accounting for **40%** of the Company's revenue from Monetization Services in Q3 2022[41](index=41&type=chunk) - The company recorded restructuring charges of **$1.9 million** in Q3 2022 and **$4.5 million** for the nine months ended September 30, 2022, primarily for severance and benefits related to workforce reductions[99](index=99&type=chunk) - On September 1, 2022, the Company redeemed **$10.5 million** of its senior secured notes, resulting in a gain on extinguishment of debt of **$2.6 million**[120](index=120&type=chunk) - On March 14, 2022, the CEO Performance Award was canceled, resulting in the recognition of the remaining unrecognized compensation cost of **$65.1 million** during the first quarter of 2022[153](index=153&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a strategic shift towards profitable growth, resulting in a 41% Q3 2022 revenue decline, a $47.6 million impairment, and improved Adjusted EBITDA, with sufficient liquidity for the next year - The company is **shifting its focus from top-line growth to driving higher efficiency** from marketing investments and **achieving profitability**[182](index=182&type=chunk)[206](index=206&type=chunk) Key Operating Metrics | Key Operating Metric | Q3 2022 | Q3 2021 | YoY Change | | :--- | :--- | :--- | :--- | | Gross Marketplace Volume (GMV) | $360.4 million | $610.9 million | -41% | | Paying Monthly Active Users (PMAUs) | 320 thousand | 509 thousand | -37% | | Monthly Active Users (MAUs) | 1,665 thousand | 2,985 thousand | -44% | - In Q3 2022, the company recorded a non-cash intangible asset impairment charge of **$47.6 million** related to the Aarki acquisition, due to a revised financial outlook and slower-than-expected realization of cost-saving synergies[184](index=184&type=chunk)[201](index=201&type=chunk) Adjusted EBITDA Reconciliation | Reconciliation to Adjusted EBITDA (in thousands) | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Net (loss) / income | $(78,547) | $50,781 | | Adjustments (Stock-based comp, D&A, Impairment, etc.) | $63,146 | $(92,522) | | **Adjusted EBITDA** | **$(15,401)** | **$(41,741)** | [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Q3 2022 revenue declined 41% to $60.3 million due to reduced marketing spend, while operating expenses decreased across R&D, Sales & Marketing, and G&A, alongside a $47.6 million impairment charge - Q3 2022 revenue decreased by **$41.8 million (41%)** YoY, attributed to lower user retention and significant decreases in user acquisition spend (down **$36.6 million**) and engagement marketing spend (down **$26.2 million**)[205](index=205&type=chunk) - Sales and marketing costs for Q3 2022 decreased by **55%** YoY to **$51.8 million**, driven by a **66%** decrease in User Acquisition (UA) marketing and a **52%** decrease in engagement marketing[216](index=216&type=chunk) - General and administrative costs for the nine months ended Sep 30, 2022 increased **38%** YoY, primarily due to a **$56.1 million** increase in stock-based compensation, which includes a **$65.1 million** charge from the cancellation of the CEO's performance stock units[221](index=221&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2022, liquidity included $239.9 million in cash and $318.4 million in marketable securities, with $166.8 million net cash used in operations, deemed sufficient for the next twelve months - As of September 30, 2022, principal sources of liquidity were **$239.9 million** in cash and cash equivalents and **$318.4 million** in marketable securities[247](index=247&type=chunk) - Net cash used in operating activities was **$166.8 million** for the nine months ended September 30, 2022, an increase from **$103.3 million** in the prior year period[253](index=253&type=chunk)[255](index=255&type=chunk) - The company may continue to retire or purchase its outstanding debt, having redeemed **$10.5 million** of its 2021 senior secured notes on September 1, 2022[250](index=250&type=chunk)[251](index=251&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on its cash and marketable securities, though a 10% rate change is not expected to be material, and foreign currency risk is immaterial - The company is exposed to interest rate risk on its cash, cash equivalents (**$239.9 million**), and marketable securities (**$318.4 million**)[273](index=273&type=chunk) - Management believes an immediate **10%** change in interest rates would not materially affect the fair market value of its investments due to their low-risk profile[273](index=273&type=chunk) - Foreign currency risk was **not material** for the nine months ended September 30, 2022 and 2021[274](index=274&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of September 30, 2022, due to material weaknesses in IT general controls and management review controls, with ongoing remediation efforts - Management concluded that disclosure controls and procedures were **not effective** as of September 30, 2022[276](index=276&type=chunk) - **Material weaknesses persist** in two areas: (1) Information technology general controls (ITGCs) over access and program changes, and (2) Controls designed to properly evaluate certain accounting processes involving management review[279](index=279&type=chunk) - **Remediation efforts are ongoing**, including designing and implementing improved processes for user access, program changes, and reinforcing management review control training[280](index=280&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 11, detailing a legal proceeding where a jury verdict of $11.6 million was reduced to $4.35 million, with both parties appealing - For information on legal proceedings, the report refers to Note 11, "Contingencies and Commitments"[287](index=287&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - There have been **no material changes** from the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021[288](index=288&type=chunk) [Other Part II Items (Items 2, 3, 4, 5, 6)](index=51&type=section&id=Other%20Part%20II%20Items%20(Items%202%2C%203%2C%204%2C%205%2C%206)) This section confirms no unregistered equity sales, no defaults on senior securities, no mine safety disclosures, and lists exhibits filed with the report - Item 2: **No unregistered sales of equity securities** and use of proceeds[289](index=289&type=chunk) - Item 3: **No defaults upon senior securities**[290](index=290&type=chunk) - Item 6: **A list of exhibits filed with the report is provided**[293](index=293&type=chunk)

Skillz Inc. (NYSE:SKLZ) Q3 2022 Earnings Conference Call November 2, 2022 5:30 PM ET Company Participants Andrew Paradise – Chief Executive Officer Casey Chafkin – Chief Revenue Officer Jason Roswig – President and Chief Financial Officer Conference Call Participants Jason Tilchen – Canaccord Genuity Clark Lampen – BTIG Operator Thank you for joining us today for Skillz Third Quarter 2022 Earnings Call. I will now turn the call over to [indiscernible] to cover the safe harbor. Taylor? Unidentified Company ...

Skillz, Inc. (NYSE:SKLZ) Q2 2022 Earnings Conference Call August 3, 2022 5:00 PM ET Company Participants Charlotte Edelman - General Counsel & Corporate Secretary Andrew Paradise - Co-Founder, CEO, President & Chairman Casey Chafkin - Co-founder, Chief Revenue Officer, Treasurer & Director Ian Lee - CFO Conference Call Participants Jason Bazinet - Citigroup Andrew Crum - Stifel, Nicolaus & Company Bradley Erickson - RBC Capital Markets Jason Tilchen - Canaccord Genuity William Lampen - BTIG Edward Alter - J ...

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 June 30, 2022 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 jurisdict ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2022 financials show 12% revenue growth, but a net loss widened to $148.1 million from increased expenses and stock-based compensation Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $114,558 | $241,332 | | Marketable securities (current & non-current) | $539,291 | $501,684 | | Total assets | $932,536 | $1,022,825 | | Total liabilities | $380,898 | $399,125 | | Total stockholders' equity | $551,638 | $623,700 | Condensed Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenue | $93,438 | $83,677 | | Total costs and expenses | $238,042 | $135,145 | | Loss from operations | $(144,604) | $(51,468) | | Net loss | $(148,113) | $(53,592) | | Net loss per share, basic & diluted | $(0.37) | $(0.15) / $(0.16) | Condensed Consolidated Statement of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(83,450) | $(39,153) | | Net cash used in investing activities | $(40,744) | $(659) | | Net cash (used in) provided by financing activities | $(2,580) | $389,662 | [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, business combinations, and financial instruments, highlighting high revenue concentration, Aarki acquisition, $300 million debt, legal contingency, and substantial stock-based compensation - The company's business model is a mobile eSports platform that enables game developers to host tournaments and monetize their content through a revenue-sharing agreement[32](index=32&type=chunk)[36](index=36&type=chunk) - Revenue concentration remains high, with two developer partners accounting for a combined **79% of revenue in Q1 2022** (41% and 38% respectively), compared to 83% in Q1 2021[43](index=43&type=chunk) - The acquisition of Aarki, Inc. was completed in July 2021 for **$162.3 million**, resulting in **$86.8 million of identifiable intangible assets** and **$86.4 million of goodwill** as of March 31, 2022[78](index=78&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - In December 2021, the company issued **$300 million in 10.25% senior secured notes** due 2026[107](index=107&type=chunk) - A lawsuit from a former employee resulted in a jury verdict of **$11.6 million**. In April 2022, a judge ordered a new trial on damages or allowed the plaintiff to accept a reduced verdict of **$4.35 million**[115](index=115&type=chunk) - Total stock-based compensation expense was **$77.9 million in Q1 2022**, a sharp increase from **$10.9 million in Q1 2021**. This was primarily driven by the cancellation of the CEO Performance Award, which resulted in an accelerated expense recognition of **$65.1 million**[127](index=127&type=chunk)[139](index=139&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2022 performance, noting 12% revenue growth to $93.4 million, but a significant increase in operating losses to $144.6 million due to higher costs, especially a 240% rise in G&A from a large stock-based compensation charge [Overview](index=31&type=section&id=Overview) Skillz operates a mobile eSports marketplace with 3.2 million MAUs in Q1 2022, heavily relying on its top three games which accounted for 71% of revenue Key Operating Metrics | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Monthly Active Users (MAUs) | 3.2 million | 2.7 million | | Paying MAUs | 0.6 million | 0.5 million | | Paying MAU to MAU Ratio | 18% | 17% | | Average Revenue Per User (ARPU) | $9.65 | $10.35 | - Revenue concentration from top titles remains significant, with three games from two developers (Tether Studios and Big Run Studios) accounting for **71% of revenue in Q1 2022**[155](index=155&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q1 2022 revenue increased 12% YoY to $93.4 million, but total costs surged 76% to $238.0 million, driven by a 240% rise in G&A expenses due to a $65.1 million stock-based compensation charge, leading to a $144.6 million operating loss Comparison of Operating Expenses (in thousands) | Expense Category | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | Cost of Revenue | $9,265 | $4,256 | 118% | | Research and Development | $18,653 | $7,282 | 156% | | Sales and Marketing | $117,332 | $96,323 | 22% | | General and Administrative | $92,792 | $27,284 | 240% | - The **240% increase in General and Administrative costs** was primarily driven by a **$65.5 million increase in stock-based compensation**, which included a one-time **$65.1 million charge** related to the cancellation of the CEO's performance stock units[178](index=178&type=chunk) - Sales and marketing costs increased by **22%**, driven by a **10% rise in user acquisition spending ($59.7 million)** and a **17% increase in engagement marketing ($42.1 million)**[177](index=177&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA, a non-GAAP measure, showed a nearly doubled loss of $61.0 million in Q1 2022, primarily adjusted for stock-based compensation, depreciation, amortization, and warrant liabilities Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net loss | $(148,113) | $(53,592) | | Stock-based compensation | $77,925 | $10,945 | | Depreciation and amortization | $5,539 | $555 | | Change in fair value of common stock warrant liabilities | $(4,462) | $2,108 | | Other adjustments | $8,105 | $8,855 | | **Adjusted EBITDA** | **$(61,021)** | **$(31,129)** | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2022, Skillz had strong liquidity with $114.6 million in cash and $539.3 million in marketable securities, despite operating cash burn doubling to $83.5 million, with management asserting sufficient resources for the next year - The company's principal sources of liquidity as of March 31, 2022, were **$114.6 million in cash and cash equivalents** and **$539.3 million in marketable securities**[188](index=188&type=chunk) - Net cash used in operating activities more than doubled to **$83.5 million in Q1 2022** from **$39.2 million in Q1 2021**, driven by a larger net loss[192](index=192&type=chunk)[194](index=194&type=chunk) - In December 2021, the company raised **$300 million** through the private placement of senior secured notes due 2026 with a **10.25% interest rate**[190](index=190&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate fluctuations on cash and marketable securities, but management believes a 10% rate change would not materially impact due to low-risk investments, and foreign currency risk is immaterial - The company's main market risk is interest rate risk on its cash, cash equivalents, and marketable securities portfolio[203](index=203&type=chunk)[204](index=204&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were ineffective as of March 31, 2022, due to material weaknesses in IT general controls and management review controls, with remediation efforts underway - Management concluded that disclosure controls and procedures were **not effective** as of the end of the period due to existing material weaknesses[206](index=206&type=chunk) - The material weaknesses relate to: 1) IT general controls over user access and program changes, and 2) insufficient documentation of management review controls[209](index=209&type=chunk) - Remediation efforts are underway, including designing and implementing improved processes and controls for IT systems and reinforcing training for management review controls[210](index=210&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 9 for legal matters, detailing a former employee lawsuit where a judge offered to reduce an $11.6 million jury verdict to $4.35 million or order a new trial - The company is involved in a legal proceeding with a former employee. A judge has ordered a new trial on damages or alternatively permitted the plaintiff to accept a reduced verdict of **$4.35 million**, down from an initial **$11.6 million jury award**[115](index=115&type=chunk)[216](index=216&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the 2021 Annual Report on Form 10-K - There have been **no material changes** to the company's risk factors since its 2021 Annual Report on Form 10-K[217](index=217&type=chunk)