skillz(SKLZ) - 2025 Q2 - Quarterly Results

Skillz Preliminary Q2 2025 Results Financial & Operational Highlights Skillz reported revenue growth and a significant increase in Paying Monthly Active Users, reflecting progress towards its strategic goals of top-line growth and improved profitability Q2 2025 Preliminary Financial Highlights | Metric | Value | | :--- | :--- | | Revenue | $27.4 million | | Gross Profit | $24.2 million | | Net Loss | $8.9 million | | Adjusted EBITDA Loss | $10.4 million | | Paying Monthly Active Users (PMAU) | 146,000 | | Avg. Revenue Per Paying Monthly Active User (ARPPU) | $62.8 | - Revenue grew 8% year-over-year, while Paying Monthly Active Users (PMAUs) grew 18% sequentially and 20% year-over-year, reaching the highest level since Q3 2023[3] - The company is advancing its $75 million Developer Accelerator program to diversify game genres and remains committed to its four key pillars for long-term shareholder value[3] - Management emphasized that disciplined operating expense management improved the Adjusted EBITDA loss year-over-year, and the company's cash and restricted cash balance of over $238 million provides significant financial flexibility[3] Consolidated Statements of Operations (Preliminary & Unaudited) The company's Q2 2025 net loss of $8.9 million contrasts sharply with a $26.0 million net income in Q2 2024, primarily due to a one-time litigation settlement gain in the prior year Q2 Statement of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | $27,372 | $25,295 | | Total costs and expenses | $33,953 | $(297) | | (Loss) income from operations | $(6,581) | $25,592 | | Net (loss) income | $(8,919) | $26,045 | | Diluted (Loss) Earnings per share | $(0.58) | $1.44 | - Sales and marketing expenses decreased to $17.5 million in Q2 2025 from $20.8 million in Q2 2024[20] - The significant income from operations and net income in Q2 2024 were driven by a $46.0 million gain from a litigation settlement, which was not repeated in Q2 2025[20] Consolidated Balance Sheets (Preliminary & Unaudited) The company's balance sheet shows a reduction in both total assets and total liabilities as of June 30, 2025, while maintaining a strong cash position of $238.7 million Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $228,657 | $271,923 | | Total Assets | $328,302 | $362,619 | | Total Liabilities | $187,884 | $200,671 | | Total stockholders' equity | $140,418 | $161,948 | Consolidated Statements of Cash Flows (Preliminary & Unaudited) Net cash used in operating activities was $31.7 million for the first half of 2025, a significant shift from cash provided by operations in the prior-year period Six-Month Cash Flow Summary (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(31,709) | $23,406 | | Net cash (used in) provided by investing activities | $(3,446) | $2,210 | | Net cash used in financing activities | $(8,111) | $(11,225) | | Net change in cash, cash equivalents and restricted cash | $(43,266) | $14,391 | | Cash, cash equivalents and restricted cash – end of period | $238,657 | $326,419 | Reconciliation of Net Loss to Adjusted EBITDA The company's Adjusted EBITDA loss improved to $10.4 million in Q2 2025 from $12.6 million in Q2 2024, after adjusting for items like stock compensation and insurance recovery Reconciliation to Adjusted EBITDA Loss (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net (loss) income | $(8,919) | $26,045 | | Stock-based compensation | $4,366 | $7,433 | | Insurance recovery | $(8,367) | — | | Gain from litigation settlement | — | $(46,000) | | Adjusted EBITDA loss | $(10,388) | $(12,572) | Reconciliation of GAAP to Non-GAAP Costs and Expenses Non-GAAP operating expenses for Q2 2025 reflect significant year-over-year reductions in sales, marketing, and administrative costs after excluding stock-based compensation Q2 Non-GAAP Expense Reconciliation (in thousands) | Expense Category | GAAP Expense | Stock-Based Comp. | Non-GAAP Expense | | :--- | :--- | :--- | :--- | | Q2 2025 | | | | | Research and development | $4,840 | $(250) | $4,590 | | Sales and marketing | $17,540 | $(690) | $16,850 | | General and administrative | $8,353 | $(3,426) | $4,927 | | Q2 2024 | | | | | Research and development | $4,272 | $(182) | $4,090 | | Sales and marketing | $20,849 | $(1,787) | $19,062 | | General and administrative | $17,236 | $(5,462) | $11,774 | Key Operating Metrics While Paying Monthly Active Users grew 20% year-over-year in Q2 2025, a decline in Gross Marketplace Volume led to lower monetization per paying user Key Operating Metrics Comparison | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Gross marketplace volume ("GMV") (000s) | $136,590 | $161,663 | | Paying monthly active users ("PMAUs") (000s) | 146 | 122 | | Monthly active users ("MAUs") (000s) | 748 | 807 | | Average revenue per paying monthly active user ("ARPPU") | $62.8 | $69.4 | | Average revenue per monthly active user ("ARPU") | $12.3 | $10.4 | | Paying MAU to MAU ratio | 19% | 15% | Disclosures and Other Information The company discusses its use of non-GAAP metrics, the preliminary nature of results, and its plan to address an NYSE non-compliance notice for delayed SEC filings - The company uses non-GAAP measures like Adjusted EBITDA to supplement GAAP results, believing they provide a useful evaluation of operating performance consistent with industry practice[9] - The reported financial results are preliminary and subject to change upon completion of the company's internal review and independent accounting firm's review[12] - Skillz received a non-compliance notice from the NYSE for failure to timely file its Form 10-K and has a six-month grace period to regain compliance[14] - The report contains forward-looking statements that are subject to significant risks and uncertainties, including competition, developer relationships, and regulatory changes[15][16]