skillz(US:SKLZ)2025-12-11 22:22Financial 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].