skillz(US:SKLZ)2025-12-11 22:19Financial Performance - Revenue decreased by $3.3 million, or 13%, to $21.9 million for the three months ended March 31, 2025, compared to $25.2 million in the same period of 2024 [186]. - Net loss was $17.1 million for the three months ended March 31, 2025, compared to a net loss of $26.7 million in the same period of 2024, reflecting a decrease of $9.6 million or 36% [196]. - Net cash used in operating activities was $10.9 million for the three months ended March 31, 2025, compared to $4.4 million in the same period of 2024 [199]. Marketing Expenses - User acquisition marketing spend for Q1 2025 was approximately $4.5 million, down from $5.6 million in Q1 2024, indicating a reduction in marketing expenses that is expected to continue impacting revenue negatively [172]. - Sales and marketing costs decreased by $3.0 million, or 14%, to $18.0 million for the three months ended March 31, 2025, from $21.0 million in the same period of 2024 [189]. - Engagement marketing expenses may be impacted by end-user incentives, which include Bonus Cash for entering paid contests [171]. Legal Matters - The company is involved in ongoing litigation with Tether and Papaya, which may impact its financial condition and operational results [173][178]. - The company recorded a gain of $46 million from the litigation settlement with AviaGames, netting the gross payment received [180]. - The gain from litigation settlement was $7.5 million for the three months ended March 31, 2025, related to a settlement with AviaGames [191]. Revenue Sources - 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 [174]. Company Operations - The company operates two reportable segments: Skillz and Aarki, with Aarki focusing on AI-driven advertising solutions for mobile app developers [181]. - The company has developed a technology platform that allows developers to integrate and update games seamlessly, enhancing data-driven algorithms and LiveOps systems [168]. Financial Reporting - The company filed its Annual Report on Form 10-K for the year ended December 31, 2024, on November 6, 2025, as part of its compliance plan with the NYSE [176]. - The NYSE granted an extension for continued listing through December 17, 2025, contingent upon the company becoming current with SEC filings [177]. Cost Management - Cost of revenue decreased by $0.5 million, or 14%, to $3.0 million for the three months ended March 31, 2025, from $3.5 million in the same period of 2024 [187]. - General and administrative costs decreased by $4.0 million, or 17%, to $19.1 million for the three months ended March 31, 2025, from $23.0 million in the same period of 2024 [190]. - Research and development costs increased by $0.2 million, or 4%, to $4.8 million for the three months ended March 31, 2025, from $4.6 million in the same period of 2024 [188]. Debt and Cash Position - As of March 31, 2025, the company had cash, cash equivalents, and restricted cash totaling $264.3 million [195]. - The total principal amount of long-term debt was $129.7 million, due on December 15, 2026 [206].