skillz(US:SKLZ)2022-05-05 00:29Financial Data and Key Metrics Changes - Revenue increased by 12% year-over-year to $93 million [11] - Paying monthly active users rose by 22% year-over-year to 569,000 users [11] - Revenue after engagement marketing grew by 8% year-over-year to $51 million [11] - Adjusted EBITDA improved by $17 million compared to Q4 2021 [11] Business Line Data and Key Metrics Changes - The company focused on improving marketing efficiency, resulting in reduced spending while maintaining revenue after engagement marketing [12] - Product innovations were unveiled, including a private beta of a hot gaming product and a system-wide chat feature to enhance user engagement [13] Market Data and Key Metrics Changes - The U.S. market remains the core focus, with over 95% of paying users based in the U.S. [23] - Approximately 60% of smartphones in the U.S. are Android, presenting a significant opportunity for user growth [23][24] Company Strategy and Development Direction - The company aims to transition to profitable growth, targeting a year-over-year revenue growth rate above 30% and an adjusted EBITDA margin better than negative 30% by the end of 2022 [10] - Continued investment in developers and content diversification is a priority, with partnerships established with UFC and NFL to create branded mobile games [14][43] Management's Comments on Operating Environment and Future Outlook - Management expressed a commitment to building revenue and increasing profitable growth through improved marketing efficiency and enhanced user engagement [15] - The future of interactive entertainment is viewed as a massive and fast-growing opportunity, with plans to pursue profitable growth while investing in exciting technologies [16] Other Important Information - The company is exploring the potential of cloud-based gaming, which could enhance user engagement and lower user acquisition costs [22] - Management is cautious about the impact of marketing spend reductions on paying users and average revenue per user (ARPU), noting that the product remains sticky [29][30] Q&A Session Summary Question: Engagement from users on Android versus iOS during cloud gaming testing - Management indicated that data collection is still in early stages, but they believe cloud gaming can increase lifetime value and lower user acquisition costs [22] Question: Impact of efficient marketing spend on paying users and ARPU - Initial reductions in marketing spend led to a slight decrease in paying monthly active users, but the product's stickiness helped maintain user numbers [29] Question: Timing for launches of new games with UFC and NFL - Developers gain access to IP without upfront payments, fostering innovation and interest in building content [50] - The timeline for NFL game launches is aligned with the kickoff for the next season [52] Question: Stock-based compensation figures for Q2 onward - A significant portion of Q1's stock-based compensation was a one-time expense, suggesting a lower run rate moving forward [54] Question: Efforts to optimize supply paths and improve DSP value - Management noted that buyers are focused on efficiency and return on ad spend, but no significant trend towards narrowing DSPs was observed [62] Question: Future features and partnerships to generate revenue - The company is focused on enhancing social features, competition formats, and reducing friction for developers to bring new games to market [92][94]