skillz(US:SKLZ)2024-03-15 00:07Financial Data and Key Metrics Changes - For Q4 2023, revenue was $29 million, down 38% year-over-year and down 20% sequentially [49] - The adjusted EBITDA loss improved to negative $12 million from negative $18 million in Q3, with an adjusted EBITDA margin improvement from negative 51% in Q3 to negative 42% in Q4 [51] - The net loss was $21 million, including a $3 million impairment charge, compared to a net loss of $144 million in Q4 2022 [33] Business Line Data and Key Metrics Changes - The paid user conversion rate was 15% in Q4, slightly down from 16% in Q3 due to prioritizing platform optimization over user acquisition [49] - Research and development expense was $3 million, down 54% year-over-year, while sales and marketing expense was $23 million, down 28% year-over-year [50] Market Data and Key Metrics Changes - The company reported a significant reduction in user acquisition costs, with the payback period for user acquisition in Q4 improving sequentially and approaching the goal of six months [25][41] - The company anticipates that the elimination of bot fraud will benefit customer acquisition costs (CAC) and lifetime value (LTV), which would accelerate the turnaround of the business [3] Company Strategy and Development Direction - The company is focused on four strategic pillars: enhancing the platform for customer engagement, up-leveling the organization, improving go-to-market efficiency, and demonstrating a clear path to profitability [19] - The introduction of new features like Instant Match and account merge aims to improve player experience and reduce support requests [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving positive adjusted EBITDA by the end of the year, emphasizing that this goal is not contingent on the outcome of ongoing lawsuits [1][28] - The company is committed to eradicating unfair practices in the industry, particularly the use of bots, which they believe undermines player trust and fair competition [20] Other Important Information - The company ended Q4 with approximately $312 million in cash, providing significant runway for sustainable and profitable growth [52] - The company has over $50 million remaining in its share repurchase authorization program as of December 31, 2023 [30] Q&A Session Summary Question: How will the company bridge the gap from a $12 million EBITDA loss to a positive number in the future? - Management indicated that growth will come from sequential user growth and improved retention and monetization through platform launches [40] Question: How does the fair play initiative impact revenue improvements? - Management stated that while fair play is important, achieving profitability does not depend solely on stopping bots, although it would be a helpful tailwind [55]