Skillz Inc. Q1 FY2025 earnings call

• Fair play initiative and litigation: Ongoing efforts against bots, lawsuits against Papaya and Voodoo, class action lawsuits filed by consumers, commitment to protecting consumers and industry integrity.
• Q1 performance and pillars:
  • Pillar 1 (Enhancing platform): Accelerator program launched to drive innovation, aiming to deploy $75 million over 3 years for 25 high-potential games, successful GDC developer engagement.
  • Pillar 2 (Up-leveling organization): Scaling and optimizing Las Vegas and Bangalore teams.
  • Pillar 3 (Go-to-market): Positive improvement in paying users, PMAU growth driven by reengaging lapsed users, focusing on optimizing CAC and LTV.
  • Pillar 4 (Demonstrating path to profitability): Progress towards profitability, managing expenses while investing, improving operating cash burn, strong balance sheet.

Revenue for the first quarter was $22 million, up 21% sequentially and down 11% year-over-year. Excluding a $1.6 million life-to-date incentive adjustment in Q4, revenue grew 12% sequentially. Paid MAU (monthly active users) in Q1 was 123,000 compared to 110,000 in Q4 2024, with a paid user conversion rate of 16.2% in Q1 (up from 14.6% in Q4 2024). Research and development expense was $5 million, up 4% year-over-year. Sales and marketing expense was $19 million, down 9% year-over-year. General and administrative expense was $16 million, down 29% year-over-year. Net loss was $15 million compared to a net loss of $27 million in the prior year. Adjusted EBITDA loss in Q1 was $15 million compared to $19 million in Q4 2024. The company ended the first quarter with $264 million in cash, including $7.5 million from AviaGames settlement.

• Litigation and fair play issues impacting business.
• Non-compliance with NYSE listing standards, need to file 10-K within 6 months.
• Forward-looking statements subject to risks and uncertainties outlined in SEC filings.

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