Skillz Inc. Q4 FY2025 earnings call

First pillar: Enhancing the platform for player and developer engagement. On the skills platform, invest in new content and strengthen developer experience, debuted Pro SDK product at Game Developers Conference. At Razor, modernize technology stack, evolve into scale performance marketing platform, improve machine learning training capacity. Second pillar: Upleveling our organization. Operational efficiency improves, both businesses operate globally, recently strengthened Board of Directors with new members bringing finance and operating experience. Third pillar: Go-to-market strategy and monetization. Skills focus on acquiring and retaining paying players, Razor's machine learning enhancements contribute to margin expansion. Fourth pillar: Path to profitability. Razor achieving positive full year adjusted EBITDA, skills platform improving, making progress to profitability. Also, update on Fair Play initiative, litigation against Papaya Gaming and Voodoo Gaming, settlement with ABA Games and future payments.

For the fourth quarter of 2025, GAAP revenue was $30 million, up 11% from $27 million in the third quarter, and up 67% from $18 million in the prior year period. For the full year of 2025, GAAP revenue was $105 million, up from $93 million in 2024, which represented 13% year-over-year growth. A key driver of 2025 was our AI ad tech segment, Razor, which delivered 146% net revenue growth year over year, and for the first time since its 2021 acquisition, it generated positive adjusted EBITDA for the full year 2025.

Q: Hi, everyone. Thanks for the question. We'd love to just dig into the skill side of the results on the paying MAUs and GMV looks like kind of the direction of growth from paying users versus GMV is kind of flipped versus the last couple quarters where paying users were up a little bit and then GMV per payer was down a bit and that kind of flipped in the fourth quarter. We'd love to hear just your thoughts on kind of what changed here and is this kind of the trajectory going forward or kind of how to think about that.

A: Hey, Ed. Thanks for the question. Yeah. As you recall, in Q4, we had one of our larger gaming developers leave the platform. So we had a little bit of a dip in our paying mau. But you can see that we continue to increase on our GMV per person for paying mau going forward as we restart as we you know continue to uh drive better efficiencies in our ua we're going to rescale our our ua spend and continue to grow also on our pmap.

Q: Yeah i guess on on the uh partner that you guys kind of leaving the platform I think you guys had disclosed that in your 10K yesterday that there were 51% of revenue last year. How is the progress going in terms of kind of moving folks from those games into, I think you talked about, some skills-branded versions of that content? I would love to hear how that rollout's gone.

A: Yeah, we don't disclose the transition for a variety of reasons, but basically when the partner left the platform, there were some games that left immediately, and then the The two larger games that are, call it the majority, call it 80 plus percent, are there and we're in the process of transitioning to our own games. Also, if I could just jump in, this is Andrew, and thank you for the question, Ed. The other thing that we saw in Q4 is we had a technical issue with some of our engagement in marketing. technologies for our player base, and we've now addressed that. So you're seeing both effects in the change in PMAP in Q4.

Q: Okay, great. Appreciate it. Thanks.

A: Thank you for your question. There are no additional questions waiting at this time, so that will conclude the conference call. Thank you for your participation. You may now disconnect your lines.