Executive Summary

Q1 2025 revenue was $22.4M, up 10% q/q from Q4 and down 11% y/y, and beat S&P Global consensus of $20.8M by ~8%; GAAP diluted EPS was $(0.92), better than the prior year’s $(1.45) and improved vs Q4’s $(1.50) . Revenue consensus: $20.75M*; EPS consensus: $(1.10)* — a revenue beat and EPS better than prior periods (see Estimates Context).
Paying monthly active users (PMAU) rose sequentially to 124k (vs 110k in Q4), with conversion improving to ~16% (PMAU/MAU) as the company re-engaged lapsed users; ARPPU moderated to $62.2 .
Adjusted EBITDA loss narrowed y/y to $(15.1)M, aided by lower G&A and sales & marketing, and excluding a $7.5M litigation settlement gain received from AviaGames (first of four annual payments) .
Key near-term catalysts: continued PMAU growth and monetization features, progress on the $75M Accelerator program, and litigation/fair play initiatives; risks include late 10-K and 10-Q timing (NYSE notice) and ongoing litigation, which management is actively addressing .

What Went Well and What Went Wrong

What Went Well

Sequential demand recovery: PMAU increased to 124k and conversion improved to ~16% (16.2% cited on the call) as lapsed-user marketing drove re-engagement .
Operating discipline: Sales & marketing fell to $19.1M and G&A to $16.3M, supporting improved y/y adjusted EBITDA loss of $(15.1)M; non-GAAP G&A was $12.2M, reflecting reduced SBC .
Strategic initiatives: Management highlighted the $75M Accelerator program targeting at least 25 games over three years to broaden the portfolio and increase engagement and monetization .

Selected management quote:

“Our $75 million accelerator program is helping us identify the next generation of skill-based mobile games… [and] broaden the scope of our offerings.” — Andrew Paradise, CEO .

What Went Wrong

Top-line still below prior year: Revenue declined 11% y/y to $22.4M despite sequential improvement; ARPPU softened to $62.2 vs $69.8 y/y, and GMV fell to $126.5M (from $161.3M) .
Filings delay risk: The company is still completing FY 2024 financials and expects to file the 10-K within the NYSE’s six-month window; Q1 results are preliminary and may be revised .
Litigation and market integrity overhang: Ongoing suits (Papaya, Voodoo) and industry fair-play concerns continue; while Skillz received $7.5M from AviaGames, legal processes may add uncertainty .

Financial Results

Core Financials vs Prior Periods and Estimates

Metric	Q3 2024	Q4 2024	Q1 2025 Actual	Q1 2025 Consensus
Revenue ($USD Millions)	$24.6	$20.4	$22.4	$20.75*
Net Loss ($USD Millions)	$(21.1)	$(26.4)	$(14.9)	—
GAAP Diluted EPS ($USD)	$(1.20)	$(1.50)	$(0.92)	$(1.10)*
Adjusted EBITDA ($USD Millions)	$(13.9)	$(18.5)	$(15.1)	—

Note: Q1 2025 consensus values marked with * are from S&P Global. Values retrieved from S&P Global.

Highlights:

Revenue beat: Q1 revenue $22.4M vs $20.75M consensus → beat ~8%* .
EPS trajectory: GAAP diluted EPS improved to $(0.92) vs $(1.50) in Q4 and $(1.45) y/y .

Margins and Operating Expenses

Metric	Q3 2024	Q4 2024	Q1 2025
Cost of Revenue ($M)	$3.37	$3.23	$2.97
Gross Profit ($M)	$21.19 (calc. from rev–COR)	$17.10	$19.45 (calc. from rev–COR)
Gross Margin (%)	86.3% (calc.)	83.8% (calc.)	86.8% (calc.)
R&D ($M)	$4.74	$3.56	$4.81
Sales & Marketing ($M)	$19.29	$19.12	$19.07
General & Administrative ($M)	$18.15	$20.54	$16.33
Operating Loss ($M)	$(20.99)	$(26.08)	$(13.27)

Note: Gross margin values are calculated from disclosed revenue and cost of revenue and are not separately disclosed as a GAAP metric in filings.

KPIs

KPI	Q3 2024	Q4 2024	Q1 2025
GMV ($USD 000s)	$158,238	$127,079	$126,485
PMAU (000s)	121	110	124
MAU (000s)	845	753	764
ARPPU ($)	$67.6	$68.1	$62.2
ARPU ($)	$9.7	$9.9	$10.0
PMAU/MAU Ratio (%)	14%	15%	16%
End-user incentives per paying user ($)	$28.0	$26.0	$23.5

Guidance Changes

Skillz did not issue numeric forward guidance for revenue, margins, or EPS in Q1 2025; management reiterated its focus on returning to consistent top-line growth and positive adjusted EBITDA (no quantified ranges provided) .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q2 2025	n/a	n/a	Maintained: No formal guidance
Adjusted EBITDA	FY/Q2 2025	n/a	n/a	Maintained: No formal guidance
OpEx (non-GAAP)	FY/Q2 2025	n/a	Continued discipline; no numeric	Maintained qualitative
Taxes, OI&E	FY/Q2 2025	n/a	Not provided	n/a

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
Accelerator program / content pipeline	Program announced; focus on new features and payback discipline	$75M Accelerator; pipeline “strong,” goal to support ≥25 games; broaden genres	Scaling initiative; increased engagement with devs
User growth and monetization	PMAU stable seq. in Q3; improving through Feb 2025; payback ~6 months	PMAU +13k q/q to 124k; conversion 16.2%; lapsed-user marketing; features to increase spend	Sequential improvement; monetization features in focus
Operating discipline	S&M targeted UA; OpEx down y/y; adjusted EBITDA improving	S&M $19.1M; G&A $16.3M; non-GAAP G&A $12.2M; adjusted EBITDA $(15.1)M	Continued cost reductions and mix shift
Litigation / fair play initiative	Highlighted industry integrity; ongoing matters (Voodoo, Papaya)	Emphasis on bots allegations; Papaya depositions; consumer class actions; $7.5M Avia payment	Elevated as a strategic narrative
Capital & liquidity	>$300M cash at 9/30/24; debt ~$129.7M	$264M total cash incl. restricted; $129.7M principal due; flexibility to deploy capital	Adequate runway; managing cash burn
Filings / governance	FY24 preliminary; potential 10-K extension	NYSE notice on late 10-K; plan to file within 6 months; preliminary Q1; possible 10-Q extension	Ongoing filing remedy efforts

Management Commentary

“First quarter paying monthly active users rose quarter over quarter… our $75 million accelerator program is helping us identify the next generation of skill-based mobile games…” — Andrew Paradise, CEO .
“Our focus on disciplined operating expense management continues to drive year over year improvements in our Adjusted EBITDA loss… cash and restricted cash of more than $264 million provides significant financial flexibility…” — Gaetano Franceschi, CFO .
“Paying MAU… was 123,000 compared to 110,000 in Q4 2024… primarily driven by marketing to our lapsed users… UA spend in Q1 was consistent with recent quarters.” — Andrew Paradise, prepared remarks .
“Adjusted EBITDA loss… $15 million compared to… $90 million in Q4 2024… cash position… includes the $7.5 million payment we received from AviaGames…” — Gaetano Franceschi .

Q&A Highlights

The call concluded without analyst Q&A; no incremental disclosures or guidance clarifications beyond prepared remarks .

Estimates Context

Revenue: Q1 2025 actual $22.4M vs consensus $20.75M → beat ~8%* .
EPS: GAAP diluted EPS $(0.92) vs consensus $(1.10)* → better than consensus on a GAAP basis; note S&P “Primary EPS” may reflect different methodology than GAAP diluted EPS.
Prior quarters context: Q4 2024 revenue of $20.4M missed consensus $25.1M*, and EPS $(1.50) missed consensus $(1.14); Q3 2024 revenue $24.6M missed consensus $26.7M, and EPS $(1.20) missed $(1.12)* .

Metric	Q3 2024 Actual	Q3 2024 Consensus	Q4 2024 Actual	Q4 2024 Consensus	Q1 2025 Actual	Q1 2025 Consensus
Revenue ($M)	$24.56	$26.66*	$20.37	$25.07*	$22.41	$20.75*
Primary EPS ($)	$(1.20)	$(1.12)*	$(1.50)	$(1.14)*	$(0.92)	$(1.10)*

Note: Consensus values marked with * are from S&P Global. Values retrieved from S&P Global.

Implications:

The Q1 revenue beat and improved GAAP EPS vs consensus may warrant upward revisions to near-term revenue forecasts and reduced loss expectations, especially if PMAU gains are sustained .

Key Takeaways for Investors

Sequential recovery: PMAU and conversion improved; if re-engaged cohorts ramp spend, revenue trajectory could continue to normalize in coming quarters .
Cost control: Continued OpEx discipline with lower G&A/S&M underpins adjusted EBITDA improvement y/y; watch mix of UA vs engagement marketing for payback continuity .
Litigation/fair play narrative: $7.5M Avia payment received; ongoing cases may catalyze industry behavior changes and potentially benefit Skillz’s positioning if resolved favorably .
Filing timeline: Preliminary results and NYSE notice create procedural risk; monitor 10-K and 10-Q timing for resolution and any restatements or revisions .
Cash runway: ~$264M total cash including restricted supports investment in the $75M Accelerator and product roadmap while managing burn and debt service ($129.7M principal due) .
Estimate revisions: Revenue beat and improved EPS vs consensus suggest near-term estimate upgrades; however, ARPPU softness and lower GMV y/y warrant caution on magnitude .
Execution focus: Key drivers are retention features, monetization upgrades, and developer pipeline; sustained PMAU growth and ARPPU stabilization will be critical to the medium-term thesis .

Sources: Q1 2025 8-K press release (preliminary) and attachments , company press releases , Q1 2025 earnings call transcripts , Q4 2024 8-K , Q3 2024 8-K .

S&P Global estimates: Values marked with * are retrieved from S&P Global.

Skillz Inc. (SKLZ)·Q1 2025 Earnings Summary