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Skillz Inc. (SKLZ)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered sequential and year-over-year revenue growth with preliminary revenue of $27.4M (+11% YoY; +9% QoQ) and PMAU of 155K (+28% YoY; +6% QoQ), supported by the Skillz platform and accelerating Aarki ad-tech momentum .
  • Adjusted EBITDA loss improved year over year to $(11.8)M vs $(13.9)M in Q3 2024, while net loss narrowed to $(17.4)M from $(21.1)M YoY; management emphasized ongoing OpEx discipline and a healthy cash balance of $213M .
  • Against Wall Street consensus, revenue missed ($27.4M vs $29.1M) and EPS was slightly below expectations (−$1.14 vs −$1.10) on limited coverage (2 estimates), reflecting continued investment and evolving monetization dynamics; results are preliminary and subject to revision . Values retrieved from S&P Global*.
  • Catalysts near term: progress in Fair Play litigation (Papaya summary judgment denial advancing to trial), launch of Solitaire Skills and developer accelerator funnel, and NYSE cure timeline (extension through Dec 17, 2025) for delayed filings, which collectively shape risk/reward into year-end .

What Went Well and What Went Wrong

What Went Well

  • PMAU growth and monetization: PMAU rose to 155K (+28% YoY; +6% QoQ); ARPU improved to $14.9, indicating stronger engagement despite seasonal headwinds .
  • Aarki momentum: AI-driven ad-tech launches (including privacy-forward iOS offerings) are “already driving measurable scale and efficiency”; management sees addressable market expansion and better advertiser ROAS .
  • Year-over-year profitability improvement: Adjusted EBITDA loss improved to $(11.8)M from $(13.9)M YoY, supported by cost discipline and optimization in sales & marketing .

Management quotes:

  • “We delivered 11% year-over-year and 9% sequential quarterly revenue growth… and 28% year-over-year growth in paying monthly active users” — CEO Andrew Paradise .
  • “With $213 million in cash, we’re well positioned to invest in strategic initiatives and deliver long-term shareholder value” — CFO Gaetano Franceschi .
  • “Aarki launched on iOS, enabling privacy-forward performance marketing… driving measurable scale and efficiency” — CEO Andrew Paradise .

What Went Wrong

  • Consensus miss: Revenue of $27.4M fell short of the $29.1M consensus; EPS slightly missed at −$1.14 vs −$1.10 (limited estimate breadth), signaling ongoing normalization and investment needs. Values retrieved from S&P Global*.
  • Filing delays and compliance risk: The company remains delinquent on FY24 10-K and Q1/Q2 2025 10-Qs; NYSE granted an additional cure period through Dec 17, 2025 to regain compliance .
  • KPI pressure vs prior year baselines: ARPPU declined YoY ($58.9 vs $67.6), and GMV per paying user was lower ($300 vs $436), indicating a mix shift toward broader conversion at lower per-user spend .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$24.564 $22.413 $27.372 $27.374
Diluted EPS ($USD)$(1.20) $(0.92) $(0.58) $(1.14)
Net Loss ($USD Millions)$(21.115) $(14.931) $(8.919) $(17.442)
Adjusted EBITDA ($USD Millions)$(13.882) $(15.062) $(10.388) $(11.759)
Gross Profit ($USD Millions)——$24.2 $24.0
Cash + Restricted Cash ($USD Millions, period-end)—$264.3 $238.7 $213.0
EBITDA Margin %Q3 2024Q1 2025Q2 2025Q3 2025
Adjusted EBITDA / Revenue−56.6% −67.2% −38.0% −42.9%
KPIsQ3 2024Q1 2025Q2 2025Q3 2025
PMAU (000s)121 124 146 155
MAU (000s)845 764 748 613
ARPPU ($)67.6 62.2 62.8 58.9
ARPU ($)9.7 10.0 12.3 14.9
GMV ($USD Millions)158.238 126.485 136.590 139.451
Incentives per Paying User ($)28.0 23.5 24.6 18.4
Estimates vs Actual (Q3 2025)Consensus*Actual
Revenue ($USD)$29.05M*$27.374M
Primary EPS ($USD)−$1.10*−$1.14
# of Estimates (Revenue / EPS)2 / 2*—

Values retrieved from S&P Global*.

Notes:

  • Company disclosed Q2 preliminary adjustments: revenue −$2.2M, G&A +$8.0M, S&M −$1.1M, increasing net loss by $9.1M, which may affect sequential comparisons and narrative; results remain preliminary pending filings .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2025 / FY25Not disclosedNot disclosedMaintained: no formal guidance
Adjusted EBITDAQ4 2025 / FY25Not disclosedNot disclosedMaintained: no formal guidance
OpEx (Non-GAAP)Q4 2025 / FY25Not disclosedNot disclosedMaintained: no formal guidance
OI&E / Tax RateQ4 2025 / FY25Not disclosedNot disclosedMaintained: no formal guidance
Filing Timeline (Compliance)Through 12/17/2025Initial cure periodAdditional cure period granted, target filings by 12/17/2025Updated timeline

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
AI/ad-tech (Aarki)Foundation in place; focus on profitable growth Momentum building; disciplined OpEx AI-driven product launches incl. privacy-forward iOS, measurable scale/efficiency Strengthening
Developer Accelerator & First-Party Title$75M accelerator to broaden offerings Program well underway Launch of Solitaire Skills; more titles targeted for GDC Mar-2026 Execution milestone
Monetization & PMAUFocus on retention/spend; PMAU up QoQ PMAU +20% YoY; ARPPU ~$62.8 PMAU 155K; ARPU $14.9; quality-over-volume approach Improving conversion; mixed ARPPU
Cost Discipline & Path to ProfitabilityNon-GAAP OpEx framed; EBITDA improvement YoY EBITDA improvement YoY; cash flexibility YoY EBITDA improvement; S&M optimization; cash $213M Ongoing
Litigation (Fair Play)Ongoing cases referenced Continued resolution efforts Papaya summary judgment denied; trial path; Tether post-termination terms Legal overhang with positive progress
Filings/NYSE ComplianceFY24 10-K delayed; initial cure period 10-K/10-Q delayed; plan to file; notice Additional cure period to 12/17/25; intent to file by deadline Critical near-term milestone

Management Commentary

  • “By combining our strengths in gaming and AI-driven ad-tech, we are building a powerful foundation that can extend beyond gaming into adjacent verticals where performance marketing and content converge.” — CEO Andrew Paradise .
  • “Our focus on expense management and operational efficiency continues to drive improvement in Adjusted EBITDA and maintain a healthy balance sheet.” — CFO Gaetano Franceschi .
  • “Aarki launched on iOS, enabling privacy-forward performance marketing… we will continue to invest in machine and deep learning capabilities.” — CEO Andrew Paradise .
  • “Judge Cote… denied Papaya’s motion for summary judgment… [and] motion to exclude Skillz’ survey and damages experts… [our] claims against Papaya will proceed to a trial.” — CEO Andrew Paradise .

Cross-reference note: The 8-K shows Q3 2025 Adjusted EBITDA loss of $(11.8)M vs $(13.9)M in Q3 2024 (improvement), while the call commentary references a quarter-over-quarter decrease and 15% year-over-year “growth” in the loss; the preliminary nature of results and Q2 adjustments may contribute to narrative inconsistencies .

Q&A Highlights

  • No analyst Q&A occurred; the operator closed the session without recorded questions, so clarifications were limited to prepared remarks .

Estimates Context

  • Revenue missed consensus: $27.4M actual vs $29.05M consensus; EPS slightly below: −$1.14 actual vs −$1.10 consensus; coverage was limited (two estimates), increasing the potential for dispersion. Values retrieved from S&P Global*.
  • Given improved PMAU and ARPU, and Aarki’s AI rollouts, estimate models may adjust for mix in monetization and conversion vs per-user spend, ongoing cost optimization, and legal/filing milestones .

Key Takeaways for Investors

  • Platform traction with improving conversion: PMAU +28% YoY and ARPU up to $14.9 highlights engagement gains; monitor ARPPU trend as growth prioritizes quality over volume .
  • Aarki is an emerging growth driver: iOS privacy-forward launch and ML investments position ad-tech for scale and margin uplift; watch net revenue and margin disclosures in future filings .
  • Profitability trajectory mixed sequentially but better YoY: Adjusted EBITDA loss improved YoY; sequential margin reflects Q2 adjustments and seasonal traffic costs; look for normalization in Q4 .
  • Legal overhang with constructive developments: Papaya case advancing to trial; Tether games remain up to 18 months post-termination; potential positive resolution but timing uncertain .
  • Balance sheet provides runway: $213M in cash/restricted cash supports growth and compliance execution; debt ~$127M net of current portion warrants continued capital discipline .
  • Filings are the near-term catalyst/risk: NYSE cure extension through Dec 17, 2025; timely filings of FY24 10-K and Q1/Q2/Q3 10-Qs are essential for listing compliance and investor confidence .
  • Trading setup: Narrative hinges on execution in ad-tech and developer pipeline, Q4 seasonality, and filing resolution; consensus misses were modest amid limited estimates, suggesting sensitivity to updates in KPIs and filings .