Sign in

You're signed outSign in or to get full access.

SI

Skillz Inc. (SKLZ)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $20.4M, down 17% q/q and 35% y/y, with diluted EPS of $(1.50); PMAU fell to 110k, though management emphasized a sequential monthly rebound in PMAU from November through February and plans to scale UA while preserving payback discipline .
  • Adjusted EBITDA loss widened to $(18.5)M from $(13.9)M in Q3; cash, cash equivalents and restricted cash ended at $281.9M and total debt at $129.7M, supporting continued investment in the turnaround .
  • Management launched a $75M Skillz Developer Accelerator to seed new content (targeting at least 25 games) and reiterated the four-pillar plan (product/content, org scale, GTM with disciplined UA, path to profitability) .
  • No explicit numerical forward guidance; company filed preliminary FY24 results and indicated a potential 10-K extension. Near-term stock catalysts include execution proof-points (PMAU/MAU stabilization and UA scaling), accelerator deal flow, and receipt of a $7.5M AviaGames settlement installment in March .

What Went Well and What Went Wrong

  • What Went Well

    • Strategic content pipeline push: Announced a $75M developer accelerator to fund and support new skill-based games; management reports strong developer interest so far .
    • Sequential PMAU momentum into early 2025 despite Q4 drop: “paying monthly active users improving sequentially each month from November 2024 through February 2025” .
    • Balance sheet strength to fund turnaround: “We ended 2024 with cash, cash equivalents and restricted cash of $282 million,” providing flexibility to invest in key initiatives .

  • What Went Wrong

    • Top-line and engagement compression: Q4 revenue $20.4M (−17% q/q; −35% y/y) and PMAU 110k (down from 121k in Q3), with CFO noting both PMAU and MAU were lower q/q .
    • Profitability deterioration q/q: Adjusted EBITDA loss widened to $(18.5)M in Q4 vs $(13.9)M in Q3; G&A ex-SBC ran high vs revenue (75% of Q4 revenue) as the company invests in the turnaround .
    • Reporting uncertainty: FY24 results are preliminary and the company may file a 10-K extension; internal control weaknesses remain an area of focus per forward-looking and risk disclosures .

Financial Results

MetricQ4 2023Q3 2024Q4 2024Vs Est.
Revenue ($M)$31.104 $24.564 $20.372 N/A
Net Income (Loss) ($M)$(15.514) $(21.115) $(26.438) N/A
Diluted EPS ($)$(0.74) $(1.20) $(1.50) N/A
Adjusted EBITDA ($M)$(7.305) $(13.882) $(18.508) N/A

Balance sheet snapshot (period-end):

  • Cash, cash equivalents and restricted cash: $311.4M at Q3 2024; $281.9M at Q4 2024; $312.0M at Q4 2023 .
  • Total debt (principal): ~$130M at Q3; $129.7M at Q4 2024 .

KPIs and engagement

KPIQ2 2024Q3 2024Q4 2024
GMV (000s)161,663 158,238 127,079
PMAU (000s)122 121 110
MAU (000s)807 845 753
ARPPU ($)69.4 67.6 68.1
ARPU ($)10.4 9.7 9.9
End-user incentives per PMAU ($)28.9 28.0 25.98

Notes:

  • Q4 UA marketing was ~$5M and engagement marketing ~$10M; management continues to target maintaining system-wide payback periods near 2024 levels as they scale .
  • Segment/geographic breakouts were introduced in filings in 2024, but detailed segment results were not disclosed in these press releases; thus no segment table is provided here .

Guidance Changes

Metric/ItemPeriodPrevious Guidance/CommentaryCurrent Guidance/CommentaryChange
Adjusted EBITDA run-rate positive2025Management expected to reach positive Adj. EBITDA on a run-rate basis in 2025 (Q3 commentary) Reiterated focus on path to positive Adj. EBITDA; no new date provided in Q4 call Maintained directional target
UA scaling and paybackOngoingTarget ~6-month system-wide payback before scaling (prior calls) Will scale traffic strategically while striving to keep payback near 2024 timelines Maintained
AviaGames settlement inflowMarch 2025$50M received in April 2024; four annual $7.5M payments to follow (prior disclosures) Expect $7.5M before end of March 2025 (first of four annual payments) New near-term cash timing detail
10-K timingFY24 filing—FY24 results are preliminary; company may file an extension for the Form 10-K New disclosure of possible extension

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Fair Play initiative / litigation vs. botsAggressive stance vs. Avia/Papaya/Voodoo; class actions noted; seeking regulatory attention Reiterated strong stance; ongoing lawsuits; emphasis on industry-wide fairness and regulatory action Increasing focus
Product/content pipelineLive Brackets in development; positive GDC feedback Launch of $75M Developer Accelerator to seed at least 25 titles over 3 years Scaling initiatives
Go-to-market and UA disciplineTrend toward ~6-month payback; cautious scaling; leverage Aarki Q4 UA spend $5M (engagement $10M); intent to scale while maintaining payback near 2024 timelines Steady discipline
Operating expense managementY/Y reductions across R&D/SM/G&A; improving Adj. EBITDA Ex-litigation OpEx $16M; continued cost focus; G&A ex-SBC at 75% of revenue Mixed (discipline vs. revenue pressure)
Cash/Capital allocationCash >$325M mid-2024; flexibility to invest YE24 cash $281.9M; expects $7.5M Avia inflow; debt ~$129.7M Solid liquidity
Segment/geography disclosureBegan breaking out in filings No detailed segment results in press release; not discussed in depth on call Neutral

Management Commentary

  • CEO: “We recently announced a $75 million developer accelerator program to drive and deliver the best game innovation and expand the offerings on our platform… paying monthly active users improving sequentially each month from November 2024 through February 2025” .
  • CFO: “We ended 2024 with cash, cash equivalents and restricted cash of $282 million, which provides us with the flexibility to continue investing in key initiatives” .
  • CFO details: “Q4 UA marketing was $5 million, while Q4 engagement marketing was $10 million… Adjusted EBITDA loss in the fourth quarter was $19 million… We expect to receive $7.5 million from [AviaGames] before the end of this month” .
  • Strategic tone: Emphasis on fair competition, disciplined UA scaling with payback constraints, and leveraging balance sheet to fund content and product roadmap .

Q&A Highlights

  • The Q4 call ended without analyst questions; prepared remarks highlighted: (1) monthly PMAU rebound Nov–Feb, (2) UA mix (UA vs. engagement marketing) and commitment to maintain system-wide paybacks, and (3) expected $7.5M Avia payment by end of March .
  • No additional quantitative guidance or segment targets were provided .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q4 2024 revenue/EPS/EBITDA and number of estimates but were unable to due to an S&P Global daily request limit; therefore, estimate comparisons are not shown. As a result, “Vs Est.” is marked N/A in the tables above [GetEstimates error].
  • Implication: Absent visible consensus, we cannot characterize beats/misses; investors should anchor revisions on the reported top-line decline q/q and y/y and the widened Adj. EBITDA loss q/q when consensus becomes available .

Key Takeaways for Investors

  • Top-line pressure continued in Q4 (−17% q/q; −35% y/y) as PMAU/MAU declined; management highlighted a monthly PMAU rebound into early 2025 and intends to cautiously scale UA while maintaining historical payback discipline .
  • Profitability remains challenged near-term (Q4 Adj. EBITDA $(18.5)M vs $(13.9)M in Q3), but strong liquidity ($281.9M cash/restricted cash; $129.7M debt) provides runway to fund product/content and UA scaling tests .
  • The $75M Developer Accelerator is the primary growth swing over the next 12–24 months; watch for funded titles, KPI traction (PMAU/GMV/ARPPU), and publishing deal economics .
  • Near-term catalysts: proof of sustained PMAU growth, UA ramp with stable paybacks, arrival of $7.5M AviaGames installment, and progress on 10-K filing/internal controls .
  • Litigation/regulatory overhang may reshape competitive dynamics if bot usage is curtailed; successful outcomes could improve LTV/CAC math and player trust, a key narrative driver for multiple expansion .
  • Absent explicit guidance, model conservatively on revenue and engagement into H1 2025; re-assess as the accelerator pipeline converts to launches and as monthly PMAU trend data is disclosed .
Sources:  
- Q4 2024 8-K and press release: revenue, EPS, net loss, Adj. EBITDA, cash/debt, KPI tables, preliminary results and potential 10-K extension **[1801661_0001801661-25-000005_ex991_fy24q4-8xkxearningsr.htm:0]** **[1801661_0001801661-25-000005_sklz-20250313.htm:2]** **[1801661_618b42d003694ea09d81cb00d6781921_0]** **[1801661_618b42d003694ea09d81cb00d6781921_11]**.  
- Q4 2024 earnings call (transcript): sequential PMAU trend, UA/engagement spend mix, payback/scaling stance, cash details and Avia $7.5M installment timing **[1801661_1974586_0]** **[1801661_1974586_3]**.  
- Prior quarters for trend (Q3 2024 and Q2 2024): press releases and transcripts for revenue, EPS, Adj. EBITDA, cash, KPIs, UA payback commentary **[1801661_354a8bd1a2514c52adff49b37d206add_0]** **[1801661_354a8bd1a2514c52adff49b37d206add_10]** **[1801661_SKLZ_3407131_0]** **[1801661_SKLZ_3407131_5]** **[1801661_b107cd33d9e64ea6911467dbe3db0883_0]** **[1801661_b107cd33d9e64ea6911467dbe3db0883_11]** **[1801661_SKLZ_3396129_0]** **[1801661_SKLZ_3396129_6]**.  
- Developer Accelerator press release (Feb 25, 2025) **[1801661_f9804ac3c36d404ea4f606dc1a47fc7a_0]** **[1801661_f9804ac3c36d404ea4f606dc1a47fc7a_2]**.