Skillz Inc. Q4 FY2024 earnings call

• Fairplay Initiative and Litigation: Actively working on Fairplay to address deception by other companies using bots, filed lawsuits against Papaya and Voodoo, class action lawsuits against Avia Games and Papaya Gaming, and advocating for regulatory oversight.
• Business Performance in Q4:
  • Pillar 1: Enhancing platform with $75 million developer accelerator program over three years to support high-potential games, received strong response from developers.
  • Pillar 2: Scaled Las Vegas and Bangalore-based teams to up-level the organization.
  • Pillar 3: Paying MAU had variance in Q4 but rebounded, focused on optimizing CAC and growing LTV, UA spend consistent with recent quarters at lowest since 2018.
  • Pillar 4: Demonstrated path to profitability with steady strides in 2024, improved operating cash burn and strong balance sheet.

In the fourth quarter, revenue was $20 million, down 17% sequentially and 35% year over year. Paid MAU was 110,000 in Q4 compared to 121,000 in Q3, but rebounded to 123,000 in February. Operating expense excluding litigation expenses was $16 million, a $3 million improvement from the prior quarter. Net loss was $26 million, compared to $60 million in Q4 2023. Adjusted EBITDA loss in Q4 was $19 million, and for the full year, it was $63 million. The company ended the year with $282 million in cash, consisting of $272 million in cash and cash equivalents and $10 million in restricted cash.

• Announced $75 million developer accelerator program to be deployed over three years to support high-potential games.
• Expecting $7.5 million from Avia Games settlement before end of the month, part of $50 million already received.
• With improving cash burn, has flexibility to deploy capital to enhance shareholder value.

• Forward-looking statements subject to numerous risks and uncertainties from federal securities laws, with actual results possibly differing materially from expectations.
• Litigation risks related to ongoing lawsuits against companies using bots, which could impact operating results.

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