Skillz (SKLZ, Financial) recently announced its preliminary financial results for the first quarter, revealing an adjusted EBITDA loss of $15.1 million. The company reported an increase in monthly active users paying for services, reaching 124,000, with each user generating an average revenue of $62.2. This reflects a quarter-over-quarter growth in paying users.
According to CEO Andrew Paradise, Skillz is making strides towards sustainable revenue growth and achieving a positive adjusted EBITDA. The company's strategy involves introducing new features to enhance user retention and stimulate spending. A key component of this strategy is the $75 million accelerator program, which aims to discover emerging skill-based mobile games that could expand the company's offerings in the future.
With a focus on improving player engagement and monetization, Skillz is aligning its efforts with its strategic pillars to drive value for its shareholders. The company remains optimistic about leveraging its unique platform to unlock greater shareholder value.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 2 analysts, the average target price for Skillz Inc (SKLZ, Financial) is $10.00 with a high estimate of $15.00 and a low estimate of $5.00. The average target implies an upside of 89.39% from the current price of $5.28. More detailed estimate data can be found on the Skillz Inc (SKLZ) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, Skillz Inc's (SKLZ, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Skillz Inc (SKLZ, Financial) in one year is $5.15, suggesting a downside of 2.46% from the current price of $5.28. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Skillz Inc (SKLZ) Summary page.
SKLZ Key Business Developments
Release Date: March 13, 2025
- Revenue: $20 million, down 17% sequentially and 35% year over year.
- Paid User Conversion Rate: 14.6% in Q4, up from 14.3% in Q3.
- Operating Expense (Excluding Litigation): $60 million, a $3 million improvement versus the prior quarter.
- Research and Development Expense: $4 million, up 5% year over year, 16% of Q4 revenue excluding stock-based compensation.
- Sales and Marketing Expense: $19 million, down 18% year over year, 86% of Q4 revenue excluding stock-based compensation.
- General and Administrative Expense: $21 million, up 11% year over year, 75% of Q4 revenue excluding stock-based compensation.
- Net Loss: $26 million, compared to a net loss of $60 million in Q4 2023.
- Adjusted EBITDA Loss: $19 million in Q4; $63 million for the full year compared to $69 million in 2023.
- Cash and Cash Equivalents: $272 million, with an additional $10 million in restricted cash.
- Total Principal Due on Outstanding Debt: $129.7 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Skillz Inc (SKLZ, Financial) announced a $75 million Developer Accelerator Program to drive game innovation and expand platform offerings.
- The company is actively pursuing legal actions to protect its business interests and ensure fair play in the gaming industry.
- Skillz Inc (SKLZ) has a strong balance sheet with $282 million in cash and cash equivalents, providing financial flexibility.
- The company reported a sequential growth in paying monthly active users (MAU) from November through February.
- Skillz Inc (SKLZ) achieved a 9% improvement in adjusted EBITDA loss excluding litigation expenses compared to 2023.
Negative Points
- Revenue for the fourth quarter was $20 million, down 17% sequentially and 35% year over year.
- The company experienced a decline in both paying MAU and overall MAU quarter over quarter.
- Sales and marketing expenses were high, accounting for 86% of Q4 revenue excluding stock-based compensation.
- General and administrative expenses increased by 11% year over year, representing 75% of Q4 revenue excluding stock-based compensation.
- Skillz Inc (SKLZ) reported a net loss of $26 million for the fourth quarter.
