Skillz (SKLZ) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $25.3M, down 37% year-over-year, with net income of $26.0M driven by a $46M litigation settlement gain.

• Adjusted EBITDA loss improved to $(12.6)M, reflecting ongoing cost discipline and operational improvements.

• Paying monthly active users increased sequentially for the first time in ten quarters, reaching 122,000.

• Company is addressing delayed SEC filings and NYSE non-compliance, working to regain compliance within the allowed period.

• Focused on platform enhancement, organizational optimization, go-to-market strategy, and path to profitability.

Financial highlights

• Q2 2024 revenue: $25.3M (Q2 2023: $40.2M); net income: $26.0M (Q2 2023: net loss $16.7M); adjusted EBITDA loss: $(12.6)M (Q2 2023: $(18.9)M).

• Operating cash flow for the first half of 2024 was $23.4M, compared to $(41.1)M in the prior year.

• Cash and cash equivalents at June 30, 2024: $326.4M, including restricted cash.

• Gross margin for Q2 2024 was approximately 87% ($21.9M gross profit on $25.3M revenue).

• Gross marketplace volume (GMV) for Q2 2024 was $161.7M, down from $255.2M in Q2 2023.

Outlook and guidance

• Management expects continued lower revenue due to reduced user acquisition and engagement marketing spend, prioritizing profitability.

• Company aims to prudently scale spending to grow the paying user base while maintaining focus on customer acquisition returns.

• Existing liquidity is sufficient to fund operations for at least the next 12 months.

• Difficulty achieving positive Adjusted EBITDA run rate by late 2024; optimistic for 2025.

• Anticipate further progress on regulatory and legal actions against bot fraud, which could improve business metrics.