Company: SKLZ
Filing Date: 2025-11-06
Form Type: 10-K
Source: 0001801661-25-000050
Chunk: 124

Company: Skillz Inc.
Filing Date: 2025-11-06
Form: 10-K
Item: Item 7
Chunk 124
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,798)(18)%Gain from litigation settlement(46,000)— (46,000)— %Impairment of goodwill and long-lived assets— 3,335 (3,335)(100)%Total costs and expenses139,368 266,371 (127,003)(48)%Loss from operations(46,503)(114,292)67,789 (59)%Gain on extinguishment of debt— 15,205 (15,205)(100)%Interest income (expense), net298 (2,852)3,150 (110)%Change in fair value of common stock warrant liabilities11 278 (267)(96)%Other (expense) income, net(530)540 (1,070)(198)%Loss before income taxes(46,724)(101,121)54,397 (54)%Provision for income taxes66 239 (173)(72)%Net loss$(46,790)$(101,360)54,570 (54)%

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Revenue

Revenue decreased by $59.2 million, or 39%, to $92.9 million in 2024 from $152.1 million in 2023. This was primarily due to a reduction in the player base as our monthly active users were 0.8 million in 2024, lower by 0.2 million, or 22%, compared to 1.0 million in 2023. This was commensurate with the decreases in UA marketing and engagement marketing spend of 39% and 44% in 2024, respectively. Beginning in fiscal 2023, the Company reduced  user acquisition marketing spend, which is primarily focused on acquiring new players and driving growth in order to improve efficiency and prioritizing profitability over top-line expansion.  In parallel, the Company also reduced engagement marketing spend, which is primarily focused on player retention, to eliminate programs that were not profitable on a dollar-for-dollar basis. The Company intentionally reduced spend to achieve better user acquisition efficiency and eliminate lower-return engagement marketing programs. ARPU decreased 19% over the same period.

Cost of Revenue

Cost of revenue decreased by $2.0 million, or 13%, to $13.4 million in 2024 from $15.4 million in 2023. This was primarily driven by a reduction in customer support personnel and payment processing costs. Cost of revenue as a percentage of revenue increased to 14% in 2024 from