Company: SKLZ
Filing Date: 2025-11-06
Form Type: 10-K
Source: 0001801661-25-000050
Chunk: 164

Company: Skillz Inc.
Filing Date: 2025-11-06
Form: 10-K
Item: Item 8
Chunk 164
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 evaluating the disclosure requirements related to the new standard.

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TABLE OF CONTENTSSKILLZ INC.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(Amounts in tables are in thousands, unless otherwise noted)

3. Spin-Off Transaction

On August 31, 2023, in order to more directly incentivize the key employees of the Company’s subsidiary, Aarki, Inc. (“Aarki”), the Company made the determination to allow certain key employees of Aarki to receive equity awards in Aarki. In connection with the spin-off transaction, the Company provided Aarki $5.0 million to fund its operations in exchange for Series A Preferred Stock of Aarki. In December 2024, the Company provided Aarki an additional $5.0 million to fund its operations in exchange for Series B Preferred Stock of Aarki.  Both the Series A and Series B funding transactions were eliminated in consolidation and were used to provide working capital to Aarki.  Subsequent to the funding of Series B, on a fully diluted basis, the awards would represent 17.6% of the ownership of Aarki, which, as of December 31, 2024 and 2023,  13.4% and 0.0% of the awards had been granted, respectively. Vested and exercised awards constituted an immaterial non-controlling interest in Aarki. The Company does not intend to grant future Skillz equity awards to Aarki employees. In connection with the foregoing, Aarki is also being designated as an unrestricted subsidiary under the indenture governing the Company’s 10.25% Secured Notes due 2026.

4. Revenue

The following tables present our revenues, disaggregated by offering, geographical region, and reportable segment. Revenue by geographical region is based on the location where the game developer or advertising customer is headquartered.  Revenue is recognized net of any taxes collected from customers (e.g., sales and other indirect taxes), which are subsequently remitted to governmental entities. For more information on revenues presented by reportable segments, see Note 17, Segment Reporting.Year Ended December 31, 2024SkillzAarkiEliminationConsolidatedRevenue From Customers:Entry Fee Revenue$80,426 $— $— $80,426 Advertising Revenue— 10,876 (453)10,423 Other Revenue:Maintenance Fee Revenue2,016 —