Company: SKLZ
Filing Date: 2025-11-06
Form Type: 10-K
Source: 0001801661-25-000050
Chunk: 125

Company: Skillz Inc.
Filing Date: 2025-11-06
Form: 10-K
Item: Item 7
Chunk 125
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10% in 2023.

Research and Development

Research and development costs decreased by $11.4 million, or 41%, to $16.7 million in 2024 from $28.1 million in 2023. This was primarily driven by a $8.0 million decrease in research and development employee related costs.

Sales and Marketing

Sales and marketing costs decreased by $46.5 million, or 38%, to $76.4 million in 2024 from $122.9 million in 2023. This was primarily due to decreases of 39% and 44% in UA marketing and engagement marketing spend in 2024, respectively, compared to prior periods. This intentional decrease was driven by the strategic decision to prioritize profitability over revenue growth starting in the fiscal year ending December 31, 2023. UA marketing and engagement marketing decreased by $11.5 million and $29.0 million, respectively in 2024 and 2023. Additionally, employee related expenses decreased $3.2 million, or 15% due to a reduction in headcount in the sales and marketing departments during 2024. 

General and Administrative

General and administrative costs decreased by $17.8 million, or 18%, to $78.9 million in 2024 from $96.7 million in 2023. This was primarily driven by a $9.3 million decrease in employee related expenses due to a reduction in headcount in general and administrative departments.

Gain on Legal Settlement

        During 2024, we received proceeds under the terms of a settlement agreement entered into with AviaGames in connection with certain bot misuse litigation. The recorded gain on legal settlement was  $46 million in 2024. Refer to Note 10, Commitments and Contingencies, of the notes to the consolidated financial statements for further discussion.

Impairment of Goodwill and Long-lived Assets

During the year ended December 31, 2024, there was no impairment of goodwill or long-lived assets. During the year ended December 31, 2023, we recorded an impairment of $3.3 million related to goodwill and long-lived assets. The impairment was primarily driven by an investment in non-marketable securities we held of a privately held company on account of significant concerns related to the private company’s ability to continue as a going concern. 

Gain on Extinguishment of Debt

During the year ended December 31, 2024, there was no gain