Company: SKLZ
Filing Date: 2025-12-11
Form Type: 10-Q
Source: 0001801661-25-000070
Chunk: 23

Company: Skillz Inc.
Filing Date: 2025-12-11
Form: 10-Q
Item: Item 1
Chunk 23
---
 over its estimated useful life of 39 years, and the land is not subject to depreciation.Advertising and Promotional ExpenseAdvertising and promotional expenses are included in sales and marketing expenses within the condensed consolidated statements of operations and comprehensive loss and are expensed when incurred. Advertising expenses, excluding marketing promotions related to the Company’s end-user incentive programs, were $5.0 million and $6.0 million for the three months ended March 31, 2025 and 2024, respectively.User Acquisition User acquisition (“UA”) marketing costs to acquire new paying users to the platform are presented in sales and marketing expenses in the consolidated statements of operations and comprehensive loss. UA marketing costs were $4.6 million and $5.6 million for the three months ended March 31, 2025 and 2024, respectively.Interest (Expense) Income, NetInterest (expense) income, net consisted of the following for the three months ended March 31, 2025 and 2024.Three Months Ended March 31,20252024Interest expense$(3,796)$(3,772)Interest income2,725 3,884 Interest (expense) income, net$(1,071)$112 Indirect Tax LiabilitiesThe Company is subject to indirect taxes such as sales and use tax in the United States and value-added tax in certain foreign jurisdictions, respectively. Indirect tax liabilities are adjusted considering changing facts and circumstances, such as the closing of a tax examination, further interpretation of existing tax law, or new tax law. The Company recognizes changes to its estimate if it is estimable and probable that its position would not be sustainable upon examination by taxing authorities. Although management believes the Company’s recorded liabilities are reasonable, no assurance can be given that the final tax outcomes of these matters will not be different from that which its liabilities are based on. To the extent that final tax outcomes of these matters are different than the amounts recorded, such differences could have a material impact on the Company’s condensed consolidated financial statements as the Company records related tax reserves as a reduction in revenue, and penalties and interest in general and administrative expenses. The Company recorded indirect tax liabilities of $15.4 million and $14.9 million at March 31, 2025 and December 31, 2024, respectively. See Note 8, Commitments and Contingencies.401(k) PlanThe Company has a 401(k) Plan that qualifies as a deferred salary arrangement under Section 401 of the Internal Revenue Code. Under