Company: SKLZ
Filing Date: 2025-11-06
Form Type: 10-K
Source: 0001801661-25-000050
Chunk: 150

Company: Skillz Inc.
Filing Date: 2025-11-06
Form: 10-K
Item: Item 8
Chunk 150
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 TO THE CONSOLIDATED FINANCIAL STATEMENTS(Amounts in tables are in thousands, unless otherwise noted)

2. Summary of Significant Accounting Policies

Use of EstimatesThe preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the amounts reported in these financial statements and the accompanying notes. Estimates are used in several areas including, but not limited to, end-user incentives, including Bonus Cash and Ticketz accrual, indirect tax liabilities, the fair value of non-marketable securities, and the impairment of long-lived assets. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities. The actual results may materially differ from these estimates. Revenue RecognitionThe Company recognizes revenue for its services in accordance with the FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). For additional information see Note 4, Revenue.Cost of RevenueCost of revenue primarily consists of third-party payment processing fees, server costs, amortization of developed technology, personnel expenses, direct software costs, amortization of internal use software, hosting expenses, and allocation of shared facility and other costs.Cash, Cash Equivalents, and Restricted CashCash and cash equivalents consist of cash, commercial paper, money market funds and U.S. government agency securities with maturities of three months or less when purchased.Restricted cash consisted of cash maintained under an agreement that legally restricts the use of such funds and was not included within cash and cash equivalents. For the years ended December 31, 2024, and December 31, 2023 restricted cash of $10.0 million relates to the letter of credit for the Company’s former headquarters in San Francisco and cash required to be held by our financial institution.  In April 2025, the Company executed a settlement with the landlord of the Company’s former headquarters and as such, in September 2025, the portion of the letter of credit related to the lease was terminated.  In addition, the financial institution reduced the amount it required of cash held.  As such, in September 2025, the letter of credit was reduced from a total of $10 million to $1 million and in the accompanying balance sheet dated December 31, 2024, $9 million of restricted cash is presented as restricted cash, a component of current assets.