Company: SKLZ
Filing Date: 2025-12-11
Form Type: 10-Q
Source: 0001801661-25-000071
Chunk: 10

Company: Skillz Inc.
Filing Date: 2025-12-11
Form: 10-Q
Item: Item 2
Chunk 10
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 to lower employee related costs of $4.4 million from our Skillz segment.

Gain from litigation settlement

The gain from litigation settlement of $7.5 million and $46.0 million for the six months ended June 30, 2025 and 2024, respectively, was related to the litigation settlement with AviaGames from our Skillz segment. Refer to Note 8, Commitments and Contingencies, of the notes to the condensed consolidated financial statements for further discussion.

Interest (expense) income, net

Interest expense was $2.4 million for the six months ended June 30, 2025 compared to interest income of $0.4 million for the six months ended June 30, 2024. This was primarily due to lower interest income earned as the Company sold its marketable securities during the prior year period from our Skillz segment.

Provision for income taxes

Provision for income taxes decreased by $91.0 thousand to $20.0 thousand in the six months ended June 30, 2025, from $111.0 thousand in the six months ended June 30, 2024. This was primarily due to a book loss, state taxes and equity award activities, mostly offset by a full valuation allowance on our deferred tax assets.     

Liquidity and Capital Resources

Since inception, we have financed our operations primarily from the sales of capital stock. As of June 30, 2025, our principal sources of liquidity were our cash, cash equivalents and restricted cash in the amount of $238.7 million, which are primarily invested in money market funds and marketable securities with maturities of less than three months.

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In December 2021, the Company offered $300 million in aggregate principal senior secured notes due 2026 in a private offering. The notes were sold in a private placement to qualified institutional buyers. Annual interest started to accrue from December 20, 2021 at a stated rate of 10.25% and is payable semiannually on June 15 and December 15 of each year, beginning on June 15, 2022. The notes will mature on December 15, 2026. We used the net proceeds from the offering for general corporate purposes. The notes contain customary covenants restricting our and certain of our subsidiaries’ ability to incur debt, incur liens, make distributions to holders of our stock, make certain transactions with our affiliates, as well as certain financial coven