- Fourth Quarter Revenue of $68 million, Up 95%
Year-over-Year - Full Year Revenue of $230 million vs $225 million
Guidance, Up 92% Year-over-Year - Initiates Full Year 2021 Revenue
Guidance of $366 Million
Skillz Inc. (NYSE: SKLZ) (“Skillz” or the “Company”), the
leading mobile games platform bringing fair competition to players
worldwide, today announced financial results for the fourth quarter
and full year ended December 31, 2020 and initiated full year 2021
revenue guidance.
“Our first quarter as a publicly traded company was our
twentieth consecutive quarter of revenue growth,” said Andrew
Paradise, CEO and founder. “We look forward to many more such
quarters ahead.”
Fourth Quarter Financial Highlights
- Revenue grew to $68 million during the fourth quarter of 2020,
8% higher than expectations, and up 95% compared with $35 million
during the comparable quarter in 2019.
- Gross profit grew 95% to $64 million during the fourth quarter
of 2020, compared with $33 million during the comparable quarter in
2019.
- Gross margin was 95% during the fourth quarter of 2020,
consistent with the comparable quarter in 2019.
- Net loss was $44 million during the fourth quarter of 2020,
compared with a net loss of $9 million during the comparable
quarter in 2019.
- Gross Marketplace Volume1 (“GMV”) grew 78% to $463 million
during the fourth quarter of 2020, compared with $259 million
during the comparable quarter in 2019.
Full Year Financial Highlights
- Revenue grew 92% to $230 million in 2020, compared with $120
million during 2019.
- Gross profit grew 91% to $218 million during 2020, compared
with $114 million in 2019.
- Gross margin was 95% during 2020, the same as the year
prior.
- Net loss was $122 million during 2020, compared with a net loss
of $24 million during 2019.
- GMV grew 80% to $1.6 billion during 2020, compared with $886
million during 2019.
- As of December 31, 2020, the Company had $263 million of cash
and no debt.
Recent Business Highlights
- Went public on the NYSE, providing greater access to capital
and increasing the visibility and transparency of the platform for
developers, users, and brands.
- Signed multi-year agreement with the NFL subsequent to the end
of the quarter, underscoring the trusted relationship Skillz is
building with leading brands.
- Blackout Bingo became Skillz’s #1 game based on GMV,
highlighting the ability of the platform to enable innovative
developers to build successful businesses.
- Bolstered Skillz Board of Directors with the addition of film
and television producer, Jerry Bruckheimer, and Chris Gaffney,
co-founder of Great Hill Partners.
1 “GMV” or “Gross Marketplace Volume”
means the total entry fees paid by users for contests hosted on
Skillz’s platform. Total entry fees include entry fees paid by
end-users using cash deposits, prior cash winnings from end-users’
accounts that have not been withdrawn, and end-user incentives used
to enter paid entry fee contests.
Financial Outlook
The Company is initiating 2021 revenue guidance of $366 million,
which equates to 59% year-over-year growth.
Investor Conference Call and Webcast
The Company will host a conference call and audio webcast on
Wednesday, March 10, 2021 at 5:00pm Eastern Time. The conference
call can be accessed by registering online at
http://www.directeventreg.com/registration/event/2977385 at which
time registrants will receive dial-in information as well as a
passcode and registrant ID. At the time of the call, participants
will dial in using the numbers in the confirmation email and enter
their passcode and ID, upon which they will enter the conference
call.
Access to a live audio-webcast of the discussion in listen-only
mode will be available through the “Investors” section of the
Skillz website at www.skillz.com. A replay of the webcast will be
archived on the Company’s website.
About Skillz Inc.
Skillz (NYSE: SKLZ) is the leading mobile games platform that
connects players around the world in fair, fun, and meaningful
competition. The Skillz platform helps developers build
multi-million dollar franchises by enabling social competition in
their games. Leveraging its patented technology, Skillz hosts
billions of casual esports tournaments for millions of mobile
players worldwide, and distributes millions in prizes each month.
Skillz has earned recognition as one of Fast Company’s Most
Innovative Companies, CNBC’s Disruptor 50, Forbes’ Next
Billion-Dollar Startups, and the #1 fastest-growing company in
America on the Inc. 5000. www.skillz.com
Use of Non-GAAP Financial Measure
In this press release, the Company includes Adjusted EBITDA
which is a non-GAAP performance measure that the Company uses to
supplement its results presented in accordance with U.S. GAAP. As
required by the rules of the Securities and Exchange Commission
(“SEC”), the Company has provided herein a reconciliation of the
non-GAAP financial measure contained in this press release to the
most directly comparable measures under GAAP. The Company’s
management believes Adjusted EBITDA is useful in evaluating its
operating performance and is a similar measure reported by
publicly-listed U.S. competitors, and regularly used by security
analysts, institutional investors, and other interested parties in
analyzing operating performance and prospects. By providing this
non-GAAP measure, the Company’s management intends to provide
investors with a meaningful, consistent comparison of the Company’s
profitability for the periods presented. Adjusted EBITDA is not
intended to be a substitute for any U.S. GAAP financial measure
and, as calculated, may not be comparable to other similarly titled
measures of performance of other companies in other industries or
within the same industry.
The Company defines and calculates Adjusted EBITDA as net loss
before interest, other non-operating expense or income, provision
for income taxes, and depreciation and amortization, and further
adjusted for stock-based compensation and other special items
determined by management, including, but not limited to, fair value
adjustments for certain financial liabilities (including
derivatives) associated with debt and equity transactions and
impairment charges as they are not indicative of business
operations.
Forward-Looking Statements
This press release includes “forward-looking statements” within
the meaning of the “safe harbor” provisions of the United States
Private Securities Litigation Reform Act of 1995. The Company’s
actual results may differ from its expectations, estimates, and
projections and, consequently, you should not rely on these
forward-looking statements as predictions of future events. Words
such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“believes,” “predicts,” “potential,” “continue,” and similar
expressions (or the negative versions of such words or expressions)
are intended to identify such forward-looking statements.
These forward-looking statements involve significant risks and
uncertainties that could cause the Company’s actual results to
differ materially from those discussed in the forward-looking
statements. Most of these factors are outside of the Company’s
control and are difficult to predict. Factors that may cause such
differences include, but are not limited to, the ability of Skillz
to: realize the benefits expected from the business combination;
effectively compete in the global entertainment and gaming
industries; attract and retain successful relationships with the
third party developers that develop and update all of the games
hosted on Skillz’s platform; comply with laws and regulations
applicable to its business; and as well as other risks and
uncertainties indicated from time to time in the Company’s SEC
filings, including those under “Risk Factors” therein, which are
available on the SEC’s website at www.sec.gov. Additional
information will be made available in other filings that the
Company makes from time to time with the SEC. In addition, any
forward-looking statements contained in this press release are
based on assumptions that the Company believes to be reasonable as
of this date. The Company undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after
the date of this press release or to reflect new information or the
occurrence of unanticipated events, except as required by law.
Source: Skillz Inc.
Skillz Inc.
Consolidated Statements of
Operations
(in thousands, except share and
per share amounts)
Three months ended December
31,
Year ended December
31,
2020
2019
2020
2019
(unaudited)
(unaudited)
Revenue
$
67,723
$
34,746
$
230,115
$
119,872
Costs and expenses
Cost of revenue
3,475
1,878
12,281
5,713
Research and development
9,972
3,438
23,225
11,241
Sales and marketing
79,560
33,428
251,941
111,370
General and administrative
17,953
4,385
42,289
16,376
Total costs and expenses
110,960
43,129
329,736
144,700
Loss from operations
(43,237
)
(8,383
)
(99,621
)
(24,828
)
Interest expense, net
(28
)
(370
)
(1,325
)
(2,497
)
Other income (expense), net
(651
)
67
(21,400
)
3,720
Loss before income taxes
(43,916
)
(8,686
)
(122,346
)
(23,605
)
Provision for income taxes
15
—
115
—
Net loss
$
(43,931
)
$
(8,686
)
$
(122,461
)
$
(23,605
)
Net loss per share attributable to common
stockholders – basic and diluted
$
(0.14
)
$
(0.07
)
$
(0.42
)
$
(0.09
)
Weighted average common shares
outstanding – basic and diluted
311,259,678
120,926,970
294,549,146
261,228,108
Skillz Inc.
Consolidated Balance
Sheets
(in thousands, except share and
per share amounts)
December 31,
2020
2019
Assets
Current assets:
Cash and cash equivalents
$
262,728
$
25,628
Prepaid expenses and other current
assets
10,491
9,464
Total current assets
273,219
35,092
Property and equipment, net
5,292
3,648
Other long-term assets
3,910
116
Total assets
$
282,421
$
38,856
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
22,039
$
2,944
Accrued professional fees
5,699
—
Other current liabilities
19,618
7,537
Total current liabilities
47,356
10,481
Long-term debt, non-current
—
9,628
Other long-term liabilities
46
82
Total liabilities
47,402
20,191
Commitments and contingencies
Stockholders’ equity:
Preferred stock $0.0001 par value; 10
million shares authorized — 0 issued and outstanding as of December
31, 2020 and 2019
—
—
Common stock $0.0001 par value; 625
million shares authorized; Class A common stock – 500 million
shares authorized; 292 million and 99 million shares issued and
outstanding as of December 31, 2020 and 2019, respectively; Class B
common stock – 125 million shares authorized; 78 million and 51
million shares issued and outstanding as of December 31, 2020 and
2019, respectively
37
29
Additional paid-in capital
450,248
108,892
Accumulated deficit
(215,266
)
(90,256
)
Total stockholders’ equity
235,019
18,665
Total liabilities and stockholders’
equity
$
282,421
$
38,856
Skillz Inc.
Consolidated Statements of
Cash Flows
(in thousands)
Year ended December
31,
2020
2019
Operating Activities
Net loss
$
(122,461
)
$
(23,605
)
Adjustment to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,609
711
Stock-based compensation
23,757
1,237
Accretion of unamortized discount and
amortization of issuance costs
558
2,139
Fair value adjustment of derivatives
21,463
(3,649
)
Impairment charges
3,573
—
Changes in operating assets and
liabilities:
Prepaid expenses and other assets
(7,505
)
(4,307
)
Accounts payable
10,729
(54
)
Other liabilities
12,045
5,591
Net cash used in operating
activities
(56,232
)
(21,937
)
Investing Activities
Purchases of property and equipment,
including internal-use software
(3,246
)
(3,223
)
Net cash used in investing
activities
(3,246
)
(3,223
)
Financing Activities
Borrowings under debt agreements, net of
issuance costs
–
9,563
Payments for issuance costs
(201
)
—
Payments under debt agreements
(10,000
)
(3,500
)
Net Business Combination and Private
Placement Financing
246,484
—
Payments made towards offering costs
(1,993
)
—
Proceeds from issuance of redeemable
convertible preferred stock, net of issuance costs
76,617
24,908
Proceeds from exercise of stock options
and issuance of common stock
1,243
197
Proceeds from exercise of common stock
warrants
379
—
Proceeds from exercise of preferred stock
warrants
3
—
Taxes paid related to net share settlement
of equity awards
(13,404
)
—
Payments made to repurchase common
stock
(1,339
)
—
Payments for redemption of preferred
stock
(1,211
)
—
Net cash provided by financing
activities
296,578
31,168
Net change in cash, cash equivalents and
restricted cash
237,100
6,008
Cash, cash equivalents and restricted
cash – beginning of year
28,548
22,540
Cash, cash equivalents and restricted
cash – end of year
$
265,648
$
28,548
Supplemental cash flow data:
Cash paid during the period for:
Interest
$
815
$
269
Noncash investing and financing
activities:
Carrying value of long-term debt and
accrued interest converted to redeemable convertible preferred
stock
$
—
$
14,852
Deferred offering costs in accounts
payable and accrued liabilities
$
14,065
$
—
Payment of promissory notes through
surrender of shares
$
18,673
$
—
Skillz Inc.
Reconciliation of GAAP Net
loss to Adjusted EBITDA
(UNAUDITED)
(in thousands, except share and
per share amounts)
Three months ended December
31,
Year ended December
31,
2020
2019
2020
2019
Net loss
$
(43,931
)
$
(8,686
)
$
(122,461
)
$
(23,605
)
Interest expense, net
28
370
1,325
2,497
Stock-based compensation
14,192
268
23,757
1,237
Provision for income taxes
15
—
115
—
Depreciation and amortization
517
269
1,609
711
Other non-operating costs
(income)(1)(2)
651
(67
)
21,400
(3,648
)
Impairment charge(3)
—
—
3,395
—
One-time transaction related
expenses(4)
4,747
—
4,747
—
Adjusted EBITDA
$
(23,781
)
$
(7,846
)
$
(66,113
)
$
(22,808
)
(1) For 2020, other non-operating costs
(income) is primarily attributed to a $20.8 million adjustment to
the fair value of the redeemable convertible Series E preferred
stock forward contract liability.
(2) For 2019, other non-operating costs
(income) include a $3.6 million remeasurement gain for the
bifurcated derivative liability related to the Company’s 2018
Convertible Promissory Notes.
(3) This represents an impairment charge
of a lease deposit and prepayment in connection with a lease
agreement related to our new corporate facilities in San
Francisco.
(4) For 2020, amounts represent one-time
transaction expenses related to the Business Combination.
Skillz Inc.
Supplemental Financial
Information
(UNAUDITED)
(in millions, except ARPU and
ARPPU)
Three months ended December
31,
Year Ended December
31,
2020
2019
2020
2019
Monthly active users (“MAUs”)(1)
2.4
2.0
2.6
1.6
Average revenue per user (“ARPU”)(2)
$
9.42
$
5.86
$
7.49
$
6.30
Paying monthly active users
(“pMAUs”)(3)
0.391
0.177
0.324
0.161
Average revenue per paying user
(“ARPPU”)(4)
$
58
$
66
$
58
$
62
Gross marketplace volume (“GMV”)(5)
$
463
$
259
$
1,592
$
886
(1) “Monthly Active Users” or “MAUs” means
the number of end-users who entered into a paid or free contest
hosted on Skillz’s platform at least once in a month, averaged over
each month in the period.
(2) “Paying Monthly Active Users” or
“pMAUs” means the number of end-users who entered into a paid
contest hosted on Skillz’s platform at least once in a month,
averaged over each month in the period.
(3) “Average Revenue Per Monthly Active
User” or “ARPU” means the average revenue in a given month divided
by MAUs in that month, averaged over the period.
(4) “Average Revenue Per Paying Monthly
Active User” or “ARPPU” means the average revenue in a given month
divided by Paying MAUs in that month, averaged over the period.
(5) “GMV” or “Gross Marketplace Volume”
means the total entry fees paid by users for contests hosted on
Skillz’s platform. Total entry fees include entry fees paid by
end-users using cash deposits, prior cash winnings from end-users’
accounts that have not been withdrawn, and end-user incentives used
to enter paid entry fee contests.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210310005954/en/
Investors: ir@skillz.com Media:
skillz@methodcommunications.com
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