- First Quarter Revenue Hits $84 Million, Up
92% Year-over-Year
- Paying Monthly Active Users Grows 81%
Year-over-Year
- Raises Full Year 2021 Revenue Guidance to
$375 Million
Fifth bullet under First Quarter Financial Highlights should
read: Adjusted EBITDA was $(31.1) million during the first quarter
of 2021, compared with $(14.6) million in the prior year (instead
of Adjusted EBITDA was $31.1 million during the first quarter of
2021, compared with $14.6 million in the prior year).
The updated release reads:
SKILLZ REPORTS RECORD Q1 REVENUE AND RAISES
2021 GUIDANCE
- First Quarter Revenue Hits $84 Million, Up
92% Year-over-Year
- Paying Monthly Active Users Grows 81%
Year-over-Year
- Raises Full Year 2021 Revenue Guidance to
$375 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 first quarter
ended March 31, 2021.
“We are proud to report record-breaking first quarter results,
giving us 21 consecutive quarters of revenue growth,” said Andrew
Paradise, CEO and founder of Skillz. “Our performance and strong
growth trajectory gave us the confidence to increase investment in
Q1 and raise full year revenue guidance to $375 million.”
First Quarter Financial Highlights
- Revenue grew to $83.7 million during the first quarter of 2021,
up 92% over the prior year.
- Gross profit grew to $79.4 million during the first quarter of
2021, up 95% over the prior year.
- Gross margin was 95% during the first quarter of 2021, 100
basis points higher than the prior year.
- Net loss was $53.6 million during the first quarter of 2021,
compared with $15.5 million in the prior year.
- Adjusted EBITDA was $(31.1) million during the first quarter of
2021, compared with $(14.6) million in the prior year.
- Gross Marketplace Volume1 (GMV) grew to $566.6 million during
the first quarter of 2020, up 85% over the prior year.
- Cash on balance sheet of $613 million and no debt at the end of
first quarter 2021.
First Quarter Business Highlights
- Paying MAU reached 0.467 million with a 17% Paying to Playing
MAU ratio which is 8x higher than the mobile gaming industry
average2 and highlights the platform’s powerful competitive
advantage over in-app purchases.
- Launched developer progression, a feature that allows game
developers to create in-game milestones for players, such as
winning a reward for bowling perfect games. This enables developers
to introduce new game design mechanics that enhance player
retention and engagement.
- Expanded Android footprint, growing revenue from Android users
2x faster than iOS.
1 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.
2 Note: According to Wappier Gaming Apps,
conversion rates were 1.6% to 2% in 2020.
Financial Outlook
The Company is increasing 2021 revenue guidance to $375 million,
which equates to 63% year-over-year growth.
Investor Conference Call and Webcast
The Company will host a conference call and webcast on Tuesday,
May 4, 2021, at 5:00 pm Eastern Time. The conference call can be
accessed by registering online at webcast registration, 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 video-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 Measures
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 measure 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: 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
(Unaudited, in thousands, except
share and per share amounts)
Three months ended March
31,
2021
2020
Revenue
$
83,677
$
43,559
Costs and expenses:
Cost of revenue
4,256
2,767
Research and development
7,282
4,366
Sales and marketing
96,323
46,825
General and administrative
27,284
4,833
Total costs and expenses
135,145
58,791
Loss from operations
(51,468
)
(15,232
)
Interest expense, net
(24
)
(316
)
Change in fair value of common stock
warrant liabilities
(2,108
)
—
Other income, net
50
51
Loss before income taxes
(53,550
)
(15,497
)
Provision for income taxes
42
25
Net loss
$
(53,592
)
$
(15,522
)
Net loss per share attributable to common
stockholders – basic and diluted
$
(0.15
)
$
(0.06
)
Weighted average common shares
outstanding – basic and diluted
356,818,954
278,348,903
Skillz Inc.
Consolidated Balance
Sheets
(Unaudited, in thousands, except
share and per share amounts)
March 31,
December 31,
2021
2020 1
Assets
Current assets:
Cash and cash equivalents
$
612,578
$
262,728
Warrant exercise receivable
104,558
—
Prepaid expenses and other current
assets
14,981
10,491
Total current assets
732,117
273,219
Property and equipment, net
5,398
5,292
Other long-term assets
3,908
3,910
Total assets
$
741,423
$
282,421
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
9,513
$
22,039
Accrued professional fees
725
5,699
Other current liabilities
29,860
19,618
Total current liabilities
40,098
47,356
Common stock warrant liabilities
112,378
178,232
Other long-term liabilities
36
46
Total liabilities
152,512
225,634
Commitments and contingencies
Stockholders’ equity:
Preferred stock $0.0001 par value; 10
million shares authorized — 0 issued and outstanding as of March
31, 2021 and December 31, 2020
—
—
Common stock $0.0001 par value; 625
million shares authorized; Class A
common stock – 500 million shares
authorized; 326 million and 292 million
shares issued and outstanding as of March
31, 2021 and December 31, 2020, respectively;
Class B common stock – 125 million shares
authorized; 70 million and
78 million shares issued and outstanding
as of March 31, 2021 and December 31, 2020,
respectively
39
37
Additional paid-in capital
880,779
295,065
Accumulated deficit
(291,907
)
(238,315
)
Total stockholders’ equity
588,911
56,787
Total liabilities and stockholders’
equity
$
741,423
$
282,421
(1) Amounts in this column are preliminary
estimates and are subject to change as management completes the
restatement of the Company’s consolidated financial statements for
the year ended December 31, 2020 required to reclassify its public
warrants and private placement warrants as liabilities and record
non-cash fair value adjustments into earnings to align with the
guidance set forth by the Securities and Exchange Commission in the
public statement entitled “Staff Statement on Accounting and
Reporting Considerations for Warrants issued by Special Purpose
Acquisition Companies,” as further described in our Current Report
on Form 8-K filed May 4, 2021. Our independent registered public
accounting firm has not audited or reviewed these estimates.
Skillz Inc.
Consolidated Statements of
Cash Flows
(Unaudited, in thousands)
Three months ended March
31,
2021
2020
Operating Activities
Net loss
$
(53,592
)
$
(15,522
)
Adjustment to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
555
308
Stock-based compensation
10,945
357
Accretion of unamortized discount and
amortization of issuance costs
9
171
Change in fair value of common stock
warrant liabilities
2,108
—
Changes in operating assets and
liabilities:
Prepaid expenses and other assets
(4,499
)
(2,290
)
Accounts payable
(12,526
)
2,109
Accrued professional fees
(851
)
—
Other liabilities
10,332
5,758
Net cash used in operating
activities
(47,519
)
(9,109
)
Investing Activities
Purchases of property and equipment,
including internal-use software
(659
)
(860
)
Net cash used in investing
activities
(659
)
(860
)
Financing Activities
Borrowings under debt agreements, net of
issuance costs
—
(95
)
Proceeds from issuance of common stock in
follow-on offering, net of underwriting commissions, and offering
costs
402,817
—
Payments made towards offering costs
(4,801
)
—
Proceeds from exercise of stock options
and issuance of common stock
12
241
Net cash provided by financing
activities
398,028
146
Net change in cash, cash equivalents and
restricted cash
349,850
(9,823
)
Cash, cash equivalents and restricted
cash – beginning of year
265,648
28,548
Cash, cash equivalents and restricted
cash – end of year
$
615,498
$
18,725
Supplemental cash flow data:
Cash paid during the period for:
Interest
$
15
$
178
Noncash investing and financing
activities:
Deferred offering costs in accounts
payable and accrued liabilities
$
678
$
—
Warrant exercise receivable
$
104,558
$
—
Skillz Inc.
Reconciliation of GAAP Net
loss to Adjusted EBITDA
(UNAUDITED)
(Unaudited, in thousands, except
share and per share amounts)
Three months ended March
31,
2021
2020
Net loss
$
(53,592
)
$
(15,522
)
Interest expense, net
24
316
Stock-based compensation
10,945
357
Change in fair value of common stock
warrant liabilities(2)
2,108
—
Provision for income taxes
42
25
Depreciation and amortization
555
308
Other non-operating costs (income)
(50
)
(51
)
One-time transaction related
expenses(1)
8,839
—
Adjusted EBITDA
$
(31,129
)
$
(14,567
)
(1) For the three months ended March 31,
2021, amounts represent transaction expenses related to the
follow-on offering.
(2) For the three month ended March 31,
2021, amounts represent the fair value adjustments related to the
revaluation of liability classified warrants.
Skillz Inc.
Supplemental Financial
Information
(UNAUDITED)
(Unaudited, in millions, except
ARPU and ARPPU)
Three months ended March
31,
2021
2020
Monthly active users (“MAUs”)(1)
2.7
2.6
Average revenue per user (“ARPU”)(2)
$
10.35
$
5.57
Paying monthly active users
(“pMAUs”)(3)
0.467
0.258
Average revenue per paying user
(“ARPPU”)(4)
$
60
$
56
Gross marketplace volume (“GMV”)(5)
$
567
$
306
(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/20210504006307/en/
Investors: ir@skillz.com Media:
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