Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Skillz Inc (SKLZ, Financial) has maintained a strong balance sheet with cash, cash equivalents, and restricted cash totaling $311 million.
- The company has made progress in stabilizing its paying user base, with 121,000 paying users in Q3 2024, consistent with the previous quarter.
- Skillz Inc (SKLZ) is actively pursuing legal actions to combat unfair practices in the gaming industry, which could enhance its reputation and competitive position.
- The company is focusing on enhancing its platform to improve customer and developer engagement and retention, which could drive future growth.
- Skillz Inc (SKLZ) has shown improvement in its adjusted EBITDA loss, which decreased from $18.5 million in Q3 2023 to $13.9 million in Q3 2024.
Negative Points
- Revenue for Skillz Inc (SKLZ) was flat sequentially at $25 million and down 33% year over year, indicating challenges in top-line growth.
- The company's paid user conversion rate decreased from 15% in Q2 to 14% in Q3 2024, suggesting potential issues in converting users to paying customers.
- Skillz Inc (SKLZ) continues to face significant legal expenses related to lawsuits against companies using bots, impacting its financial performance.
- Operating cash flow was negative $11 million in Q3 2024, highlighting ongoing cash burn issues.
- The company has not yet identified specific new games or publishers that could significantly drive growth, indicating potential challenges in expanding its content pipeline.
Q & A Highlights
Q: Can you speak to the churn within the paying MAUs, which have been stable for three quarters? Is it a core group or is there more churn?
A: We've slowed down acquisition and focused on retention and reactivation of paying users through owned marketing channels. Most of our efforts are on retaining and reactivating users rather than acquiring new ones.
Q: What are the top three capital deployment priorities for Skillz?
A: We aim to invest in improving our platform, creating better tools and processes for developers, and scaling up our user acquisition (UA) and marketing efforts. These areas include product development, new content, and people.
Q: As you scale UA, what success factors will you measure against?
A: We aim for a six-month payback period, which is challenging as many in the industry target 12 to 18 months. Our strategy is to cautiously scale UA in categories we're already in, focusing on optimizing retention before increasing marketing spend.
Q: Have there been any notable developments in the new game and publisher pipeline?
A: We are seeing signs of green shoots in the new game and publisher pipeline, but there are no specific details to share at this moment.
Q: Can you elaborate on the strategy for scaling UA and marketing efforts?
A: We plan to cautiously scale UA in existing categories, focusing on top titles like Blackout Bingo and Solitary Cube. We are also exploring publishing deals with developers to capture more revenue share and support games with marketing budgets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
