Skillz (SKLZ) 7 Nov 24 2024 Q3 Earnings call transcript
2min read In a recent earnings call, Skillz Inc., a leading developer of mobile games, reported its financial results for the third quarter of 2024. The call, moderated by JCIR, was led by Co-Founder and CEO Andrew Paradise and CFO Gaetano Franceschi. The executives discussed the company's progress on its four strategic pillars, updates on the fair play initiative, and litigation matters.
Financial Performance and Strategic Initiatives
Skillz Inc. reported a flat sequential revenue of $25 million for Q3 2024, which is a 33% decrease compared to the same period last year. The company's financial performance has been impacted by its focus on expense management, particularly in areas like research and development, sales and marketing, and general administration. Despite the decline in revenue, Skillz remains optimistic about its future, with plans to increase spend through Aarki to optimize user acquisition and achieve positive adjusted EBITDA.
Fighting for Fair Play and Combating Bot Use
A significant portion of the call was dedicated to Skillz's efforts to combat bot use in the gaming industry. The company has filed lawsuits against Papaya Games and Voodoo Games for their alleged use of bots to deceive players. The issue of bot use has been a persistent challenge for the industry, with Skillz leading the charge in advocating for fair competition. This initiative not only protects Skillz's stakeholders but also sets a level playing field for all players, ensuring a more transparent and honest gaming environment.
Looking Ahead: Strategic Priorities and Future Outlook
Looking ahead, Skillz is focusing on its four strategic pillars: enhancing the platform, up-leveling the organization, optimizing the go-to-market strategy, and demonstrating a clear path to profitability. The company is making steady progress in each area, with a particular focus on improving customer and developer engagement and retention. Skillz is also working on reducing its reliance on expensive third-party contractors and remote workforce, and optimizing user acquisition spend.
Investing in the Future
As Skillz continues to navigate its turnaround, the company is exploring strategic investments to enhance shareholder value. Gaetano Franceschi outlined three key areas of investment: improving the platform, creating tools for developers, and scaling up user acquisition and marketing efforts. These initiatives are designed to drive growth and profitability, positioning Skillz for long-term success.
Q&A with Analysts
During the Q&A session, Edward Alter of Jefferies asked about Skillz's paying MAUs and churn rate. Andrew Paradise explained that the company has been focusing on retention and reactivation efforts, aiming to optimize its marketing spend and user acquisition strategy. Gaetano Franceschi also discussed the company's investment priorities, highlighting the importance of platform improvement, developer tools, and scaling up user acquisition efforts.
In conclusion, Skillz Inc.'s Q3 2024 earnings call provided a comprehensive update on the company's financial performance, strategic initiatives, and ongoing efforts to combat bot use in the gaming industry. With a clear focus on enhancing the platform, up-leveling the organization, optimizing go-to-market strategies, and demonstrating a clear path to profitability, Skillz remains optimistic about its future. As the company continues to navigate its turnaround, investors and stakeholders will be closely watching its progress towards positive adjusted EBITDA and sustainable growth.
