Skillz Inc.
For the period ended Mar 31, 2026. Filed May 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 15, 2026
FIRY$11.48+6.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-12-11.
0001801661-25-000072
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-15.
0001801661-26-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 77 current paragraphs.
31 unchanged; 16 reworded; 30 added; 47 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
We were founded on one simple belief: competition holds the power to unleash possibilities in all of us. We are all born with skills and when we are able to apply those skills through competition, we can achieve great things. That is the guiding principle behind why we are advancing competitive mobile gaming.
Current report
Our Company’s mission is to bring out the best in everyone through competition. We believe our business model is unique in that we create both opportunities for game developers to turn their craft into financial success and opportunities for players to experience wins through our platform.
Current report
Our proprietary multi-player platform, a form of social media solution, provides interactive entertainment through competitive game content. We believe our platform democratizes the mobile gaming industry by “leveling the playing field” for developers worldwide, enabling us to deliver gaming experiences that our player community can trust. The trust and fairness we foster with our player community is part of the foundation upon which our business is built.
Current report
In March 2026, Aarki, our performance marketing platform business, rebranded as “RZR.” The rebrand reflects an evolution of the platform’s capabilities and market positioning and does not represent a change in ownership or legal structure.
Current report
Paired with RZR (formerly Aarki), our AI-powered advertising technology segment, Skillz operates an ecosystem that combines content, audience, and performance into a unified growth engine. RZR delivers advertising solutions that drive revenue growth for brands and mobile apps by leveraging billions of contextual bidding signals, proprietary machine learning, and behavioral models to engage audiences in a privacy-first world. We are increasingly focused on expanding into emerging performance channels such as connected television, as well as enhancing cross-channel measurement and optimization capabilities. As Skillz onboards new developers, RZR’s platform is designed to power game title growth through user acquisition and monetization, continuously enhancing its machine learning engine, which in turn delivers better outcomes for developers and greater efficiency for the Skillz platform.
Current report
User acquisition (“UA”) marketing is a sales and marketing expense to acquire new paying users to our platform. UA marketing spend for the three months ended March 31, 2026 was approximately $3.2 million, as compared to approximately $4.6 million in the three months ended March 31, 2025. We are currently unable to reasonably estimate the quantitative impact, or range of impact, that changes in UA marketing will have on forward-looking revenue as a result of the number of interrelated factors impacting revenue, including, but not limited to, retention of existing users on the platform, average revenue per paying monthly active user, efficacy of various marketing programs on existing users, elasticity of the digital advertising supply curve, and impact of varying levels of player liquidity on the existing user ecosystem.
Current report
On April 23, 2026, a jury in the U.S. District Court for the Southern District of New York found Papaya Gaming Ltd. and Papaya Gaming Inc. (together, “Papaya”) liable for false advertising and ordered Papaya to pay $420 million in damages. The jury also issued advisory figures of $719 million in profits-based disgorgement and $652 million in cost-savings disgorgement. The court is set to issue a decision in June 2026 with respect to which theory to accept. Refer to Note 8, “Commitments and Contingencies” for further discussion.
Current report
Skillz
Current report
Our platform enables game developers to monetize their content through multi-player competition by integrating real-money tournaments, virtual prizes, and social competition features directly into their games. The platform provides a managed backend that supports key competitive functionality, including player matching, leaderboards, anti-cheat integrity systems, and payment processing. Our scalable multi-player platform allows for real-world prizes that go beyond one-off competitive implementations and provides for a repeatable, developer-accessible system. In exchange for access to our multi-player platform and monetization services, Skillz and its developers share in the aggregate entry fees paid by end users. Our platform capability highlights include:
Current report
•Monetize Through Competitions: Developers may earn revenue by hosting skill-based competitions where players pay entry fees, and Skillz takes a percentage of the pool.
Current report
•Player Matching: Automatically match players based on skill levels, ensuring fair and engaging gameplay experiences.
Current report
•Cross-Platform Support: The Skillz platform is compatible with Android, iOS, and some Unity-based games, allowing developers to reach a broad audience.
Current report
•Comprehensive Analytics: Developers have access to performance metrics, player insights, and revenue data through the Skillz dashboard.
Current report
•Focus on Game Development: With Skillz managing tournaments, payments, and player matching, developers can focus on building their games’ core mechanics and experiences.
Current report
In addition to using its platform to partner with game developers, Skillz publishes select game titles, which are shared with the broader ecosystem.
Current report
RZR (formerly Aarki)
Current report
RZR is a performance marketing platform that enables advertisers to acquire, retain, and monetize users across mobile, connected television (CTV), and other digital channels. The platform utilizes proprietary machine learning and neural network-based architecture to optimize campaigns across user acquisition, retargeting, and brand performance objectives within a unified system.
Current report
The platform processes large-scale data inputs in real time and applies predictive models to optimize bidding, targeting, and campaign performance across channels.
Current report
While historically focused on mobile gaming, RZR now serves a broader set of industries, including consumer applications, retail, food and beverage, and entertainment.
Current report
At the center of this long-term vision is RZR’s strategic relationship with our Skillz platform. Together, we believe our Skillz platform and RZR form an ecosystem in which content creation, audience, and performance continuously reinforce one another. For our developers, RZR enables monetization through user acquisition and re-targeting, and the more Skillz SDK-enabled developers use RZR, the better RZR’s machine learning engine becomes, which we believe drives improved outcomes for the developers and more spend on the RZR platform.
Current report
Total revenue increased by $7.2 million, or 33%, to $29.1 million for the three months ended March 31, 2026 from $21.9 million for the same period in the prior year. This was primarily due to higher revenue from our RZR segment, together with additional revenue from our Skillz segment.
Current report
RZR revenue increased by $5.3 million, or 120%, to $9.8 million for the three months ended March 31, 2026 from $4.4 million for the same period in the prior year. This was primarily due to higher advertising revenue from greater demand.
Current report
Skillz revenue increased by $2.0 million, or 12%, to $19.7 million for the three months ended March 31, 2026 from $17.6 million for the same period in the prior year. This was primarily due to higher average entry fees, partially offset by reduced tournament play.
Current report
Costs and Expenses
Current report
Cost of revenue increased by $0.6 million, or 21%, to $3.6 million for the three months ended March 31, 2026 from $3.0 million for the same period in the prior year. This was primarily due to higher software license, server and payment processing costs from our Skillz segment.
Current report
Research and development costs increased by $0.2 million, or 5%, to $5.1 million for the three months ended March 31, 2026 from $4.8 million for the same period in the prior year. This was primarily due to higher employee related costs from our Skillz and RZR segments.
Current report
Sales and marketing costs decreased by $0.7 million, or 4%, to $17.3 million for the three months ended March 31, 2026 from $18.0 million for the same period in the prior year. This was primarily due to lower engagement and user acquisition marketing expenses, partially offset by higher employee related costs from our Skillz segment. The overall decrease was partially offset by higher employee related costs from our RZR segment.
Current report
General and administrative costs increased by $0.3 million, or 2%, to $19.4 million for the three months ended March 31, 2026 from $19.1 million for the same period in the prior year. This was primarily due to higher software license costs and legal fees, partially offset by lower employee related costs from our Skillz segment. This increase was also attributed to higher employee related costs from our RZR segment.
Current report
Net cash used in operating activities decreased by $4.2 million to $6.7 million for the three months ended March 31, 2026 from $10.9 million for the same period in the prior year. This was primarily due to a lower net loss in addition to changes in operating assets and liabilities related to cash receipts and disbursements in the normal course of business from our Skillz and RZR segments for the three months ended March 31, 2026.
Current report
Net cash used in financing activities decreased by $4.4 million to $0.5 million for three months ended March 31, 2026 from $4.9 million for the same period in the prior year. This was primarily due to share repurchase activities that occurred during the prior year period.
Removed paragraphs (47)
Previous report
We operate a marketplace that connects the world through competition, serving both developers and users. Our platform enables fair, fun and competitive gaming experiences and the trust we foster with users is the foundation upon which our community is built.
Previous report
Our technological capabilities provide the tools necessary for developers to compete in the marketplace. Our software development kit (“SDK”) allows developers to monitor, integrate and update their games seamlessly over the air. We ingest and analyze hundreds of data points from each game play session, enhancing our data-driven algorithms and LiveOps systems. Moreover, we have developed a platform enabling fun, fair and meaningful competitive gameplay.
Previous report
The Company offers a technology platform (i.e. demand side platform, “DSP”) to source available advertising space from its network of vendors and suppliers, which uses a real-time auction process. The revenue from advertising is recognized over time based on the number of impressions as the performance obligation is satisfied. The Company considers itself the agent of its customer(s). This is due to the Company’s involvement in programmatically placing and sourcing advertisements on behalf of customers via a network of third party publishers. The Company does not, at any time, take ownership of advertising inventory being sourced and placed. Via the DSP, if the Company wins the auction and an impression is served, the customer’s advertisement is displayed on the publisher or supplier’s mobile application.
Previous report
User acquisition (“UA”) marketing is a sales and marketing expense to acquire new paying users to our platform. UA marketing spend for the nine months ended September 30, 2025 was approximately $12.4 million, as compared to approximately $14.1 million in the nine months ended September 30, 2024. The reduction in UA marketing and engagement marketing expenses in fiscal year ending December 31, 2024 and the first nine months of 2025 compared to prior periods has resulted in a substantial reduction in revenue and is expected to continue to result in a reduction in revenue.
Previous report
Extension for Continued Listing on the New York Stock Exchange
Previous report
On April 2, 2025, we received a notice from the NYSE indicating that we are not in compliance with the NYSE’s continued listing requirements under the timely filing criteria outlined in Section 802.01E of the NYSE Listed Company Manual as a result of our failure to timely file our Annual Report on Form 10-K for the year ended December 31, 2024. The NYSE informed us that, under the NYSE’s rules, we had six months to file our Annual Report on Form 10-K with the U.S. Securities and Exchange Commission (the “SEC”) and that the NYSE will continue to list our shares on the NYSE provided that we regain compliance with Section 802.01E within the initial six-month cure period.
Previous report
We presented a compliance plan to the NYSE in September 2025 to request an additional extension period for continued listing of our Class A common stock on the NYSE (the “Additional Cure Period”) in order for us to complete and file our Annual Report on Form 10-K, and our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2025 and June 30, 2025, and any subsequent delinquent SEC quarterly filings (the Quarterly Reports on Form 10-Q together with our Annual Report on Form 10-K, collectively, the “Delayed Filings”), and regain compliance with the NYSE’s continued listing requirements. We worked diligently to file our Annual Report on Form 10-K for the year ended December 31, 2024 on November 6, 2025, the quarterly reports for the quarters ended March 31, 2025 and June 30, 2025 on December 11, 2025 and this filing of the quarterly report for the quarter ended September 30, 2025, which constitute compliance with NYSE’s continued listing requirements and completes the necessary steps in order to regain compliance with the NYSE.
Previous report
On September 25, 2025, the NYSE granted our request for an Additional Cure Period and agreed to provide us with an extension to continue our listing on the NYSE through December 17, 2025, subject to ongoing reassessment by the NYSE and provided that we become current with our SEC filings by such date.
Previous report
On October 28, 2025, the court denied Papaya’s motion for summary judgment as to Skillz’s claims against Papaya. The Court also denied Papaya’s motion to exclude Skillz’s consumer and damages experts. On November 24, 2025, the Court granted Skillz’s motion for summary judgment on Papaya’s remaining counterclaims and unclean hands defense. The court’s rulings on certain motions related to the admissibility of expert testimony remain pending(see Note 8, Commitments and Contingencies).
Previous report
•A vendor and the Company agreed to mediate a dispute that resulted in a settlement where the Company agreed to pay the vendor $533 thousand in June 2025, which represented the past due balances for year one and year two of the agreement that were fully accrued as of December 31, 2024.
Previous report
•The Company and a lessor of its former headquarters in San Francisco mutually agreed to terminate a lease. In exchange for the mutual releases, the Company paid the lessor a lump sum payment of $14.0 million in April 2025. The loss on termination of the operating lease of $0.4 million represented the difference between the settlement amount and the carrying value of the lease obligation and was recorded during the fiscal year 2024.
Previous report
•A federal jury in San Jose, California issued a verdict in favor of Skillz in a patent infringement action Skillz brought against a privately-held mobile gaming company, AviaGames (“Patent Case”). Skillz, Big Run, and AviaGames entered into a settlement agreement with respect to both the Patent Case and Unfair Competition Case pending against AviaGames (the “Litigation Settlement”). In exchange for dismissal of both actions and other settlement terms, AviaGames agreed to pay Skillz and Big Run a total of $80.0 million. The Company and Big Run Studio entered into a Side Letter Agreement providing that a portion of the AviaGames settlement funds allocated to Big Run Studio be utilized to repay the outstanding principal and accrued interest under the Loan and Security Agreement totaling $2.0 million (see Note 4, Balance Sheet Components). The Company and Big Run collectively received $50.0 million from AviaGames pursuant to the settlement agreement. Of the $50.0 million received, Skillz received $48.0 million, $2.0 million of which was for settlement of the amount outstanding under the Loan and Security Agreement with Big Run. Beginning in March of 2025, AviaGames is required to pay Skillz an additional $7.5 million annually over a four-year period as royalty payments for AviaGames’ license of the applicable patent and its patent family; no portion of these payments are due to Big Run (see Note 4, Balance Sheet Components and Note 8, Commitments and Contingencies). During the year ended December 31, 2024, the Company recorded a gain from the Litigation Settlement netting $46.0 million consisting of the gross payment of $48.0 million less the $2.0 million received for satisfaction and settlement of the Loan and Security Agreement. The Company recorded the $7.5 million payment received in March 2025 and will record the $7.5 million to be received in March 2026, 2027 and 2028 as a gain upon receipt of each payment.
Previous report
•In connection with the Company’s De-SPAC litigation, Skillz filed suit against its insurance carrier for D&O insurance coverage and on January 17, 2025, the insurance carrier agreed to contribute a total of $9.8 million to the Company in connection with this matter’s settlement agreement. Of those funds, $1.3 million was received in the quarter ending March 31, 2025 and was used to pay defense costs. During the quarter ended June 30, 2025, Skillz received the remaining $8.5 million. The parties involved with the De-SPAC litigation executed a term sheet to settle the action in principle for $10.0 million, subject to completing settlement documentation and obtaining court approval. As the successor to Flying Eagle, the defendant in the De-SPAC litigation, Skillz is obligated to indemnify and pay legal costs of the Individual D&O Defendants of Flying Eagle in their capacities as such in connection with this action and, as such recorded an expense of $10.0 million, offset by the insurance proceeds of $9.8 million, which is reflected in general and administrative expenses for the year ended December 31, 2024. The Company recorded the insurance recovery proceeds as an offset to general and administrative expenses for the year ended December 31, 2024.
Previous report
Skillz (the “Company” or “Skillz”) operates a competitive multi-player platform, driving the future of entertainment by accelerating the convergence of video games, real world prizes, and media. The Company’s principal activities are to develop and support a proprietary online-hosted technology platform that creates a multi-player system inside of game developer’s games (“Competitions”) to end-players worldwide.
Previous report
Aarki (“Aarki”) is a subsidiary of the Company and is an artificial intelligence company that delivers advertising solutions to drive revenue growth for mobile app developers. Aarki enables brands to effectively engage audiences in a privacy-first world by using billions of contextual bidding signals coupled with proprietary machine learning and behavioral models. Aarki works with advertisers globally and manages ad requests on mobile devices.
Previous report
Revenue increased by $2.8 million, or 11%, to $27.4 million in the three months ended September 30, 2025 from $24.6 million in the three months ended September 30, 2024. This was primarily due to higher advertising revenue of $3.8 million generated by our Aarki segment, partially offset by lower tournament services and other revenue of $1.0 million from our Skillz segment.
Previous report
Cost of revenue was relatively consistent for the three months ended September 30, 2025 and 2024.
Previous report
Research and Development
Previous report
Research and development costs increased by $0.7 million, or 15%, to $5.4 million in the three months ended September 30, 2025 from $4.7 million in the three months ended September 30, 2024. This was primarily driven by a$1.0 million increase in research and development employee related costs, partially offset by lower server and software license expenses of $0.3 million from our Skillz segment.
Previous report
Sales and Marketing
Previous report
Sales and marketing costs decreased by $1.9 million, or 10%, to $17.4 million in the three months ended September 30, 2025 from $19.3 million in the three months ended September 30, 2024. This was primarily driven by lower marketing expenses of $1.8 million and a reduction in employee related costs of $0.3 million from our Skillz segment.
Previous report
General and Administrative
Previous report
General and administrative costs decreased by $0.6 million, or 3%, to $17.5 million in the three months ended September 30, 2025 from $18.1 million in the three months ended September 30, 2024. This was primarily driven by lower professional fees of $0.6 million from our Skillz segment.
Previous report
Interest (expense) income, net
Previous report
Provision for income taxes
Previous report
On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA” or the “Act”) was signed into law, enacting significant changes to U.S. federal tax regulations. In accordance with Accounting Standards Codification 740 (“ASC 740”), Income Taxes, the effects of new tax legislation are required to be recognized in the period of enactment, which for the Company, a calendar-year entity, is the quarter ended September 30, 2025. The total net impact of the tax law changes on the income tax provision for the three and nine months ended September 30, 2025, was not material. A discrete adjustment of approximately $866 thousand was made to the existing deferred tax assets and deferred tax liability that were fully offset by an adjustment to the valuation allowance on our deferred taxassets. OBBBA adjustments impacting these deferred balances relate to the restoration of bonus depreciation for qualifying assets and the inclusion of Section 174A which allows taxpayers to fully expense domestic research expenditures.
Previous report
Results of Operations
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Comparison for the nine months ended September 30, 2025 and 2024.
Previous report
Revenue
Previous report
Revenue decreased by $0.6 million, or 1%, to $74.5 million in the nine months ended September 30, 2025 from $75.1 million in the nine months ended September 30, 2024. This was primarily due to lower tournament, services and other revenue of $9.5 million from our Skillz segment, mostly offset by higher advertising revenue of $8.9 million generated from our Aarki segment.
Previous report
Cost of revenue decreased by $0.6 million, or 6%, to $9.5 million for the nine months ended September 30, 2025 from $10.2 million in the nine months ended September 30, 2024. This was primarily due to a reduction of customer support personnel costs of $0.8 million, partially offset by server and other costs of $0.2 million from our Skillz segment.
Previous report
Research and Development
Previous report
Research and development costs increased by $1.5 million, or 11%, to $15.1 million in the nine months ended September 30, 2025 from $13.6 million in the nine months ended September 30, 2024. This was primarily associated with higher research and development employee related costs of $2.4 million, partially offset by lower server and software license expenses of $0.4 million and professional fees and facilities allocation of $0.4 million, respectively from our Skillz segment.
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Sales and Marketing
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Sales and marketing costs decreased by $9.3 million, or 15%, to $51.8 million in the nine months ended September 30, 2025 from $61.1 million in the nine months ended September 30, 2024. This was primarily driven by lower marketing expenses of $6.3 million, employee related expenses of $2.4 million, software, facilities, professional fees and other expenses of $0.7 million from our Skillz segment.
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General and Administrative
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General and administrative costs decreased by $5.2 million, or 9%, to $53.3 million in the nine months ended September 30, 2025 from $58.4 million in the nine months ended September 30, 2024. This was primarily related to lower employee related costs of $6.3 million and marketing related expenses of $0.5 million, partially offset by higher other general and administrative expenses of $1.6 million from our Skillz segment.
Previous report
Gain from litigation settlement
Previous report
The gain from litigation settlement of $7.5 million and $46.0 million for the nine months ended September 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.
Previous report
Interest (expense) income, net
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Reworded paragraphs (16)
Previous wording
This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), about Skillz and our industry that involve numerous risks and uncertainties, including, but not limited to, those described in Part I, Item IA, “Risk Factors” in our Annual Report and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q. All statements other than statements of historical facts contained, including statements regarding guidance, our future results of operations or financial condition, business strategy and plans, user growth and engagement, product initiatives, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. We caution you that the foregoing may not include all of the forward-looking statements made.
Current wording
This discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), about Skillz and our industry that involve numerous risks and uncertainties, including, but not limited to, those described in Part I, Item 1A, “Risk Factors” in our Annual Report and Part II, Item 1A, “Risk Factors” in this Quarterly Report on Form 10-Q. All statements other than statements of historical facts contained, including statements regarding our future results of operations or financial condition, business strategy and plans, user growth and engagement, product initiatives, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. We caution you that the foregoing may not include all of the forward-looking statements made.
Previous wording
Certain of the Tether Agreements restrict the removal of Tether’s top two games, Solitaire Cube and 21 Blitz, from the Company’s platform for at least 18 months following termination. During the post-termination period, Skillz has the option, but not the obligation, to host paid competitions for such games on the platform. For the year ended December 31, 2024, Tether accounted for 45% of our revenue. If we are unable to negotiate new terms with Tether or, as applicable with other developers, or if any new terms are less favorable to us, or if our litigation against Tether is unsuccessful, and these games were to be removed from our platform and we are unable to identify and market suitable replacements, there may be a material adverse effect on our business and results of operations.
Current wording
Certain of the Tether Agreements restrict the removal of Tether’s top two games, Solitaire Cube and 21 Blitz, from the Company’s platform for at least 18 months following termination. During the post-termination period, Skillz has the option, but not the obligation, to host paid competitions for such games on the platform. If we are unable to negotiate new terms with Tether or, as applicable with other developers, or if any new terms are less favorable to us, or if our litigation against Tether is unsuccessful, and these games were to be removed from our platform and we are unable to identify and market suitable replacements, there may be a material adverse effect on our business and results of operations.
Previous wording
Following receipt of the Notice, on September 1, 2025, we filed suit in the Court of Chancery of the State of Delaware, seeking injunctive and declaratory relief in relation to Tether’s breach of the Tether Agreements. The Company is also disputing Tether’s allegations with respect to the grounds for termination of the Tether Agreements for cause. We intend to defend our position, but can provide no assurances regarding the outcome of the claim and the impact it may have on our business. The removal of Solitaire Cube and 21 Blitz contrary to the terms set forth in the agreements and/or before Skillz can provide a suitable replacement to such games may cause a material adverse effect on our platform business and results of operations.
Current wording
Following receipt of the Notice, on September 1, 2025, we filed suit in the Court of Chancery of the State of Delaware, seeking injunctive and declaratory relief in relation to Tether’s breach of the Tether Agreements. The Company is also disputing Tether’s allegations with respect to the grounds for termination of the Tether Agreements for cause. We intend to defend our position, but can provide no assurances regarding the outcome of the claim and the impact it may have on our business. See the risk factor entitled “Historically, a limited number of games have accounted for a substantial portion of our revenue. If these games were to become less popular or be removed from our platform and we are unable to identify and market suitable replacements, our business and prospects could suffer” in Part I, Item 1A, Risk Factors of this Annual Report for additional information on risks related to Tether’s Notice. The removal of Solitaire Cube and 21 Blitz contrary to the terms set forth in the agreements and/or before Skillz can provide a suitable replacement to such games may cause a material adverse effect on our platform business and results of operations.
Previous wording
•A vendor and the Company settled a dispute March 2025. In exchange for mutual releases of all claims, the Company paid the vendor $2.75 million in March 2025, $2.75 million of which has been accrued for in fiscal year 2024.
Current wording
•In March 2025, the Company and a vendor settled a dispute. In exchange for mutual releases of all claims, the Company paid the vendor $2.8 million that was fully accrued as of December 31, 2024. Refer to Note 8, “Commitments and Contingencies,” of the notes to the condensed consolidated financial statements included in this Form 10-Q for more information.
Previous wording
We generate revenue from our two reportable segments, Skillz and Aarki. Refer to Note 12, Segment Reporting, of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion.
Current wording
We have two reportable business segments: Skillz and RZR. Refer to Note 12, “Segment Reporting”, of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion.
Previous wording
Interest expense was $1.6 million for the three months ended September 30, 2025 compared to interest income of $0.2 million for the three months ended September 30, 2024. This was primarily related to lower interest income earned as the Company held less interest bearing investments in the three months ended September 30, 2025 compared to the prior year period from our Skillz segment.
Current wording
Interest expense, net of interest income increased by $1.2 million, or 113%, to $2.3 million for the three months ended March 31, 2026 from $1.1 million for the same period in the prior year. This was primarily related to lower interest income earned as the Company held less interest bearing investments.
Previous wording
The provision for income taxes increased by $8.0 thousand to $40.0 thousand in the three months ended September 30, 2025, from $32.0 thousand in the three months ended September 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.
Current wording
The provision for income taxes was $0.1 million for the three months ended March 31, 2026, representing a 90% increase when compared to the provision for income taxes for the three months ended March 31, 2025. This was primarily due to a book loss, state and foreign taxes and equity award activities, mostly offset by a full valuation allowance on our deferred tax assets.
Previous wording
Since inception, we have financed our operations primarily from the sales of capital stock. As of September 30, 2025, our principal sources of liquidity were our cash, cash equivalents and restricted cash in the amount of $212.8 million, which are primarily invested in money market funds and marketable securities with maturities of less than three months.
Current wording
As of March 31, 2026, our principal sources of liquidity are our cash and cash equivalents in the amount of $185.4 million, which are primarily invested in money market funds with maturities of less than three months.
Previous wording
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 covenants specified in the indentures. After giving effect to the 2023 and other previous open market repurchases of our senior secured notes, as of September 30, 2025, $129.7 million of the senior secured notes remained outstanding.
Current wording
In December 2021, the Company offered and sold $300.0 million in aggregate principal senior secured notes due 2026 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 covenants specified in the indentures. After giving effect to open market repurchases of our senior secured notes, $129.7 million of the senior secured notes remained outstanding as of March 31, 2026. We were in compliance with all covenants applicable to our secured notes as of March 31, 2026.
Previous wording
Net Cash (Used In) Provided By Operating Activities
Current wording
We believe our existing sources of liquidity are sufficient to fund our operating activities on a short- and long-term basis. Our future cash requirements will depend on many factors, including revenue growth and additional sales and marketing spending activities in addition to funds needed to invest in or acquire complementary businesses, applications or technologies. However, we cannot assure you that cash provided by operating activities or cash and cash equivalents will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain additional financing on favorable terms or at all.
Previous wording
The following table provides a summary of cash flow data (in thousands):
Current wording
The following table provides a summary of cash flow data:
Previous wording
Net cash used in operating activities of $56.2 million for the nine months ended September 30, 2025 primarily reflected a net loss of $52.5 million, non-cash expenses of $14.2 million related to stock-based compensation, and net cash inflows of $19.9 million from changes in operating assets and liabilities from our Skillz and Aarki segments. During the nine months ended September 30, 2025, $7.5 million was received from the litigation settlement with AviaGames from our Skillz segment.
Current wording
Net Cash Used In Operating Activities
Previous wording
Net cash used in investing activities of $4.7 million, for the nine months ended September 30, 2025, was primarily driven by capitalization of software development costs of $2.6 million and purchases of property and equipment of $2.1 million, respectively from our Skillz segment.
Current wording
Net cash used in investing activities decreased by $0.8 million to $1.0 million for the three months ended March 31, 2026 from $1.7 million for the same period in the prior year. This was primarily due to $0.6 million of capitalized software development costs and $0.4 million for purchases of property and equipment from our Skillz and RZR segments.
Previous wording
We have operating lease arrangements for office space, and finance lease agreements for certain network equipment. As of September 30, 2025, we had lease payment obligations of $1.3 million, of which $0.4 million is payable within 12 months.
Current wording
We have operating lease arrangements for office space. As of March 31, 2026, we had lease payment obligations of $1.1 million, of which $0.5 million is payable within 12 months.
Previous wording
The Company’s long-term debt consists of the 2021 Senior Secured Notes. The total principal amount of $129.7 million, gross of discount and issuance costs of $2.6 million, is due on December 15, 2026.
Current wording
The Company’s long-term debt consists of the 2021 Senior Secured Notes. As of March 31, 2026, the total principal amount of $129.7 million, gross of discount and issuance costs of $1.6 million, is due on December 15, 2026.
Previous wording
See critical accounting policies and estimates in our Annual Report as there have been no material changes.
Current wording
There have been no material changes from the critical accounting policies and estimates previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.