Skillz Reports Record Q1 Revenue and Raises 2021 Guidance

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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entry fees paid by end-users using cash deposits, prior cash winnings from end-users' accounts that have not been withdrawn, and end-user incentives used to enter paid entry fee contests.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