Skillz Inc. Reports Revenue Decline and Increased Net Losses in Q2 2025

Skillz Inc. reported its financial results for the second quarter of 2025, revealing a slight decline in revenue and a significant increase in net losses compared to the same period last year. The company generated $25.2 million in revenue for the three months ended June 30, 2025, a decrease of $81,000 or less than 0.1% from $25.3 million in the prior year. For the first half of 2025, total revenue was $47.1 million, down 7% from $50.5 million in the same period of 2024. The decline was attributed primarily to lower tournament and service revenues from the Skillz segment, offset by increased advertising revenue from the Aarki segment.

The company's net loss for the second quarter was $17.9 million, a stark contrast to a net income of $26.0 million reported in the same quarter of 2024. This shift was largely influenced by the absence of a significant litigation settlement gain that had contributed $46.0 million to last year's results. Total costs and expenses for the quarter rose to $41.2 million, compared to a mere $297,000 in the previous year, driven by increased research and development costs and a reduction in sales and marketing expenses.

In terms of operational metrics, Skillz reported a decrease in user engagement marketing expenses, which fell to $8.1 million from $10.6 million year-over-year. The company also noted a reduction in user acquisition marketing costs, which amounted to $3.6 million for the quarter, down from $4.2 million in the prior year. The total employee headcount as of June 30, 2025, was not disclosed, but the company has been actively managing its workforce in response to changing market conditions.

Skillz continues to face challenges, including a notice of default related to its senior secured notes due to delays in filing required financial reports. The company received a temporary extension from the New York Stock Exchange to regain compliance with its listing requirements. Additionally, Skillz is involved in ongoing litigation with Tether, which accounted for a significant portion of its revenue, raising concerns about potential impacts on future earnings if the agreements are terminated.

Looking ahead, Skillz's management expressed cautious optimism, emphasizing the importance of strategic investments in technology and personnel to enhance operational efficiency. The company aims to stabilize its financial position and improve its market share through continued innovation and engagement with its user base. However, the outlook remains uncertain as the company navigates legal challenges and market dynamics.