Skillz Inc. Reports 33% Revenue Growth to $29.1 Million in Q1 2026

Skillz Inc. reported its financial results for the first quarter of 2026, revealing a total revenue of $29.1 million, a 33% increase from $21.9 million in the same period last year. The growth was primarily driven by a significant rise in revenue from its RZR segment, which saw a 120% increase to $9.8 million, attributed to higher advertising demand. The Skillz segment also contributed to the revenue growth, with a 12% increase to $19.7 million, mainly due to higher average entry fees despite a reduction in tournament play.

The company's total costs and expenses rose slightly by 1% to $37.9 million, compared to $37.4 million in the prior year. Notably, the cost of revenue increased by 21% to $3.6 million, driven by higher software licensing, server, and payment processing costs. Research and development expenses also saw a modest increase of 5% to $5.1 million. However, sales and marketing expenses decreased by 4% to $17.3 million, reflecting lower engagement and user acquisition marketing costs. The net loss for the quarter was $10.9 million, a 36% improvement from a loss of $17.1 million in the previous year.

In terms of operational metrics, Skillz reported a weighted average of 15.8 million shares outstanding for the quarter, with a loss per share of $0.69, compared to $1.05 in the same quarter of 2025. The company’s cash and cash equivalents stood at $185.4 million as of March 31, 2026, down from $194.5 million at the end of 2025. The decrease in cash was attributed to net cash used in operating activities, which improved to $6.7 million from $10.9 million year-over-year, reflecting a lower net loss and better management of working capital.

Strategically, Skillz underwent a rebranding of its performance marketing platform Aarki to RZR in March 2026, which aims to enhance its market positioning and capabilities without altering its legal structure. The company continues to focus on expanding its user acquisition and monetization strategies through RZR, leveraging machine learning and data-driven approaches to optimize advertising campaigns across various digital channels.

Looking ahead, Skillz remains optimistic about its growth trajectory, emphasizing the importance of user engagement and retention in driving revenue. The company is also navigating ongoing legal challenges, including litigation with Tether Studios and Papaya Gaming, which could impact its operations and financial performance. Despite these challenges, Skillz believes its existing liquidity and strategic initiatives will support its operational needs and growth objectives in the coming quarters.