Financial Analysis

Commitments and Contingencies Legal Matters The Company is a party to certain claims, suits, and proceedings which arise in the ordinary course and conduct of its business and has certain unresolved claims pending, the outcomes of which are not determinable at this time. The Company records a liability when it believes that it is probable that a loss will be incurred and the amount can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the Company discloses the possible loss or range of loss. In the Companys opinion, resolution of pending matters, other than as disclosed herein, is not expected to have a material adverse impact on the results of operations, cash flows, or the Companys financial position, as of September 30, 2025. Given the unpredictable nature of legal proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect the results of operations, cash flows, or financial position in a particular period. However, based on the information known by the Company, except as set forth herein, any such amount is either immaterial or it is not possible to provide an estimated range of any such possible loss. The Company records legal fee expenses associated with such matters when the relevant services are provided. Former Employee On May 15, 2019, a former employee of the Company filed a suit again …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

Long-Term Debt Long-term debt consisted of the following as of September 30, 2025 and December 31, 2024: September 30, December 31, 2025 2024 2021 Senior Secured Notes $ 129,671 $ 129,671 Unamortized discount and issuance costs (2,588) (4,017) Long-term debt, net $ 127,083 $ 125,654 2021 Senior Secured Notes On December 20, 2021, the Company entered into $300 million of 10.25% secured notes (the 2021 Senior Secured Notes) in a private placement to certain institutional buyers. The 2021 Senior Secured Notes are guaranteed by the Companys domestic restricted subsidiaries. The interest is payable semiannually on June 15 and December 15 of each year, beginning on June 15, 2022. At issuance, the effective interest rate on the 2021 Senior Secured Notes was 12.14%, and maturity will be on December 15, 2026, unless repurchased or redeemed earlier. On April 13, 2023, the Company repurchased approximately $159.8 million of its senior secured notes. In connection with the repurchase, the Companys recognized a gain on extinguishment of $15.2 million on the condensed consolidated statements of operations and comprehensive loss. The gain primarily reflected the payment discounts as the notes were redeemed for total consideration below the par value of the notes as well as the write-off of unamortized debt issuance costs and discounts. After giving effect to the 2023 and other previous open market repurchases, as of September 30, 2025 and December 31, 2024, $129.7 million of the 2021 Senior …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following tables present the Companys revenues, disaggregated by offering, geographical region, and reportable segment for the three and nine months ended September 30, 2025 and 2024. Revenue by geographical region is based on the location where the game developer or advertising customer is headquartered. Revenue is recognized net of any taxes from customers (e.g. sales and other indirect taxes), which are subsequently remitted to governmental entities. For more information on revenues presented by reportable segment, see Note 12, Segment Reporting. Three Months Ended September 30, 2025 Skillz Aarki Elimination Consolidated Revenue From Customers: Entry Fee Revenue $ 20,200 $ $ $ 20,200 Advertising Revenue 6,939 6,939 Other Revenue: Maintenance Fee Revenue 235 235 Total Revenue $ 20,435 $ 6,939 $ $ 27,374 United States $ 19,066 $ 1,764 $ $ 20,830 Other Countries 1,369 5,175 6,544 Total Revenue $ 20,435 $ 6,939 $ $ 27,374 Three Months Ended September 30, 2024 Skillz Aarki Elimination Consolidated Revenue From Customers: Entry Fee Revenue $ 20,909 $ $ $ 20,909 Advertising Revenue 3,111 (21) 3,090 Other Revenue: Maintenance Fee Revenue 565 565 Total Revenue $ 21,474 $ 3,111 $ (21) $ 24,564 United States $ 19,950 $ 943 $ (21) $ 20,872 Other Countries 1,524 2,168 3,692 Total Revenue $ 21,474 $ 3,111 $ (21) $ 24,564 Nine Months Ended September 30, 2025 Skillz Aarki Elimination Consolidated Revenue From Customers: Entry Fee Revenue $ 56,406 $ $ $ 56,406 Advertising Revenue 17,29 …

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Stock-Based Compensation The following table summarizes stock-based compensation expense recognized for the three and nine months ended September 30, 2025 and 2024: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Cost of revenue $ $ 4 $ 3 $ 7 Research and development 50 322 549 651 Sales and marketing 656 1,086 2,529 4,885 General and administrative 3,560 5,309 11,100 17,351 Total stock-based compensation expense $ 4,266 $ 6,721 $ 14,181 $ 22,894 For the three and nine months ended September 30, 2025, $24.0 thousand and $166.6 thousand of stock-based compensation expense was capitalized as internally developed software and included in property and equipment, net. For the three and nine months ended September 30, 2024, no stock-based compensation expense was capitalized as internally developed software. Stock Options and Restricted Stock Units Stock option and RSU activity during the nine months ended September 30, 2025 is as follows (in thousands, except for share, per share, and contractual term data): Options Outstanding Restricted Stock Outstanding Number of Shares Available for Issuance Under the Plan Number of Shares Outstanding Under the Plan Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Number of Plan shares outstanding Weighted-Average Grant Date Fair Value per share Balance at December 31, 2024 3,325,575 681,729 $ 312.44 5.96 30 1,769,947 $ 10.52 Additional shares a …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements As of September 30, 2025 and December 31, 2024, the recorded values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of the instruments. Cash and money market funds are classified within Level 1 of the fair value hierarchy. Highly liquid investments such as commercial papers and corporate bonds are classified within Level 2 of the fair value hierarchy. Assets measured at fair value on a recurring basis consisted of the following as of September 30, 2025 and December 31, 2024: Fair Value Measurements as of September 30, 2025 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 200,108 $ $ $ 200,108 Total assets $ 200,108 $ $ $ 200,108 Fair Value Measurements as of December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 251,948 $ $ $ 251,948 Total assets $ 251,948 $ $ $ 251,948 …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The Companys provision for income taxes was $40.0 thousand and $32.0 thousand for the three months ended September 30, 2025 and 2024, respectively, which represented an effective tax rate of negative 0.23% and 0.15% for the respective periods. The Company's provision for income taxes was $59.0 thousand and $142.0 thousand to continuing operations for the nine months ended September 30, 2025 and 2024, respectively, which represented an effective tax rate of negative 0.11% and 0.66%, respectively. The effective tax rates were less than the federal statutory rate of 21% primarily due to book losses, state taxes and equity award activities, mostly offset by a full valuation allowance on our deferred tax assets for the three and nine months ended September 30, 2025 and 2024, respectively. 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 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 adju …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recently Issued Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued Accounting Standard Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures. In November 2024, FASB issued ASU 2024-03, Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses and an issued amendment ASU 2025-01 in January 2025 that clarified the effective date. The new standard requires public entities to disclose disaggregated information about certain costs and expenses in the notes to their financial statements in both annual and interim filings. ASU 2024-03 is effective for financial statements issued for annual reporting periods beginning after December 15, 2026, with early adoption permitted and can be applied either prospectively or retrospectively. The Company is evaluating the disclosure requirements related to the new standard. In July 2025, the FASB issued ASU 2025-05, Financial InstrumentsCredit Losses (Topic 326): Measurement of Credit Losses for Accounts Recei …

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Revenue The following tables present the Companys revenues, disaggregated by offering, geographical region, and reportable segment for the three and nine months ended September 30, 2025 and 2024. Revenue by geographical region is based on the location where the game developer or advertising customer is headquartered. Revenue is recognized net of any taxes from customers (e.g. sales and other indirect taxes), which are subsequently remitted to governmental entities. For more information on revenues presented by reportable segment, see Note 12, Segment Reporting. Three Months Ended September 30, 2025 Skillz Aarki Elimination Consolidated Revenue From Customers: Entry Fee Revenue $ 20,200 $ $ $ 20,200 Advertising Revenue 6,939 6,939 Other Revenue: Maintenance Fee Revenue 235 235 Total Revenue $ 20,435 $ 6,939 $ $ 27,374 United States $ 19,066 $ 1,764 $ $ 20,830 Other Countries 1,369 5,175 6,544 Total Revenue $ 20,435 $ 6,939 $ $ 27,374 Three Months Ended September 30, 2024 Skillz Aarki Elimination Consolidated Revenue From Customers: Entry Fee Revenue $ 20,909 $ $ $ 20,909 Advertising Revenue 3,111 (21) 3,090 Other Revenue: Maintenance Fee Revenue 565 565 Total Revenue $ 21,474 $ 3,111 $ (21) $ 24,564 United States $ 19,950 $ 943 $ (21) $ 20,872 Other Countries 1,524 2,168 3,692 Total Revenue $ 21,474 $ 3,111 $ (21) $ 24,564 Nine Months Ended September 30, 2025 Skillz Aarki Elimination Consolidated Revenue From Customers: Entry Fee Revenue $ 56,406 $ $ $ 56,406 Advertising Reven …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

Segment Reporting Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-making group (the CODM). Our CODM consists of the Chief Executive Officer who allocates resources and measures profitability based on our operating segments, which are managed and reviewed separately, as each represents products and services that can be sold separately to our customers. The CODM does not review information regarding total assets on a reportable segment basis. Effective in the fourth quarter of 2023, the Company had two operating and reporting segments. A description of the Companys two reportable segments, as determined by our CODM, is as follows: Skillz Skillz is a leading eSports gaming platform. Its platform enables game developers to monetize their content through multi-player competition. By utilizing Skillz monetization services, developers can enhance their end-user experiences by enabling them to compete in head-to-head matches, live tournaments, and leagues while also increasing player retention through referral bonus programs, loyalty perks, on-system achievements, and rewards / prizes. Skillz provides its monetization services to developers via a downloadable SDK. The SDK integrates with developers existing games. Monetization services include end-user registration, player matching, fraud & fair play monitoring, and settlement for player billings and payouts. Ski …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Summary of Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions that affect the amounts reported in these condensed consolidated financial statements and the accompanying notes. Estimates are used in several areas including, but not limited to, end-user incentives, including Bonus Cash and Ticketz accrual, indirect tax liabilities, the fair value of non-marketable securities, and the impairment of long-lived assets. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities. The actual results may materially differ from these estimates. Revenue Recognition The Company recognizes revenue for its services in accordance with the FASB ASC Topic 606, Revenue from Contracts with Customers (ASC 606). For additional information, see Note 3, Revenue. Cost of Revenue Cost of revenue primarily consists of third-party payment processing fees, server costs, amortization of developed technology, personnel expenses, direct software costs, amortization of internal use software, hosting expenses, and allocation of shared facility and other costs. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash, commercial …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Share Repurchase Program On August 18, 2023, the Board authorized a share repurchase program (the Share Repurchase Program) pursuant to which the Company was authorized to repurchase, at any time or from time to time, but for a period no longer than one year from the date of authorization, shares of the Companys Class A common stock up to an aggregate purchase price of $65.0 million. Such purchases may be made on the New York Stock Exchange or any other national securities exchange on which the common stock is then traded. The Share Repurchase Program is pursuant to a plan pursuant to Rule 10b5-1 promulgated under the Exchange Act and/or pursuant to accelerated share repurchase arrangements, tender offers, privately negotiated transactions or otherwise. On December 5, 2024, the Board reapproved the Share Repurchase Program and extended the expiration date until otherwise suspended, terminated or modified at any time for any reason by the Board. In the nine months ended September 30, 2025 and 2024, the Company repurchased 1.4 million and 1.8 million shares at a weighted average price of $5.39 and $5.99 per share for an aggregate value of $7.7 million and $10.8 million, respectively under the Share Repurchase Program. …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Events For the purpose of the condensed consolidated financial statements as of September 30, 2025, the Company evaluated subsequent events for recognition and measurement purposes as of the filing date. Except as described elsewhere in these condensed consolidated financial statements, the Company has concluded that no events or transactions have occurred that require disclosure except as follows: Skillz v. Papaya Litigation On October 28, 2025, the Judge denied Papayas motion for summary judgment as to Skillzs claims against Papaya. The Court also denied Papayas motion to exclude Skillzs survey and damages experts. On November 24, 2025, the Court granted Skillzs motion for summary judgment on Papayas remaining counterclaims and unclean hands defense. The courts rulings on certain motions related to the admissibility of expert testimony remain pending (see Note 8, Commitments and Contingencies) . Hanna v. Paradise, et. al. On July 3, 2025, the Court issued a ruling converting defendants motion to dismiss on demand futility grounds to a motion for summary judgment and ordered limited discovery on the independence of a former Skillz director. The Court stayed consideration of defendants other dismissal arguments given its ultimate ruling on the demand futility issue could moot these other dismissal arguments. Further briefing in support of summary judgment on demand futility grounds is expected, but no schedule is currently in place for such briefing (see Note 8, Co …

SubsequentEventsTextBlock · excerpt; the full note is in the filing