Skillz (SKLZ 13.25%), a mobile gaming platform enabling players to compete in skill-based tournaments for real rewards, released its second quarter 2025 results on August 7, 2025. The main headlines were a return to revenue growth, with GAAP revenue reaching $27.4 million in Q2 2025, surpassing analyst expectations by $4.6 million, or 20.2%. It also reported a GAAP loss per share of $(0.58), which was much better than the $(1.34) GAAP loss per share anticipated by Wall Street. Total platform gross marketplace volume continued to shrink and the company remains unprofitable. Overall, the quarter showed sequential progress in key user metrics and the beginnings of a possible turnaround, but lingering compliance and profitability issues remain.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.58) | $(1.34) | $1.44 | (140.3%) |
| Revenue (GAAP) | $27.4 million | $22.8 million | $25.3 million | 8.3% |
| Adjusted EBITDA Loss | $(10.4 million) | $(12.6 million) | -17.5% | |
| Paying Monthly Active Users | 146,000 | 122,000 | 19.7% | |
| Average Revenue Per Paying Monthly Active User | $62.8 | $69.4 | (9.5%) |
Source: Analyst estimates for the quarter provided by FactSet.
Understanding the Business and Its Focus Areas
Skillz runs a mobile gaming platform where independent developers host skill-based games for players who can join cash-prize tournaments.
Recent business efforts have focused on developer engagement and retention, technological innovation, expanding the user base, and improving profitability and operational efficiency. Key drivers for success include getting compelling games onto the platform, continuously improving technology, attracting more engaged paying users, outpacing competitors, and broadening the ways players can find and access Skillz games.
Quarter Performance: Key Developments and Metrics
Revenue outpaced analyst forecasts by 20.2%, while the net loss per share (GAAP) significantly beat consensus estimates. The quarter also marked a jump in paying monthly active users to 146,000, a 19.7 % increase compared to the prior year and 17.7% higher than in Q1 2025. This is the highest paying user count since Q3 2023 and signals success in re-engaging lapsed or dormant players, according to management commentary.
Even as more users paid to play, average revenue per paying user (ARPPU) fell to $62.8 in Q2 2025, down approximately 9.5% year-over-year but stable compared to the previous quarter. The conversion rate from regular monthly active users (MAUs) to paying active users rose to 19% in Q2 2025, up from 15% a year earlier. However, total MAUs decreased from 807,000 in Q2 2024 to 748,000 in Q2 2025, indicating that overall reach and player engagement outside the paid cohort declined year-over-year. Management highlighted ongoing initiatives, such as its $75 million Developer Accelerator, but did not provide fresh data on the impact of these programs during the period.
Gross marketplace volume—the total dollar value of entry fees from tournaments—fell by 15.5% from Q2 2024 to $136.6 million in Q2 2025, suggesting that while more users are converting to paid play, overall spending on the platform declined year-over-year. Adjusted EBITDA loss improved by over 17% year-over-year. Research and development spending (GAAP) increased modestly to $4.8 million in Q2 2025, but management did not outline major product launches or upgrades this quarter.
From a product standpoint, the company offers a platform for hosting tournaments in third-party mobile games. Its main offering is the online skills competition platform, which pairs competitors and enforces "fair play" via proprietary algorithms. Litigation updates during the quarter highlighted ongoing cases against other gaming providers related to bot usage and industry fairness, but did not directly impact financial results. The company remains under New York Stock Exchange notice for late financial filings, presenting an ongoing compliance and listing risk for investors.
Looking Ahead: Outlook and Risks
Management did not offer formal quantitative financial guidance for the next quarter or the full fiscal year. Instead, the stated objective remains “consistent top line growth and positive Adjusted EBITDA.” The company reiterated its plan to keep investing in new strategic growth areas and to maintain cost discipline as it works toward eventual profitability and growth in its user base.
Investors should monitor Skillz’s liquidity and cash burn rates, as the company ended Q2 2025 with $238.7 million in cash and restricted cash. Ongoing regulatory and reporting compliance is a material risk, as the company continues to address delays with required filings and the related NYSE listing notice. Platform growth, new developer partnerships, and proof of sustained user engagement will also be important signals for the company’s path forward.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
