What happened

Shares of Skillz (SKLZ -2.82%) flamed out on Thursday, falling as much as 16.6%. As of 11:22 a.m. ET, the stock is still down 11%.

The catalyst that sent the mobile games platform plunging was its abysmal financial results.

So what

For the second quarter, Skillz reported revenue of $73 million, a decline of 18% year over year, while its net loss of $60.6 million improved 24%. This resulted in a loss per share of $0.15, compared to a loss per share of $0.21 in the prior-year quarter. 

To give those numbers some context, analysts' consensus estimates were calling for revenue of $92.8 million and a loss per share of $0.16, so there wasn't much in the way of good news.

Management tried to put the best possible spin on the abysmal results, pointing out that it had eliminated unprofitable programs, resulting in EBITDA that improved 48% sequentially.

Unfortunately, many of the metrics told a different story. Skillz's paying monthly active users of 420,000 declined 9% year over year and 26% sequentially as players continued to abandon the platform. This resulted in monthly average revenue per playing user that declined 10% year over year, but improved 6% sequentially.

Now what

Skillz has taken some drastic steps to spark a turnaround. The company brought in Jason Roswig, former managing director of private equity firm Blackstone, as its CFO. Skillz also hired former Netflix exec Valerie Texin as CFO of its competition segment.

Unfortunately for investors, things don't look to be improving any time soon. Skillz lowered its full-year outlook and now expects revenue of roughly $275 million -- down from its previous guidance for $400 million -- resulting in an adjusted EBITDA margin of -56%.

Skillz grew to prominence during pandemic-era lockdowns, but its results have cratered as people ditched the platform for other entertainment options. It's hard to see how Skillz comes back from this, though stranger things have happened.

Investors should give Skillz a wide berth until the former highflier makes meaningful improvements to its flailing results.