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Segment Reporting
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segment Reporting 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 Company’s two reportable segments, including products and services, 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. Skillz is headquartered in Las Vegas, NV with an office in Bangalore, India and a presence in San Francisco, CA.

Aarki

Aarki is an Artificial Intelligence (“AI”) company that delivers advertising solutions to drive revenue growth for mobile app developers. Aarki enables brands to effectively engage audiences in a privacy-first world by using billions of contextual bidding signals coupled with proprietary machine learning and behavioral models. Aarki works with hundreds of advertisers globally and manages millions of mobile ad requests per second from over 10 billion devices. Aarki is headquartered in San Francisco, CA, with offices in Europe, the Middle East and Asia. The Company’s CODM received discrete Aarki financial information on a regular basis for purposes of evaluating its operating performance and allocating resources beginning in the fourth quarter of 2023. Effective in the fourth quarter 2023, Aarki met the definition of an operating segment as defined in ASC 280, Segment Reporting (“ASC 280”).

The Company’s corporate operations primarily support Skillz and are included in the results for the Skillz segment. Likewise, Aarki largely has its own corporate operations, which are included in the Aarki segment.
For the Skillz Segment, end user engagement marketing represents the cost of incentives provided to end users such as Bonus Cash and Ticketz. Paid acquisition spend represents amounts paid to third parties to promote the Skillz platform. Headcount expenses include salaries, bonuses, contractors, travel, and burden such as employer taxes, benefits and insurance. Consulting fees represent expenses paid for professional fees. Vendor/Software expenses represent fees paid for the Company’s annual audit and tax advisors, software and server costs and third party technical support. Legal fees (non-litigation) represents legal expenses that relate to contract negotiations, securities law, compliance and lawsuits that do not relate to the Company’s lawsuits against AviaGames, Papaya (see Note 8. Commitments and Contingencies) and a third competitor. Litigation expenses include legal expenses incurred where the Company is pursuing damages against AviaGames and Papaya (see Note 8 Commitments and Contingencies) and a third competitor for unfair business practices and their use of ‘bots’. Office and operations expenses represent rent and building maintenance. Other segment items include marketing expenses which, in turn, consists mostly affiliate marketing, state and corporate fees, fines and penalties and trade shows. For both the Skillz and Aarki segments, stock-based compensation expenses are not included in operating expenses.

For the Aarki Segment, operating expenses include all operating expenses such as headcount, marketing, software, professional fees such as legal, audit and tax compliance and rent.

The CODM evaluates the performance of the Company’s segments based on Segment Revenue and Segment Adjusted EBITDA. Segment Adjusted EBITDA is indicative of operational performance and is monitored by the CODM to evaluate past performance and identify actions required to improve profitability. The CODM does not review information regarding total assets on a reportable segment basis.

The following tables provide summarized information about the Company’s operations by reportable segment and a reconciliation of Segment Adjusted EBITDA to net (loss) income in the three and six months ended June 30, 2025 and 2024.

Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Revenue
Skillz Segment$19,365 $22,738 $36,958 $45,155 
Aarki Segment5,916 2,578 10,355 5,443 
Elimination(67)(21)(202)(68)
Total Revenue$25,214 $25,295 $47,111 $50,530 
Segment Adjusted EBITDA
Skillz Segment$(11,365)$(10,465)$(27,647)$(26,157)
Aarki Segment(62)(2,107)(1,036)(4,151)
Total Segment Adjusted EBITDA$(11,427)$(12,572)$(28,683)$(30,308)
Items to reconcile Segment Adjusted EBITDA to Net (loss) income:
Interest (expense) income, net
$(1,321)$334 $(2,392)$447 
Stock-based compensation(4,362)(7,433)(9,912)(16,173)
Change in fair value of warrant liability— 2 — 11 
Provision for income taxes19 (73)(20)(111)
Depreciation and amortization(194)(403)(361)(798)
Gain from litigation settlement— 46,000 7,500 46,000 
Other (expense) income, net(637)190 (1,196)254 
Net (loss) income$(17,922)$26,045 $(35,064)$(678)
The following tables provide summarized information about the Company’s operations used by the CODM by reportable segment for the three and six months ended June 30, 2025 and 2024, respectively.

Three Months Ended June 30, 2025Six Months Ended June 30, 2025
Skillz SegmentAarki SegmentSkillz SegmentAarki Segment
Revenue$19,365 $5,916 $36,958 $10,355 
Less:
Cost of Revenue2,098 1,052 4,076 2,028 
End User Engagement Marketing8,100 16,381 
Paid Acquisition Spend3,347 7,078 
Headcount expenses7,091 14,137 
Consulting fees1,366 2,580 
Vendor/Software Expenses2,590 6,288 
Legal fees (non-litigation)
520 1,046 
Litigation expenses4,522 10,177 
Office and operations expense1,065 2,772 
Aarki operating expenses4,926 9,363 
Other segment items31 70 
Total Operating Expenses30,730 5,978 64,605 11,391 
Segment Adjusted EBITDA
$(11,365)$(62)$(27,647)$(1,036)


Three Months Ended June 30, 2024Six Months Ended June 30, 2024
Skillz SegmentAarki SegmentSkillz SegmentAarki Segment
Revenue$22,738 $2,578 $45,155 $5,443 
Less:
Cost of Revenue1,943 983 3,986 1,828 
End User Engagement Marketing10,559 19,445 
Paid Acquisition Spend3,590 8,279 
Headcount expenses7,167 16,324 
Consulting fees1,259 2,756 
Vendor/Software Expenses3,300 6,747 
Legal fees (non-litigation)
666 6,503 
Litigation expenses2,708 2,708 
Office and operations expense1,802 3,882 
Aarki operating expenses3,702 7,766 
Other segment items209 682 
Total Operating Expenses33,203 4,685 71,312 9,594 
Segment Adjusted EBITDA
$(10,465)$(2,107)$(26,157)$(4,151)