Skillz Inc.SKLZ
Skillz Inc. Segments Disclosure
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 CEO who allocates resources and measures profitability based on our operating segments, which are managed and reviewed separately, as each represents services that can be sold separately to our customers. To monitor performance, the CODM regularly receives and reviews Adjusted EBITDA information for each operating segment, together with consolidated expense information. Additionally, the CODM receives estimated and forecasted expense information by operating segment. The CODM uses this information to monitor the operating efficiencies of segments and trends to monitor the overall health of the of each segment. The CODM evaluates operating performance and allocates resources based on Adjusted EBITDA. In particular, the CODM utilizes Adjusted EBITDA to evaluate total company performance and individual operating segment performance. In addition, the CODM utilizes Adjusted EBITDA in the evaluation of incentive compensation and the annual budget process. The CODM measures segment performance against annual budgets, forecasts and actual results. The CODM does not review information regarding total assets on a reportable segment basis.
A description of the Company’s two reportable segments, as determined by our CODM, is as follows:
•Skillz: Our platform enables game developers to monetize their content through multi-player competition by integrating real-money tournaments, virtual prizes, and social competition features directly into their games. The platform provides a managed backend that supports key competitive functionality, including player matching, leaderboards, anti-cheat integrity systems, and payment processing. Our scalable multi-player platform allows for real-world prizes that go beyond one-off competitive implementations and provides for a repeatable, developer-accessible system. In exchange for access to our multi-player platform and monetization services, Skillz and its developers share in the aggregate entry fees paid by end users.
•RZR: In March 2026, RZR, our performance marketing platform business, rebranded as “RZR.” The rebrand reflects an evolution of the platform’s capabilities and market positioning and does not represent a change in ownership or legal structure. RZR is a performance marketing platform that enables advertisers to acquire, retain, and monetize users across mobile, connected television (CTV), and other digital channels. The platform utilizes proprietary machine learning and neural network-based architecture to optimize campaigns across user acquisition, retargeting, and brand performance objectives within a unified system. The platform processes large-scale data inputs in real time and applies predictive models to optimize bidding, targeting, and campaign performance across channels. While historically focused on mobile gaming, RZR now serves a broader set of industries, including consumer applications, retail, food and beverage, and entertainment.
The Company’s corporate operations primarily support Skillz and are included in the results for the Skillz segment. Likewise, RZR largely has its own corporate operations, which are included in the RZR 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 9. 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 9. 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 of affiliate marketing, state and corporate fees, fines and penalties and trade shows.
For the RZR Segment, operating expenses include all operating expenses such as headcount, marketing, software, professional fees such as legal, audit and tax compliance and rent.
For both the Skillz and RZR segments, stock-based compensation expenses are not included in operating expenses.
The following tables provide summarized information about the Company’s operations by reportable segment and a reconciliation of adjusted EBITDA to loss before income taxes for the years ended December 31, 2025 and 2024.
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Revenue | |||||||||||
| Skillz | $ | 78,154 | $ | 82,442 | |||||||
| RZR | 26,790 | 10,876 | |||||||||
Eliminations(1) | (448) | (453) | |||||||||
| Total revenue | $ | 104,496 | $ | 92,865 | |||||||
| Adjusted EBITDA | |||||||||||
| Skillz | $ | (52,003) | $ | (53,205) | |||||||
| RZR | 1,546 | (7,618) | |||||||||
| Total adjusted EBITDA | $ | (50,457) | $ | (60,823) | |||||||
| Items to reconcile Adjusted EBITDA to loss before income taxes: | |||||||||||
| Interest (expense) income, net | $ | (5,815) | $ | 298 | |||||||
| Stock-based compensation | (19,580) | (30,015) | |||||||||
| Change in fair value of common stock warrant liabilities | — | 11 | |||||||||
| Depreciation and amortization | (1,381) | (1,665) | |||||||||
| Other (expense) income, net | (567) | (530) | |||||||||
Gain on litigation settlement(2) | 7,500 | 46,000 | |||||||||
| Loss before income taxes | $ | (70,300) | $ | (46,724) | |||||||
(1)Amounts represent the RZR (formerly Aarki) revenue earned from Skillz.
(2)Amounts represent a gain on a legal settlement recorded in connection with proceeds under terms of a settlement agreement entered into with AviaGames.
The following tables provide summarized information about the Company’s operations by reportable segment for the years ended December 31, 2025 and 2024, respectively:
For the Year Ended December 31, 2025 | |||||||||||
| Skillz | RZR | ||||||||||
| Revenue | $ | 78,154 | $ | 26,790 | |||||||
| Less: | |||||||||||
| Cost of revenue | (8,532) | (4,246) | |||||||||
End user engagement marketing | (34,046) | ||||||||||
| Paid acquisition spend | (15,744) | ||||||||||
| Headcount expenses | (26,301) | ||||||||||
| Consulting fees | (11,305) | ||||||||||
| Vendor and software expenses | (8,204) | ||||||||||
| Legal fees (non-litigation) | (3,105) | ||||||||||
| Litigation expenses | (16,193) | ||||||||||
| Office and operations expenses | (5,589) | ||||||||||
| RZR operating expenses | (20,998) | ||||||||||
| Other segment items | (1,138) | ||||||||||
| Adjusted EBITDA | $ | (52,003) | $ | 1,546 | |||||||
For the Year Ended December 31, 2024 | |||||||||||
| Skillz | RZR | ||||||||||
| Revenue | $ | 82,442 | $ | 10,876 | |||||||
| Less: | |||||||||||
| Cost of revenue | (9,522) | (3,883) | |||||||||
End user engagement marketing | (37,164) | ||||||||||
| Paid acquisition spend | (15,891) | ||||||||||
| Headcount expenses | (26,709) | ||||||||||
| Consulting fees | (4,194) | ||||||||||
| Vendor and software expenses | (12,852) | ||||||||||
| Legal fees (non-litigation) | (6,836) | ||||||||||
| Litigation expenses | (13,087) | ||||||||||
| Office and operations expenses | (5,659) | ||||||||||
| RZR operating expenses | (14,611) | ||||||||||
| Other segment items | (3,733) | ||||||||||
| Adjusted EBITDA | $ | (53,205) | $ | (7,618) | |||||||
Transactions Between Segments
Intercompany revenue was approximately $0.5 million for each of the years ended December 31, 2025 and 2024, respectively.
Capital Expenditures
Consolidated capital expenditures were $6.1 million and $2.5 million during the years ended December 31, 2025 and 2024, respectively. Capital expenditures consisted primarily of costs related to internal-use software for the years ended December 31, 2025 and 2024, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Nov 6, 2025 | |
| 2023 | Aug 29, 2024 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.