(SKLZ) Reports Q4 Earnings. Is it a Buy?

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Skillz Inc. (NYSE: SKLZ), the leading mobile games platform bringing fair competition to players worldwide, today announced financial results for the fourth quarter and full year ended December 31, 2020 and initiated full year 2021 revenue guidance.

“Our first quarter as a publicly traded company was our twentieth consecutive quarter of revenue growth,” said Andrew Paradise, CEO and founder. “We look forward to many more such quarters ahead.”

Fourth Quarter Financial Highlights

  • Revenue grew to $68 million during the fourth quarter of 2020, 8% higher than expectations, and up 95% compared with $35 million during the comparable quarter in 2019.
  • Gross profit grew 95% to $64 million during the fourth quarter of 2020, compared with $33 million during the comparable quarter in 2019.
  • Gross margin was 95% during the fourth quarter of 2020, consistent with the comparable quarter in 2019.
  • Net loss was $44 million during the fourth quarter of 2020, compared with a net loss of $9 million during the comparable quarter in 2019.
  • Gross Marketplace Volume1 (“GMV”) grew 78% to $463 million during the fourth quarter of 2020, compared with $259 million during the comparable quarter in 2019.

Full Year Financial Highlights

  • Revenue grew 92% to $230 million in 2020, compared with $120 million during 2019.
  • Gross profit grew 91% to $218 million during 2020, compared with $114 million in 2019.
  • Gross margin was 95% during 2020, the same as the year prior.
  • Net loss was $122 million during 2020, compared with a net loss of $24 million during 2019.
  • GMV grew 80% to $1.6 billion during 2020, compared with $886 million during 2019.
  • As of December 31, 2020, the Company had $263 million of cash and no debt.

Recent Business Highlights

  • Went public on the NYSE, providing greater access to capital and increasing the visibility and transparency of the platform for developers, users, and brands.
  • Signed multi-year agreement with the NFL subsequent to the end of the quarter, underscoring the trusted relationship Skillz is building with leading brands.
  • Blackout Bingo became Skillz’s #1 game based on GMV, highlighting the ability of the platform to enable innovative developers to build successful businesses.
  • Bolstered Skillz Board of Directors with the addition of film and television producer, Jerry Bruckheimer, and Chris Gaffney, co-founder of Great Hill Partners.

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