v3.26.1
Segment Reporting
 6 Months Ended
Jun. 30, 2026
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. 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 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.
We believe Adjusted EBITDA, a non-GAAP performance measure, is useful in evaluating the performance of its operating segments and is a similar measure reported by publicly-listed U.S. competitors, and regularly used by securities analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. By providing this non-GAAP measure, the Company’s management intends to provide investors with a meaningful, consistent comparison of the Company’s profitability for the periods presented. As required by the rules of the SEC, the Company has provided herein a reconciliation of Adjusted EBITDA to the most directly comparable measures under GAAP. Adjusted EBITDA is not intended to be a substitute for any U.S. GAAP financial measures and, as calculated, may not be comparable to other similarly titled financial measures of other companies in other industries or within the same industry.
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: 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.
Effective in the second quarter of 2026, the Company changed the composition of the information reviewed by the CODM to present unallocated corporate costs separately from the results of the Skillz reportable segment. The change reflects a change in the information regularly provided to and used by the CODM in assessing segment performance and allocating resources. Segment information for the prior-year periods presented has been recast to conform to the current period presentation. The change in segment presentation had no effect on the Company's condensed consolidated results of operations, financial condition or cash flows for any period presented.
The Company’s corporate operations primarily consist of executive, legal, finance and accounting, and support for our ongoing litigation matters, which are excluded from the results of our operating segments.
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 and software expenses represent fees paid for software and server costs and third-party technical support. Office and operations expenses represent rent and building maintenance. Other segment items include marketing expenses which, in turn, consists mostly of affiliate marketing and trade shows.
For the RZR segment, operating expenses include all operating expenses such as headcount, marketing, software, professional fees such as legal 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 three and six months ended June 30, 2026 and 2025:
Three Months Ended June 30,
20262025
Revenue
Skillz$20,771 $19,365 
RZR10,349 5,916 
Eliminations(1)
(128)(67)
Total Revenue$30,992 $25,214 
Adjusted EBITDA
Skillz$583 $(2,665)
RZR1,930 (62)
Corporate(2)
(16,066)(8,700)
Total Adjusted EBITDA$(13,553)$(11,427)
Items to reconcile Adjusted EBITDA to net loss before income taxes:
Interest expense, net of interest income$(2,424)$(1,321)
Stock-based compensation(7,019)(4,362)
Depreciation and amortization(995)(194)
Other (expense) income, net(388)(637)
Net loss before income taxes$(24,379)$(17,941)
1.Amounts represent the RZR revenue earned from Skillz.
2.Amounts represent certain corporate executive, legal, finance and accounting, and litigation costs.
Six Months Ended June 30,
20262025
Revenue
Skillz$40,398 $36,958 
RZR20,105 10,355 
Eliminations(1)
(406)(202)
Total Revenue$60,097 $47,111 
Adjusted EBITDA
Skillz$(3,440)$(7,670)
RZR3,794 (1,036)
Corporate(2)
(26,684)(19,977)
Total Adjusted EBITDA$(26,330)$(28,683)
Items to reconcile Adjusted EBITDA to net loss before income taxes:
Interest expense, net of interest income$(4,704)$(2,392)
Stock-based compensation(9,776)(9,912)
Depreciation and amortization(1,711)(361)
Gain from litigation settlement(3)
7,500 7,500 
Other (expense) income, net(229)(1,196)
Net loss before income taxes$(35,250)$(35,044)
1.Amounts represent the RZR revenue earned from Skillz.
2.Amounts represent certain corporate executive, legal, finance and accounting, and litigation costs.
3.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 three and six months ended June 30, 2026 and 2025, respectively:
Three Months Ended June 30, 2026
SkillzRZR
Revenue$20,771 $10,349 
Less:
Cost of revenue2,445 1,235 
End-user engagement marketing6,885 
Paid acquisition spend1,139 
Headcount expenses5,265 5,409 
Consulting fees740 188 
Vendor and software expenses1,980 306 
Legal fees (non-litigation)81 
Litigation expense1,387 
Office and operations expense278 668 
Other segment items(1)
69 532 
Adjusted EBITDA$583 $1,930 
1.Other segment items for each segment are comprised of creative and live event marketing costs, employee event expenses and various miscellaneous expenses.
Three Months Ended June 30, 2025
SkillzRZR
Revenue$19,365 $5,916 
Less:
Cost of revenue2,098 1,052 
End-user engagement marketing8,100 
Paid acquisition spend3,347 
Headcount expenses5,371 3,980 
Consulting fees403 110 
Vendor and software expenses2,035 175 
Legal fees (non-litigation)97 
Office and operations expense660 215 
Other segment items(1)
16 349 
Adjusted EBITDA$(2,665)$(62)
1.Other segment items for each segment are comprised of creative and live event marketing costs, tax and license expenses, employee event expenses and various miscellaneous expenses.
Six Months Ended June 30, 2026
SkillzRZR
Revenue$40,398 $20,105 
Less:
Cost of revenue4,856 2,281 
End-user engagement marketing14,805 
Paid acquisition spend4,047 
Headcount expenses10,974 10,865 
Consulting fees2,166 322 
Vendor and software expenses3,111 546 
Legal fees (non-litigation)— 221 
Litigation expense1,815 
Office and operations expense1,205 1,002 
Other segment items(1)
859 1,074 
Adjusted EBITDA$(3,440)$3,794 
1.Other segment items for each segment are comprised of creative and live event marketing costs, employee event expenses and various miscellaneous expenses.
Six Months Ended June 30, 2025
SkillzRZR
Revenue$36,958 $10,355 
Less:
Cost of revenue4,076 2,028 
End-user engagement marketing16,381 
Paid acquisition spend7,078 
Headcount expenses10,435 7,533 
Consulting fees586 216 
Vendor and software expenses4,175 262 
Legal fees (non-litigation)178 
Office and operations expense1,250 429 
Other segment items(1)
647 745 
Adjusted EBITDA$(7,670)$(1,036)
1.Other segment items for each segment are comprised of creative and live event marketing costs, tax and license expenses, employee event expenses and various miscellaneous expenses.
Transactions Between Segments
Intercompany revenue was $0.1 million and $0.4 million for the three and six months ended June 30, 2026, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2025, respectively.
Capital Expenditures
Consolidated capital expenditures were $2.0 million and $3.4 million for the six months ended June 30, 2026 and 2025, respectively, which consisted primarily of costs related to internal-use software and costs to purchase property and equipment.