Why Shares of Video Game Company Skillz (SKLZ) Crashed 40% Today

Shares of Skillz (NYSE: SKLZ) have plummeted nearly 40% in premarket trading Thursday after the company reported worse-than-expected Q4 financial results.

Skillz posted a loss per share of 25 cents in the quarter, compared to the loss per share of 14 cents in the year-ago period. Revenue came in at $108.8 million, up 61% YOY, missing the consensus estimates of $114.1 million.

Operating loss in the quarter totaled $104 million, compared to the $43.2 million loss reported in the year-ago period and analyst estimates of $58.5 million loss. Adjusted EBITDA loss totaled 77.8 million in Q4, compared to the $23.8 million in the year-ago period and broader than the expected loss of $38.8 million.

The number of monthly active users in the quarter stood at 3.7 million, up 54% YOY, while the average revenue per user stood at $9.80, up 4% YOY. Total marketplace gross merchandise value was reported at $650 million, up 40% YOY.

For full-year 2022, Skillz expects revenue of about $400 million, well below the analyst consensus of $550 million.

"Our guidance is based on an estimated reduction in engagement marketing as a percentage of revenue of approximately 10 percentage points, when compared with engagement marketing as a percentage of revenue of 49% in 2021.”

Skillz shares were already down over 50% YTD heading into earnings.

By Senad Karaahmetovic | [email protected]

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