SKLZ - Earnings call transcript Q3 2021

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Operator

Good afternoon. Thank you for attending today's Skillz Third Quarter 2021 Earnings Conference Call. My name is Nai, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for question-and-answer at the end. [Operator Instructions] I would now like to pass the conference over to your host, Stefan Gerhard with Skillz. you. Thank

Mr. proceed, Gerhard. may You

Stefan Gerhard

the and you day session our a and Skillz by Casey then Chief letter, welcome followed today, published Lee, statements the our a question-and-answer the have Good quarter Thank release Officer reading also brief of Ian chance stockholder Revenue Chief had available XXXX question-and-answer website. you've read remarks and forward-looking Chief company. Officer; Chafkin, shortly we which hope and third proceed Executive earnings earlier to I'll Andrew press of immediately Hosting Nai. Officer; conference and today introductory on to We measures, which Relations non-GAAP Financial we Investor session. our both by call. Paradise, are

short posted our also to of our highlights a website our this video business have quarter. discussing CEO We

forward-looking comments the management's will federal today laws. of securities of Some within include the meaning statements

should as differ and similar could which what numerous use risks actual expect, uncertainties the are usually we are from to phrases to results will, by Forward-looking cause statements, identified subject words, or materially that of such other more the Therefore, SEC on them. financial condition. to and should filings exercise relying could expect. refer the you for operating caution interpreting We risks of results and you in detailed a that future discussion company's impact

the over remarks. quarter should that, is prepared can During brief discuss in some A measures measures, considered in be useful be GAAP believe our to the to isolation, available the our accordance financial evaluating Andrew XXXX substitute the will third operating call or reconciliation we turn for with for most measure results measures management These not call which With these as release. in I'll company's earnings comparable GAAP. performance. non-GAAP a in of opening directly

Andrew Paradise

with our I to discuss highlights QX before a today In you thank review Good all we quarter. year-over-year few acquisition which drove just definitely chance proud in lower haven't several generated the we case stockholder acquire we our you from large had Stefan. quarter Investors marketing monthly to news to for from part cost joining we want led your started share questions. revenue everyone, during results. year-over-year while growth paying afternoon share third efficiency growth this that by per as XX% to investment you published to quarter get active our CPI able company maintaining high this The very user to with afternoon, a you increase XX% that prior Thank or the quarter new us and letter, users, in XXXX was site initiatives install We're key users.

Engine. Hunter: quarter know that shooting Buck at Chicago love. was we all also world first celebrated iconic World in the It and This were we ability by accelerated Its Big for synchronous the synchronous popular engine Exit advanced our Photon Exit Throughout the racing first-person several able and to years. technology Skillz we to through of Marksman, Championships the convergence game Big market-leading investment has Games, online off-line officially first time. arcade and with games XXth onto of the the support shooter our Games' Annual the platform version integrate multiplayer mobile Hunter game launched and Buck

us the scaled the Vatsal product we he where finally, multiplayer and in to team announced game teams. Amazon who from At development our responsible services, development for Officer, to popular bring Skillz a distributed And platform. addition joins the Skillz, grew for be the with developed, etermax led leading Product the cloud. using responsible are games including large-scale developer transforming will Bhardwaj, franchise game with as operated, Chief how Crack the world, of our Vatsal executive team our Trivia also We most deal trivia

work Before to questions Internet to The I day create who creativity makes want layer teams, our it they all taking for who build on let thank possible. every team Skillz competition, that through of future our of a everyone's of and to out imagination moment With tirelessly take developer their me everyone just to partners up teams and, for the their bring fun. course, and open questions. the competition that, us the

Operator

first Please Canaccord. Graham question [Operator with Instructions] The is Michael proceed. from

Michael Graham

Hi, dig much information bit. shareholder so a for little the in lot all to letter. I and into thanks thanks the a Aarki wanted

You were really but of spend marketing year plans from kind yet your get the I you kind that of integrated. on any Aarki do the have your you mentioned and doesn't guidance side to guess there that incorporate for benefit shift

commentary So could seeing some then leverage around some integration. the about a expected just the comment And talking the you end of if that the of I UA did of us you at give next possibility letter year. have spend pace wonder, on

get of Aarki UA a now that kind you've going equation forward. a -- to about And of had your more on of a to bit thinking so maybe of engagement updated whole just, spend deeper and thinking get wanted that you're chance little just sense I versus into get kind how

Ian Lee

Yeah. Hi, Hope Michael. well. you're It's Lee. Ian doing

are pleased of we yes with So the very Aarki. integration

in of from Aarki. is that year. thing, the synergies that here. and next yet more have as the very spend head Aarki forward. two we're about continuing a in yet noted I'll we benefits from again going improvement, we've to quarters points didn't again the excited into But QX on is the about other As you We're there, talk CPI In noted, this several process more any quarter take UA integrate to the include saw going -- the letter -- noted the from that we that

some QX. be in improvements with there CPI and So in we see user to us did aggressive, allowing acquisition investment the more

traffic use, optimization, search which were able and us that reasons those several scale as precision. again some initiatives networks, app we're our of able some enabled increase which to store also traffic. buying media to allowed the to grow tools, bidding Some engine organic us were our which we're of to There such

but to disciplined. forward also we look into going aggressive to So next QX forward year, be continue

a marketing little engagement next marketing engagement QX recap introduced that different the a in QX. in drive just we number side, you doing to talk and initiatives of engagement monetization on year, to that continue On experiments QX into about end-user testing continue and for expect so and

to XXXX, of quarters. last Specifically in noted letter the around the lot done your over a marketing that question several testing about we've experiments we engagement these particularly

we'll to most engagement effectively So of we users which the investment all will the those from into really on on over time sort we increase and monetization. better focus programs, go learnings the looking as, and next year of leverage be believe

we some around So again lead to noted, those it as but XXXX. possible reduction, early revenue that predict it's a to in specific in marketing may to engagement changes is of certain marketing still relative changes too initiatives engagement

Michael Graham

Thanks All Ian. right. a helpful. That’s lot,

Operator

next Mr. Lampen you, with question Please proceed. from Graham. is The BTIG. Thank Clark

Clark Lampen

on maybe side Good Aarki. a the Thanks evening. with lot. SSP I'll I'll Mike's make and question easy on follow-up this

we've that MAU think guys is about that I'm curious base that as the umbrella a Is the How of to had the increasing Now it? could contribute about think integration? particularly year? sort that something, maybe thinking this you we have that under How how about for Is starting you next difficult quarter? opportunity. that something you're do seen ad an little while

Ian Lee

one? that take to like you do Andrew,

Andrew Paradise

Yeah, I'd to love that. take

the that be well integration as between We're been and the about take quarters, synergies as think I should excited the is that in of So acquisition, messaging generally, we've Aarki science relations. track. somewhere think expectation. The will and terms eight really two user integration four data I between developer still the on businesses

Clark Lampen

If I on just follow-up could guidance. the quick with sort maybe a of

You $XXX we guys tapering that think year. spend? about the you million so for or target still the as talked right UA about Is investment in guys

Ian Lee

Hey, Ian Lee Clark. again. It's

look year for We haven't rate we Again, specific budget specific UA also a be the in XXXX. target for given XXXX. but but full aggressive the overall to the QX for spend target to run haven't a full of given we'll for

Clark Lampen

Got guys. Thanks it.

Operator

[Operator Instructions] Please next Thank The from Markets. with Erickson question Mr. is proceed. RBC Lampen. Capital Brad

Dan Parr

Erickson. in hoping and as as Dan two And might after. Buck I questions for was and of have Big I on for user incentive revenue guys. be the sales contra this you able quarter XXXX? Parr Hunter Thanks, incentive well the then user provide quarter to third spend It's Brad the marketing on

Ian Lee

Sure. Hi. It's Ian Lee here.

So the for million was $XX just amount QX under reduction in QX. revenue for

If you're $XX in around looking marketing the that in million year. sales was engagement this number that at and was of QX marketing

$XX under looking was last just QX year, million. about back If you're at of it

Dan Parr

been Buck concentration Got launch? for launch the properties cannibalization has it. mix Big guys on platform? And Thanks. in of the engagement And any any the seen then shift Hunter, have on Thanks. with other developer with there you

Ian Lee

to Casey take to I'll pass one. that that

Casey Chafkin

question. Thank Hi for the Dan. you

a excited on category the performance seen The out probably game the game top gate. was sports for in the about quickly both you've game category Buck as think particularly we're strong I Skillz. the became and Big of Hunter and

One to of the highlights of genres substantially business the tend that, be demographics between is our different.

shared experiences mixes. we think might as we see the so, business, concentration you the concentration but business expect in And accretive new new cannibalistic degree we've the always as games and gaming competitive than I of of best see as this, other towards view to move consumers rather experiences. revenue perspective, launch From in to a a our

in to our so, concentration And we always see expect top titles.

system concentration the though top two more a experiences online. seen have on small have among as We developers the in come the decrease

Dan parr

Thanks.

Casey Chafkin

Thank you.

Operator

Mr. Erickson. you, Thank

We have with follow-up a Please proceed. question Lampen Clark BTIG. from

Clark Lampen

I follow up the release. genre for commentary back wanted just in. letting me in to the Thanks on

so guess FPS you demand fighting. be coverage the guys you was of in decided terms that of a those were You guys racers My and one, talked the just that, is about of as may seeing there and to community? pent-up sort first pursue this But expansion. is developer reason that sort of the amongst start guys sort there genre

Ian Lee

Andrew. to I'll it pass

Andrew Paradise

into the the categories, hits popular on of Yes. Look, today, platform build Skillz. the The of surface gaming. scratched only game candidly, possible in really market platform. categories content falls the ahead are there and casual most opportunity But on asynchronous it the board many to we've even card of other

progress trivia So, games, Trivia announced pioneered so games, about word an of yet lot agreement We the even think quarter. onto with of many classic platform. arcade types that last this about in games haven't about made category. Crack We arcade a the trivia,

shooter particular platform, Big a wide Call is Trivia one number It's not deal Buck highlighting well. on reason international geographic asynchronous you we game has It is like of I It's asynchronous the Strike. the game but in shooting. what a the is it first-person game primary game first Counter Duty first-person might Hunter: shooter game. like MAU mode Marksman, that with today and Crack availability the see or also world. XX trivia million the is in a about partnership truly keep the as The think pretty

And we're I expansion platform the the genres. core of beyond that when think, of really platform, accelerate we casual asynchronous the today with ahead and into our are they're It's on expect think about racing of for prizes. fighting fidelity mid-core with Exit Skillz midterm genres are rollout Games partnership and the that playing XG. users kind the real possible excited the the in level of leveraging to of two

Clark Lampen

Understood. the Thanks for color.

Andrew Paradise

Thank you.

Operator

Brian question with Thank Fargo. Please from is you, Mr. Lampen. proceed. The next Wells Fitzgerald

Brian Fitzgerald

back Thanks, worked. was up the the an up there queue don't dialing I that guys. issue, problems in had I but know I queuing way. by ended if and

about other be channels? inside to value think other pieces own to Chartboost the your and bought Aarki. tool game bought Machine like there perspective tools So have a Zynga bought do Zone DSPs of glad need the chain toolkit? sets, would to distribution engines, parts How and critical Are you Applovin in. you you From

Ian Lee

pass to I'll Andrew. it

Andrew Paradise

terms was value our many So in I acquisition terms particularly our think we're well across of user a as and a the with in very thing as our Buying for so our growth relationship thoughtful DSP of budget. logical inorganic acquisition being very Skillz DSPs chain.

at we pieces As definitely opportunities sharing we're looking this at publicly of we're inorganic evaluating, value are and ahead anything there aren't that but time. the the thinking next multiple chain

Brian Fitzgerald

Appreciate Andrew. it. Got

Andrew Paradise

Brian. Thanks,

Operator

Contentful. with Thank [Operator is you, [ph] McAllister question Fitzgerald. The next proceed. from Please Mr. Instructions] Henry

Unidentified Analyst

objectives on XX performance unit to achieving stock company that mentioned regarding service, a remain service the term the a Paradise. continued the certain multiyear then associated than achieve of or Paradise's and he's the Skillz. Paradise's press in based under this. didn't not price said either even And with noted service. CEO will Mr. if performance Chief that continued which on this milestones company as Mr. the is company Hi, the release release grant you clarify Could a there. Product milestones was Chairman put stock later shares or Skillz related based he it any lines Form the light Mr. on Mr. the On September press the Executive future? Paradise in receive shed if release out stock Officer entirely achievement and four The grant these few must those to about press rather his vesting really And at

Ian Lee

It's Ian Lee again.

So documentation the would that. we included with that's Operator, public but be all public any in the there is documentation. to the as service qualify the all can question that's company again no in included he ongoing move if please. next But

Operator

There no to will Andrew I remarks. time. closing pass questions back additional are at this for it now

Andrew Paradise

on results excited our forward you game year for taking when fourth all We're and on. for early thank Well, build providing Until look join progress and to today. our continue the quarter again XXXX. to in we forward us we very report continued company -- the full update time to an to then,

Ian Lee

Great. everybody. Thanks

Operator

Skillz your third earnings call. conference of day. quarter rest the Enjoy concludes XXXX the That

Skillz (SKLZ) 4 Nov 212021 Q3 Earnings call transcript