What Happened?
Shares of mobile game developer Skillz (NYSE:SKLZ) fell 12.9% in the morning session after the company reported disappointing fourth-quarter 2024 results: Its user count, and the number of paying monthly active users fell short of Wall Street's estimates. Adding to the concern, key metrics we track fell below Wall Street's expectations, including sales, EBITDA, and EPS. Notably, sales plummeted 30% year on year, reflecting a persistent decline in platform engagement and competitive pressures. This drop in revenue, combined with elevated operating expenses, pushed adjusted EBITDA deeper into negative territory. Overall, this was a softer quarter.
The shares closed the day at $4.39, down 13.9% from previous close.
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What The Market Is Telling Us
Skillz’s shares are very volatile and have had 29 moves greater than 5% over the last year. But moves this big are rare even for Skillz and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock dropped 10.9% on the news that the company reported weak first-quarter 2024 results that missed analysts' revenue and EPS estimates. Its number of users declined, and its revenue growth was quite weak. Gross margin also fell, while free cash flow stayed negative. Overall, this was a mediocre quarter for Skillz.
Skillz is down 17.4% since the beginning of the year, and at $4.40 per share, it is trading 39% below its 52-week high of $7.21 from June 2024. Investors who bought $1,000 worth of Skillz’s shares at the IPO in April 2020 would now be looking at an investment worth $22.22.
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