Skillz Inc. reported significant financial results for the first quarter of 2024, reflecting a challenging market environment. The company generated total revenue of $25.2 million, a decrease of 43% from $44.4 million in the same period of 2023. This decline was attributed to a 27% drop in monthly active users and a substantial reduction in marketing expenditures, with user acquisition marketing spend down by 33% and engagement marketing spend reduced by 50%.

Despite the revenue decline, Skillz improved its operational loss, reporting a loss from operations of $26.9 million, which is an improvement of $5.2 million compared to the loss of $32.1 million in Q1 2023. The net loss for the quarter was $26.7 million, a decrease of $8.9 million from the net loss of $35.6 million in the prior year. The net loss per share attributable to common stockholders improved to $(1.45) from $(1.70) in Q1 2023.

Total costs and expenses for the quarter were $52.1 million, down 32% from $76.5 million in the same period last year. The cost of revenue decreased to $3.5 million, primarily due to reductions in server and payment processing costs. Research and development expenses also saw a significant reduction, falling to $4.6 million from $8.9 million, driven by lower employee-related costs due to a reduced headcount.

Skillz's cash and cash equivalents stood at $290.6 million as of March 31, 2024, down from $302.0 million at the end of 2023. The company reported net cash used in operating activities of $4.4 million, a notable improvement from $14.7 million in the same period of 2023. Additionally, Skillz's total assets decreased to $382.4 million from $395.8 million at the end of 2023.

Strategically, Skillz has been focusing on enhancing its competitive gaming platform, which allows independent game developers to host tournaments. The company continues to invest in its monetization services, which are crucial for driving user engagement. In Q1 2024, the Skillz segment generated $22.4 million in revenue, down from $40.0 million in the same period last year, while the Aarki segment contributed $2.9 million, a decrease from $4.5 million.

Skillz has also been active in share repurchase programs, having repurchased 1.2 million shares in Q1 2024 at an average price of $5.76 per share, totaling $7.0 million. The company has authorized a repurchase program of up to $65 million, reflecting its commitment to returning value to shareholders.

Overall, while Skillz faced significant revenue challenges, it demonstrated improved operational efficiency and cost management, positioning itself for potential recovery in the competitive gaming market.