Skillz Inc.

Thank you for joining us today for a skills third quarter 2022 earnings call. I will now turn the call over to Taylor Giles to cover the safe harbor. Taylor?

Good afternoon, and welcome to the skills third quarter 2022 earnings conference call. With me today are Andrew Paradise, skills chief executive officer, Casey Chapkin, chief revenue officer, and Jason Roswig, president and chief financial officer. Note, our full financial results were published earlier today and are available on our investor relations website. Before I turn the call over to Andrew, please note that some of our management's comments today will include forward-looking statements within the meaning of the federal security clause. Forward-looking statements, which are usually identified by the use of such words as will, expect, should, or other similar phrases, are subject to numerous risks and uncertainties that could materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. We refer to the company's SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition. During the call, management will discuss non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our third quarter 2022 earnings release. With that, I'll turn the call over to Andrew for some brief opening remarks.

Andrew? Good afternoon, and thank you for joining us. Today, I'll touch upon the quarter and update you on our initiatives to reaccelerate growth and improve the bottom line. Then I'll turn the call over to Jason Roswig, our new president and CFO, to quickly touch on the numbers before we open up the call for Q&A. Clearly, skills isn't a time to transition as we right-size the organization. During the quarter, revenue continued to be impacted by both the macro environment for mobile gaming as well as some of the internal product and organizational challenges that I referenced last quarter. Conversely, we made good progress in our march to profitability. We reduced adjusted EBITDA by 51% quarter over quarter while improving our payback period through better platform engagement retention. We also made many difficult strategic changes within the organization to better align talent with our desired business outcomes. So there's no quick fix. The path to re-accelerating growth is now well defined across the company. We've identified the things we can and cannot control and have a plan in place to address those that we can control. We are focused on four key pillars to enable us to return to durable growth and long-term profitability. Our first pillar is enhancing our platform to improve customer and developer engagement and retention. I've taken back the helm of the product organization and I'm working closely with our new CTO, Vasily Filipov, most recently a director of engineering at Meta, who has already dug in to make crucial contributions to the platform. We're rolling back some product changes that were unsuccessfully introduced over the course of the prior 18 months and are returning to our foundation of rigorous split testing and disciplined product rollouts. From a product perspective, cloud gaming is on target. Our proof of concept shows we can offer our game streaming technology to provide an experience comparable to a native iOS or Android game. We're currently AB testing to ensure we have the right onboarding experiences for new cloud players as we look forward to a full launch. Our core user and live streaming experiences are proceeding on or ahead of plan with favorable results from redesigns to cube cube and our limited time live ops launches, including sweepstakes chase trophies and blitz mobile. We're always looking for ways to better help our developers scale their content as we bring on new developers and brand partners of all sizes, including the NFL and UFC, who, while very early days, can leverage our platform to market their games. In the quarter, we launched new tools to support more successful launches and improve developer support infrastructure and processes. Clearly, the success of our partners is our success. And we will continue to improve the tools we provide to these key constituents. Our second pillar is up leveling our organization. During this time of transition, it's crucial that each and every employee embraces the skills vision and commits to reigniting your potential. During the quarter we performance manage the organization for the reduced headcount to ensure this alignment. Our headcount now stands at little more than half of what it was a year ago through thoughtful and deliberate decisions on structure. Though these changes were difficult, the existing team is fully capable of and focused on returning value to our players, developers, and shareholders. In the quarter, we also began our return to office. It's essential to our success as a team to be in lockstep, which, given the magnitude and the complexity of the path ahead, can really only happen in person. The new talent that we're carefully adding understands that we must work swiftly and efficiently to fix the challenges that we've identified. To this end, we've added some key hires across the company during the quarter, including Vasili, who I just mentioned, to restore the culture of innovation that Skills was built upon. We are also restructuring the Archie team and expect to announce some important and compelling hires there in the next quarter. Additionally, we've added two new board members, Henry Hoffman, an experienced portfolio manager at SL Advisors, and Seth Shore, a seasoned gaming executive. These strong, experienced operators and advisors will be key as we make the tough decisions that rebuilding the company requires. Our third pillar is our go-to-market, where we're focused on improving customer engagement and monetization through efficient spend. By reducing end-user discounts that were not driving profitable growth, becoming more granular in our UA spend, and increasing organic traffic through owned communication channels, we believe we can return our user acquisition payback period to the six months that we discussed on our IPO Roadshow. Though it's early days, we've already reduced the payback period, which had grown unacceptably long by over 25% this quarter alone. The most exciting part of improving the ratio of LTV to CAC is their improvements this past quarter were from improving LTV as opposed to purely saving on acquisition costs. We're seeing early signs that the new cohorts are performing much better than in recent quarters, and we are working hard to reengage the prior cohorts where we've seen churn. Our fourth pillar is straightforward, demonstrating a clear path to profitability. I'll let Jason cover the details, but you can see in the numbers that we are focused on reducing expenses while steering toward a return to growth. We are looking at every single line item of spend to justify its potential return and will continue to do so with an eye toward efficiency and productivity. In the meantime, we have over half a billion dollars in our war chest as we navigate a return to growth. Our mission of bringing out the best in everyone through fair competition and the patents that differentiate our games of skill versus those of chance hold as true today as they did when we first went public. We are reinvigorated with the potential of our mission and the opportunity to enable developers to monetize their games while allowing our players to improve their skills and to compete in a thriving ecosystem. We have lots of work ahead, but a much clearer vision and a united team. We are energized to tackle these challenges ahead. We look forward to updating you on our progress going forward. And with that, I'll turn the call over to Jason to summarize the financials.