Skillz Inc.

Good afternoon, everyone. I'd like to welcome you to the Skillzinc first quarter 2026 results call. At this time, I would like to turn the conference over to your host, Joe Giaffone from JCIR to begin.

Good afternoon, everyone. Skillz issued its 2026 first quarter earnings release on May 15th, which is available on the company's investor relations website. Let me read the safe harbor language and then we'll get right into the call. All statements and comments made by management during this conference call other than statements of historical fact, may be deemed forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. SCILS cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those reflected by the forward-looking statements made during the call. For additional details on these risks and uncertainties, please see SCILS' annual report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission, and SCILS subsequent public filings with the SEC. Skills undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Additionally, we will reference various non-GAAP financial measures and KPIs during this call. Please refer to our earnings release for an explanation of these measures and how we use them and, in the case of the non-GAAP financial measures, reconciliations to the nearest GAAP equivalents. Now, my pleasure to turn the call over to Skill's CEO, Andrew Paradise. Andrew, please go ahead.

Thank you, Joe, and good afternoon, everyone. I'll begin today's call with a review of our first quarter results. For the first quarter, GAAP revenue was $29 million, down 3% quarter over quarter, and up 33% year over year. Adjusted EBITDA loss was $13 million, compared to a loss of $10 million in the fourth quarter. The increase in adjusted EBITDA loss is driven by higher litigation-related expenses during quarter. Importantly, excluding litigation-related expenses, adjusted EBITDA in Q1 2026 improved to a loss of $7 million, representing a 15% improvement quarter-over-quarter on a normalized basis. At Razor, adjusted EBITDA was $2 million, marking a third consecutive quarter of profitability. We expect this improvement in underlying profitability across our portfolio as we continue to move into the second quarter. Paying MAU for the skills platform was 128,000, down 9% quarter over quarter, and up 3% year over year. This quarterly sequential decline in PMAU is partly driven by our decrease in UA spend, resulting in fewer new user cohort additions. While top line PMAUs decreased, we're encouraged that retention across our more mature cohorts improved from the previous quarter. This reflects a healthier platform demonstrated by our 7% quarter-over-quarter increase in average revenue per paying user. Moving to our Fair Play initiative and an update on our litigation against Papaya Gaming. In April, a unanimous jury in the U.S. District Court for the Southern District of New York found Papaya liable for false advertising under the Lanham Act and deceptive practices under New York law. Awarding skills $420 million in actual damages. the largest false advertising award in U.S. history under the Landon Act. The jury also made advisory findings supporting disgorgement of either $719 million based on Papaya's profits or $652 million based on Papaya's cost savings. These are alternative theories and will not be added together. The court will determine whether to award disgorgement, and if so, the final amount. It may accept, modify, or decline the advisory findings entirely, ensuring There is no recovery where actual damages and discouragement overlap. Under the Lanham Act, the court has the ability to enhance the actual damages award by up to three times the $420 million. For any discouragement the court chooses to award, there is no cap on enhancement. In simple terms, the total potential award ranges from $420 million to over $1.2 billion, depending on the court's determination on discouragement enhancement. To understand what this verdict means for the category we pioneered, it helps to understand some of the why. Skills founded the skill-based competitive gaming category on a single premise, that players compete fairly against real human opponents for real prizes. As the category grew, we saw competitors gaining market share in ways that defied explanation. This turned out to be what we believed to be fraud. We had to use the legal system to fight back on behalf of our players and our shareholders. What we alleged against one of these competitors was confirmed by Papaya's own internal documents. Bots were being deployed at scale. Bot scores selected by Papaya determined the outcomes, and none of it was disclosed to the players. I remind you, we've taken this path before. In 2024, a federal jury found ABA Games liable for patent infringement and awarded $42.9 million in damages. We subsequently pursued a separate false advertising case against AVM, and the two cases ultimately sold together for $80 million. We applied those learnings and brought Papaya to trial on false advertising grounds directly. The evidence at trial was clear. Papaya's bots outnumbered human players. Across tournaments advertising approximately $6.7 billion in prize pools, only about $2 billion was actually paid to real users. leaving roughly 4.7 billion in, quote, imaginary money, quote, a term used by Papaya's own defense counsel that was never paid to human players. The jury's verdict confirmed that these practices violated the Lanham Act's false advertising standards. We founded this industry, and we remain committed to ensuring that fair competition is the standard every participant is held to. On collectability, based on publicly available data Papaya operates at substantial scale, with leading titles ranking among the most downloaded in the U.S., generating significant revenue. Based on independent analyst coverage notes, Papaya's annual net revenue is approximately $950 million to $1.1 billion. We believe this scale supports Papaya's capacity to satisfy a judgment of this size. Looking ahead, we expect that the court will determine the final discouragement award in June. The parties have been ordered to engage in settlement discussions, which we're actively pursuing. We're also evaluating alternatives to secure capital against the judgment and are monitoring closely whether an appeal bond or other secured capital will be required. This verdict confirms that false advertising in a skill-based gaming category violates federal law. We believe the Papaya verdict supports the integrity of the category and may improve competitive dynamics over time. Our litigation against Voodoo Games continues to proceed on the same principles of fair play. The papaya verdict is a significant milestone, and our focus remains on operating and growing their business. As we move through 2026, we're organizing our execution around three core initiatives that build on the foundation established during our turnaround. First, strengthen demand and engagement. Second, execute a more efficient and disciplined go to market. And third, improve our platform performance and infrastructure. Across each of these initiatives, we're leveraging the skills competition platform, Razor's performance marketing engine, and Beamable, our newly acquired developer platform. Together, our businesses are building a connected ecosystem designed to improve performance and drive efficiency. Turning to our first initiative, strengthening demand and engagement. On the skills platform, we remain focused on quality and long-term value. We saw continued strength in our core player base, particularly among longer-tenured cohorts. Retention across our three-plus-month cohorts improved quarter-over-quarter, driving higher engagement and monetization on a per-user basis. This reflects the underlying health of the platform. Solitude of Skills continues to scale as the top title on the platform. We also strengthened our own content portfolio through the acquisitions of Blackout Bingo and Domino's Gold and are expanding the pipeline with new titles launching later this year. At Razor, engagement is driven by precision targeting and performance marketing and scale. We added several new advertisers across gaming, consumer applications, retail, and entertainment. We grew revenue across both new and existing customers and launched our connected TV business, opening a new channel for advertiser spend. Turning to our second initiative, efficient and disciplined go-to-market. On the skills platform, we remain focused on executing an efficient and disciplined go-to-market strategy. In Q1, user acquisition spend continued to focus on attracting profitable long-term players. Our approach reflects concentrating investment in channels with attractive returns. At Razor, we continue to scale our performance, expanding our advertiser base and deepening relationships with existing clients. During the quarter, we continue to optimize media margins through improved product mix. Our machine learning platform continues to drive stronger targeting efficiency and return on ad spend for advertisers. Additionally, the launch of connected TV has attracted initial advertiser commitments, broadening Razor's addressable market and opening a new channel for advertising spend. Turning to our third initiative, improving platform performance and infrastructure. On the skills platform, we continue to invest in systems supporting player engagement. We're also advancing our pro SDK development with several developers building new games or converting existing games using this technology. During the quarter, Razer continued migration to more advanced neural network models, improved training efficiency and prediction accuracy, expanded integrations with measurement partners, and advanced next generation machine learning infrastructure. In Q1, we completed the acquisition of Beamable, a developer platform providing the game services and backend infrastructure that we believe will power skills over time. Beamable joins Razer, and the skills competition platform is the third component of our connected ecosystem, bringing developer tooling to our own products and to the customers Razer brings into the network. Beamable also continues to serve the developers and studios that relied on the platform prior to the acquisition. Taken together, our businesses form a compounding flywheel. We believe the campaigns improve the model, every impression strengthens targeting, and every outcome improves future performance. In closing, the first quarter reflected discipline execution across the organization. We strengthened the skills platform, improved unit economics, continued to scale Razor as a profitable growth engine, and began integrating Beamable as the developer platform, powering our products and ecosystem over time. By combining competitive skill-based gaming with AI-driven performance marketing, we're building an ecosystem designed to scale engagement, data, and monetization with discipline. We believe this integrated approach creates long-term optionality in gaming as well as in adjacent areas where content, identity, commerce, and performance marketing converge. Our focus remains on executing against that opportunity while maintaining potential discipline and driving long-term shareholder value. And with that, I'll turn it over to Gaetano for the financial review.