0001801661-26-000031
SEC filingRevenue accelerated 32.9% to $29.1M driven by higher advertising revenue from greater demand, while operating losses narrowed 43.4% to -$8.8M primarily due to higher employee related costs in Skillz and RZR segments.
Revenue grew 32.9% to $29.1 million in Q1 FY2026 from $21.9 million in the prior year quarter. This increase was primarily due to higher advertising revenue from greater demand, as noted in management's discussion. The business generates revenue through Skillz platform entry fees and RZR advertising services, with geographical attribution based on customer headquarters location.
Gross profit expanded 34.7% to $25.5 million, yielding a gross margin of 87.6%. Cost of revenue, which primarily consists of third-party payment processing fees, server costs, amortization of developed technology, personnel expenses, direct software costs, amortization of internal use software, hosting expenses, and allocation of shared facility costs, grew more slowly than revenue. This dynamic supported margin stability despite the revenue mix across segments.
Operating income loss narrowed 43.4% to -$8.8 million from -$15.5 million, with operating margin at -30.1%. The improvement occurred even as the company faced higher employee related costs from both Skillz and RZR segments. For RZR, operating expenses encompass headcount, marketing, software, professional fees such as legal, audit and tax compliance, and rent. These factors explain the path to reduced losses, highlighting emerging operating leverage as revenue scales.
Net income loss improved 36.2% to -$10.9 million from -$17.1 million, with diluted EPS at -$0.69 versus -$1.05 year-over-year. This reflects the operating progress, though other expenses including debt issuance cost amortization on the 2021 Senior Secured Notes—capitalized and amortized straight-line over five years—and promotions recorded as sales and marketing expenses contributed to the bottom line.
These results demonstrate revenue momentum from advertising demand and cost management amid segment-specific pressures, positioning Skillz for continued focus on scalable growth drivers. Historical results are not necessarily indicative of future periods, and forward-looking information carries no achievement guarantee.