Skillz Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Yes. No, this is great. Yes. So we'll obviously run through some questions and get through the latest near-term and long-term items. But just to start, I think obviously, still somewhat newer to the public market. Maybe just catch us up over the last kind of 6 to 12 months. COVID, obviously, I think, was generally a nice tailwind for your business. How have things changed kind of over the last year and bring us up to present tense, if you could?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Yes, absolutely. And let's go there, let's talk about content. Obviously, you have things like Blackout Bingo and Solitaire Cube among others that are kind of your top current games. You mentioned Buck Hunter, which has obviously started already and then the Trivia Crack and things like the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 8:20PM, SKLZ.N - Skillz Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual) NFL partnerships. How should we think about the -- functionally, how those sort of add to the model as we move forward here in terms of the new games you're bringing to the platform?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Yes. No, that's a good example. I guess, to date, the business has been relatively concentrated amongst, call it, a few developers. So when you talk about some of those emerging partnerships, is that something you feel like we could see a diversification overtime? And maybe just as a quick reminder, what is -- what are the considerations for why a developer would develop a game with Skillz versus maybe some of the more, call it, traditional monetization method through the App Store and advertising, et cetera?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Got it. Okay. And then just quickly on Big Buck Hunter. Obviously, that's been the new nice shot in the arm from the content side of things. Maybe just a little bit more specifics on how that -- how we've seen that accretion lately in your numbers relative to Big Buck Hunter coming on the platform?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Got it. And then moving from the first-person shooter to the synchronous games, obviously, that's where I think you guys have made some investments over the years as well as lately with Exit Games. Talk about what the challenges are there trying to achieve a really solid synchronous gaming platform? And then what sort of opportunity do you think that would unlock as we hopefully get there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 8:20PM, SKLZ.N - Skillz Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Is latency kind of the core issue or hurdle that needs to be overcome? Or are there other developments that also need to be scaled there?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Okay. So let's talk about new customer acquisition and user engagement. Obviously, you guys spent a fair amount of money to bring new customers to the platform as well as retain them. It's been high in terms of a percentage of revenue. I think the future vision is, obviously, intend to come down. How and sort of when should we start to see that evolve, would you say, on the engagement marketing side of things?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Okay. So -- and just so I hear you clearly, though, when you think about balancing growth versus profitability, would you say, we're sort of more balanced than we were? Because it feels like you guys were pursuing growth before, I think, head on, and now it feels like you're a little bit more measured in your commentary there. Is that a fair characterization?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Okay. Okay. I guess -- and then as we think about '22, you're essentially saying, you're going to bring that metric down, but essentially, pursuing higher-quality users, if I'm hearing you correctly. Is that right?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Okay. And then just on the churn comment. I know you guys don't comment on churn or you don't disclose that as a KPI. But just in general, what have you sort of observed churn wise historically on the platform? And now that we've come out of COVID, what should be sort of -- or what are your rough expectations around churn on the platform overall in terms of paying users?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Yes. Yes. Absolutely. And then just on the sort of seasonal trends we just saw. I think you guys obviously beat users nicely last quarter. GMV came in a little bit late. What are we -- relative to some of the high-value targeting you just talked about, what are we sort of seeing at the moment seasonally as we move into next year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 8:20PM, SKLZ.N - Skillz Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Yes. Yes. Got it. So let's talk about Aarki, very interesting DSP acquisition in the Ad-Tech space you made earlier this year. You've said, it's early days. It's going to take, I think, 2 to 4 quarters or something to sort of get that more fully integrated. What is the broader thesis there, though, just to reset for a moment?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : I didn't mean to put words in your mouth. To set the record straight...

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Okay. And then... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 8:20PM, SKLZ.N - Skillz Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Progress is ongoing. I won't leave the business anymore, I guess. Yes. And then on the -- it sounds like, obviously, on the cost per install, you'll start to get those benefits down the road. What about in terms of feeding your data over to Aarki and sort of their pre-existing business? Do we expect sort of any tailwinds to that piece of it, say, within the next 4 quarters or start to see it out beyond that?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Got it. And then talk about international markets as you look to expand. I think you've talked about India, in particular, has been a focus before the year ends here. Just any updates you can offer there? And sort of what we should expect from a user growth perspective going forward?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Got it. So -- but you're -- safe to say that you're on the precipice of beginning to invest in that market. If I'm hearing it exactly.

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Got it. Got it. Okay. And then just lastly, just in terms of the types of games, and you touched on this earlier, but remind us where you see sort of the low-hanging fruit for categories of games that could drive growth more meaningfully? And obviously, we've gotten into Big Buck, would be curious to hear about what you think the NFL might offer? And then other categories. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 16, 2021 / 8:20PM, SKLZ.N - Skillz Inc at RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference (Virtual)

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Got it. Got it. That's great. And then lastly, just you remind us just on your target model. Obviously, you're pursuing growth at this point, so we recognize it's not going to be profitable for a bit. But what is kind of the long-term target model here factoring in things like the engagement marketing we mentioned over time seeing leverage, et cetera?

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : No, no, you're good.

Question: Bradley D. Erickson - RBC Capital Markets, Research Division - Analyst : Yes. Yes. Got it. Great. Well, Andrew, it's a pleasure talking with you. Unfortunately, we're out of time, but thank you. And I hope you have a great rest of your day.