Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | May 02, 2022 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39243 | |
Entity Registrant Name | SKILLZ INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-4478274 | |
Entity Address, Address Line One | PO Box 445 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94104 | |
City Area Code | 415 | |
Local Phone Number | 762-0511 | |
Title of 12(b) Security | Class A common stock, par value $0.0001 per share | |
Trading Symbol | SKLZ | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001801661 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock, par value $0.0001 per share | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 340,808,740 | |
Class B Common Stock | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 68,717,138 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 114,558 | $ 241,332 |
Marketable securities, current | 369,566 | 319,055 |
Accounts receivable, net | 13,230 | 13,497 |
Prepaid expenses and other current assets | 21,967 | 16,704 |
Total current assets | 519,321 | 590,588 |
Property and equipment, net | 8,629 | 9,988 |
Operating lease right-of-use assets, net | 13,977 | 14,511 |
Marketable securities, non-current | 169,725 | 182,629 |
Non-marketable equity securities | 55,649 | 55,649 |
Intangible assets, net | 75,066 | 79,137 |
Goodwill | 86,436 | 86,845 |
Other long-term assets | 3,733 | 3,478 |
Total assets | 932,536 | 1,022,825 |
Current liabilities: | ||
Accounts payable | 13,305 | 19,753 |
Operating lease liabilities, current | 2,005 | 2,110 |
Other current liabilities | 57,607 | 64,969 |
Total current liabilities | 72,917 | 86,832 |
Operating lease liabilities, non-current | 13,199 | 13,567 |
Common stock warrant liabilities, non-current | 1,831 | 6,293 |
Long-term debt, non-current | 279,713 | 278,889 |
Other long-term liabilities | 13,238 | 13,544 |
Total liabilities | 380,898 | 399,125 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock $0.0001 par value; 10 million shares authorized — 0 issued and outstanding as of March 31, 2022 and December 31, 2021 | 0 | 0 |
Common stock $0.0001 par value; 625 million shares authorized; Class A common stock – 500 million shares authorized; 341 million and 340 million shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively; Class B common stock – 125 million shares authorized; 69 million shares issued and outstanding as of March 31, 2022 and December 31, 2021 | 40 | 40 |
Additional paid-in capital | 1,121,697 | 1,043,600 |
Accumulated other comprehensive loss | (2,294) | (248) |
Accumulated deficit | (567,805) | (419,692) |
Total stockholders’ equity | 551,638 | 623,700 |
Total liabilities and stockholders’ equity | $ 932,536 | $ 1,022,825 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 625,000,000 | 625,000,000 |
Class A Common Stock | ||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 341,000,000 | 340,000,000 |
Common stock, shares outstanding (in shares) | 341,000,000 | 340,000,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | |
Common stock, shares authorized (in shares) | 125,000,000 | 125,000,000 |
Common stock, shares issued (in shares) | 69,000,000 | 69,000,000 |
Common stock, shares outstanding (in shares) | 69,000,000 | 69,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Revenue | $ 93,438 | $ 83,677 |
Costs and expenses: | ||
Cost of revenue | 9,265 | 4,256 |
Research and development | 18,653 | 7,282 |
Sales and marketing | 117,332 | 96,323 |
General and administrative | 92,792 | 27,284 |
Total costs and expenses | 238,042 | 135,145 |
Loss from operations | (144,604) | (51,468) |
Interest expense, net | (8,157) | (24) |
Change in fair value of common stock warrant liabilities | 4,462 | (2,108) |
Other (expense) income, net | (27) | 50 |
Loss before income taxes | (148,326) | (53,550) |
(Benefit from) provision for income taxes | (213) | 42 |
Net loss | $ (148,113) | $ (53,592) |
Net loss per share attributable to common stockholders: | ||
Basic (in dollars per share) | $ (0.37) | $ (0.15) |
Diluted (in dollars per share) | $ (0.37) | $ (0.16) |
Weighted average shares outstanding: | ||
Basic (in shares) | 401,653,954 | 356,818,954 |
Diluted (in shares) | 401,653,954 | 359,827,649 |
Other comprehensive loss: | ||
Change in unrealized loss on available-for-sale investments, net of tax | $ (2,046) | $ 0 |
Total other comprehensive loss: | (2,046) | 0 |
Comprehensive loss | $ (150,159) | $ (53,592) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated Other Comprehensive Loss | Accumulated deficit |
Shares, beginning balance (in shares) at Dec. 31, 2020 | 369,797,524 | ||||
Beginning balance at Dec. 31, 2020 | $ 56,787 | $ 37 | $ 295,065 | $ 0 | $ (238,315) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and release of restricted stock units (in shares) | 268,426 | ||||
Issuance of common stock upon exercise of stock options and release of restricted stock units | 12 | 12 | |||
Issuance of common stock upon exercise of warrants and other, net (in shares) | 8,741,863 | ||||
Issuance of common stock upon exercise of warrants and other, net | 172,519 | 172,519 | |||
Net cash contributions from follow-on offering (in shares) | 17,000,000 | ||||
Net cash contributions from follow-on offering | 402,240 | $ 2 | 402,238 | ||
Stock-based compensation | 10,945 | 10,945 | |||
Other comprehensive loss | 0 | ||||
Net income (loss) | (53,592) | (53,592) | |||
Shares, ending balance (in shares) at Mar. 31, 2021 | 395,807,813 | ||||
Ending balance at Mar. 31, 2021 | 588,911 | $ 39 | 880,779 | 0 | (291,907) |
Shares, beginning balance (in shares) at Dec. 31, 2021 | 408,753,837 | ||||
Beginning balance at Dec. 31, 2021 | $ 623,700 | $ 40 | 1,043,600 | (248) | (419,692) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock upon exercise of stock options and release of restricted stock units (in shares) | 774,983 | 879,936 | |||
Issuance of common stock upon exercise of stock options and release of restricted stock units | $ 236 | 236 | |||
Stock-based compensation | 77,925 | 77,925 | |||
Other comprehensive loss | (2,046) | (2,046) | |||
Net income (loss) | (148,113) | (148,113) | |||
Other, net | (64) | (64) | |||
Shares, ending balance (in shares) at Mar. 31, 2022 | 409,633,773 | ||||
Ending balance at Mar. 31, 2022 | $ 551,638 | $ 40 | $ 1,121,697 | $ (2,294) | $ (567,805) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities | ||
Net loss | $ (148,113) | $ (53,592) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 5,539 | 555 |
Stock-based compensation | 77,925 | 10,945 |
Accretion of unamortized debt discount and amortization of debt issuance costs | 824 | 9 |
Amortization of premium (accretion of discount) for marketable securities | 984 | 0 |
Deferred income taxes | (318) | 0 |
Change in fair value of common stock warrant liabilities | (4,462) | 2,108 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 267 | 0 |
Prepaid expenses and other assets | (5,676) | (4,499) |
Operating lease right-of-use assets | 534 | (13,453) |
Accounts payable | (5,613) | (4,060) |
Operating lease liabilities | (473) | 14,386 |
Other accruals and liabilities | (4,868) | 8,448 |
Net cash used in operating activities | (83,450) | (39,153) |
Investing Activities | ||
Purchases of property and equipment, including internal-use software | (107) | (659) |
Purchases of marketable securities | (149,495) | 0 |
Proceeds from maturities of marketable securities | 83,265 | 0 |
Proceeds from sales of marketable securities | 25,593 | 0 |
Net cash used in investing activities | (40,744) | (659) |
Financing Activities | ||
Principal payments on finance leases obligations | (840) | 0 |
Payments for debt issuance costs | (1,976) | 0 |
Proceeds from issuance of common stock in follow-on offering, net of underwriting commissions, and offering costs | 0 | 402,817 |
Payments made towards deferred offering costs | 0 | (13,167) |
Net proceeds from exercise of stock options and issuance of common stock | 236 | 12 |
Net cash (used in) provided by financing activities | (2,580) | 389,662 |
Net change in cash, cash equivalents and restricted cash | (126,774) | 349,850 |
Cash, cash equivalents and restricted cash – beginning of year | 244,252 | 265,648 |
Cash, cash equivalents and restricted cash – end of period | 117,478 | 615,498 |
Cash paid during the period for: | ||
Interest | 86 | 15 |
Noncash investing and financing activities: | ||
Deferred offering costs and issuance costs in accounts payable and accrued liabilities | 28 | 1,449 |
Warrant exercise receivable | 0 | 104,558 |
Warrant liability reclassified to additional paid-in capital | $ 0 | $ 67,961 |
Description of the Business and
Description of the Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business and Basis of Presentation | Description of the Business and Basis of Presentation Business Skillz (the “Company” or “Skillz”) is a mobile eSports platform, driving the future of entertainment by accelerating the convergence of sports, video games and media. The Company’s principal activities are to develop and support a proprietary online-hosted technology platform that enables independent game developers to host tournaments and provide competitive gaming activity (“Competitions”) to end-users worldwide. Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). Unaudited Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of the Company’s management, necessary for the fair presentation of the results of operations for the interim periods. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 1, 2022. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Estimates are used in several areas including, but not limited to, stock-based compensation, valuation of common stock warrants, the fair values of goodwill and intangible assets and the useful lives of the Company’s intangible assets. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities. Actual results could differ materially from these estimates. Revenue Recognition The Company generates substantially all its revenues by providing a service to the game developers aimed at improving the monetization of their game content. The monetization service provided by Skillz allows developers to offer multi-player competition to their end-users which increases end-user retention and engagement. Skillz provides developers with a software development kit (“SDK”) that they can download and integrate with their existing games. The SDK serves as a data interface between Skillz and the game developers that enables Skillz to provide monetization services to the developer. The Company recognizes revenue for its services in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenues from Contracts with Customers The Company applies the five-step model to achieve the core principle of ASC 606. The Company determined that its customer in the provision of its technology platform and services is the game developer. The Company’s ordinary activities consist of providing game developers services through access to its technology platform using the Skillz SDK. The SDK acts as an application programming interface enabling communication of data between Skillz and the game developers, which when integrated with the developer’s game content, facilitates end-user registration into Competitions, managing and hosting end-user Competition accounts, matching players of similar skill levels, collecting end-user entry fees, distributing end-user prizes, resolving end-user disputes pertaining to their participation in Competitions, and running third-party marketing campaigns (“Monetization Services”). The Company provides Monetization Services to game developers enabling them to offer competitive games to their end-users. These activities are not distinct from each other as the Company provides an integrated service enabling the game developers to provide the competitive game service to the end-users, and as a result, they do not represent separate performance obligations. The Company is entitled to a revenue share based on total entry fees for paid Competitions, regardless of how they are paid, net of end-user prizes (i.e., winnings from the Competitions) and other costs to provide the Monetization Services. The game developers’ revenue share, however, is calculated solely based upon entry fees paid by net cash deposits received from end-users. End-user incentives are not paid for by game developers. In addition, the Company reduces revenue for end-user incentives which are treated as a reduction of revenue. The Company collects the entry fees and related charges from end-users on behalf of game developers using the end-user’s pre-authorized credit card or PayPal account and withholds its fees before making the remaining disbursement to the game developer; thus, the game developer’s ability and intent to pay is not subject to significant judgment. Revenue is recognized at the time the performance obligation is satisfied by transferring control of the promised service in an amount that reflects the consideration that the Company expects to receive in exchange for the Monetization Services. The Company recognizes revenue upon completion of a game, which is when its performance obligation to the game developer is satisfied. The Company does not have contract assets or contract liabilities as the payment of the transaction price is concurrent with the fulfillment of the services. At the time of game completion, the Company has the right to receive payment for the services rendered. The Company’s agreements with game developers can generally be terminated for convenience by either party upon thirty days prior written notice, and in certain of the Company’s larger developer agreements, the developer, if required by the Company, must continue to make its games available on the platform for a period of up to twelve months. As the Company is able to terminate the developer agreements at its convenience, the Company has concluded the contract term for revenue recognition does not extend beyond the contractual notification period. The Company did not have any transaction price allocated to performance obligations that are unsatisfied (or partially satisfied) as of March 31, 2022 and 2021. Games provided by two developer partners, accounted for 41% and 38% of the Company’s revenue in the three months ended March 31, 2022, and 42% and 41% of the Company’s revenue in the three months ended March 31, 2021. End-User Incentive Programs To drive traffic to the platform, the Company provides promotions and incentives to end-users in various forms. Evaluating whether a promotion or incentive is a payment to a customer may require significant judgment. Promotions and incentives which are consideration payable to a customer are recognized as a reduction of revenue at the later of when revenue is recognized or when the Company pays or promises to pay the incentive. Promotions and incentives recorded as sales and marketing expense are recognized when the related cost is incurred by the Company. In either case, the promotions and incentives are recognized when they are used by end-users to enter into a paid Competition. • Marketing promotions and discounts accounted for as a reduction of revenue. These promotions are typically pricing actions in the form of discounts that reduce the end-user entry fees and are offered on behalf of the game developers. Although not required based on the Company’s agreement with its developers, the Company considers that the game developers have a valid expectation that certain incentives will be offered to end-users. The determination of a valid expectation is based on the evaluation of all information reasonably available to the game developers regarding the Company’s customary business practices, published policies and specific statements. An example of an incentive for which the game developer has a valid expectation is Ticketz, which are a virtual currency earned for every Competition played based on the amount of the entry fee (“Ticketz”). Ticketz can be redeemed for prizes, including bonus cash prizes, a promotional incentive that cannot be withdrawn and can only be used by end-users to enter into paid entry fee contests (“Bonus Cash”). Another example is initial deposit Bonus Cash which is a promotional incentive that can be earned in fixed amounts when an end-user makes an initial deposit on the Skillz platform. Bonus Cash can only be used by end-users to enter into future paid entry fee Competitions and cannot be withdrawn by end-users. For the three months ended March 31, 2022 and 2021, the Company recognized a reduction of revenue of $16.3 million and $17.6 million, respectively, related to these end-user incentives. • Marketing promotions accounted for as sales and marketing expense. When the Company concludes that the game developers do not have a valid expectation that the incentive will be offered, the Company records the related cost as sales and marketing expense. The Company’s assessment is based on an evaluation of all information reasonably available to the game developers regarding the Company’s customary business practices, published policies and specific statements. These promotions are offered to end-users to draw, re-engage, or generally increase end-users’ use of the Company’s platform. An example of this type of incentive is limited-time Bonus Cash offers, which are targeted to specific end-users, typically those who deposit more frequently or have not made a deposit recently, via email or in-app promotions. The Company targets groups of end-users differently, offering specific promotions it thinks will best stimulate engagement. Similar to Bonus Cash earned from a redemption of Ticketz or an initial deposit, limited-time Bonus Cash can only be used by end-users to enter into future paid entry fee competitions and cannot be withdrawn by end-users. The Company also hosts engagement marketing leagues run over a period of days or weeks, which award league prizes in the form of cash or luxury goods to end-users with the most medals at the end of the league. End-users accumulate medals by winning Skillz enabled paid entry fee competitions. Skillz determines whether or not to run a league, what prizes should be awarded, over what time period the league should run, and to which end-users the prizes should be paid, all at its discretion. The league parameters vary from one league to the next and are not reasonably known to the game developers. League prizes in the form of cash can be withdrawn or used by end-users to enter into future paid entry fee competitions. For the three months ended March 31, 2022 and 2021, the Company recognized sales and marketing expense of $37.0 million and $33.3 million, respectively, related to these end-user incentives. From time to time, the Company issues credits or refunds to end-users that are unsatisfied by the level of service provided by the game developer. There is no contractual obligation for the Company to refund such end-users nor is there a valid expectation by the game developers for the Company to issue such credits or refunds to end-users on their behalf. The Company accounts for credits or refunds, which are not recoverable from the game developer, as sales and marketing expenses when incurred. Total marketing promotions accounted for as sales and marketing expense recognized in three months ended March 31, 2022 and 2021 were $42.1 million and $36.0 million, respectively. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash, commercial paper, money market funds and U.S government agency securities with maturities of three months or less when purchased. Restricted cash maintained under an agreement that legally restricts the use of such funds is not included within cash and cash equivalents and is reported within other long-term assets. Restricted cash is comprised of $2.9 million which is pledged in the form of a letter of credit for the Company’s new headquarters in San Francisco. A reconciliation of the Company’s cash and cash equivalents in the condensed consolidated balance sheets to cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows is as follows: March 31, December 31, 2022 2021 Cash and cash equivalents $ 114,558 $ 241,332 Restricted cash 2,920 2,920 Cash, cash equivalents and restricted cash $ 117,478 $ 244,252 Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash, cash equivalents, restricted cash, and marketable securities. Although the Company deposits its cash with multiple well-established financial institutions, the deposits, at times, may exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. Marketable securities are primarily consisted of U.S government, corporate debt securities, asset backed securities, commercial paper, and debt instruments issued by foreign governments. The Company limits the amount of credit exposure to any one issuer. Management believes that the institutions are financially stable and, accordingly, minimal credit risk exists. Accounts Receivable, Net Accounts receivable, net, is comprised of trade accounts receivable recorded at the invoiced amounts for programmatic media campaigns, net of an allowance for credit losses. The allowance for credit losses is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the consolidated statements of operations and comprehensive loss. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when there are specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. At March 31, 2022, the Company’s allowance for credit losses on accounts receivable was not significant to the condensed consolidated financial statements. Fair Value Measurement The Company applies fair value accounting for financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 — Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 — Unobservable inputs reflecting management’s estimate of assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the consolidated balance sheets. The fair value of debt was estimated using primarily level 2 inputs including quoted market prices or present value of future payments discounted by the market interest rates or the fixed rates based on current rates offered to the Company for debt with similar terms and maturities. Investments The Company considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year are classified as non-current marketable securities. Marketable securities are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive loss. Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, the Company employs a systematic methodology that considers available quantitative and qualitative evidence. In addition, the Company considers specific adverse conditions related to the financial health of, and business outlook for, the investee. If the Company plans to sell the security or it is more likely than not that the Company will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other (expense) income, net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, the Company may incur future impairments. The Company has elected to measure its existing investments in non-marketable equity securities at cost, less impairments, with remeasurements to fair value only upon the occurrence of observable price changes in orderly transactions for the identical or similar securities of the same issuer (“measurement alternative”). This election is reassessed each reporting period to determine whether non-marketable equity securities have a readily determinable fair value, in which case they would no longer be eligible for this election and would be measured at fair value. The Company evaluates its non-marketable equity securities for impairment at each reporting period based on a qualitative assessment that considers various potential impairment indicators. Impairment indicators might include, but would not necessarily be limited to, a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, a significant adverse change in the regulatory, economic, or technological environment of the investee, a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar securities for an amount less than the carrying amount of the investments in those securities. If an impairment exists, a loss is recognized in the condensed consolidated statements of operations and comprehensive loss for the amount by which the carrying value exceeds the fair value of the investment. Gains and losses resulting from the remeasurement of non-marketable equity securities, including impairment, are recorded through other (expense) income, net in the condensed consolidated statement of operations and comprehensive loss. The Company separately presents investments in non-marketable equity securities within long-term assets on the condensed consolidated balance sheets. Advertising and Promotional Expense Advertising and promotional expenses are included in sales and marketing expenses within the condensed consolidated statements of operations and comprehensive loss and are expensed when incurred. For the three months ended March 31, 2022 and 2021, advertising expenses, not including marketing promotions related to the Company’s end-user incentive programs, were $59.7 million and $54.5 million, respectively. Public and Private Common Stock Warrant Liabilities As part of the Company’s initial public offering, it issued to third party investors 69.0 million units, consisting of one share of Class A common stock and one-fourth of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously, the Company completed the private sale of 10,033,333 warrants at a purchase price of $1.50 per warrant (the “Private Warrants”) of which 5,016,666 Private Warrants were subsequently forfeited. Each Private Warrant allows the holder to purchase one share of Class A common stock at $11.50 per share. There were zero Public Warrants and 4,535,728 Private Warrants outstanding as of March 31, 2022. The Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Public and Private Warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity , (“ASC 815-40”), and concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Public and Private Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of the Company’s Class A stockholders. As there are two classes of common stock, not all of the stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Public Warrants and Private Warrants do not meet the conditions to be classified in equity. Since the Public and Private Common Stock Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations and comprehensive loss at each reporting date. Because the Public Warrants were publicly traded and thus had an observable market price in an active market, they were valued based on their trading price as of each reporting date. The Private Warrants are valued using the Black-Scholes-Merton Option (“BSM”) pricing model that is based on the individual characteristics of the warrants on the valuation date, which include the Company’s stock price and assumptions for expected volatility, expected life and risk-free interest rate, as well as the present value of the minimum cash payment component of the instrument for the warrants, when applicable. Changes in the assumptions used could have a material impact on the resulting fair value of each warrant. The primary inputs affecting the value of the warrant liability are the Company’s stock price and volatility in the Company's stock price, as well as assumptions about the probability and timing of certain events, such as a change in control or future equity offerings. Increases in the fair value of the underlying stock or increases in the volatility of the stock price generally result in a corresponding increase in the fair value of the warrant liability; conversely, decreases in the fair value of the underlying stock or decreases in the volatility of the stock price generally result in a corresponding decrease in the fair value of the warrant liability. Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards based on estimated grant-date fair values recognized over the requisite service period. For awards that vest solely based on a service condition, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. The compensation expense related to awards with performance conditions is recognized over the requisite service period when the performance conditions are probable of being achieved. The compensation expense related to awards with market conditions is recognized on an accelerated attribution basis over the requisite service period identified as the derived service period over which the market conditions are expected to be achieved, and is not reversed if the market condition is not satisfied. See Note 9 for more information. The Company accounts for forfeitures as they occur. If an employee stock-based award is canceled without the concurrent grant or offer of a replacement award, the cancellation should be treated as a settlement for no consideration and any previously unrecognized compensation cost shall be recognized at the cancellation date. Stock-based awards granted to employees are primarily stock options and restricted stock units. The Company has primarily granted restricted stock units (“RSUs”), which have a service based vesting condition over a four-yea For awards with market conditions, the Company determines the grant date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, expected capital raise percentage and market capitalization milestones. Given the Company’s limited market trading history, it has estimated the volatility of its common stock on the date of grant of awards with market conditions based on the weighted average historical stock price volatility of comparable publicly-traded companies in its industry group. The Company estimated the expected term of its awards with market conditions based on various exercise scenarios, as these awards are not considered “plain vanilla.” The Company utilized a risk-free interest rate based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated the expected date of a qualifying event, the expected capital raise percentage and the expected achievement date of market capitalization milestones based on management’s expectations at the time of measurement of the award’s value. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. During the three months ended March 31, 2022, the Company continued to operate as a single operating and reportable segment as the CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocation of resources, and evaluating financial performance. Recently Issued Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers, instead of fair value at the acquisition date in accordance with Topic 805. The amendments in ASU 2021-08 will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. The amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Acquisition of Aarki, Inc. On July 16, 2021, the Company completed the acquisition of Aarki, Inc. (“Aarki”) and acquired 100% of the outstanding equity and voting interest of Aarki under the terms of the Agreement and Plan of Merger. The Company transferred $162.3 million in consideration comprised of $95.3 million in cash and the remaining $67.1 million comprised of 4.4 million shares of Skillz Class A common stock to the existing Aarki stockholders. The addition of Aarki’s technology-driven marketing platform is expected to result in significant efficiencies in user-acquisition costs, which can be reinvested to acquire more users to accelerate growth and provide a broader product offering, including media buying capabilities to better serve game developers. The following table summarizes the fair value of the purchase price to acquire Aarki: Description Amount Cash $ 95,296 Common stock issued (1) 67,051 Total purchase price $ 162,347 _______________ (1) The fair value of the Skillz Class A Common Stock issued in the merger was based on 4,401,663 shares issued on the July 16, 2021 acquisition date at the closing price of the Company’s common stock on such date of $15.23 per share. The following is an allocation of the purchase price as of July 16, 2021, the acquisition closing date, based on an estimate of the fair value of the assets acquired and liabilities assumed by the Company in the acquisition: Description Amount Cash and cash equivalents $ 11,309 Accounts receivable, net 13,700 Prepaid expenses and other current assets 356 Property, plant and equipment, net 5,075 Intangible assets, net 86,800 Other long-term assets 91 Accounts payable (445) Accrued professional fees (3,145) Other current liabilities (16,471) Deferred tax liabilities (20,075) Other long-term liabilities (1,693) Identifiable net assets acquired 75,502 Goodwill 86,845 Total purchase price $ 162,347 The following is a summary of identifiable intangible assets acquired and their expected lives as of the acquisition closing date: Type Weighted-average useful life (in years) Fair Value Developed technology 8 $ 60,400 Customer relationships 3 26,200 Trademark and trade name 0.3 200 Total identifiable intangible assets acquired $ 86,800 During the first quarter of 2022, the Company recorded a measurement period adjustment of $0.4 million to increase the carrying value of the identifiable net assets acquired, with a corresponding decrease to goodwill. The adjustment is related to a subsequent adjustment to Aarki’s federal and state tax payable as of the acquisition closing date. The following table presents details of changes to the Company’s goodwill balance for the three months ended March 31, 2022: Goodwill Balance at December 31, 2021 $ 86,845 Goodwill adjustment (409) Balance as of March 31, 2022 $ 86,436 |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Balance Sheet Components | Balance Sheet Components Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 Credit card processing reserve $ 10,450 $ 9,527 Prepaid expenses 10,427 5,681 Other current assets 1,090 1,496 Prepaid expenses and other current assets $ 21,967 $ 16,704 Intangible Assets, Net The components of intangible assets consisted of the following as of March 31, 2022: Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 7.33 $ 60,400 $ (5,348) $ 55,052 Customer relationships 2.33 26,200 (6,186) 20,014 Trademark and trade name 0.00 200 (200) — Intangible assets, net $ 86,800 $ (11,734) $ 75,066 The following table sets forth the activity related to finite-lived intangible assets: Three Months Ended March 31, 2022 Beginning balance at December 31, 2021 $ 79,137 Amortization (4,071) Ending balance at March 31, 2022 $ 75,066 The following table summarizes amortization expense associated with finite-lived intangible assets recognized in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 as follows: Three Months Ended March 31, 2022 Cost of revenue $ 1,888 Sales and marketing 2,183 General and administrative — Total amortization expense $ 4,071 The following table outlines the estimated future amortization expense related to finite intangible assets as of March 31, 2022: Amount 2022 $ 12,212 2023 16,283 2024 12,281 2025 7,550 2026 7,550 Thereafter 19,190 Total $ 75,066 Other Current Liabilities Other current liabilities consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 Accrued sales and marketing expenses $ 13,425 $ 28,895 Accrued compensation 10,737 12,108 Accrued publisher fees 7,242 3,912 End-user liability, net 3,562 4,118 Accrued developer revenue share 1,147 1,655 Short-term lease obligations 2,043 2,447 Accrued legal expenses 4,757 5,126 Accrued interest expense 8,773 956 Other accrued expenses 5,921 5,752 Other current liabilities $ 57,607 $ 64,969 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements As of March 31, 2022 and December 31, 2021, the recorded values of cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of the instruments. Cash and cash equivalents held by the Company as of March 31, 2022 and December 31, 2021 were $114.6 million and $241.3 million, respectively, and were comprised of cash on hand, money market funds, and highly liquid investments with original contractual maturity dates of three months or less. Cash and money market funds are classified within Level 1 of the fair value hierarchy. Highly liquid investments such as commercial papers and corporate bonds are classified within Level 2 of the fair value hierarchy. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021: As of March 31, 2022 Level 1 Level 2 Level 3 Total Assets: Available-for-Sale Investments Asset backed securities $ — $ 113,038 $ — $ 113,038 Certificates of deposits — 6,000 — 6,000 Corporate notes and bonds — 234,237 — 234,237 Commercial paper — 129,202 — 129,202 Foreign government securities — 18,151 — 18,151 US Government Securities 44,974 27,959 — 72,933 Total assets $ 44,974 $ 528,588 $ — $ 573,562 Liabilities: Private Common Stock Warrants — — 1,831 1,831 Total liabilities $ — $ — $ 1,831 $ 1,831 As of December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Available-for-Sale Investments Asset backed securities $ — $ 111,552 $ — $ 111,552 Certificates of deposits — 6,002 — 6,002 Corporate notes and bonds — 206,989 — 206,989 Commercial paper — 109,391 — 109,391 Foreign government securities — 8,181 — 8,181 US Government Securities 86,787 — — 86,787 Total assets $ 86,787 $ 442,114 $ — $ 528,902 Liabilities: Private Common Stock Warrants — — 6,293 6,293 Total liabilities $ — $ — $ 6,293 $ 6,293 Available-for-Sale Investments Available-for-sale investments were classified within Level 1 or Level 2 because the Company’s use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. The market values of Level 2 investments are determined based on observable inputs for the securities other than quoted prices, such as interest rates, yield curves, and credit spreads, or quoted prices for identical or similar securities in markets that are not considered active. There were no transfers between levels during the periods presented. Private Common Stock Warrants The Private Warrants were classified within Level 3 as they were valued based on a BSM pricing model, which involved the use of certain unobservable inputs, such as expected volatility estimated based on the average historical stock price volatility of comparable companies. The following is a rollforward of balances for Private Warrants: Private Warrants Balance at December 31, 2021 $ 6,293 Fair market value adjustment (4,462) Balance as of March 31, 2022 $ 1,831 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investment Components The components of investments were as follows: As of March 31, 2022 Adjusted Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities - Marketable Securities - Asset backed securities $ 113,392 $ 3 $ (357) $ 113,038 $ — $ 6,364 $ 106,674 Certificates of deposits 6,005 — (5) 6,000 — 6,000 — Corporate notes and bonds 235,942 2 (1,707) 234,237 — 171,187 63,051 Commercial paper 129,290 4 (93) 129,202 26,282 102,921 — Money market funds 5,615 — — 5,615 5,615 — — Foreign government securities 18,289 — (137) 18,151 — 18,151 — US government and agency securities 72,938 1 (5) 72,934 7,989 64,943 — Total investments $ 581,471 $ 10 $ (2,304) $ 579,177 $ 39,886 $ 369,566 $ 169,725 As of December 31, 2021 Adjusted Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities - Marketable Securities - Asset backed securities $ 111,619 $ 1 $ (68) $ 111,552 $ — $ 5,372 $ 106,180 Certificates of deposits 6,002 — — 6,002 — 6,002 — Corporate notes and bonds 207,169 21 (201) 206,990 3,026 132,688 71,276 Commercial paper 109,391 — — 109,391 24,193 85,198 — Money market funds 51,768 — — 51,768 51,768 — Foreign government securities 8,186 — (5) 8,181 — 3,008 5,173 US government securities 86,783 4 — 86,787 — 86,787 — Total investments $ 580,918 $ 26 $ (274) $ 580,671 $ 78,987 $ 319,055 $ 182,629 Non-marketable equity securities are investments in privately held companies without readily determinable fair values. The carrying value of the Company’s investments without readily determinable fair values was $55.6 million as of March 31, 2022 and December 31, 2021, and was classified within “Investments in non-marketable equity securities” in the condensed consolidated balance sheets. The Company did not record any adjustments to the carrying value of its non-marketable equity securities accounted for under the measurement alternative, and did not recognize any gains or losses related to the sale of non-marketable equity securities in the three months ended March 31, 2022. Unrealized Losses on Marketable Securities The Company did not have any marketable securities with unrealized losses for more than 12 months. Unrealized losses from fixed-income securities are primarily attributable to changes in interest rates. Marketable Securities Maturities Adjusted Estimated Cost Basis Fair Value March 31, 2022 Due in one year or less $ 370,511 $ 369,566 Due after one year through five years 171,074 169,725 Due after five years through ten years — — Total $ 541,585 $ 539,291 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Components of long-term debt were as follows as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 2021 Senior Secured Notes $ 300,000 $ 300,000 Unamortized discount and issuance costs (20,287) (21,111) Net carrying amount $ 279,713 $ 278,889 Current portion of long-term debt $ — $ — Non-current portion of long-term debt $ 279,713 $ 278,889 2021 Senior Secured Notes In December 2021, the Company entered into a $300 million 10.25% secured notes in a private placement to certain institutional buyers. The interest is payable semiannually on June 15 and December 15 of each year, beginning on June 15, 2022. The effective interest rate on the notes is 12.14%. The notes will mature on December 15, 2026 unless repurchased or redeemed earlier. The secured notes contain customary covenants restricting the Company’s ability to incur debt, incur liens, make distributions to stockholders, make certain transactions with our affiliates, as well as certain other financial covenants. The Company was in compliance with all covenants as of March 31, 2022. In accounting for the senior secured notes, unamortized discount and issuance costs were deducted from the carrying value in the condensed consolidated balance sheet. Issuance costs will be recognized as interest expense over the five-year term of the senior secured notes. The senior secured notes are classified as Level 2 financial instruments, and its fair value is presented for disclosure purposes only. The Company determined the fair value of the notes is $261 million as of March 31, 2022 based on secondary market quotes. Interest is paid semi-annually. Accrued interest as of March 31, 2022 was $8.8 million, and was recorded within other current liabilities in the Company’s condensed consolidated balance sheets. No cash has been paid for interest as of March 31, 2022. The following table outlines maturities of the principle related to the Company’s long-term debt, including the current portion, as of March 31, 2022: Amount 2022 (excluding the three months ended March 31, 2022) $ — 2023 — 2024 — 2025 — 2026 300,000 Total $ 300,000 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company is a party to various non-cancelable operating lease agreements for certain of its offices. The Company is a party to various non-cancelable finance lease agreements for certain network equipment. The leases have original lease periods expiring between 2022 to 2030. Some leases include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. The lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. The Company adopted Accounting Standards Update 2016-02, Leases (“ASC 842”), which supersedes the guidance in Accounting Standards Codification (“ASC”) 840, Leases (“ASC 840”), effective January 1. 2021. As the Company elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Jumpstart Our Business Startups Act of 2012, ASU 842 was not adopted until the fourth quarter of 2021. The comparative information for the three months ended March 31, 2021 have been adjusted to reflect impact of the adoption of ASC 842 as of January 1, 2021. The adoption did not impact the Company’s prior year consolidated statements of operations and comprehensive loss and statements of stockholders’ equity for the three-month period ended March 31, 2021. There was no impact on the Company’s prior year total cash used in operating activities in the Company’s condensed consolidated statement of cash flows; however, the Company has adjusted the operating lease right-of-use assets ($13.5 million decrease), operating lease liabilities ($14.4 million increase) and other accruals and liabilities ($0.9 million decrease) line items within changes in operating assets and liabilities in our condensed consolidated statement of cash flows for the three months ended March 31, 2021 included herein. As of March 31, 2022, the Company does not have additional operating and finance leases not yet commenced. |
Leases | Leases The Company is a party to various non-cancelable operating lease agreements for certain of its offices. The Company is a party to various non-cancelable finance lease agreements for certain network equipment. The leases have original lease periods expiring between 2022 to 2030. Some leases include one or more options to renew. The Company does not assume renewals in its determination of the lease term unless the renewals are deemed to be reasonably assured at lease commencement. The lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. The Company adopted Accounting Standards Update 2016-02, Leases (“ASC 842”), which supersedes the guidance in Accounting Standards Codification (“ASC”) 840, Leases (“ASC 840”), effective January 1. 2021. As the Company elected the extended transition period for complying with new or revised accounting standards pursuant to Section 107(b) of the Jumpstart Our Business Startups Act of 2012, ASU 842 was not adopted until the fourth quarter of 2021. The comparative information for the three months ended March 31, 2021 have been adjusted to reflect impact of the adoption of ASC 842 as of January 1, 2021. The adoption did not impact the Company’s prior year consolidated statements of operations and comprehensive loss and statements of stockholders’ equity for the three-month period ended March 31, 2021. There was no impact on the Company’s prior year total cash used in operating activities in the Company’s condensed consolidated statement of cash flows; however, the Company has adjusted the operating lease right-of-use assets ($13.5 million decrease), operating lease liabilities ($14.4 million increase) and other accruals and liabilities ($0.9 million decrease) line items within changes in operating assets and liabilities in our condensed consolidated statement of cash flows for the three months ended March 31, 2021 included herein. As of March 31, 2022, the Company does not have additional operating and finance leases not yet commenced. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters The Company is a party to certain claims, suits, and proceedings which arise in the ordinary course and conduct of its business and has certain unresolved claims pending, the outcomes of which are not determinable at this time. The Company records a liability when it believes that it is probable that a loss will be incurred and the amount can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the Company discloses the possible loss or range of loss. In the Company’s opinion, resolution of pending matters, other than as disclosed herein, is not expected to have a material adverse impact on the results of operations, cash flows, or the Company’s financial position, as of March 31, 2022. Given the unpredictable nature of legal proceedings, there is a reasonable possibility that an unfavorable resolution of one or more such proceedings could in the future materially affect the results of operations, cash flows, or financial position in a particular period. However, based on the information known by the Company, except as set forth herein, any such amount is either immaterial or it is not possible to provide an estimated range of any such possible loss. On May 15, 2019, a former employee of the Company filed a suit against the Company in the San Francisco Superior Court in California for claims including breach of contract, retaliation and wrongful termination. The case was tried in August and September 2021. The jury found in favor of the former employee and rendered a verdict against the Company for $11.6 million in compensatory damages, and the Company recorded a loss contingency accrual and corresponding general and administrative expenses in such amount in the third quarter of 2021. In April 2022, the judge in the case determined, in light of the Company’s post-verdict motions, that the instructions given to the jury at trial were defective. Accordingly, the judge ordered a new trial on damages or, alternatively, permitted the plaintiff accept a reduced verdict in the amount of $4.35 million. The plaintiff has until May 25, 2022 to decide whether to accept the reduced verdict, proceed with a new trial on damages, or pursue an appeal. |
Common Stock Warrants
Common Stock Warrants | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Common Stock Warrants | Common Stock Warrants As of March 31, 2022, the Company had zero Public Warrants and 4,535,728 Private Warrants outstanding. During the three months ended March 31, 2022, there were no Private Warrants exercised. As part of FEAC’s initial public offering, 17,250,000 Public Warrants were sold. The Public Warrants entitled the holder thereof to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustments. The Public Warrants were only exercisable for a whole number of shares of Class A common stock. No fractional shares were issued upon exercise of the warrants. The Public Warrants had an expiration date of 5:00 p.m. New York City time on December 16, 2025, or earlier upon redemption or liquidation. The Public Warrants were listed on the NYSE under the symbol “SKLZ.WS.” The Company was permitted to call the Public Warrants for redemption starting anytime, in whole and not in part, at a price of $0.01 per warrant, so long as the Company provides not less than 30 days’ prior written notice of redemption to each warrant holder, and if, and only if, the reported last sale price of Class A common stock equaled or exceeded $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date the Company sent the notice of redemption to the warrant holders, provided there was an effective registration statement covering the shares of Class A common stock issuable upon exercise of the warrants at such time. On July 16, 2021, the Company announced the redemption of all Public Warrants that remained outstanding on August 16, 2021. On August 16, 2021, 5,888,294 Public Warrants remained unexercised at 5pm New York City time, and such warrants expired and were no longer exercisable, and the holders of those Public Warrants were entitled to receive only the redemption price of $0.01 per warrant. Simultaneously with FEAC’s initial public offering, FEAC consummated a private placement of 10,033,333 Private Placement Warrants with FEAC’s sponsor. In connection with the FEAC Business Combination, FEAC’s sponsor agreed to forfeit 5,016,666 private placement warrants. Each outstanding Private Placement Warrant is exercisable for one share of Class A common stock at a price of $11.50 per share, subject to adjustment. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock The Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, expect with respect to voting and conversion. Holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to 20 votes per share. Shares of Class B common stock are convertible into an equivalent number of shares of Class A common stock and generally convert into shares of Class A common stock upon transfer. Any dividends paid to the holders of Class A common stock and Class B common stock will be paid on a pro rata basis. On a liquidation event, any distribution to common stockholders is made on a pro rata basis to the holders of the Class A common stock and Class B common stock. As of March 31, 2022, the Company has authorized a total of 635 million shares, consisting of 500 million shares of Class A common stock, par value $0.0001 per share (“Class A common stock”), 125 million shares of Class B common stock, par value $0.0001 per share (“Class B common stock”), and 10 million shares of preferred stock, par value $0.0001 per share (“preferred stock”). In March 2021, the Company completed an underwritten public offering of its Class A common stock and issued 17,000,000 shares of Class A common stock, for an aggregate purchase price of $408.0 million, before issuance costs of $5.9 |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | Stock-Based Compensation The following table summarizes stock-based compensation expense recognized for the three months ended March 31, 2022 and 2021 as follows: Three Months Ended March 31, 2022 2021 Research and development $ 2,354 $ 1,207 Sales and marketing 2,879 1,838 General and administrative 72,692 7,900 Total stock-based compensation expense $ 77,925 $ 10,945 Equity Incentive Plans Skillz Inc. 2020 Omnibus Incentive Plan In December 2020, the Board of Directors of the Company adopted the Skillz Inc. 2020 Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan became effective upon consummation of the FEAC Business Combination and succeeds the Company’s legacy equity incentive plans. Under the 2020 Plan, the Company may grant stock-based awards to purchase or directly issue shares of common stock to employees, directors and consultants. Options are granted at a price per share equal to the fair market value of the underlying common stock at the date of grant. Options granted are exercisable over a maximum term of 10 years from the date of grant. Restricted stock units (“RSUs”) are also granted under the 2020 Plan. These awards typically have a cliff vesting period of one year and continue to vest quarterly thereafter. The 2020 Plan also permits the Company to grant stock-based awards with performance or market conditions. In connection with the closing of the FEAC Business Combination, the Company entered into certain option agreements that include vesting conditions contingent upon the attainment of volume weighted average price targets related to the Company’s Class A common stock on the NYSE. The 2020 Plan permits the Company to deliver up to 86,771,777 shares of common stock pursuant to awards issued under the 2020 Plan, consisting of 15,000,000 shares which may be of Class A and/or Class B common stock, 56,264,600 shares of Class A common stock and 15,507,177 shares of Class B common stock. The total number of shares of Class A common stock and Class B common stock that will be reserved and that may be issued under the 2020 Plan will automatically increase on the first trading day of each calendar year, beginning with calendar year 2021, by a number of shares equal to five percent 5% of the total number of shares of Class A common stock and Class B common stock, respectively, outstanding on the last day of the prior calendar year. Stock Options and Restricted Stock Units Stock option and RSU activity during the three months ended March 31, 2022 is as follows (in thousands, except for share, per share, and contractual term data): Options Outstanding Restricted Stock Units Number of Number of Weighted- Weighted- Aggregate Number of Plan shares outstanding Weighted-Average Grant Date Fair Value per share Balance at December 31, 2021 51,437,898 27,727,088 $ 7.79 7.04 $ 113,110 7,600,097 $ 13.17 Additional shares authorized 20,437,691 — — Options and restricted stock units granted (6,062,088) — — 6,062,088 2.86 Options exercised and restricted stock units released — (774,983) 0.30 (104,953) 18.65 Options and restricted stock units canceled 868,193 (198,648) 1.26 (669,545) 11.94 Balance at March 31, 2022 66,681,694 26,753,457 $ 8.06 6.88 $ 40,977 12,887,687 $ 8.34 Exercisable at December 31, 2021 13,157,036 $ 0.15 5.17 $ 95,946 Exercisable at March 31, 2022 12,842,842 0.16 5.09 36,610 Unvested at December 31, 2021 14,570,052 14.69 8.72 17,164 Unvested at March 31, 2022 13,910,615 15.36 8.53 4,367 The number of unvested stock options as of March 31, 2022 and December 31, 2021 does not include 7.2 million and 8.2 million shares of restricted common stock, respectively, previously issued upon the early exercise of grants by certain executives. The number of RSUs granted and outstanding does not include 2.0 million performance based RSUs which the Company issued as of March 31, 2022, as the performance-based RSUs are not deemed granted for accounting purposes. The stock option and RSU activity presented in the table above does not include activity related to the 2021 CEO Performance Award and Founders' Option Agreements, both described below. As of March 31, 2022, unrecognized stock-based compensation expense related to unvested stock options, restricted common stock, RSUs, performance-based RSUs and performance stock units was $177.3 million. The weighted-average period over which such compensation expense will be recognized is 3.24 years. The aggregate intrinsic value of options exercised was $2.6 million and $7.9 million during the three months ended March 31, 2022 and 2021, respectively. 2021 CEO Performance Award In September 2021, the Company granted the Company’s Chief Executive Officer (“CEO”), an award of up to 16.1 million performance stock units (the “CEO Performance Award”) under the Company’s 2020 Plan, pursuant to which the CEO may earn one share of the Company’s Class A Common Stock for each performance stock unit that vests based on the achievement of certain Market Capitalization Milestones (as defined in the award agreement for the CEO Performance Award). The performance stock units were divided into four tranches, with each tranche corresponding to a Market Capitalization Milestone ranging from two to five times the Company’s market capitalization baseline. Each tranche vested if and when the Company’s market capitalization equals or exceeds the corresponding Market Capitalization Milestone at any point during the seven-year performance period following the grant date (the “Performance Period”). For purposes of determining achievement of the Market Capitalization Milestones, the Company’s market capitalization was calculated based on the trailing 60-trading day volume weighted average price per share (“VWAP”) of the Company’s Class A common stock and the average number of outstanding shares during such period. The Company’s market capitalization baseline was calculated using the trailing 30-trading day VWAP of the Company’s Class A common stock on the grant date and the average number of outstanding shares during such period. The $70.8 million grant date fair value of the CEO Performance Award was estimated using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the market condition targets may not be satisfied. On March 14, 2022 (“cancellation date”), the Board of Directors of Skillz and the CEO, entered into an agreement to cancel this CEO Performance Award. The Company determined that the cancellation of the CEO Performance Award was a settlement for no consideration and not accompanied by a concurrent grant (or offer to grant) of a replacement award. As a result, the Company recorded the remaining unrecognized compensation costs related to the CEO Performance Award of $65.1 million during three months ended March 31, 2022. ` Founders’ Option Agreements In December 2020, the Company entered into option agreements with each of the CEO and CRO (the “Option Agreements”) awarding options to purchase (i) 9,960,000 shares of New Skillz Class B common stock to the CEO and (ii) 2,040,000 shares of Class A common stock to the CRO. The options will vest in three equal increments as follows (i) one-third (1/3) of the options shall vest and become exercisable as of the date, following the grant date, that the volume weighted average price on the NYSE over a ten (10) trading day period of underlying Skillz Class A common stock (“VWAP”) equals or exceeds 3.0x the VWAP of the shares as of the Closing Date (as defined in the Options Agreements), (ii) one-third (1/3) of the options shall vest and become exercisable as of the date, following the grant date, that the VWAP of the shares equals or exceeds 4.0x the VWAP of the shares as of the Closing Date; and (iii) one-third (1/3) of the options shall vest and become exercisable as of the date, following the grant date, that the VWAP of the shares equals or exceeds 5.0x the VWAP of the shares as of the Closing Date. The $93.4 million grant date fair value of the Founders’ Options was estimated using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the market condition targets may not be satisfied. The significant inputs to the valuation included the Company’s Class A stock price and the risk-free interest rate as of the grant date, as well as the estimated volatility of the Company’s Class A common stock. For the three months ended March 31, 2022, the Company recognized $4.8 million in compensation expense related to these grants. As of March 31, 2022, the unrecognized stock-based compensation cost related to Founders’ Option Agreements was $68.4 million. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s (benefit from) provision for income taxes was $(213) thousand and $42 thousand for the three months ended March 31, 2022 and 2021, respectively. This represents an effective tax rate for the respective periods of 0.14% and (0.08)%. The Company has historically been in an overall loss position and is only subject to state and foreign taxes. The Company maintains a full valuation allowance for all of its deferred tax assets. The effective tax rate differs from the federal statutory rate due to the valuation allowance, as well as due to foreign taxes and state taxes |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related-Party TransactionsThe Company did not have any material related party transactions in the three months ended March 31, 2022 and 2021 |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes net loss per share of the Class A common stock and Class B common stock using the two-class method required for participating securities. Basic and diluted loss per share are the same for each class of common stock because they are entitled to the same liquidation and dividend rights. The effect of potentially dilutive common shares is reflected in diluted earnings per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted loss per Class A common stock and Class B common stock (in thousands, except for share and per share data): Three Months Ended March 31, 2022 2021 Numerator: Net loss – basic $ (148,113) $ (53,592) Denominator: Weighted average common shares outstanding – basic 401,653,954 356,818,954 Net income (loss) per share attributable to common stockholders – basic $ (0.37) $ (0.15) Numerator: Net loss – basic $ (148,113) $ (53,592) Decrease in fair value of public and private common stock warrant liabilities — (3,799) Net loss – diluted $ (148,113) $ (57,391) Denominator: Weighted average common shares outstanding – basic 401,653,954 356,818,954 Incremental common shares from assumed exercise of public and private common stock warrants — 3,008,695 Weighted average common shares outstanding – diluted 401,653,954 359,827,649 Net loss per share attributable to common stockholders – diluted $ (0.37) $ (0.16) The following outstanding common stock equivalents were considered antidilutive, and therefore, excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the periods presented (share numbers are not in thousands). As of March 31 2022 2021 Common stock warrants 4,535,728 8,157,942 Common stock options 33,999,568 51,121,618 Restricted stock units 6,062,088 1,521,335 Total 44,597,384 60,800,895 |
Geographical Information
Geographical Information | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Geographical Information | Geographical Information No sales to a country other than the United States accounted for more than 10% of revenue for the three months ended March 31, 2022 or 2021. Revenue, classified by the major geographic areas where the end users were located when they entered paid competitions, was as follows: Three Months Ended March 31, 2022 2021 United States 69,177 72,382 Other countries 24,261 11,295 Total $ 93,438 $ 83,677 Property and equipment, net and operating lease right-of-use assets by geography is as follows: March 31, December 31, 2022 2021 United States $ 18,940 $ 20,997 Other countries 3,666 3,502 Total $ 22,606 $ 24,499 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”). Unaudited Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and in accordance with the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements reflect all normal and recurring adjustments that are, in the opinion of the Company’s management, necessary for the fair presentation of the results of operations for the interim periods. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, as filed with the SEC on March 1, 2022. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and the related disclosures at the date of the condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during the periods presented. Estimates are used in several areas including, but not limited to, stock-based compensation, valuation of common stock warrants, the fair values of goodwill and intangible assets and the useful lives of the Company’s intangible assets. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying amounts of assets and liabilities. Actual results could differ materially from these estimates. |
Revenue Recognition | Revenue Recognition The Company generates substantially all its revenues by providing a service to the game developers aimed at improving the monetization of their game content. The monetization service provided by Skillz allows developers to offer multi-player competition to their end-users which increases end-user retention and engagement. Skillz provides developers with a software development kit (“SDK”) that they can download and integrate with their existing games. The SDK serves as a data interface between Skillz and the game developers that enables Skillz to provide monetization services to the developer. The Company recognizes revenue for its services in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenues from Contracts with Customers The Company applies the five-step model to achieve the core principle of ASC 606. The Company determined that its customer in the provision of its technology platform and services is the game developer. The Company’s ordinary activities consist of providing game developers services through access to its technology platform using the Skillz SDK. The SDK acts as an application programming interface enabling communication of data between Skillz and the game developers, which when integrated with the developer’s game content, facilitates end-user registration into Competitions, managing and hosting end-user Competition accounts, matching players of similar skill levels, collecting end-user entry fees, distributing end-user prizes, resolving end-user disputes pertaining to their participation in Competitions, and running third-party marketing campaigns (“Monetization Services”). The Company provides Monetization Services to game developers enabling them to offer competitive games to their end-users. These activities are not distinct from each other as the Company provides an integrated service enabling the game developers to provide the competitive game service to the end-users, and as a result, they do not represent separate performance obligations. The Company is entitled to a revenue share based on total entry fees for paid Competitions, regardless of how they are paid, net of end-user prizes (i.e., winnings from the Competitions) and other costs to provide the Monetization Services. The game developers’ revenue share, however, is calculated solely based upon entry fees paid by net cash deposits received from end-users. End-user incentives are not paid for by game developers. In addition, the Company reduces revenue for end-user incentives which are treated as a reduction of revenue. The Company collects the entry fees and related charges from end-users on behalf of game developers using the end-user’s pre-authorized credit card or PayPal account and withholds its fees before making the remaining disbursement to the game developer; thus, the game developer’s ability and intent to pay is not subject to significant judgment. Revenue is recognized at the time the performance obligation is satisfied by transferring control of the promised service in an amount that reflects the consideration that the Company expects to receive in exchange for the Monetization Services. The Company recognizes revenue upon completion of a game, which is when its performance obligation to the game developer is satisfied. The Company does not have contract assets or contract liabilities as the payment of the transaction price is concurrent with the fulfillment of the services. At the time of game completion, the Company has the right to receive payment for the services rendered. The Company’s agreements with game developers can generally be terminated for convenience by either party upon thirty days prior written notice, and in certain of the Company’s larger developer agreements, the developer, if required by the Company, must continue to make its games available on the platform for a period of up to twelve months. As the Company is able to terminate the developer agreements at its convenience, the Company has concluded the contract term for revenue recognition does not extend beyond the contractual notification period. The Company did not have any transaction price allocated to performance obligations that are unsatisfied (or partially satisfied) as of March 31, 2022 and 2021. Games provided by two developer partners, accounted for 41% and 38% of the Company’s revenue in the three months ended March 31, 2022, and 42% and 41% of the Company’s revenue in the three months ended March 31, 2021. End-User Incentive Programs To drive traffic to the platform, the Company provides promotions and incentives to end-users in various forms. Evaluating whether a promotion or incentive is a payment to a customer may require significant judgment. Promotions and incentives which are consideration payable to a customer are recognized as a reduction of revenue at the later of when revenue is recognized or when the Company pays or promises to pay the incentive. Promotions and incentives recorded as sales and marketing expense are recognized when the related cost is incurred by the Company. In either case, the promotions and incentives are recognized when they are used by end-users to enter into a paid Competition. • Marketing promotions and discounts accounted for as a reduction of revenue. These promotions are typically pricing actions in the form of discounts that reduce the end-user entry fees and are offered on behalf of the game developers. Although not required based on the Company’s agreement with its developers, the Company considers that the game developers have a valid expectation that certain incentives will be offered to end-users. The determination of a valid expectation is based on the evaluation of all information reasonably available to the game developers regarding the Company’s customary business practices, published policies and specific statements. An example of an incentive for which the game developer has a valid expectation is Ticketz, which are a virtual currency earned for every Competition played based on the amount of the entry fee (“Ticketz”). Ticketz can be redeemed for prizes, including bonus cash prizes, a promotional incentive that cannot be withdrawn and can only be used by end-users to enter into paid entry fee contests (“Bonus Cash”). Another example is initial deposit Bonus Cash which is a promotional incentive that can be earned in fixed amounts when an end-user makes an initial deposit on the Skillz platform. Bonus Cash can only be used by end-users to enter into future paid entry fee Competitions and cannot be withdrawn by end-users. For the three months ended March 31, 2022 and 2021, the Company recognized a reduction of revenue of $16.3 million and $17.6 million, respectively, related to these end-user incentives. • Marketing promotions accounted for as sales and marketing expense. When the Company concludes that the game developers do not have a valid expectation that the incentive will be offered, the Company records the related cost as sales and marketing expense. The Company’s assessment is based on an evaluation of all information reasonably available to the game developers regarding the Company’s customary business practices, published policies and specific statements. These promotions are offered to end-users to draw, re-engage, or generally increase end-users’ use of the Company’s platform. An example of this type of incentive is limited-time Bonus Cash offers, which are targeted to specific end-users, typically those who deposit more frequently or have not made a deposit recently, via email or in-app promotions. The Company targets groups of end-users differently, offering specific promotions it thinks will best stimulate engagement. Similar to Bonus Cash earned from a redemption of Ticketz or an initial deposit, limited-time Bonus Cash can only be used by end-users to enter into future paid entry fee competitions and cannot be withdrawn by end-users. The Company also hosts engagement marketing leagues run over a period of days or weeks, which award league prizes in the form of cash or luxury goods to end-users with the most medals at the end of the league. End-users accumulate medals by winning Skillz enabled paid entry fee competitions. Skillz determines whether or not to run a league, what prizes should be awarded, over what time period the league should run, and to which end-users the prizes should be paid, all at its discretion. The league parameters vary from one league to the next and are not reasonably known to the game developers. League prizes in the form of cash can be withdrawn or used by end-users to enter into future paid entry fee competitions. For the three months ended March 31, 2022 and 2021, the Company recognized sales and marketing expense of $37.0 million and $33.3 million, respectively, related to these end-user incentives. From time to time, the Company issues credits or refunds to end-users that are unsatisfied by the level of service provided by the game developer. There is no contractual obligation for the Company to refund such end-users nor is there a valid expectation by the game developers for the Company to issue such credits or refunds to end-users on their behalf. The Company accounts for credits or refunds, which are not recoverable from the game developer, as sales and marketing expenses when incurred. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consist of cash, commercial paper, money market funds and U.S government agency securities with maturities of three months or less when purchased. |
Concentrations of Credit Risk | Concentrations of Credit RiskFinancial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash, cash equivalents, restricted cash, and marketable securities. Although the Company deposits its cash with multiple well-established financial institutions, the deposits, at times, may exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. Marketable securities are primarily consisted of U.S government, corporate debt securities, asset backed securities, commercial paper, and debt instruments issued by foreign governments. The Company limits the amount of credit exposure to any one issuer. Management believes that the institutions are financially stable and, accordingly, minimal credit risk exists. |
Accounts Receivable, Net | Accounts Receivable, NetAccounts receivable, net, is comprised of trade accounts receivable recorded at the invoiced amounts for programmatic media campaigns, net of an allowance for credit losses. The allowance for credit losses is recorded as an offset to accounts receivable and changes in such are classified as general and administrative expense in the consolidated statements of operations and comprehensive loss. The Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when there are specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status and makes judgments about the creditworthiness of customers based on ongoing credit evaluations. The Company also considers customer-specific information, current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss data. |
Fair Value Measurement | Fair Value Measurement The Company applies fair value accounting for financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value measurements for assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 — Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. • Level 3 — Unobservable inputs reflecting management’s estimate of assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Certain financial instruments, including debt, are not measured at fair value on a recurring basis in the consolidated balance sheets. The fair value of debt was estimated using primarily level 2 inputs including quoted market prices or present value of future payments discounted by the market interest rates or the fixed rates based on current rates offered to the Company for debt with similar terms and maturities. |
Investments | Investments The Company considers all highly liquid interest-earning investments with a maturity of three months or less at the date of purchase to be cash equivalents. The fair values of these investments approximate their carrying values. In general, investments with original maturities of greater than three months and remaining maturities of less than one year are classified as short-term investments. Investments with maturities beyond one year are classified as non-current marketable securities. Marketable securities are classified as available-for-sale and realized gains and losses are recorded using the specific identification method. Changes in fair value, excluding credit losses and impairments, are recorded in other comprehensive loss. Fair value is calculated based on publicly available market information or other estimates determined by management. If the cost of an investment exceeds its fair value, the Company evaluates, among other factors, general market conditions, credit quality of debt instrument issuers, and the extent to which the fair value is less than cost. To determine credit losses, the Company employs a systematic methodology that considers available quantitative and qualitative evidence. In addition, the Company considers specific adverse conditions related to the financial health of, and business outlook for, the investee. If the Company plans to sell the security or it is more likely than not that the Company will be required to sell the security before recovery, then a decline in fair value below cost is recorded as an impairment charge in other (expense) income, net and a new cost basis in the investment is established. If market, industry, and/or investee conditions deteriorate, the Company may incur future impairments. The Company has elected to measure its existing investments in non-marketable equity securities at cost, less impairments, with remeasurements to fair value only upon the occurrence of observable price changes in orderly transactions for the identical or similar securities of the same issuer (“measurement alternative”). This election is reassessed each reporting period to determine whether non-marketable equity securities have a readily determinable fair value, in which case they would no longer be eligible for this election and would be measured at fair value. The Company evaluates its non-marketable equity securities for impairment at each reporting period based on a qualitative assessment that considers various potential impairment indicators. Impairment indicators might include, but would not necessarily be limited to, a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee, a significant adverse change in the regulatory, economic, or technological environment of the investee, a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or similar securities for an amount less than the carrying amount of the investments in those securities. If an impairment exists, a loss is recognized in the condensed consolidated statements of operations and comprehensive loss for the amount by which the carrying value exceeds the fair value of the investment. Gains and losses resulting from the remeasurement of non-marketable equity securities, including impairment, are recorded through other (expense) income, net in the condensed consolidated statement of operations and comprehensive loss. The Company separately presents investments in non-marketable equity securities within long-term assets on the condensed consolidated balance sheets. |
Advertising and Promotional Expense | Advertising and Promotional ExpenseAdvertising and promotional expenses are included in sales and marketing expenses within the condensed consolidated statements of operations and comprehensive loss and are expensed when incurred. For the three months ended March 31, 2022 and 2021, advertising expenses, not including marketing promotions related to the Company’s end-user incentive programs, were |
Public and Private Common Stock Warrant Liabilities | Public and Private Common Stock Warrant Liabilities As part of the Company’s initial public offering, it issued to third party investors 69.0 million units, consisting of one share of Class A common stock and one-fourth of one warrant, at a price of $10.00 per unit. Each whole warrant entitled the holder to purchase one share of Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously, the Company completed the private sale of 10,033,333 warrants at a purchase price of $1.50 per warrant (the “Private Warrants”) of which 5,016,666 Private Warrants were subsequently forfeited. Each Private Warrant allows the holder to purchase one share of Class A common stock at $11.50 per share. There were zero Public Warrants and 4,535,728 Private Warrants outstanding as of March 31, 2022. The Private Warrants and the shares of common stock issuable upon the exercise of the Private Warrants are not transferable, assignable or salable, subject to certain limited exceptions. Additionally, the Private Warrants are exercisable for cash or on a cashless basis, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants. The Company evaluated the Public and Private Warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity , (“ASC 815-40”), and concluded that they do not meet the criteria to be classified in stockholders’ equity. Specifically, the exercise of the Public and Private Warrants may be settled in cash upon the occurrence of a tender offer or exchange that involves 50% or more of the Company’s Class A stockholders. As there are two classes of common stock, not all of the stockholders need to participate in such tender offer or exchange to trigger the potential cash settlement and the Company does not control the occurrence of such an event, the Company concluded that the Public Warrants and Private Warrants do not meet the conditions to be classified in equity. Since the Public and Private Common Stock Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the balance sheet at fair value, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations and comprehensive loss at each reporting date. Because the Public Warrants were publicly traded and thus had an observable market price in an active market, they were valued based on their trading price as of each reporting date. The Private Warrants are valued using the Black-Scholes-Merton Option (“BSM”) pricing model that is based on the individual characteristics of the warrants on the valuation date, which include the Company’s stock price and assumptions for expected volatility, expected life and risk-free interest rate, as well as the present value of the minimum cash payment component of the instrument for the warrants, when applicable. Changes in the assumptions used could have a material impact on the resulting fair value of each warrant. The primary inputs affecting the value of the warrant liability are the Company’s stock price and volatility in the Company's stock price, as well as assumptions about the probability and timing of certain events, such as a change in control or future equity offerings. Increases in the fair value of the underlying stock or increases in the volatility of the stock price generally result in a corresponding increase in the fair value of the warrant liability; conversely, decreases in the fair value of the underlying stock or decreases in the volatility of the stock price generally result in a corresponding decrease in the fair value of the warrant liability. |
Stock-Based Compensation | Stock-Based Compensation The Company measures and recognizes compensation expense for all stock-based awards based on estimated grant-date fair values recognized over the requisite service period. For awards that vest solely based on a service condition, the Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. The compensation expense related to awards with performance conditions is recognized over the requisite service period when the performance conditions are probable of being achieved. The compensation expense related to awards with market conditions is recognized on an accelerated attribution basis over the requisite service period identified as the derived service period over which the market conditions are expected to be achieved, and is not reversed if the market condition is not satisfied. See Note 9 for more information. The Company accounts for forfeitures as they occur. If an employee stock-based award is canceled without the concurrent grant or offer of a replacement award, the cancellation should be treated as a settlement for no consideration and any previously unrecognized compensation cost shall be recognized at the cancellation date. Stock-based awards granted to employees are primarily stock options and restricted stock units. The Company has primarily granted restricted stock units (“RSUs”), which have a service based vesting condition over a four-yea For awards with market conditions, the Company determines the grant date fair value utilizing a Monte Carlo valuation model, which incorporates various assumptions including expected stock price volatility, expected term, risk-free interest rates, expected date of a qualifying event, expected capital raise percentage and market capitalization milestones. Given the Company’s limited market trading history, it has estimated the volatility of its common stock on the date of grant of awards with market conditions based on the weighted average historical stock price volatility of comparable publicly-traded companies in its industry group. The Company estimated the expected term of its awards with market conditions based on various exercise scenarios, as these awards are not considered “plain vanilla.” The Company utilized a risk-free interest rate based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimated the expected date of a qualifying event, the expected capital raise percentage and the expected achievement date of market capitalization milestones based on management’s expectations at the time of measurement of the award’s value. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. During the three months ended March 31, 2022, the Company continued to operate as a single operating and reportable segment as the CODM reviews financial information presented on a consolidated basis for the purposes of making operating decisions, allocation of resources, and evaluating financial performance. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers, instead of fair value at the acquisition date in accordance with Topic 805. The amendments in ASU 2021-08 will result in the acquirer recording acquired contract assets and liabilities on the same basis that would have been recorded by the acquiree before the acquisition under ASC Topic 606. The amendments in ASU 2021-08 are effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The Company is evaluating the effect of adopting this new accounting guidance. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | A reconciliation of the Company’s cash and cash equivalents in the condensed consolidated balance sheets to cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows is as follows: March 31, December 31, 2022 2021 Cash and cash equivalents $ 114,558 $ 241,332 Restricted cash 2,920 2,920 Cash, cash equivalents and restricted cash $ 117,478 $ 244,252 |
Schedule of Cash, Cash Equivalents and Restricted Cash | A reconciliation of the Company’s cash and cash equivalents in the condensed consolidated balance sheets to cash, cash equivalents and restricted cash in the condensed consolidated statement of cash flows is as follows: March 31, December 31, 2022 2021 Cash and cash equivalents $ 114,558 $ 241,332 Restricted cash 2,920 2,920 Cash, cash equivalents and restricted cash $ 117,478 $ 244,252 |
Business Combination (Tables)
Business Combination (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Business Combinations [Abstract] | |
Schedule of Business Combination | The following table summarizes the fair value of the purchase price to acquire Aarki: Description Amount Cash $ 95,296 Common stock issued (1) 67,051 Total purchase price $ 162,347 _______________ (1) The fair value of the Skillz Class A Common Stock issued in the merger was based on 4,401,663 shares issued on the July 16, 2021 acquisition date at the closing price of the Company’s common stock on such date of $15.23 per share. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following is an allocation of the purchase price as of July 16, 2021, the acquisition closing date, based on an estimate of the fair value of the assets acquired and liabilities assumed by the Company in the acquisition: Description Amount Cash and cash equivalents $ 11,309 Accounts receivable, net 13,700 Prepaid expenses and other current assets 356 Property, plant and equipment, net 5,075 Intangible assets, net 86,800 Other long-term assets 91 Accounts payable (445) Accrued professional fees (3,145) Other current liabilities (16,471) Deferred tax liabilities (20,075) Other long-term liabilities (1,693) Identifiable net assets acquired 75,502 Goodwill 86,845 Total purchase price $ 162,347 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following is a summary of identifiable intangible assets acquired and their expected lives as of the acquisition closing date: Type Weighted-average useful life (in years) Fair Value Developed technology 8 $ 60,400 Customer relationships 3 26,200 Trademark and trade name 0.3 200 Total identifiable intangible assets acquired $ 86,800 |
Schedule of Goodwill | The following table presents details of changes to the Company’s goodwill balance for the three months ended March 31, 2022: Goodwill Balance at December 31, 2021 $ 86,845 Goodwill adjustment (409) Balance as of March 31, 2022 $ 86,436 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 Credit card processing reserve $ 10,450 $ 9,527 Prepaid expenses 10,427 5,681 Other current assets 1,090 1,496 Prepaid expenses and other current assets $ 21,967 $ 16,704 |
Schedule of Finite-Lived Intangible Assets | The components of intangible assets consisted of the following as of March 31, 2022: Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology 7.33 $ 60,400 $ (5,348) $ 55,052 Customer relationships 2.33 26,200 (6,186) 20,014 Trademark and trade name 0.00 200 (200) — Intangible assets, net $ 86,800 $ (11,734) $ 75,066 The following table sets forth the activity related to finite-lived intangible assets: Three Months Ended March 31, 2022 Beginning balance at December 31, 2021 $ 79,137 Amortization (4,071) Ending balance at March 31, 2022 $ 75,066 |
Finite-lived Intangible Assets Amortization Expense | The following table summarizes amortization expense associated with finite-lived intangible assets recognized in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022 as follows: Three Months Ended March 31, 2022 Cost of revenue $ 1,888 Sales and marketing 2,183 General and administrative — Total amortization expense $ 4,071 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table outlines the estimated future amortization expense related to finite intangible assets as of March 31, 2022: Amount 2022 $ 12,212 2023 16,283 2024 12,281 2025 7,550 2026 7,550 Thereafter 19,190 Total $ 75,066 |
Schedule of Other Current Liabilities | Other current liabilities consisted of the following as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 Accrued sales and marketing expenses $ 13,425 $ 28,895 Accrued compensation 10,737 12,108 Accrued publisher fees 7,242 3,912 End-user liability, net 3,562 4,118 Accrued developer revenue share 1,147 1,655 Short-term lease obligations 2,043 2,447 Accrued legal expenses 4,757 5,126 Accrued interest expense 8,773 956 Other accrued expenses 5,921 5,752 Other current liabilities $ 57,607 $ 64,969 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2022 and December 31, 2021: As of March 31, 2022 Level 1 Level 2 Level 3 Total Assets: Available-for-Sale Investments Asset backed securities $ — $ 113,038 $ — $ 113,038 Certificates of deposits — 6,000 — 6,000 Corporate notes and bonds — 234,237 — 234,237 Commercial paper — 129,202 — 129,202 Foreign government securities — 18,151 — 18,151 US Government Securities 44,974 27,959 — 72,933 Total assets $ 44,974 $ 528,588 $ — $ 573,562 Liabilities: Private Common Stock Warrants — — 1,831 1,831 Total liabilities $ — $ — $ 1,831 $ 1,831 As of December 31, 2021 Level 1 Level 2 Level 3 Total Assets: Available-for-Sale Investments Asset backed securities $ — $ 111,552 $ — $ 111,552 Certificates of deposits — 6,002 — 6,002 Corporate notes and bonds — 206,989 — 206,989 Commercial paper — 109,391 — 109,391 Foreign government securities — 8,181 — 8,181 US Government Securities 86,787 — — 86,787 Total assets $ 86,787 $ 442,114 $ — $ 528,902 Liabilities: Private Common Stock Warrants — — 6,293 6,293 Total liabilities $ — $ — $ 6,293 $ 6,293 |
Reconciliation of Level 3 Liabilities | The following is a rollforward of balances for Private Warrants: Private Warrants Balance at December 31, 2021 $ 6,293 Fair market value adjustment (4,462) Balance as of March 31, 2022 $ 1,831 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Components of Investments | The components of investments were as follows: As of March 31, 2022 Adjusted Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities - Marketable Securities - Asset backed securities $ 113,392 $ 3 $ (357) $ 113,038 $ — $ 6,364 $ 106,674 Certificates of deposits 6,005 — (5) 6,000 — 6,000 — Corporate notes and bonds 235,942 2 (1,707) 234,237 — 171,187 63,051 Commercial paper 129,290 4 (93) 129,202 26,282 102,921 — Money market funds 5,615 — — 5,615 5,615 — — Foreign government securities 18,289 — (137) 18,151 — 18,151 — US government and agency securities 72,938 1 (5) 72,934 7,989 64,943 — Total investments $ 581,471 $ 10 $ (2,304) $ 579,177 $ 39,886 $ 369,566 $ 169,725 As of December 31, 2021 Adjusted Cost Basis Unrealized Gains Unrealized Losses Fair Value Cash and Cash Equivalents Marketable Securities - Marketable Securities - Asset backed securities $ 111,619 $ 1 $ (68) $ 111,552 $ — $ 5,372 $ 106,180 Certificates of deposits 6,002 — — 6,002 — 6,002 — Corporate notes and bonds 207,169 21 (201) 206,990 3,026 132,688 71,276 Commercial paper 109,391 — — 109,391 24,193 85,198 — Money market funds 51,768 — — 51,768 51,768 — Foreign government securities 8,186 — (5) 8,181 — 3,008 5,173 US government securities 86,783 4 — 86,787 — 86,787 — Total investments $ 580,918 $ 26 $ (274) $ 580,671 $ 78,987 $ 319,055 $ 182,629 |
Schedule of Debt Investment Maturities | Adjusted Estimated Cost Basis Fair Value March 31, 2022 Due in one year or less $ 370,511 $ 369,566 Due after one year through five years 171,074 169,725 Due after five years through ten years — — Total $ 541,585 $ 539,291 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Components of long-term debt were as follows as of March 31, 2022 and December 31, 2021: March 31, December 31, 2022 2021 2021 Senior Secured Notes $ 300,000 $ 300,000 Unamortized discount and issuance costs (20,287) (21,111) Net carrying amount $ 279,713 $ 278,889 Current portion of long-term debt $ — $ — Non-current portion of long-term debt $ 279,713 $ 278,889 |
Schedule of Maturities | The following table outlines maturities of the principle related to the Company’s long-term debt, including the current portion, as of March 31, 2022: Amount 2022 (excluding the three months ended March 31, 2022) $ — 2023 — 2024 — 2025 — 2026 300,000 Total $ 300,000 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock-Based Compensation Expense | The following table summarizes stock-based compensation expense recognized for the three months ended March 31, 2022 and 2021 as follows: Three Months Ended March 31, 2022 2021 Research and development $ 2,354 $ 1,207 Sales and marketing 2,879 1,838 General and administrative 72,692 7,900 Total stock-based compensation expense $ 77,925 $ 10,945 |
Summary of Stock Option and RSU Activity | Stock option and RSU activity during the three months ended March 31, 2022 is as follows (in thousands, except for share, per share, and contractual term data): Options Outstanding Restricted Stock Units Number of Number of Weighted- Weighted- Aggregate Number of Plan shares outstanding Weighted-Average Grant Date Fair Value per share Balance at December 31, 2021 51,437,898 27,727,088 $ 7.79 7.04 $ 113,110 7,600,097 $ 13.17 Additional shares authorized 20,437,691 — — Options and restricted stock units granted (6,062,088) — — 6,062,088 2.86 Options exercised and restricted stock units released — (774,983) 0.30 (104,953) 18.65 Options and restricted stock units canceled 868,193 (198,648) 1.26 (669,545) 11.94 Balance at March 31, 2022 66,681,694 26,753,457 $ 8.06 6.88 $ 40,977 12,887,687 $ 8.34 Exercisable at December 31, 2021 13,157,036 $ 0.15 5.17 $ 95,946 Exercisable at March 31, 2022 12,842,842 0.16 5.09 36,610 Unvested at December 31, 2021 14,570,052 14.69 8.72 17,164 Unvested at March 31, 2022 13,910,615 15.36 8.53 4,367 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted loss per Class A common stock and Class B common stock (in thousands, except for share and per share data): Three Months Ended March 31, 2022 2021 Numerator: Net loss – basic $ (148,113) $ (53,592) Denominator: Weighted average common shares outstanding – basic 401,653,954 356,818,954 Net income (loss) per share attributable to common stockholders – basic $ (0.37) $ (0.15) Numerator: Net loss – basic $ (148,113) $ (53,592) Decrease in fair value of public and private common stock warrant liabilities — (3,799) Net loss – diluted $ (148,113) $ (57,391) Denominator: Weighted average common shares outstanding – basic 401,653,954 356,818,954 Incremental common shares from assumed exercise of public and private common stock warrants — 3,008,695 Weighted average common shares outstanding – diluted 401,653,954 359,827,649 Net loss per share attributable to common stockholders – diluted $ (0.37) $ (0.16) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following outstanding common stock equivalents were considered antidilutive, and therefore, excluded from the computation of diluted net income (loss) per share attributable to common stockholders for the periods presented (share numbers are not in thousands). As of March 31 2022 2021 Common stock warrants 4,535,728 8,157,942 Common stock options 33,999,568 51,121,618 Restricted stock units 6,062,088 1,521,335 Total 44,597,384 60,800,895 |
Geographical Information (Table
Geographical Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Areas | Revenue, classified by the major geographic areas where the end users were located when they entered paid competitions, was as follows: Three Months Ended March 31, 2022 2021 United States 69,177 72,382 Other countries 24,261 11,295 Total $ 93,438 $ 83,677 |
Schedule of Property and Equipment, Net and Operating Lease Right-Of-Use Assets by Geographic Area | Property and equipment, net and operating lease right-of-use assets by geography is as follows: March 31, December 31, 2022 2021 United States $ 18,940 $ 20,997 Other countries 3,666 3,502 Total $ 22,606 $ 24,499 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 16, 2020 | Mar. 02, 2020 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 |
Concentration Risk [Line Items] | |||||
Reduction to revenue, end-user incentives | $ 16,300 | $ 17,600 | |||
Sales and marketing expense, end-user incentive | 37,000 | 33,300 | |||
Engagement expense | 42,100 | 36,000 | |||
Restricted cash | 2,920 | $ 2,920 | |||
Advertising costs | $ 59,700 | $ 54,500 | |||
Number of shares issued in private placement (in shares) | 69,000,000 | 10,033,333 | |||
Number of warrants per unit (in shares) | 0.25 | ||||
Stock sold, price per share (in dollars per share) | $ 10 | $ 23.34 | |||
Warrant exercise price (in dollars per share) | $ 11.50 | ||||
Warrants forfeited (in shares) | 5,016,666 | ||||
Restricted stock units | |||||
Concentration Risk [Line Items] | |||||
Vesting period | 4 years | ||||
Sponsor | |||||
Concentration Risk [Line Items] | |||||
Warrants forfeited (in shares) | 5,016,666 | ||||
Public Warrant | |||||
Concentration Risk [Line Items] | |||||
Number of shares issued in private placement (in shares) | 17,250,000 | ||||
Warrant exercise price (in dollars per share) | $ 11.50 | ||||
Warrants outstanding (in shares) | 0 | ||||
Private Common Stock Warrants | |||||
Concentration Risk [Line Items] | |||||
Number of shares issued in private placement (in shares) | 10,033,333 | ||||
Stock sold, price per share (in dollars per share) | $ 1.50 | ||||
Warrants outstanding (in shares) | 4,535,728 | ||||
Class A common stock, par value $0.0001 per share | |||||
Concentration Risk [Line Items] | |||||
Number of shares per unit (in shares) | 1 | ||||
Number of shares called by each warrant (in shares) | 1 | ||||
Class A common stock, par value $0.0001 per share | Public Warrant | |||||
Concentration Risk [Line Items] | |||||
Number of shares called by each warrant (in shares) | 1 | ||||
Class A common stock, par value $0.0001 per share | Private Common Stock Warrants | |||||
Concentration Risk [Line Items] | |||||
Number of shares called by each warrant (in shares) | 1 | ||||
Revenue | Customer Concentration Risk | Developer One | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage (less than) | 41.00% | 42.00% | |||
Revenue | Customer Concentration Risk | Developer Two | |||||
Concentration Risk [Line Items] | |||||
Concentration risk, percentage (less than) | 38.00% | 41.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 114,558 | $ 241,332 | ||
Restricted cash | 2,920 | 2,920 | ||
Cash, cash equivalents and restricted cash | $ 117,478 | $ 244,252 | $ 615,498 | $ 265,648 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | Jul. 16, 2021 | Mar. 31, 2022 |
Business Acquisition [Line Items] | ||
Decrease to goodwill | $ (409) | |
Aarki | ||
Business Acquisition [Line Items] | ||
Percentage of voting interest acquired | 100.00% | |
Total purchase price | $ 162,347 | |
Cash | 95,296 | |
Common stock issued | $ 67,051 | |
Number of shares issued (in shares) | 4,401,663 | |
Increase to accrued federal and state tax payable, current deferred tax liability and uncertain tax liability | 400 | |
Decrease to goodwill | $ (400) |
Business Combinations - Acquisi
Business Combinations - Acquisition of Aarki, Inc (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 16, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 86,436 | $ 86,845 | |
Aarki | |||
Business Acquisition [Line Items] | |||
Cash | $ 95,296 | ||
Common stock issued | 67,051 | ||
Total purchase price | $ 162,347 | ||
Number of shares issued (in shares) | 4,401,663 | ||
Share price (in dollars per share) | $ 15.23 | ||
Cash and cash equivalents | $ 11,309 | ||
Accounts receivable, net | 13,700 | ||
Prepaid expenses and other current assets | 356 | ||
Property, plant and equipment, net | 5,075 | ||
Intangible assets, net | 86,800 | ||
Other long-term assets | 91 | ||
Accounts payable | (445) | ||
Accrued professional fees | (3,145) | ||
Other current liabilities | (16,471) | ||
Deferred tax liabilities | (20,075) | ||
Other long-term liabilities | (1,693) | ||
Identifiable net assets acquired | 75,502 | ||
Goodwill | 86,845 | ||
Total purchase price | 162,347 | ||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Fair Value | $ 86,800 | ||
Aarki | Developed technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average useful life (in years) | 8 years | ||
Fair Value | $ 60,400 | ||
Aarki | Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average useful life (in years) | 3 years | ||
Fair Value | $ 26,200 | ||
Aarki | Trademark and trade name | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted-average useful life (in years) | 3 months 18 days | ||
Fair Value | $ 200 |
Business Combinations - Goodwil
Business Combinations - Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2021 | $ 86,845 |
Goodwill adjustment | (409) |
Balance as of March 31, 2022 | $ 86,436 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Credit card processing reserve | $ 10,450 | $ 9,527 |
Prepaid expenses | 10,427 | 5,681 |
Other current assets | 1,090 | 1,496 |
Prepaid expenses and other current assets | $ 21,967 | $ 16,704 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 86,800 | |
Accumulated Amortization | (11,734) | |
Net Carrying Amount | 75,066 | $ 79,137 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 60,400 | |
Accumulated Amortization | (5,348) | |
Net Carrying Amount | $ 55,052 | |
Developed technology | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (in years) | 7 years 3 months 29 days | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 26,200 | |
Accumulated Amortization | (6,186) | |
Net Carrying Amount | $ 20,014 | |
Customer relationships | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (in years) | 2 years 3 months 29 days | |
Trademark and trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 200 | |
Accumulated Amortization | (200) | |
Net Carrying Amount | $ 0 | |
Trademark and trade name | Weighted Average | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Remaining Useful Life (in years) | 0 years |
Balance Sheet Components - Fini
Balance Sheet Components - Finite-Lived Intangible Assets Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Finite-lived Intangible Assets [Roll Forward] | |
Beginning balance at December 31, 2021 | $ 79,137 |
Amortization | (4,071) |
Ending balance at March 31, 2022 | $ 75,066 |
Balance Sheet Components - Amor
Balance Sheet Components - Amortization Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Total amortization expense | $ 4,071 |
Cost of revenue | |
Finite-Lived Intangible Assets [Line Items] | |
Total amortization expense | 1,888 |
Sales and marketing | |
Finite-Lived Intangible Assets [Line Items] | |
Total amortization expense | 2,183 |
General and administrative | |
Finite-Lived Intangible Assets [Line Items] | |
Total amortization expense | $ 0 |
Balance Sheet Components - Futu
Balance Sheet Components - Future Amortization Expense (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
2022 | $ 12,212 | |
2023 | 16,283 | |
2024 | 12,281 | |
2025 | 7,550 | |
2026 | 7,550 | |
Thereafter | 19,190 | |
Net Carrying Amount | $ 75,066 | $ 79,137 |
Balance Sheet Components - Othe
Balance Sheet Components - Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Accrued sales and marketing expenses | $ 13,425 | $ 28,895 |
Accrued compensation | 10,737 | 12,108 |
Accrued publisher fees | 7,242 | 3,912 |
End-user liability, net | 3,562 | 4,118 |
Accrued developer revenue share | 1,147 | 1,655 |
Short-term lease obligations | 2,043 | 2,447 |
Accrued legal expenses | 4,757 | 5,126 |
Accrued interest expense | 8,773 | 956 |
Other accrued expenses | 5,921 | 5,752 |
Other current liabilities | $ 57,607 | $ 64,969 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value Disclosures [Abstract] | ||
Cash and cash equivalents | $ 114,558 | $ 241,332 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Private Common Stock Warrants | $ 1,831 | $ 6,293 |
Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 573,562 | 528,902 |
Total liabilities | 1,831 | 6,293 |
Fair Value, Recurring | Asset backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 113,038 | 111,552 |
Fair Value, Recurring | Certificates of deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 6,000 | 6,002 |
Fair Value, Recurring | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 234,237 | 206,989 |
Fair Value, Recurring | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 129,202 | 109,391 |
Fair Value, Recurring | Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 18,151 | 8,181 |
Fair Value, Recurring | US Government Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 72,933 | 86,787 |
Fair Value, Recurring | Private Common Stock Warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Private Common Stock Warrants | 1,831 | 6,293 |
Level 1 | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 44,974 | 86,787 |
Total liabilities | 0 | 0 |
Level 1 | Fair Value, Recurring | Asset backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 1 | Fair Value, Recurring | Certificates of deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 1 | Fair Value, Recurring | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 1 | Fair Value, Recurring | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 1 | Fair Value, Recurring | Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 1 | Fair Value, Recurring | US Government Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 44,974 | 86,787 |
Level 1 | Fair Value, Recurring | Private Common Stock Warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Private Common Stock Warrants | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 528,588 | 442,114 |
Total liabilities | 0 | 0 |
Level 2 | Fair Value, Recurring | Asset backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 113,038 | 111,552 |
Level 2 | Fair Value, Recurring | Certificates of deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 6,000 | 6,002 |
Level 2 | Fair Value, Recurring | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 234,237 | 206,989 |
Level 2 | Fair Value, Recurring | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 129,202 | 109,391 |
Level 2 | Fair Value, Recurring | Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 18,151 | 8,181 |
Level 2 | Fair Value, Recurring | US Government Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 27,959 | 0 |
Level 2 | Fair Value, Recurring | Private Common Stock Warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Private Common Stock Warrants | 0 | 0 |
Level 3 | Fair Value, Recurring | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Total liabilities | 1,831 | 6,293 |
Level 3 | Fair Value, Recurring | Asset backed securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 3 | Fair Value, Recurring | Certificates of deposits | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 3 | Fair Value, Recurring | Corporate notes and bonds | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 3 | Fair Value, Recurring | Commercial paper | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 3 | Fair Value, Recurring | Foreign government securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 3 | Fair Value, Recurring | US Government Securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Available-for-Sale Investments | 0 | 0 |
Level 3 | Fair Value, Recurring | Private Common Stock Warrants | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Private Common Stock Warrants | $ 1,831 | $ 6,293 |
Fair Value Measurements - Unobs
Fair Value Measurements - Unobservable Input Reconciliation (Details) - Private Common Stock Warrants $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2021 | $ 6,293 |
Fair market value adjustment | (4,462) |
Balance as of March 31, 2022 | $ 1,831 |
Investments - Components of Inv
Investments - Components of Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | $ 581,471 | $ 580,918 |
Unrealized Gains | 10 | 26 |
Unrealized Losses | (2,304) | (274) |
Fair Value | 579,177 | 580,671 |
Cash and Cash Equivalents | 39,886 | 78,987 |
Marketable securities, current | 369,566 | 319,055 |
Marketable securities, non-current | 169,725 | 182,629 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | 113,392 | 111,619 |
Unrealized Gains | 3 | 1 |
Unrealized Losses | (357) | (68) |
Fair Value | 113,038 | 111,552 |
Cash and Cash Equivalents | 0 | 0 |
Marketable securities, current | 6,364 | 5,372 |
Marketable securities, non-current | 106,674 | 106,180 |
Certificates of deposits | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | 6,005 | 6,002 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (5) | 0 |
Fair Value | 6,000 | 6,002 |
Cash and Cash Equivalents | 0 | 0 |
Marketable securities, current | 6,000 | 6,002 |
Marketable securities, non-current | 0 | 0 |
Corporate notes and bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | 235,942 | 207,169 |
Unrealized Gains | 2 | 21 |
Unrealized Losses | (1,707) | (201) |
Fair Value | 234,237 | 206,990 |
Cash and Cash Equivalents | 0 | 3,026 |
Marketable securities, current | 171,187 | 132,688 |
Marketable securities, non-current | 63,051 | 71,276 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | 129,290 | 109,391 |
Unrealized Gains | 4 | 0 |
Unrealized Losses | (93) | 0 |
Fair Value | 129,202 | 109,391 |
Cash and Cash Equivalents | 26,282 | 24,193 |
Marketable securities, current | 102,921 | 85,198 |
Marketable securities, non-current | 0 | 0 |
Money market funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | 5,615 | 51,768 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 5,615 | 51,768 |
Cash and Cash Equivalents | 5,615 | 51,768 |
Marketable securities, current | 0 | 0 |
Marketable securities, non-current | 0 | |
Foreign government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | 18,289 | 8,186 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (137) | (5) |
Fair Value | 18,151 | 8,181 |
Cash and Cash Equivalents | 0 | 0 |
Marketable securities, current | 18,151 | 3,008 |
Marketable securities, non-current | 0 | 5,173 |
US Government Securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Adjusted Cost Basis | 72,938 | 86,783 |
Unrealized Gains | 1 | 4 |
Unrealized Losses | (5) | 0 |
Fair Value | 72,934 | 86,787 |
Cash and Cash Equivalents | 7,989 | 0 |
Marketable securities, current | 64,943 | 86,787 |
Marketable securities, non-current | $ 0 | $ 0 |
Investments - Additional Inform
Investments - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Non-marketable equity securities | $ 55,649 | $ 55,649 |
Investments - Maturities (Detai
Investments - Maturities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Adjusted Cost Basis | |
Due in one year or less | $ 370,511 |
Due after one year through five years | 171,074 |
Due after five years through ten years | 0 |
Total | 541,585 |
Estimated Fair Value | |
Due in one year or less | 369,566 |
Due after one year through five years | 169,725 |
Due after five years through ten years | 0 |
Total | $ 539,291 |
Long-Term Debt - Summary of Deb
Long-Term Debt - Summary of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
2021 Senior Secured Notes | $ 300,000 | |
Unamortized discount and issuance costs | (20,287) | $ (21,111) |
Net carrying amount | 279,713 | 278,889 |
Current portion of long-term debt | 0 | 0 |
Non-current portion of long-term debt | 279,713 | 278,889 |
2021 Senior Secured Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
2021 Senior Secured Notes | $ 300,000 | $ 300,000 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Dec. 31, 2021 | Mar. 31, 2022 | |
Debt Instrument [Line Items] | ||
Accrued interest expense | $ 956,000 | $ 8,773,000 |
Interest paid | 0 | |
Senior Notes | 2021 Senior Secured Notes | ||
Debt Instrument [Line Items] | ||
Face amount | $ 300,000,000 | |
Interest rate | 10.25% | |
Effective interest rate | 12.14% | |
Debt term | 5 years | |
Fair value | $ 261,000,000 |
Long-Term Debt - Maturities (De
Long-Term Debt - Maturities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2022 (excluding the three months ended March 31, 2022) | $ 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 300,000 |
Total | $ 300,000 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Leases [Abstract] | ||
Decrease in operating lease right-of-use assets | $ 534 | $ (13,453) |
Increase in operating lease liabilities | $ (473) | 14,386 |
Decrease in operating assets and liabilities | $ 900 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Apr. 30, 2022 | Sep. 30, 2021 | |
Loss Contingencies [Line Items] | ||
Damages awarded | $ 11,600 | |
Subsequent Event | ||
Loss Contingencies [Line Items] | ||
Damages awarded | $ 4,350 |
Common Stock Warrants (Details)
Common Stock Warrants (Details) | Mar. 02, 2020$ / sharesshares | Mar. 31, 2022trading_day$ / sharesshares | Aug. 16, 2021shares |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Number of shares issued in private placement (in shares) | 69,000,000 | 10,033,333 | |
Warrant exercise price (in dollars per share) | $ / shares | $ 11.50 | ||
Redemption price (in dollars per share) | $ / shares | $ 0.01 | ||
Minimum number of days for written notice of redemption | trading_day | 30 | ||
Warrant redemption, sale price of common stock for warrants to be redeemed (in dollars per share) | $ / shares | $ 18 | ||
Warrant redemption, number of trading days | trading_day | 20 | ||
Warrants forfeited (in shares) | 5,016,666 | ||
Class A common stock, par value $0.0001 per share | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Number of shares called by each warrant (in shares) | 1 | ||
Public Warrant | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Warrants outstanding (in shares) | 0 | ||
Number of shares issued in private placement (in shares) | 17,250,000 | ||
Warrant exercise price (in dollars per share) | $ / shares | $ 11.50 | ||
Number of warrants expired (in shares) | 5,888,294 | ||
Public Warrant | Class A common stock, par value $0.0001 per share | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Number of shares called by each warrant (in shares) | 1 | ||
Private Common Stock Warrants | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Warrants outstanding (in shares) | 4,535,728 | ||
Warrants exercised (in shares) | 0 | ||
Number of shares issued in private placement (in shares) | 10,033,333 | ||
Private Common Stock Warrants | Class A common stock, par value $0.0001 per share | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Number of shares called by each warrant (in shares) | 1 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ / shares in Units, $ in Thousands | Mar. 02, 2020$ / sharesshares | Mar. 31, 2021USD ($)shares | Mar. 31, 2022USD ($)vote$ / sharesshares | Mar. 31, 2021USD ($) | Dec. 31, 2021$ / sharesshares |
Class of Stock [Line Items] | |||||
Shares authorized (in shares) | 635,000,000 | ||||
Common stock, shares authorized (in shares) | 625,000,000 | 625,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |||
Number of shares issued (in shares) | 69,000,000 | 10,033,333 | |||
Issuance costs | $ | $ 6,800 | $ 0 | $ 13,167 | ||
Stock sold, price per share (in dollars per share) | $ / shares | $ 10 | $ 23.34 | |||
Underwritten Public Offering | |||||
Class of Stock [Line Items] | |||||
Number of shares available at election (in shares) | 19,800,000 | ||||
Over-Allotment Option | |||||
Class of Stock [Line Items] | |||||
Number of shares available at election (in shares) | 4,800,000 | ||||
Class A common stock, par value $0.0001 per share | |||||
Class of Stock [Line Items] | |||||
Common stock, votes per share | vote | 1,000,000 | ||||
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 | |||
Aggregate consideration | $ | $ 408,000 | ||||
Issuance costs | $ | $ 5,900 | ||||
Class A common stock, par value $0.0001 per share | Underwritten Public Offering | |||||
Class of Stock [Line Items] | |||||
Number of shares issued (in shares) | 17,000,000 | ||||
Class B Common Stock | |||||
Class of Stock [Line Items] | |||||
Common stock, votes per share | vote | 20,000,000 | ||||
Common stock, shares authorized (in shares) | 125,000,000 | 125,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 |
Stock Based Compensation - Stoc
Stock Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 77,925 | $ 10,945 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 2,354 | 1,207 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | 2,879 | 1,838 |
General and administrative | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation expense | $ 72,692 | $ 7,900 |
Stock Based Compensation - Narr
Stock Based Compensation - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)multipliershares | Dec. 31, 2020USD ($)installmentshares | Mar. 31, 2022USD ($)shares | Mar. 31, 2021USD ($) | Dec. 31, 2021shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of stock outstanding | 5.00% | ||||
Unrecognized stock-based compensation expense | $ | $ 177,300 | ||||
Unrecognized stock-based compensation expense, period for recognition | 3 years 2 months 26 days | ||||
Aggregate intrinsic value | $ | $ 2,600 | $ 7,900 | |||
Total stock-based compensation expense | $ | $ 77,925 | $ 10,945 | |||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued (in shares) | 7,200,000 | 8,200,000 | |||
Performance restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued (in shares) | 2,000,000 | ||||
2020 Omnibus Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Vesting period | 1 year | ||||
Shares authorized (in shares) | 86,771,777 | ||||
2020 Omnibus Incentive Plan | Common Class A and B | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized (in shares) | 15,000,000 | ||||
2020 Omnibus Incentive Plan | Class A common stock, par value $0.0001 per share | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized (in shares) | 56,264,600 | ||||
2020 Omnibus Incentive Plan | Class B Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized (in shares) | 15,507,177 | ||||
2020 Omnibus Incentive Plan | Performance restricted stock units | Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 7 years | ||||
Shares granted (in shares) | 16,100,000 | ||||
Market capitalization milestone, trading days | 60 days | ||||
Trading days | 30 days | ||||
Options, grant date fair value | $ | $ 70,800 | ||||
Additional stock-based compensation expense | $ | $ 65,100 | ||||
2020 Omnibus Incentive Plan | Performance restricted stock units | Chief Executive Officer | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Market capitalization baseline multiplier | multiplier | 2 | ||||
2020 Omnibus Incentive Plan | Performance restricted stock units | Chief Executive Officer | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Market capitalization baseline multiplier | multiplier | 5 | ||||
Option Agreements | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ | 68,400 | ||||
Options, grant date fair value | $ | $ 93,400 | ||||
Number of installments | installment | 3 | ||||
Total stock-based compensation expense | $ | $ 4,800 | ||||
Option Agreements | Tranche one | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Trading day period | 10 days | ||||
Vesting percentage | 33.33% | ||||
Volume weighted average price multiplier | 300.00% | ||||
Option Agreements | Tranche two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Volume weighted average price multiplier | 400.00% | ||||
Option Agreements | Tranche three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 33.33% | ||||
Volume weighted average price multiplier | 500.00% | ||||
Option Agreements | Class A common stock, par value $0.0001 per share | Chief Revenue Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized (in shares) | 2,040,000 | ||||
Option Agreements | Class B Common Stock | Chief Executive Officer | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares authorized (in shares) | 9,960,000 |
Stock Based Compensation - St_2
Stock Based Compensation - Stock Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Number of Shares Available for Issuance Under the Plan | ||
Beginning balance (in shares) | 51,437,898 | |
Options and restricted stock units granted (in shares) | (6,062,088) | |
Additional shares authorized (in shares) | 20,437,691 | |
Options canceled (in shares) | 868,193 | |
Ending balance (in shares) | 66,681,694 | 51,437,898 |
Number of Shares Outstanding Under the Plan | ||
Beginning balance (in shares) | 27,727,088 | |
Options granted (in shares) | 0 | |
Options exercised (in shares) | (774,983) | |
Options canceled (in shares) | (198,648) | |
Ending balance (in shares) | 26,753,457 | 27,727,088 |
Exercisable (in shares) | 12,842,842 | 13,157,036 |
Unvested (in shares) | 13,910,615 | 14,570,052 |
Weighted- Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 7.79 | |
Options granted (in dollars per share) | 0 | |
Options exercised (in dollars per share) | 0.30 | |
Options canceled (in dollars per share) | 1.26 | |
Ending balance (in dollars per share) | 8.06 | $ 7.79 |
Exercisable, weighted-average exercise price (in dollars per share) | 0.16 | 0.15 |
Unvested, weighted-average exercise price (in dollars per share) | $ 15.36 | $ 14.69 |
Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value | ||
Options outstanding, weighted-average remaining contractual term | 6 years 10 months 17 days | 7 years 14 days |
Exercisable, weighted-average remaining contractual term | 5 years 1 month 2 days | 5 years 2 months 1 day |
Unvested, weighted-average remaining contractual term | 8 years 6 months 10 days | 8 years 8 months 19 days |
Options outstanding, aggregate intrinsic value | $ 40,977 | $ 113,110 |
Exercisable, aggregate intrinsic value | 36,610 | 95,946 |
Unvested, aggregate intrinsic value | $ 4,367 | $ 17,164 |
Restricted stock units | ||
Number of Plan shares outstanding | ||
Beginning balance (in shares) | 7,600,097 | |
Restricted stock units granted (in shares) | 6,062,088 | |
Restricted stock units released (in shares) | (104,953) | |
Restricted stock units canceled (in shares) | (669,545) | |
Ending balance (in shares) | 12,887,687 | 7,600,097 |
Weighted-Average Grant Date Fair Value per share | ||
Beginning balance (in dollars per share) | $ 13.17 | |
Granted (in dollars per share) | 2.86 | |
Vested (in dollars per share) | 18.65 | |
Forfeited (in dollars per share) | 11.94 | |
Ending balance (in dollars per share) | $ 8.34 | $ 13.17 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
(Benefit from) provision for income taxes | $ (213) | $ 42 |
Effective tax rate | 0.14% | (0.08%) |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net loss – basic | $ (148,113) | $ (53,592) |
Decrease in fair value of public and private common stock warrant liabilities | 0 | (3,799) |
Net loss – diluted | $ (148,113) | $ (57,391) |
Denominator: | ||
Weighted average common shares outstanding - basic (in shares) | 401,653,954 | 356,818,954 |
Incremental common shares from assumed exercise of private warrants (in shares) | 0 | 3,008,695 |
Weighted average common shares outstanding - diluted (in shares) | 401,653,954 | 359,827,649 |
Net income (loss) per share attributable to common stockholders - basic (in dollars per share) | $ (0.37) | $ (0.15) |
Net loss per share attributable to common stockholders - diluted (in dollars per share) | $ (0.37) | $ (0.16) |
Net Loss Per Share - Antidiluti
Net Loss Per Share - Antidilutive Shares (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 44,597,384 | 60,800,895 |
Common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 4,535,728 | 8,157,942 |
Common stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 33,999,568 | 51,121,618 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total (in shares) | 6,062,088 | 1,521,335 |
Geographical Information - Reve
Geographical Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 93,438 | $ 83,677 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | 69,177 | 72,382 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenue | $ 24,261 | $ 11,295 |
Geographical Information - Prop
Geographical Information - Property and Equipment, Net and Operating Lease Right-of-Use Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net and operating lease right-of-use assets | $ 22,606 | $ 24,499 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net and operating lease right-of-use assets | 18,940 | 20,997 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net and operating lease right-of-use assets | $ 3,666 | $ 3,502 |