SKILLZ INC., 10-K filed on 3/12/2021
Annual Report
v3.20.4
Cover - USD ($)
$ in Billions
 12 Months Ended
Dec. 31, 2020
Mar. 05, 2021
Entity Listings [Line Items]    
Document Type 10-K  
Document Annual Report true  
Document Period End Date Dec. 31, 2020  
Current Fiscal Year End Date --12-31  
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 46-2682070  
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  
Entity Well-known Seasoned Issuer No  
Entity Voluntary Filers No  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Ex Transition Period false  
ICFR Auditor Attestation Flag false  
Entity Shell Company false  
Documents Incorporated by Reference None.  
Amendment Flag false  
Entity Central Index Key 0001801661  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus FY  
Subsequent Event    
Entity Listings [Line Items]    
Entity Public Float   $ 8.0
Class A common stock, par value $0.0001 per share    
Entity Listings [Line Items]    
Title of 12(b) Security Class A common stock, par value $0.0001 per share  
Trading Symbol SKLZ  
Security Exchange Name NYSE  
Entity Common Stock, Shares Outstanding   291,753,871
Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share    
Entity Listings [Line Items]    
Title of 12(b) Security Warrants to purchase one share of Class A common stock, each at an exercise price of $11.50 per share  
Trading Symbol SKLZ.WS  
Security Exchange Name NYSE  
Class B Common Stock    
Entity Listings [Line Items]    
Entity Common Stock, Shares Outstanding   78,090,663
v3.20.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Current assets:    
Cash and cash equivalents $ 262,728 $ 25,628
Prepaid expenses and other current assets 10,491 9,464
Total current assets 273,219 35,092
Property and equipment, net 5,292 3,648
Other long-term assets 3,910 116
Total assets 282,421 38,856
Current liabilities:    
Accounts payable 22,039 2,944
Accrued professional fees 5,699 0
Other current liabilities 19,618 7,537
Total current liabilities 47,356 10,481
Long-term debt, non-current 0 9,628
Other long-term liabilities 46 82
Total liabilities 47,402 20,191
Commitments and contingencies (Note 7)
Stockholders' equity:    
Preferred stock $0.0001 par value; 10 million shares authorized — 0 issued and outstanding as of December 31, 2020 and 2019 [1] 0 0
Common stock $0.0001 par value; 625 million shares authorized; Class A common stock – 500 million shares authorized; 292 million and 212 million shares issued and outstanding as of December 31, 2020 and 2019, respectively; Class B common stock – 125 million shares authorized; 78 million and 74 million shares issued and outstanding as of December 31, 2020 and 2019, respectively [1] 37 29
Additional paid-in capital [1] 450,248 108,892
Accumulated deficit [1] (215,266) (90,256)
Total stockholders’ equity 235,019 [2] 18,665 [1]
Total liabilities and stockholders’ equity $ 282,421 $ 38,856
[1] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
[2] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
v3.20.4
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2020
Dec. 31, 2019
Preferred stock, par value (in dollars per share) $ 0.0001 $ 0.0001
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, par value (in dollars per share) $ 0.0001  
Common stock, shares authorized (in shares) 500,000,000 500,000,000
Common stock, shares issued (in shares) 292,000,000 212,000,000
Common stock, shares outstanding (in shares) 292,000,000 212,000,000
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) 78,000,000 74,000,000
Common stock, shares outstanding (in shares) 78,000,000 74,000,000
v3.20.4
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Income Statement [Abstract]      
Revenue $ 230,115 $ 119,872 $ 50,778
Costs and expenses:      
Cost of revenue 12,281 5,713 2,112
Research and development 23,225 11,241 7,547
Sales and marketing 251,941 111,370 51,689
General and administrative 42,289 16,376 14,975
Total costs and expenses 329,736 144,700 76,323
Loss from operations (99,621) (24,828) (25,545)
Interest expense, net (1,325) (2,497) (2,190)
Other income (expense), net (21,400) 3,720 (45)
Loss before income taxes (122,346) (23,605) (27,780)
Provision for income taxes 115 0 0
Net loss [1] $ (122,461) $ (23,605) $ (27,780)
Net loss per share attributable to common stockholders - basic and diluted (in dollars per share) [2] $ (0.42) $ (0.09) $ (0.12)
Weighted average common shares outstanding - basic and diluted (in shares) [2] 294,549,146 261,228,108 236,040,717
[1] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
[2] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
v3.20.4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($)
$ in Thousands
Total
Convertible Preferred Stock [Member]
Common stock
Preferred stock
Previously Reported
Retroactive application of recapitalization
Preferred stock
Preferred stock
Previously Reported
Preferred stock
Retroactive application of recapitalization
Common stock
Common stock
Convertible Preferred Stock [Member]
Common stock
Common stock
Common stock
Preferred stock
Common stock
Previously Reported
Common stock
Retroactive application of recapitalization
Additional paid-in capital
Additional paid-in capital
Convertible Preferred Stock [Member]
Additional paid-in capital
Common stock
Additional paid-in capital
Previously Reported
Additional paid-in capital
Retroactive application of recapitalization
Accumulated deficit
Accumulated deficit
Common stock
Accumulated deficit
Preferred stock
Accumulated deficit
Previously Reported
Accumulated deficit
Retroactive application of recapitalization
Redeemable convertible preferred stock, beginning balance (in shares) at Dec. 31, 2017 [1] 0       4,404,840 (4,404,840)                                      
Redeemable convertible preferred stock, beginning balance at Dec. 31, 2017 [1] $ 0       $ 17,040 $ (17,040)                                      
Redeemable convertible preferred stock, ending balance (in shares) at Dec. 31, 2018 [1] 0                                                
Redeemable convertible preferred stock, ending balance at Dec. 31, 2018 [1] $ 0                                                
Shares, beginning balance (in shares) at Dec. 31, 2017 [1]             0 13,621,802 (13,621,802) 229,158,656       126,464,480 102,694,176                    
Beginning balance at Dec. 31, 2017 [1] 3,766       $ (13,274) $ 17,040 $ 0 $ 25,560 $ (25,560) $ 23       $ 1 $ 22 $ 42,614     $ 36 $ 42,578 $ (38,871)     $ (38,871) $ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                  
Issuance of Old Skillz redeemable convertible preferred stock (in shares) [1]                   16,705,320                              
Issuance of Old Skillz redeemable convertible preferred stock [1] 18,218                 $ 2           18,216                  
Issuance of Old Skillz common stock upon exercise of stock options (in shares) [1]                   4,036,200                              
Issuance of Old Skillz common stock upon exercise of stock options [1] 192                             192                  
Stock-based compensation [1] 6,680                             6,680                  
Net loss [1] (27,780)                                       (27,780)        
Shares, ending balance (in shares) at Dec. 31, 2018 [1]             0     249,900,176                              
Ending balance at Dec. 31, 2018 [1] $ 1,076           $ 0     $ 25           67,702         (66,651)        
Redeemable convertible preferred stock, ending balance (in shares) at Dec. 31, 2019 [1] 0                                                
Redeemable convertible preferred stock, ending balance at Dec. 31, 2019 [1] $ 0                                                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                  
Issuance of Old Skillz redeemable convertible preferred stock (in shares) [1]                   23,718,385                              
Issuance of Old Skillz redeemable convertible preferred stock [1] 39,760                 $ 3           39,757                  
Issuance of Old Skillz common stock upon exercise of stock options (in shares) [1]                   3,485,844                              
Issuance of Old Skillz common stock upon exercise of stock options [1] 197                             197                  
Stock-based compensation [1] 1,237                             1,237                  
Net loss [1] (23,605)                                       (23,605)        
Issuance of Old Skillz common stock upon early exercise of stock options with promissory note (in shares) [1]                   8,970,518                              
Issuance of Old Skillz common stock upon early exercise of stock options with promissory note [1] 0                 $ 1           (1)                  
Shares, ending balance (in shares) at Dec. 31, 2019 [1]             0     286,074,923                              
Ending balance at Dec. 31, 2019 $ 18,665 [2]           $ 0 [1]     $ 29 [1]           108,892 [1]         (90,256) [1]        
Redeemable convertible preferred stock, ending balance (in shares) at Dec. 31, 2020 [1] 0                                                
Redeemable convertible preferred stock, ending balance at Dec. 31, 2020 [1] $ 0                                                
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                  
Issuance of Old Skillz redeemable convertible preferred stock (in shares) [1]                   17,834,808                              
Issuance of Old Skillz redeemable convertible preferred stock [1] $ 98,305                 $ 2           98,303                  
Issuance of Old Skillz common stock upon exercise of stock options (in shares) 20,138,817                 7,642,110 [1]                              
Issuance of Old Skillz common stock upon exercise of stock options [1] $ 1,243                 $ 1           1,242                  
Stock-based compensation [1] 23,757                             23,757                  
Net loss [1] (122,461)                                       (122,461)        
Issuance of Old Skillz common stock upon early exercise of stock options with promissory note (in shares) [1]                   12,700,358                              
Issuance of Old Skillz common stock upon early exercise of stock options with promissory note [1] 0                 $ 1           (1)                  
Conversion of Old Skillz preferred stock warrants [1] 654                             654                  
Surrender of Old Skillz common stock upon net settlement of promissory notes (in shares) [1]                   (1,037,535)                              
Taxes paid related to net share settlement of Old Skillz equity awards (in shares) [1]                   (1,102,746)                              
Taxes paid related to net share settlement of Old Skillz equity awards [1] (13,404)                             (13,404)                  
Issuance of Old Skillz stock upon exercise of warrants (in shares) [1]                     2,860,974 726,063                          
Issuance of Old Skillz stock upon exercise of warrants [1]   $ 2 $ 382               $ 1           $ 1 $ 382              
Repurchase of Old Skillz stock (in shares) [1]                       (468,270) (13,739)                        
Repurchase of Old Skillz stock [1]     $ (1,339) $ (1,211)                 $ (1)                 $ (1,339) $ (1,210)    
Net cash contributions from Business Combination and PIPE financing (in shares) [1]                   44,580,578                              
Net cash contributions from Business Combination and PIPE financing [1] 230,426                 $ 4           230,422                  
Shares, ending balance (in shares) at Dec. 31, 2020 [1]             0     369,797,524                              
Ending balance at Dec. 31, 2020 [1] $ 235,019           $ 0     $ 37           $ 450,248         $ (215,266)        
[1] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
[2] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
v3.20.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Operating Activities      
Net loss [1] $ (122,461) $ (23,605) $ (27,780)
Adjustment to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization 1,609 711 404
Stock-based compensation 23,757 1,237 6,680
Accretion of unamortized discount and amortization of issuance costs 558 2,139 1,287
Change in fair value 21,463 (3,649) 45
Impairment charges 3,573 0 0
Changes in operating assets and liabilities:      
Prepaid expenses and other assets (7,505) (4,307) (992)
Accounts payable 10,729 (54) 1,851
Other liabilities 12,045 5,591 1,557
Net cash used in operating activities (56,232) (21,937) (16,948)
Investing Activities      
Purchases of property and equipment, including internal-use software (3,246) (3,223) (867)
Net cash used in investing activities (3,246) (3,223) (867)
Financing Activities      
Borrowings under debt agreements, net of issuance costs 0 9,563 19,920
Payments for issuance costs (201) 0 0
Payments under debt agreements (10,000) (3,500) (5,000)
Net Business Combination and Private Placement Financing 246,484 0 0
Payments made towards offering costs (1,993) 0 0
Proceeds from issuance of redeemable convertible preferred stock, net of issuance costs 76,617 24,908 18,218
Proceeds from exercise of stock options and issuance of common stock 1,243 197 192
Proceeds from exercise of common stock warrants 382 0 0
Taxes paid related to net share settlement of equity awards (13,404) 0 0
Payments made to repurchase common stock (1,339) 0 0
Payments for redemption of preferred stock (1,211) 0 0
Net cash provided by financing activities 296,578 31,168 33,330
Net change in cash, cash equivalents and restricted cash 237,100 6,008 15,515
Cash, cash equivalents and restricted cash – beginning of year 28,548 22,540 7,025
Cash, cash equivalents and restricted cash – end of year 265,648 28,548 22,540
Cash paid during the period for:      
Interest 815 269 196
Noncash investing and financing activities:      
Carrying value of long-term debt and accrued interest converted to redeemable convertible preferred stock 0 14,852 0
Settlement of the Redeemable Convertible Series E preferred stock forward contract liability 21,688 0 0
Deferred offering costs in accounts payable and accrued liabilities 14,065 0 0
Payment of promissory notes through surrender of shares $ 18,673 $ 0 $ 0
[1] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
v3.20.4
Description of the Business and Basis of Presentation
 12 Months Ended
Dec. 31, 2020
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
On December 16, 2020 (the “Closing”), Flying Eagle Acquisition Corp. (“FEAC”), a publicly traded special purpose acquisition company, consummated the merger agreement (the “Merger Agreement”) dated September 1, 2020, by and among, FEAC, Merger Sub Inc., a Delaware corporation (“Merger Sub”), Skillz Inc., a Delaware corporation (“Old Skillz”) and Andrew Paradise (the “Founder”), solely in his capacity as the representative of the stockholders of Old Skillz.
Pursuant to the terms of the Merger Agreement, a business combination between FEAC and Old Skillz was effected through the merger of Merger Sub with and into Old Skillz, with Old Skillz surviving as the surviving company and a wholly-owned subsidiary of FEAC (the “Merger” and collectively with the other transaction described in the Merger Agreement, the “Business Combination”). On the Closing Date FEAC changed its name to Skillz Inc. (the “Company” or “Skillz”) and Old Skillz changed its name to Skillz Platform Inc.
Skillz Platform Inc. was originally formed as Professional Gaming, LLC on March 28, 2012, changed its name to Lookout Gaming, LLC on May 18, 2012, and to Skillz LLC on January 31, 2013, before converting to a Delaware corporation with the name Skillz Inc. on April 29, 2013.
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 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”).
Pursuant to the Merger Agreement, the merger between Merger Sub and Old Skillz was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, FEAC was treated as the “acquired” company and Old Skillz is treated as the acquirer for financial reporting purposes.
Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Old Skillz issuing stock for the net assets of FEAC, accompanied by a recapitalization. The net assets of FEAC are stated at historical cost, with no goodwill or other intangible assets recorded.
Old Skillz was determined to be the accounting acquirer based on the following predominant factors:
•Old Skillz’s existing stockholders have the greatest voting interest in the Company;
•The largest individual minority stockholder in the Company is an existing stockholder of Old Skillz;
•Old Skillz’s directors represented the majority of the new board of directors of the Company;
•Old Skillz’s senior management is the senior management of the Company; and
•Old Skillz is the larger entity based on historical revenue and has the larger employee base.
The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Old Skillz. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 0.7471 established in the Business Combination.
Comprehensive Loss
Through December 31, 2020, there are no components of comprehensive loss which are not included in net loss; therefore, a separate statement of comprehensive loss has not been presented.
v3.20.4
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies Summary of Significant Accounting Policies
Use of Estimates
The preparation of 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 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. 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 our 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 does not have any transaction price allocated to performance obligations that are unsatisfied (or partially satisfied) as of December 31, 2020, 2019 and 2018.
Games provided by two developer partners (A and B) accounted for 59% and 28% of the Company’s revenue in the year ended December 31, 2020. Games provided by two developer partners (A and C) accounted for 83% and 7% , and 70% and 16% of the Company’s revenue in years ended December 31, 2019 and 2018, respectively. The Company did not generate material international revenues in the years ended December 31, 2020, 2019, and 2018.
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 currency earned for every Competition played based on the amount of the entry fee. Ticketz can be redeemed for 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 years ended December 31, 2020, 2019, and 2018, the Company recognized a reduction of revenue of $51.3 million, $27.7 million, and $11.6 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 years ended December 31, 2020, 2019, and 2018, the Company recognized sales and marketing expense of $91.5 million, $45.2 million, and $18.7 million, respectively, related to these end-user incentives.
Refunds
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.
Cost of Revenue
Cost of revenue primarily comprises of third-party payment processing fees, direct software costs, amortization of internal use software, hosting expenses, allocation of shared facility and other costs, and personnel expenses.
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of cash and money market funds 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 and other current assets as of December 31, 2020 and 2019, respectively. 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 Consolidated Balance Sheet to cash, cash equivalents and restricted cash in the Consolidated Statement of Cash Flows as of December 31, 2020 and 2019 is as follows:

December 31,
20202019
Cash and cash equivalents$262,728 $25,628 
Restricted Cash included in other long-term assets and other current assets as of December 31, 2020 and 2019, respectively
2,920 2,920 
Cash, cash equivalents and restricted cash$265,648 $28,548 
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash, cash equivalents and restricted cash. 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. Management believes that the institutions are financially stable and, accordingly, minimal credit risk exists.
Fair Value Measurement
The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the 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.
Advertising and Promotional Expense
Advertising and promotional expenses are included in sales and marketing expenses within the statements of operations and are expensed when incurred. For the years ended December 31, 2020, 2019, and 2018, advertising expenses, not including marketing promotions related to the Company’s end-user incentive programs, were $136.8 million, $53.5 million, and $25.3 million, respectively.
Redeemable Convertible Preferred Stock
Prior to the Business Combination, preferred stock that was redeemable at a fixed or determinable price on a fixed or determinable date, at the option of the holder, or upon the occurrence of an event that is not solely within the control of the Company was classified outside of permanent equity. Convertible preferred stock that was probable of becoming redeemable in the future was recorded at its maximum redemption amount at each balance sheet date, with adjustments to the redemption amount recorded through equity. The fair value of the redeemable convertible preferred stock was estimated primarily based on valuation methodologies which utilized certain assumptions, including probability weighting of events, recent sales of stock to external investors, volatility, time to liquidity, a risk free interest rate, and an assumption for a discount for lack of marketability, where applicable.
All redeemable convertible preferred stock previously classified outside of permanent equity was retroactively adjusted, converted into common stock, and reclassified to permanent equity as a result of the Business Combination. Additionally, changes to the redemption values of the redeemable convertible preferred stock were eliminated as a result of the retroactive
adjustment. The Company recorded changes to the redemption value of its redeemable convertible preferred stock of $866.0 million, $62.5 million and $18.8 million in the year-to-date periods ended September 30, 2020, December 31, 2019 and December 31, 2018, respectively. The changes to the redemption values of the redeemable convertible preferred stock were previously presented as adjustments to net loss available to common stockholders for each of the respective periods ended. For further details regarding the accounting for the Business Combination, see Note 3.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including its long-term debt, preferred stock and stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives and freestanding derivative financial instruments that are classified as assets or liabilities are recognized at fair value with changes in fair value recognized as a component of Other income (expense), net in the Statements of Operations. Bifurcated embedded derivatives and freestanding derivative financial instruments are classified within as Other long-term assets and Other current liabilities in the Company’s Consolidated Balance Sheets.
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 and is not reversed if the market condition is not satisfied. See Note 10 for more information. The Company accounts for forfeitures as they occur. Stock-based awards granted to employees are primarily stock options.
The fair value of stock options that vest solely based on a service condition is determined by the Black-Scholes-Merton Option (“BSM”) pricing model on the date of grant. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the BSM model, including the deemed fair value of common stock, expected term, expected volatility, risk-free interest rate, and dividend yield. These judgments are made as follows:
•Fair value of common stock —Subsequent to the Business Combination, the fair value of the Company’s common stock is based on the closing market price on the date of grant. Prior to the Business Combination, the absence of an active market for the Company’s common stock required the Company to estimate the fair value of common stock for purposes of granting stock options and for determining stock-based compensation expense for the periods presented.
The Company considered numerous factors in assessing the fair value of common stock prior to the Business Combination, including:
•The results of contemporaneous unrelated third-party valuations of the Company’s common stock
•The prices of the recent redeemable convertible preferred stock sales by the Company to investors
•The rights, preferences, and privileges of preferred stock relative to those of common stock
•Market multiples of comparable public companies in the industry as indicated by their market capitalization and guideline merger and acquisition transactions
•The Company’s performance and market position relative to competitors, which may change from time to time
•The Company’s historical financial results and estimated trends and prospects for the Company’s future performance
•The economic and competitive environment
•The financial condition, results of operations, and capital resources
•The industry outlook
•The valuation of comparable companies
•The likelihood and timeline of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions
•Any adjustments necessary to recognize a lack of marketability for the Company’s common stock
•Precedent sales of or offers to purchase the Company’s capital stock
•Expected term — The Company determines the expected term based on the average period the stock options are expected to remain outstanding, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
•Expected volatility — Given the limited market trading history prior to the Business Combination and no public market for the Company’s shares prior to the Business Combination, the expected volatility rate is based on an average historical stock price volatility of comparable publicly-traded companies in the industry group.
•Risk-free interest rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option.
•Expected dividend yield — The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero.
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, and expected capital raise percentage. Given the limited market trading history subsequent to the Business Combination and no public market for the Company’s shares prior to the Business Combination, the Company estimates the volatility of common stock on the date of grant based on the weighted average historical stock price volatility of comparable publicly-traded companies in its industry group. The Company estimates the expected term based on various exercise scenarios, as these awards are not considered “plain vanilla.” The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimates the expected date of a qualifying event and the expected capital raise percentage based on management’s expectations at the time of measurement of the award’s value.
Income Taxes
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred income taxes are recognized for differences between financial reporting and tax bases of assets and liabilities at the enacted statutory tax rates in effect for the years in which the temporary differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain.
The Company records a valuation allowance to reduce deferred tax assets to the net amount that the Company believes is more likely than not to be realized. In assessing the need for a valuation allowance, the Company considered historical levels of income, expectations of future taxable income and ongoing tax planning strategies. Because of the uncertainty of the realization of the deferred tax assets, the Company recorded a full valuation allowance against deferred tax assets. Realization of deferred tax assets is dependent primarily upon future U.S. taxable income.
The Company utilizes a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax positions for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.
Although the Company believes it has adequately reserved for the Company’s uncertain tax positions, the Company can provide no assurance that the final tax outcome of these matters will not be materially different. The Company evaluates its uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit and effective settlement of audit issues.
To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. The provision for income taxes includes the effects of any accruals that the Company believes are appropriate, as well as the related net interest and penalties.
Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset, generally three to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the term of the related lease. Maintenance and repairs that do not extend the life or improve the asset are expensed as incurred. Upon disposal of property and equipment, assets and related accumulated depreciation are removed from the accounts, and the related gain or loss is included in the results from operations.
Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. No impairment to any long-lived assets has been recorded in any of the periods presented.
The Company capitalizes certain costs related to developed or modified software solely for the Company’s internal use to deliver the Company’s services. The Company capitalizes costs during the application development stage once the preliminary project stage is complete, management authorizes and commits to funding the project, it is probable that the project will be completed, and that the software will be used to perform the function intended. Costs related to preliminary project activities and post-implementation activities are expensed as incurred.
The following table presents the estimated useful lives of the Company’s property and equipment:
Property and EquipmentUseful Life
Computer equipment and servers3 years
Capitalized internal-use software3 years
Office equipment and other5 years
Leased equipment and leasehold improvementsLesser of estimated useful life or
remaining lease term
Leases
Leases are reviewed and classified as capital or operating at their inception. The Company records rent expense associated with its operating lease on a straight-line basis over the term of the lease.
Net Loss Per Share
Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Net loss available to common stockholders represents net loss attributable to common stockholders reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities as the holders of the participating securities do not have a contractual obligation to share in any losses. Diluted loss per share adjusts basic loss per share for the potentially dilutive impact of stock options, warrants, restricted stock, and contingently issuable earnout shares. As the Company has reported losses for all periods presented, all potentially dilutive securities including stock options, warrants and contingently issuable earnout shares, are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.
The Company considers certain restricted shares of Class A Common stock issued upon exercise of executive stock options but subject to continued vesting requirements (Note 13) to be participating securities.
Net loss per share calculations for all periods prior to the Business Combination have been retrospectively adjusted for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. Subsequent to the Business Combination, net loss per share was calculated based on the weighted average number of common stock then outstanding.
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. The Company has determined that its Chief Executive Officer is the CODM. The Company operates in a single operating segment as the CODM reviews financial information presented on a consolidated basis, at the Company level, for the purposes of making operating decisions, allocation of resources, and evaluating financial performance.
As of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019, and 2018, the Company did not have material revenue earned or assets located outside of the United States.
Recently Issued Accounting Pronouncements Not Yet Adopted
As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time as the Company is no longer considered to be an EGC.
In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The ASU is effective for public companies, excluding entities eligible to be smaller reporting companies, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
In August 2018, the FASB issued ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset in the balance sheet and
expensed over the term of the hosting arrangement to the same line item in the statement of operations as the costs related to the hosting fees. For public business entities, this standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, this standard is effective for fiscal years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted for all entities, including adoption in any interim period. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after adoption. The Company will be required to adopt this standard in its annual period ending December 31, 2021 and is currently evaluating the impact of adopting this standard on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13 (Topic 326), Financial Instruments — Credit Losses. ASU 2016-13 changes how to recognize expected credit losses on financial assets. The standard requires more timely recognition of credit losses on loans and other financial assets and also provides additional transparency about credit risk. The current credit loss standard generally requires that a loss actually be incurred before it is recognized, while the new standard will require recognition of full lifetime expected losses upon initial recognition of the financial instrument. Originally, ASU 2016-13 was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. An entity should apply the standard by recording a cumulative effect adjustment to retained earnings upon adoption. In November 2019, FASB issued ASU No. 2019-10, Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). This ASU defers the effective date of ASU 2016-13 for non-public companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements for future periods and has not elected early adoption.
In February 2016, the FASB issued ASU 2016-02 (Topic 842), Leases, and issued subsequent amendments to the initial guidance or implementation guidance including ASU 2017-13, 2018-01, 2018-10, 2018-11, 2018-20 and 2019-01 (collectively, including ASU 2016-02, “ASC 842”), which supersedes the guidance in topic ASC 840, Leases. The new standard requires lessees to classify leases as either finance or operating based on whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether related expenses are recognized based on the effective interest method or on a straight-line basis over the term of the lease. For any leases with a term of greater than 12 months, ASU 2016-02 requires lessees to recognize a lease liability for the obligation to make the lease payments arising from a lease, and a right-of-use asset for the right to use the underlying asset for the lease term. An election can be made to account for leases with a term of 12 months or less similar to existing guidance for operating leases under ASC 840. The new standard will also require new disclosures, including qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. For non-public entities, ASU No. 2016-02 is effective for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is in the initial stage of its assessment of the new standard and is currently evaluating the quantitative impact of adoption, and the related disclosure requirements. The Company expects that the adoption will result in the recognition of right-of-use assets and lease liabilities that were not previously recognized, which will increase total assets and liabilities on the Company’s balance sheet. The Company does not expect the adoption of Topic 842 to have a material impact to the statements of operations or to have any impact on its cash flows from operating, investing, or financing activities.
Recently Adopted Accounting Pronouncements
In November 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also improves consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted this standard as of January 1, 2020, with no material impact on the Company’s consolidated financial statements.
In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based Payment Accounting, which expands the scope of Topic 718, to include share-based payments issued to non-employees for goods or services. The new standard supersedes Subtopic 505-50. The Company adopted this standard as of January 1, 2020, with no material impact on the Company’s consolidated financial statements.
v3.20.4
Business Combination
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Business Combination Business Combination
As discussed in Note 1, on December 16, 2020, the Company consummated the Merger Agreement dated September 1, 2020, with Old Skillz surviving the merger as a wholly owned subsidiary of the Company.
Old Skillz common stock issued and outstanding were canceled and converted into the right to receive 0.7471 shares (the "Exchange Ratio") of Common Stock. Unless otherwise stated, the Exchange Ratio was applied to the number of shares and share prices of Old Skillz throughout these consolidated financial statements.
At the effective time of the Business Combination (the “Effective Time”), and subject to the terms and conditions of the Merger Agreement, holders of 359,518,849 shares of Old Skillz (“Stock Election Shares”) received merger consideration in the form of 191,932,860 shares of the Company’s Class A common stock and 76,663,551 shares of the Company’s Class B common stock, and holders of 75,786,931 shares of Old Skillz (“Cash Election Shares”) received cash consideration of $566,204,152.
Pursuant to the Merger Agreement, Eagle Equity Partners II, LLC (the “Sponsor”) delivered 10,000,000 of its shares of FEAC Class B common stock into escrow that are subject to forfeiture if certain earnout conditions are not satisfied. If the earnout conditions are fully satisfied, 5,000,000 of such shares will be released to the Sponsor in the form of shares of the Company’s Class A common stock (the “Sponsor Earnout Shares”), and the other 5,000,000 shares will be released to the Old Skillz stockholders (the “Skillz Earnout Shares”, and collectively with the Sponsor Earnout Shares, the “Earnout Shares”), who will receive shares of the Company’s common stock as a result of the Business Combination in the form of shares of Class A common stock of the Company (other than the Founder and a trust for the benefit of his family members, who will receive shares of Class B common stock of the Company). The Earnout Shares are accounted for as equity classified equity instruments, were included as merger consideration as part of the Reverse Recapitalization, and recorded in Additional paid-in capital.
Upon the closing of the Business Combination, the Company's certificate of incorporation was amended and restated to, among other things, increase the total number of authorized shares of all classes of capital stock to 635,000,000 shares, $0.0001 par value per share, of which, 500,000,000 shares are designated as Class A Common Stock, 125,000,000 shares are designated as Class B Common Stock, and 10,000,000 shares are designated as Preferred Stock.
In connection with the Business Combination, certain institutional investors (the “Investors”) purchased from the Company an aggregate of 15,853,052 shares of Class A Common Stock (the “Private Placement”), for a purchase price of $10.00 per share and an aggregate purchase price of $158.5 million (the “Private Placement Shares”), pursuant to separate subscription agreements (each, a “Subscription Agreement”) entered into effective as of September 1, 2020.
The Business Combination is accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, FEAC was treated as the “acquired” company and Old Skillz is treated as the acquirer for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Old Skillz issuing stock for the net assets of FEAC, accompanied by a recapitalization. The net assets of FEAC were stated at historical cost, with no goodwill or other intangible assets recorded.
The following table reconciles the elements of the Business Combination to the Consolidated Statement of Cash Flows and the Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2020:

Recapitalization
Cash - FEAC trust and cash, net of redemptions$689,979 
Cash - Private Placement Financing158,531 
Non-cash net assets assumed from FEAC— 
Less: cash consideration paid to Old Skillz stockholders(566,204)
Less: transaction costs and advisory fees(35,822)
Net Business Combination and Private Placement Financing246,484 
Less: non-cash net assets assumed from FEAC— 
Less: accrued transaction costs and advisor fees(16,058)
Net cash contributions from Business Combination and PIPE Financing$230,426 

The number of shares of common stock issued immediately following the consummation of the Business Combination (share numbers are not in thousands):

Recapitalization
Common stock, outstanding prior to Business Combination69,000,000
Less: redemption of FEAC shares(2,140)
Common stock of FEAC68,997,860 
FEAC sponsor shares6,350,200 
Earnout shares10,000,000 
Shares issued in Private Placement Financing15,853,052 
Business Combination and Private Placement Financing shares - Class A common stock101,201,112 
Old Skillz shares converted to New Skillz Class A common stock(1)
191,932,861 
Old Skillz shares converted to New Skillz Class B common stock(2)
76,663,551 
Total shares of common stock immediately after Business Combination369,797,524 

(1)The number of Old Skillz shares converted to Class A common stock was determined from 332,690,933 shares of Old Skillz Class B common stock outstanding immediately prior to the closing of the Business Combination, including shares of redeemable convertible preferred stock, converted at the Exchange Ratio, less 56,620,419 shares of New Skillz stock which were repurchased from Old Skillz stockholders as part of the Business Combination. All fractional shares were rounded down.
(2)The number of Old Skillz shares converted to Class B common stock was determined from the 102,614,847 shares of Old Skillz Class A common stock outstanding immediately prior to the closing of the Business Combination, including shares of convertible preferred stock, converted at the Exchange Ratio. All fractional shares were rounded down.
v3.20.4
Balance Sheet Components
 12 Months Ended
Dec. 31, 2020
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 December 31, 2020 and 2019:
December 31,
20202019
Credit card processing reserve$5,854 $2,650 
Prepaid expenses3,772 2,460 
Other current assets865 4,354 
Prepaid expenses and other current assets$10,491 $9,464 
The Company recorded an impairment charge of $3.4 million related to prepaid expenses and other current assets for the year ended December 31, 2020, in connection with a lease agreement for corporate facilities.
Property and Equipment, Net
Property and equipment consisted of the following as of December 31, 2020 and 2019:
December 31,
20202019
Capitalized internal-use software$6,167 $3,554 
Computer equipment and servers631 458 
Furniture and fixtures184 238 
Leasehold improvements114 143 
Construction in progress1,037 519 
Total property and equipment8,133 4,912 
Accumulated depreciation and amortization(2,841)(1,264)
Property and equipment, net$5,292 $3,648 
Depreciation and amortization expense related to property and equipment was $1.6 million, $0.7 million, and $0.4 million in 2020, 2019, and 2018, respectively.
Other Current Liabilities
Other current liabilities consisted of the following as of December 31, 2020 and 2019:
December 31,
20202019
Accrued sales and marketing expenses$7,204 $1,630 
Accrued compensation3,825 2,531 
End-user liability, net2,789 1,418 
Accrued developer revenue share907 540 
Other accrued expenses4,893 1,418 
Other current liabilities$19,618 $7,537 
v3.20.4
Fair Value Measurements
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value MeasurementsAs of December 31, 2020 and 2019, the recorded values of cash and cash equivalents, restricted cash 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 December 31, 2020 and 2019 were $262.7 million and $25.6 million, respectively, and were comprised of cash on hand and money market funds classified within Level 1 of the fair value hierarchy.
Forward Contract Liability
The Company had no outstanding forward contract liability as it was settled during the year ended December 31, 2020.
Prior to the Business Combination, the Company measured the Redeemable Convertible Series E preferred stock forward contract liability at fair value based on significant inputs not observable in the market, which causes it to be classified as a Level 3 measurement within the fair value hierarchy. The valuation of the Redeemable Convertible Series E preferred stock forward contract liability uses assumptions and estimates the Company believes would be made by a market participant in making the same valuation. The Company assessed these assumptions and estimates on an on-going basis in 2020 until settlement of the contract as additional data impacting the assumptions and estimates was obtained. Changes in the fair value of the redeemable convertible Series E preferred stock forward contract liability related to updated assumptions and estimates are recognized within Other income (expense), net in the Consolidated Statements of Operations.
The table below reflects the fair value measurement of the Company’s Level 3 inputs as of September 10, 2020, the date on which the Redeemable Convertible Series E preferred forward contract liability was settled, prior to giving effect to the Business Combination:

Fair Value as of September 10, 2020Valuation TechniqueUnobservable Input DescriptionInput
Redeemable Convertible Series E preferred stock forward contract liability$21,688 Discounted cash flowFair value of Redeemable Convertible Series E preferred stock$9.17 
The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2020:
Series E forward contract liability
Fair value as of December 31, 2019$— 
Issuance of the Redeemable convertible Series E preferred stock forward contract liability$— 
Change in fair value$21,688 
Settlement of the Redeemable convertible Series E preferred stock forward contract liability$(21,688)
Fair value as of December 31, 2020$— 
The fair value of the redeemable convertible Series E preferred stock forward contract liability as of the September 10, 2020 settlement date was determined by multiplying the number of additional shares issued by the Company by the difference between the issuance price in accordance with the forward contract agreement and the estimated fair value of the redeemable convertible Series E preferred stock.
Earnout Shares
Pursuant to the Merger Agreement, FEAC delivered 10,000,000 of its shares of FEAC Class B common stock into escrow that are subject to forfeiture if certain earnout conditions described more fully in the Merger Agreement are not satisfied. If the earnout conditions are fully satisfied, 5,000,000 of such shares will be released to the Sponsor in the form of shares of Class A common stock of New Skillz, and the other 5,000,000 shares will be released to the Old Skillz stockholders, who will receive shares of New Skillz common stock as a result of the Business Combination in the form of shares of Class A common stock of New Skillz (other than the Founder and a trust for the benefit of his family members, who will receive shares of Class B common stock of New Skillz), in each case as further described in the Merger Agreement. The fair value of the Earnout Shares of $172.3 million was estimated using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the market condition targets may not be satisfied. The Earnout
Shares were included in the net consideration from the Business Combination and recorded in Additional paid-in capital with a corresponding offset to Additional paid-in capital. In January 2021, the earnout conditions were fully satisfied.
v3.20.4
Long-Term Debt
 12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Long-Term Debt Long-Term Debt
Components of long-term debt were as follows as of December 31, 2020 and 2019:
December 31,
20202019
2019 Mezzanine Term Loan$— $10,000 
Unamortized debt discount— (372)
Net carrying amount$— $9,628 
2019 Mezzanine Term Loan
In December 2019, the Company entered into a mezzanine term loan for up to $40.0 million; $30.0 million of which is immediately available and an additional $10.0 million available upon the achievement of certain performance milestones (“2019 Mezzanine Term Loan”). No payments are due until the loan maturity date of December 2023.
The facility shall bear interest on the outstanding daily balance for each 2019 Mezzanine Term Loan advance at a floating per annum rate equal to the greater of five percentage points (5.0%) above the prime rate or 9.75%. In 2019, the Company drew $10.0 million of the $30 million immediately available from the 2019 Mezzanine Term Loan and used the proceeds to pay off the outstanding balance and interest of a previous term loan. There are no financial covenants associated with the 2019 Mezzanine Term Loan.
In June 2020, the Company paid the $10.0 million outstanding principal amount related to the 2019 Mezzanine Loan, plus all accrued and unpaid interest. The Company recognized a loss on extinguishment of $0.4 million related to unamortized issuance costs within Interest expense in the Consolidated Statements of Operations.
v3.20.4
Commitment and Contingencies
 12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Operating Leases
In November 2018, the Company entered into an operating lease agreement related to its office in Portland, Oregon, which requires monthly lease payments through May 2022.
In May 2019, the Company entered into an operating lease related to its new headquarters in San Francisco. The lease is through July 2029 and will result in a total of $25.6 million in future minimum lease payments, which exclude a tenant improvement allowance from the landlord of up to $2.5 million.
In December 2019, the Company entered into an operating lease related to additional office space in San Francisco. The lease is through March 31, 2021 and included a total of $8.8 million in minimum lease payments. The Company recorded an impairment charge of $3.4 million related to prepaid expenses and other current assets for the year ended December 31, 2020, in connection with this lease agreement.
The Company recognizes rent expense on a straight-line basis over the lease period and accounts for the difference between straight-line rent and actual lease payments as deferred rent. Rent expense for all facility leases was $6.5 million, $1.9 million, and $1.2 million for the years ended December 31, 2020, 2019, and 2018, respectively.
Future minimum payments under the Company’s non-cancelable leases as of December 31, 2020, are as follows:
Operating
Lease
Commitments
Year ended December 31,
2021$4,528 
20222,498 
20232,368 
20242,439 
20252,513 
Thereafter11,795 
Future minimum lease payments$26,141 
Legal Matters
The Company is a party to certain claims, suits, and proceedings which arise in the ordinary course of business. 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 is not expected to have a material adverse impact on the results of operations, cash flows, or the Company’s financial position, as of December 31, 2020. 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, any such amount is either immaterial or it is not possible to provide an estimated range of any such possible loss.
v3.20.4
Retirement Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Retirement Plans Retirement Plans
401(k) Plan
The Company adopted a 401(k) Plan that qualifies as a deferred salary arrangement under Section 401 of the IRC. Under the 401(k) Plan, participating employees may defer a portion of their pretax earnings not to exceed the maximum amount allowable. Contributions for eligible employees for the year ended December 31, 2020 were $0.1 million. No contributions for eligible employees were made for the years ended December 31, 2019 and 2018.
v3.20.4
Stockholders' Equity
 12 Months Ended
Dec. 31, 2020
Equity [Abstract]  
Stockholders' Equity Stockholders’ Equity
The consolidated statements of equity (deficit) reflect the Business Combination as defined in Note 1 as of December 16, 2020. As Old Skillz was deemed the accounting acquirer in the Business Combination with FEAC, all periods prior to the consummation date reflect the balances and activity of Old Skillz. The balances as of December 31, 2019 and 2018 from the consolidated financial statements of Old Skillz as of that date, share activity (redeemable convertible preferred stock, preferred stock, common stock, additional paid in capital, and accumulated deficit) and per share amounts were retroactively adjusted, where applicable, using the recapitalization exchange ratio of 0.7471. All redeemable convertible preferred stock classified as redeemable equity was retroactively adjusted, converted into Class A common stock, and reclassified into permanent equity as a result of the Business Combination.
Common Stock
The Company’s amended and restated certificate of incorporation following the Business Combination 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 December 31, 2020, 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”).
Warrants
As of December 31, 2020, the Company had 22,266,643 FEAC public and private placement warrants and 48,135 Old Skillz private warrants outstanding. These warrants are equity classified.
Following the consummation of the Business Combination, holders of the FEAC warrants are entitled to acquire New Skillz Class A common stock. Each whole warrant entitles the registered holder to purchase one share of New Skillz Class A common stock at an exercise price of $11.50 per share, beginning the later of 30 days after the Closing and 12 months from the closing of FEAC’s initial public offering, which occurred on March 10, 2020.
In connection with the Business Combination, the Old Skillz private warrants outstanding immediately prior to the Business Combination converted into warrants exercisable for New Skillz Class A common stock on the same terms and conditions as applied to the Old Skillz warrants, which were adjusted for the Exchange Ratio. The private warrants entitle the holder to purchase one share of Class A common stock at a price of $1.4991.
Old Skillz Convertible Preferred Stock
Immediately prior to the completion of the Business Combination on December 16, 2020, all outstanding shares of the Old Skillz’s Series A, Series A-1, and Series B convertible preferred stock converted into an aggregate 139.0 million shares of common stock. Each share of Old Skillz redeemable convertible preferred stock was converted to ten shares of Old Skillz common stock.
Old Skillz Redeemable Convertible Preferred Stock
In September 2019, the Company received $25.0 million in cash proceeds from the issuance of redeemable convertible Series D-1 preferred stock to a private investor at a price per share of $21.516. In conjunction with the issuance of the redeemable convertible Series D-1 preferred stock, $9.8 million of the convertible promissory notes issued in 2018, plus accrued interest, were converted into shares of redeemable convertible Series D-1 preferred stock. In March 2019, $5.0 million of the convertible promissory notes issued in 2018 plus accrued interest were converted into shares of redeemable convertible Series D preferred stock.
In April and May 2020, the Old Skillz received $65.0 million in cash proceeds from the issuance of redeemable convertible Series E preferred stock to private investors at a price per share of $43.11. The Series E Stock Purchase Agreement required the Old Skillz to issue and sell, and the Series E investors to purchase, additional shares of redeemable convertible Series E preferred stock subsequent to the initial closing (the “redeemable convertible Series E preferred stock forward contract liability”). The Company concluded that the redeemable convertible Series E preferred stock forward contract liability met the definition of a freestanding financial instrument, as it was legally detachable and separately exercisable from the initial closing of the redeemable convertible Series E preferred stock. The forward contract liability had an immaterial value at the issue date.
In September 2020, the Old Skillz received $11.7 million in cash proceeds as settlement for the outstanding redeemable convertible Series E preferred stock forward contract liability and issuance of the underlying redeemable convertible Series E preferred stock to a private investor at a price per share of $43.11. During the year ended December 31, 2020, the Company recognized a non-cash charge of $21.7 million related to changes in the fair value of the redeemable convertible Series E
preferred stock forward contract liability, which was included in Other income (expense), net in the Consolidated Statements of Operations.
Immediately prior to the completion of the Business Combination on December 16, 2020, all outstanding shares of the Company’s Series C, Series D, Series D-1, and Series E redeemable convertible preferred stock converted into an aggregate 122.0 million shares of common stock.
Conversion of Old Skillz Preferred Stock and Redeemable Convertible Preferred Stock
All preferred stock and redeemable convertible preferred stock classified as redeemable was retroactively adjusted, converted into New Skillz Class A common stock each as a result of the Business Combination using the recapitalization exchange ratio of 0.7471. Redeemable convertible preferred stock was also reclassified into permanent equity as a result of the Business Combination. Based on the conversion price set forth in the Company’s certificate of incorporation, amended in June 2018 to effect for a 10-for-1 stock split of its common stock, the Conversion Rate in effect as of the Closing Date of the Business Combination was ten shares of Class B common stock for each share of preferred stock.
There were no redemption rights for the Series A, A-1, or B convertible preferred stock and the holders of these preferred shares could not unilaterally force a liquidation of the Company. Series C, Series D, Series D-1, Series E redeemable convertible preferred stock, redeemable convertible Series E preferred stock forward contract liability were redeemable at the option the of stockholder.
v3.20.4
Stock Based Compensation
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Stock Based Compensation Stock Based Compensation
The following table summarizes stock-based compensation expense recognized for the years ended December 31, 2020, 2019 and 2018, as follows:
202020192018
Research and development$6,110 $181 $361 
Sales and marketing4,505 111 114 
General and administrative13,142 945 6,205 
Total stock-based compensation expense$23,757 $1,237 $6,680 
Equity Incentive Plans
2012, 2015, and 2017 Equity Incentive Plans
Prior to the Business Combination, the Company maintained a stock based compensation plan. Old Skillz’s 2012, 2015, and 2017 Equity Incentive Plans (the “Legacy Equity Incentive Plans”) provided for the grant of stock-based awards to purchase or directly issue shares of common stock to employees, directors and consultants. Options were granted at a price per share equal to the fair market value of the underlying common stock at the date of grant. Options granted to newly hired employees typically vest 25% on the first anniversary date of hire and ratably each quarter over the ensuing 36 month period. The maximum term for stock options granted under the Legacy Equity Incentive Plans may not exceed ten years from date of grant.
Each Old Skillz option from the Legacy Equity Incentive Plans that was outstanding immediately prior to the Business Combination, whether vested or unvested, was converted into an option to acquire a number of shares of Class A Common Stock (other than in the case of the Founder, who received options exercisable for Class B common stock of the Company) (each such option, an "Exchanged Option") equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Old Skillz common stock subject to such Old Skillz option immediately prior to the Business Combination and (ii) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Old Skillz option immediately prior to the consummation of the Business Combination, divided by (B) the Exchange Ratio. Except as specifically provided in the Business Combination Agreement, following the Business Combination,
each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Old Skillz option immediately prior to the consummation of the Business Combination. All stock option activity was retroactively restated to reflect the Exchanged Options.
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 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 permits the Company to deliver up to 47,841,859 shares of common stock pursuant to awards issued under the 2020 Plan, consisting of 15,000,000 shares which may be Class A and/or Class B common stock, 24,669,278 shares of Class A common stock and 8,172,581 shares of the Class B common stock. The total number of shares of Class A common stock and Class B Common stock, respectively, 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, prices, and values adjusted by the Exchange Ratio, during the year ended December 31, 2020 is as follows (in thousands, except for share, per share, and contractual term data):
Options OutstandingRestricted Stock Units
Number of
Shares
Available for
Issuance
Under the
Plan		Number of
Shares
Outstanding
Under the
Plan		Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value		Number of Plan shares outstandingWeighted-Average Grant Date Fair Value per share
Balance at December 31, 20193,855,385 38,794,307 $0.14 7.67$13,056 
Recapitalization Impact(975,027)(9,811,081)0.05 
Balance at December 31, 20192,880,358 28,983,226 $0.19 7.67$13,056 — $— 
Additional shares authorized62,903,028 
Options and restricted stock units granted(36,074,010)35,732,754 6.70 341,256 17.68 
Options exercised(1) and restricted stock units released
— (20,138,817)0.78 — — 
Options and restricted stock units canceled5,791,227 (6,172,670)0.51 — — 
Balance at December 31, 202035,500,603 38,404,493 $5.89 8.27$542,074 341,256 $17.68 
Exercisable at December 31, 201915,225,162 $0.08 6.85$8,492 
Exercisable at December 31, 202014,248,234 $0.18 6.45$282,364 
Unvested at December 31, 201913,758,064 $0.31 8.58$4,564 
Unvested at December 31, 202024,156,259 $9.25 9.34$259,710 
_____________________________
(1)The number of options exercised includes early exercises related to the Executive grants noted below.
The number of unvested stock options as of December 31, 2020 and December 31, 2019 does not include 13.3 million and 8.2 million shares of restricted common stock issued upon the early exercise of the certain Executive grants described below.
As of December 31, 2020, unrecognized stock-based compensation expense related to unvested stock options, restricted common stock, and RSUs was $156.9 million. The weighted-average period over which such compensation expense will be recognized is 3.53 years.
The aggregate intrinsic value of options exercised was $89.9 million, $1.4 million and $0.5 million during the years ended December 31, 2020, 2019 and 2018, respectively.
The assumptions used to estimate the fair value of stock options granted and the resulting fair values for the year ended December 31, 2020, 2019 and 2018 were as follows:
202020192018
Expected volatility
45.00% – 50.00%
47.17% – 55.47%
47.69% – 49.17%
Risk-free interest rate
0.27% – 1.44%
1.57% – 2.64%
2.60% – 3.06%
Expected term (in years)
4.14 – 6.25
5.00 – 6.86
5.49 – 6.13
Expected dividend yield———
Weighted average estimated fair value of stock options granted during the year$5.06$0.21$0.11
Executive grants
Executive Grants below were retroactively adjusted to give effect of the Reverse Recapitalization Exchange Ratio of 0.7471.

2019 CEO Executive Grant
On April 29, 2019, the Board of Directors approved a grant to the Company’s co-founder and Chief Executive Officer of two separate options to purchase shares of Class A common stock at an exercise price of $0.43 per share.
The first option was to purchase 2,990,172 shares of Old Skillz Class A common stock, which vest subject to continuous service over a four-year period, whereby 1/48th of the shares vest each month. Vesting will accelerate and (i) vest as to 50% of the then-outstanding shares upon the consummation of an IPO; and (ii) vest as to 100% of the then-outstanding shares upon the earlier of (A) the consummation of an Exit Transaction and (B) termination of service by the Company other than for cause (as defined by the plan), subject to continuous services through the consummation of such event. The $1.7 million grant date fair value of this option, estimated based on the BSM pricing model, will be recognized as compensation expense over the requisite service period. As of December 31, 2020, the Company recognized $0.7 million in compensation expense related to this grant. In connection with the Business Combination, the CEO elected to waive the right to vest as to 100% of the then-outstanding shares upon the consummation of an Exit Transaction.
The second option was to purchase 5,980,344 shares of Old Skillz Class A common stock, which vest subject to continuous service and the achievement of eight market condition targets related to the valuation of the Company, ranging from $600 million to $2.7 billion, upon closing of either an Exit Transaction, Financing Event, or Initial Public Offering, on or before April 29, 2023 (“Market Condition Grant”). The Market Condition Grant has implied performance-based vesting conditions because no shares will vest unless the Exit Transaction, Financing Event, or Initial Public Offering occur. The $0.9 million grant date fair value of the Market Condition Grant 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. All compensation expense related to the Market Condition Grant was recognized during the year ended December 31, 2020 because the performance-based vesting condition was achieved.
On April 30, 2019, the two separate options to purchase shares of Old Skillz Class A common stock were early exercised by entering into a promissory note and security agreement with the Company. The promissory note includes outstanding principal of $3.8 million and bears interest at a rate of 2.55%, compounded annually. The principal amount of the promissory note, together with all accrued but unpaid interest, shall become due upon the first to occur of (i) immediately prior to the closing of a deemed liquidation event or Exit Transaction, (ii) termination of the grantees’s employment, (iii) immediately prior to the filing of a registration statement under the Securities Act of 1933, (iv) immediately prior to this note becoming prohibited under Section 13(k) of the Securities Exchange Act of 1934, and (v) nine years. The promissory note is deemed to be non-recourse. Accordingly, the promissory note was recorded as a reduction to Additional paid-in capital, offsetting the proceeds from the early exercise, rather than as a note receivable on the Company’s Balance Sheet. The total 8,970,517 shares issued related to the executive grants are included in common stock issued and outstanding within these consolidated financial statements, as they provide the holder with stockholder rights, such as the right to vote the shares with the other holders of common stock and a right to cumulative declared dividends. Immediately prior to the consummation of the Business
Combination, the CEO surrendered a portion of these shares to pay off the promissory note and security agreement with the Company.
2020 CEO Executive Grant
On April 15, 2020, the Board of Directors approved a grant to the Company’s co-founder and Chief Executive Officer of options to purchase shares of Old Skillz Class A common stock at an exercise price of $1.15 per share.
The option was to purchase 9,921,314 shares of Old Skillz Class A common stock, which vest subject to continuous service over a four-year period, whereby 25% of the shares shall vest on the one year anniversary of the grant date and 6.25% of the shares vest quarterly thereafter. Vesting will accelerate and (i) vest as to 50% of the then-outstanding shares upon the consummation of an IPO; and (ii) vest as to 100% of the then-outstanding shares upon the earlier of (A) the consummation of an Exit Transaction and (B) termination of service by the Company other than for cause (as defined by the plan), subject to continuous services through the consummation of such event. The grant date fair value of this option was estimated based on the BSM pricing model, and the total compensation expense that will be recognized over the requisite service period is $21.5 million. As of December 31, 2020, the Company recognized $3.8 million in compensation expense related to this grant. In connection with the Business Combination, the CEO elected to waive the right to vest as to 100% of the then-outstanding shares upon the consummation of an Exit Transaction.
On May 14, 2020, the option to purchase shares of Old Skillz Class A common stock was early exercised by entering into a promissory note and security agreement with the Company. The promissory note includes outstanding principal of $11.4 million and bears interest at a rate of 0.58%, compounded annually. The principal amount of the promissory note, together with all accrued but unpaid interest, shall become due upon the first to occur of (i) immediately prior to the closing of a deemed liquidation event or Exit Transaction, (ii) termination of the grantee’s employment, (iii) immediately prior to the filing of a registration statement under the Securities Act of 1933, (iv) immediately prior to this note becoming prohibited under Section 13(k) of the Securities Exchange Act of 1934, and (v) nine years. The promissory note is deemed to be non-recourse. Accordingly, the promissory note was recorded as a reduction to Additional paid-in capital, offsetting the proceeds from the early exercise, rather than as a note receivable on the Company’s Balance Sheet. The 9,921,314 shares issued related to the 2020 CEO Executive grants are included in common stock issued and outstanding within these consolidated financial statements as they provide the holder with stockholder rights, such as the right to vote the shares with the other holders of common stock and a right to cumulative declared dividends. Immediately prior to the consummation of the Business Combination, the CEO surrendered a portion of these shares to pay off the promissory note and security agreement with the Company.
2020 CRO Executive Grant
On April 15, 2020, the Board of Directors approved a grant to the Company’s co-founder and Chief Revenue Officer of two separate options to purchase shares of Class B common stock at an exercise price of $1.15 per share.
The first option was to purchase 1,852,695 shares of Old Skillz Class B common stock, which vest subject to continuous service over a four-year period, whereby 25% of the shares shall vest on the one year anniversary of the grant date and 6.25% of the shares vest quarterly thereafter. Vesting will accelerate and (i) vest as to 50% of the then-outstanding shares upon the consummation of an IPO; and (ii) vest as to 100% of the then-outstanding shares upon the earlier of (A) the consummation of an Exit Transaction and (B) termination of service by the Company other than for cause (as defined by the plan), subject to continuous services through the consummation of such event. The grant date fair value of this option was estimated based on the BSM pricing model, and the total compensation expense that will be recognized over the requisite service period is $3.5 million. As of December 31, 2020, the Company recognized $0.6 million in compensation expense related to this grant. In connection with the Business Combination, the CRO elected to waive his right to vest as to 100% of the then-outstanding shares upon the consummation of an Exit Transaction.
The second option was to purchase 926,347 shares of Old Skillz Class B common stock, which vest subject to continuous service and the achievement of five market condition targets related to the valuation of the Company, ranging from $1.5 billion to $2.7 billion, upon closing of either an Exit Transaction, Financing Event, or Initial Public Offering, on or before April 15, 2024 (“CRO Market Condition Grant”). The CRO Market Condition Grant has implied performance-based vesting conditions
because no shares will vest unless the Exit Transaction, Financing Event, or Initial Public Offering occur. The $2.0 million grant date fair value of the CRO Market Condition Grant 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. As of December 31, 2020, all compensation expense related to the CRO Market Condition Grant was recognized because the performance-based vesting condition was achieved through the consummation of the Business Combination.
On May 14, 2020, the two separate options to purchase shares of Old Skillz Class B common stock were early exercised by entering into a promissory note and security agreement with the Company. The promissory note includes outstanding principal of $3.2 million and bears interest at a rate of 0.58%, compounded annually. The principal amount of the promissory note, together with all accrued but unpaid interest, shall become due upon the first to occur of (i) immediately prior to the closing of a deemed liquidation event or Exit Transaction, (ii) termination of the grantee’s employment, (iii) immediately prior to the filing of a registration statement under the Securities Act of 1933, (iv) immediately prior to this note becoming prohibited under Section 13(k) of the Securities Exchange Act of 1934, and (v) nine years. The promissory note is deemed to be non-recourse and recorded as a reduction to Additional paid-in capital, offsetting the proceeds from the early exercise, rather than as a note receivable on the Company’s Balance Sheet. The total 2,779,042 shares issued related to the co-founder grants are included in common stock issued and outstanding within these consolidated financial statements as they provide the holder with stockholder rights, such as the right to vote the shares with the other holders of common stock and a right to cumulative declared dividends. Immediately prior to the consummation of the Business Combination, the CRO surrendered a portion of these shares to pay off the promissory note and security agreement with the Company.
2020 CTO Executive Grant
On June 8, 2020, the Board of Directors approved a grant to the Company’s Chief Technology Officer of two separate options to purchase shares of Old Skillz Class B common stock at an exercise price of $1.33 per share.
The first option was to purchase 1,520,736 shares of Old Skillz Class B common stock, which vest subject to continuous service over a four-year period, whereby 25% of the shares shall vest on the one year anniversary of the grant date and 6.25% of the shares vest quarterly thereafter. Vesting will accelerate and (i) vest as to 50% of the then-outstanding shares upon the consummation of an IPO; and (ii) vest as to 100% of the then-outstanding shares upon the earlier of (A) the consummation of an Exit Transaction and (B) termination of service by the Company for cause (as defined by the plan), subject to continuous services through the consummation of such event. The grant date fair value of this option was estimated based on the BSM pricing model, and the total compensation expense that will be recognized over the requisite service period is $9.0 million. As of December 31, 2020, the Company recognized $0.9 million in compensation expense related to this grant. In connection with the Business Combination, the CTO elected to waive the right to vest as to 100% of the then-outstanding shares upon the consummation of an Exit Transaction.
The second option was to purchase 919,862 shares of Old Skillz Class B common stock, which vest subject to continuous service and the achievement of five market condition targets related to the valuation of the Company, ranging from $1.8 billion to $3.0 billion, upon closing of either an Exit Transaction, Financing Event, or Initial Public Offering, on or before June 8, 2024 (“CTO Market Condition Grant”). The CTO Market Condition Grant has implied performance-based vesting conditions because no shares will vest unless the Exit Transaction, Financing Event, or Initial Public Offering occur. The $3.7 million grant date fair value of the CTO Market Condition Grant 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. As of December 31, 2020, all compensation expense related to the CTO Market Condition Grant was recognized because the performance-based vesting condition was achieved through the consummation of the Business Combination.
Founders’ Option Agreements
In connection with the closing of the Business Combination, 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 New Skillz 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 New Skillz Class A common stock (“VWAP”) equals or exceeds 3.0x the VWAP of the shares as of the Closing Date, (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. As of December 31, 2020, the Company recognized $0.8 million in compensation expense related to these grants.
Other Stock-Based Compensation
During the year ended December 31, 2019, certain existing and new external investors acquired $0.7 million of outstanding Old Skillz Class B common stock from a current employee at a purchase price greater than the estimated fair value at the time of the transactions. The Company recorded stock-based compensation expense for the difference between the price paid and the estimated fair value on the date of the transactions of $0.5 million in general and administrative expense.
In April and May 2020, certain existing and new investors acquired $11.0 million of outstanding Old Skillz Class B common stock from employees. The Company recorded stock-based compensation expense for the difference between the price paid and the estimated fair value on the date of the transaction of $2.3 million in general and administrative, $0.7 million in sales and marketing, and $0.4 million in research and development.
In August 2020, the Company’s Board of Directors granted an executive officer 2,757,886 non-qualified stock options, which vest 25% on the one year anniversary of the start of the vesting period, and 6.25% after each three months of continuous service subsequent to the first year. The grant date fair value of this option was estimated based on the BSM pricing model, and the total compensation expense that will be recognized over the requisite service period is $23.5 million. As of December 31, 2020, the Company recognized $2.3 million in compensation expense related to this grant.
v3.20.4
Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company has historically generated net operating losses in each of the tax jurisdictions in which it operates and has provided a valuation allowance against net deferred tax assets due to uncertainties regarding the Company’s ability to realize these assets.
The provision for income taxes consists of the following:
Year Ended December 31,
202020192018
Current:
Federal$— $— $— 
State115 — — 
Total Current115 — — 
Deferred:
Federal— — — 
State— — — 
Total Deferred— — — 
Provision for income taxes$115 $— $— 

A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate of 21% is as follows:
Year Ended December 31,
202020192018
U.S. Federal provision (benefit)
At statutory rate$(25,693)$(5,956)$(5,608)
State taxes90 — — 
Valuation allowance26,245 6,320 5,671 
Stock based compensation(7,257)(182)(141)
Permanent differences6,730 (182)78 
Total$115 $— $— 
Deferred Tax Assets and Liabilities
Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as follows:
December 31,
20202019
Deferred tax assets:
Net operating loss carryforwards$47,864 $21,309 
Stock-based compensation2,492 1,646 
Reserves and accruals1,239 513 
Other291 2 
Total deferred tax assets$51,886 $23,470 
Less: valuation allowance(51,859)(23,455)
Deferred tax assets, net of valuation allowance$27 $15 
Deferred tax liabilities:
Fixed assets(27)(15)
Total deferred tax liabilities$(27)$(15)
Net deferred tax assets$— $— 
A valuation allowance is required to be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered. As of December 31, 2020 and 2019, the Company has provided a full valuation allowance on its deferred tax assets. The change in total valuation allowance from 2019 to 2020 was an increase of $28.4 million .
The Company has net operating loss carryforwards for federal and state income tax purposes of approximately $201.3 million and $64.9 million, respectively, as of December 31, 2020. The federal and state net operating loss carryforwards, if not utilized, will expire beginning in 2033 and 2031, respectively. $165.3 million of the federal net operating loss carryforwards are not subject to expiration. Utilization of some of the federal and state net operating loss and credit carryforwards may be subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. The Company has not performed a Section 382 study as of December 31, 2020.
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES Act”) was signed into law. Among other things, the CARES Act permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act also contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. The CARES Act did not have a significant impact to the Company for any years.
On June 29, 2020, California Governor Newsom signed to law the state’s budget package which included Assembly Bill 85 (AB 85). AB 85 contained two major tax changes: (1) it suspends the usage of net operating losses (NOLs) for certain taxpayers; and (2) it limits certain business tax credits for tax years 2020, 2021, and 2022. Skillz is in a taxable loss position in 2020 and thus the bill has no impact on the 2020 provision. The Company will continue to monitor the impact of AB 85, if any, on future periods.
The Company files tax returns in the U.S., California, Massachusetts, and Oregon. The Company is not currently under examination in any of these jurisdictions and all its tax years remain open to examination due to net operating loss carryforwards. The Company does not have any reserves for uncertain tax positions.
v3.20.4
Related Party Transactions
 12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Related Party Transactions Related-Party TransactionsAside from preferred financing equity transactions discussed and Executive grants discussed in Note 10, the Company did not have any other significant related party transactions in the years ended December 31, 2020, 2019, and 2018.
v3.20.4
Net Loss Per Share
 12 Months Ended
Dec. 31, 2020
Earnings Per Share [Abstract]  
Net Loss Per Share Net Loss Per Share
Net loss per share calculations for all periods prior to the Business Combination have been retrospectively adjusted for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. Subsequent to the Business Combination, net loss per share was calculated based on the weighted average number of common stock then outstanding.
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 was the same for each period presented as the inclusion of all potential Class A Common Stock and Class B Common Stock outstanding would have been antidilutive. 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 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):
Year Ended December 31,
202020192018
Numerator:
Net loss – Basic and diluted$(122,461)$(23,605)$(27,780)
Denominator:
Weighted average common shares outstanding – Basic and diluted
294,549,146 261,228,108 236,040,717 
Net loss per share attributable to common stockholders – Basic and diluted$(0.42)$(0.09)$(0.12)
The following outstanding common stock equivalents were considered antidilutive, and therefore, excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented (share numbers are not in thousands):
Number of Securities
Outstanding at December 31,
202020192018
Convertible promissory notes— — 12,099,120 
Common and preferred stock warrants22,314,778 3,635,180 3,087,307 
Common stock options51,735,883 37,206,199 30,911,188 
Restricted stock units341,256 — — 
Earnout shares10,000,000 — — 
Total84,391,917 40,841,379 46,097,615 
v3.20.4
Subsequent Events
 12 Months Ended
Dec. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events Subsequent EventsIn January 2021, the conditions for the release of the Earnout Shares were satisfied. The Sponsor will release 10,000,000 of its shares of FEAC Class B common stock from escrow as certain earnout conditions were satisfied. 5,000,000 of such shares will be released to the Sponsor in the form of shares of the Company’s Class A common stock and the other 5,000,000 shares will be released to the Old Skillz stockholders, who will receive shares of the Company’s common stock as a result of the Business Combination in the form of shares of Class A common stock of the Company (other than the Founder and a trust for the benefit of his family members, who will receive shares of Class B common stock of the Company).
v3.20.4
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The Company’s 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”).
Pursuant to the Merger Agreement, the merger between Merger Sub and Old Skillz was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). Under this method of accounting, FEAC was treated as the “acquired” company and Old Skillz is treated as the acquirer for financial reporting purposes.
Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Old Skillz issuing stock for the net assets of FEAC, accompanied by a recapitalization. The net assets of FEAC are stated at historical cost, with no goodwill or other intangible assets recorded.
Old Skillz was determined to be the accounting acquirer based on the following predominant factors:
•Old Skillz’s existing stockholders have the greatest voting interest in the Company;
•The largest individual minority stockholder in the Company is an existing stockholder of Old Skillz;
•Old Skillz’s directors represented the majority of the new board of directors of the Company;
•Old Skillz’s senior management is the senior management of the Company; and
•Old Skillz is the larger entity based on historical revenue and has the larger employee base.
The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Old Skillz. The shares and corresponding capital amounts and losses per share, prior to the Reverse Recapitalization, have been retroactively restated based on shares reflecting the exchange ratio of 0.7471 established in the Business Combination.
Comprehensive Loss
Comprehensive Loss
Through December 31, 2020, there are no components of comprehensive loss which are not included in net loss; therefore, a separate statement of comprehensive loss has not been presented.
Use of Estimates
Use of Estimates
The preparation of 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 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. 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 our 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 does not have any transaction price allocated to performance obligations that are unsatisfied (or partially satisfied) as of December 31, 2020, 2019 and 2018.
Games provided by two developer partners (A and B) accounted for 59% and 28% of the Company’s revenue in the year ended December 31, 2020. Games provided by two developer partners (A and C) accounted for 83% and 7% , and 70% and 16% of the Company’s revenue in years ended December 31, 2019 and 2018, respectively. The Company did not generate material international revenues in the years ended December 31, 2020, 2019, and 2018.
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 currency earned for every Competition played based on the amount of the entry fee. Ticketz can be redeemed for 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 years ended December 31, 2020, 2019, and 2018, the Company recognized a reduction of revenue of $51.3 million, $27.7 million, and $11.6 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.
Refunds
Refunds
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.
Cost of Revenue
Cost of Revenue
Cost of revenue primarily comprises of third-party payment processing fees, direct software costs, amortization of internal use software, hosting expenses, allocation of shared facility and other costs, and personnel expenses.
Cash, Cash Equivalents and Restricted Cash
Cash, Cash Equivalents and Restricted Cash
Cash and cash equivalents consist of cash and money market funds 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 and other current assets as of December 31, 2020 and 2019, respectively.
Concentrations of Credit Risk
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash, cash equivalents and restricted cash. 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. Management believes that the institutions are financially stable and, accordingly, minimal credit risk exists.
Fair Value Measurement
Fair Value Measurement
The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the 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.
Advertising and Promotional Expense Advertising and Promotional ExpenseAdvertising and promotional expenses are included in sales and marketing expenses within the statements of operations and are expensed when incurred.
Redeemable Convertible Preferred Stock
Redeemable Convertible Preferred Stock
Prior to the Business Combination, preferred stock that was redeemable at a fixed or determinable price on a fixed or determinable date, at the option of the holder, or upon the occurrence of an event that is not solely within the control of the Company was classified outside of permanent equity. Convertible preferred stock that was probable of becoming redeemable in the future was recorded at its maximum redemption amount at each balance sheet date, with adjustments to the redemption amount recorded through equity. The fair value of the redeemable convertible preferred stock was estimated primarily based on valuation methodologies which utilized certain assumptions, including probability weighting of events, recent sales of stock to external investors, volatility, time to liquidity, a risk free interest rate, and an assumption for a discount for lack of marketability, where applicable.
All redeemable convertible preferred stock previously classified outside of permanent equity was retroactively adjusted, converted into common stock, and reclassified to permanent equity as a result of the Business Combination. Additionally, changes to the redemption values of the redeemable convertible preferred stock were eliminated as a result of the retroactive
adjustment. The Company recorded changes to the redemption value of its redeemable convertible preferred stock of $866.0 million, $62.5 million and $18.8 million in the year-to-date periods ended September 30, 2020, December 31, 2019 and December 31, 2018, respectively. The changes to the redemption values of the redeemable convertible preferred stock were previously presented as adjustments to net loss available to common stockholders for each of the respective periods ended. For further details regarding the accounting for the Business Combination, see Note 3.
Derivative Financial Instruments
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including its long-term debt, preferred stock and stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives depends on the nature of the host contract. Bifurcated embedded derivatives and freestanding derivative financial instruments that are classified as assets or liabilities are recognized at fair value with changes in fair value recognized as a component of Other income (expense), net in the Statements of Operations. Bifurcated embedded derivatives and freestanding derivative financial instruments are classified within as Other long-term assets and Other current liabilities in the Company’s Consolidated Balance Sheets.
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 and is not reversed if the market condition is not satisfied. See Note 10 for more information. The Company accounts for forfeitures as they occur. Stock-based awards granted to employees are primarily stock options.
The fair value of stock options that vest solely based on a service condition is determined by the Black-Scholes-Merton Option (“BSM”) pricing model on the date of grant. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the BSM model, including the deemed fair value of common stock, expected term, expected volatility, risk-free interest rate, and dividend yield. These judgments are made as follows:
•Fair value of common stock —Subsequent to the Business Combination, the fair value of the Company’s common stock is based on the closing market price on the date of grant. Prior to the Business Combination, the absence of an active market for the Company’s common stock required the Company to estimate the fair value of common stock for purposes of granting stock options and for determining stock-based compensation expense for the periods presented.
The Company considered numerous factors in assessing the fair value of common stock prior to the Business Combination, including:
•The results of contemporaneous unrelated third-party valuations of the Company’s common stock
•The prices of the recent redeemable convertible preferred stock sales by the Company to investors
•The rights, preferences, and privileges of preferred stock relative to those of common stock
•Market multiples of comparable public companies in the industry as indicated by their market capitalization and guideline merger and acquisition transactions
•The Company’s performance and market position relative to competitors, which may change from time to time
•The Company’s historical financial results and estimated trends and prospects for the Company’s future performance
•The economic and competitive environment
•The financial condition, results of operations, and capital resources
•The industry outlook
•The valuation of comparable companies
•The likelihood and timeline of achieving a liquidity event, such as an initial public offering or sale of the Company, given prevailing market conditions
•Any adjustments necessary to recognize a lack of marketability for the Company’s common stock
•Precedent sales of or offers to purchase the Company’s capital stock
•Expected term — The Company determines the expected term based on the average period the stock options are expected to remain outstanding, generally calculated as the midpoint of the stock options’ vesting term and contractual expiration period, as the Company does not have sufficient historical information to develop reasonable expectations about future exercise patterns and post-vesting employment termination behavior.
•Expected volatility — Given the limited market trading history prior to the Business Combination and no public market for the Company’s shares prior to the Business Combination, the expected volatility rate is based on an average historical stock price volatility of comparable publicly-traded companies in the industry group.
•Risk-free interest rate — The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected term of the option.
•Expected dividend yield — The Company has not paid and does not expect to pay dividends. Consequently, the Company uses an expected dividend yield of zero.
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, and expected capital raise percentage. Given the limited market trading history subsequent to the Business Combination and no public market for the Company’s shares prior to the Business Combination, the Company estimates the volatility of common stock on the date of grant based on the weighted average historical stock price volatility of comparable publicly-traded companies in its industry group. The Company estimates the expected term based on various exercise scenarios, as these awards are not considered “plain vanilla.” The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. The Company estimates the expected date of a qualifying event and the expected capital raise percentage based on management’s expectations at the time of measurement of the award’s value.
Income Taxes
Income Taxes
The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the consolidated financial statements or in the Company’s tax returns. Deferred income taxes are recognized for differences between financial reporting and tax bases of assets and liabilities at the enacted statutory tax rates in effect for the years in which the temporary differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain.
The Company records a valuation allowance to reduce deferred tax assets to the net amount that the Company believes is more likely than not to be realized. In assessing the need for a valuation allowance, the Company considered historical levels of income, expectations of future taxable income and ongoing tax planning strategies. Because of the uncertainty of the realization of the deferred tax assets, the Company recorded a full valuation allowance against deferred tax assets. Realization of deferred tax assets is dependent primarily upon future U.S. taxable income.
The Company utilizes a two-step approach to recognize and measure uncertain tax positions. The first step is to evaluate the tax positions for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.
Although the Company believes it has adequately reserved for the Company’s uncertain tax positions, the Company can provide no assurance that the final tax outcome of these matters will not be materially different. The Company evaluates its uncertain tax positions on a regular basis and evaluations are based on a number of factors, including changes in facts and circumstances, changes in tax law, correspondence with tax authorities during the course of an audit and effective settlement of audit issues.
To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will affect the provision for income taxes in the period in which such determination is made and could have a material impact on the Company’s financial condition and operating results. The provision for income taxes includes the effects of any accruals that the Company believes are appropriate, as well as the related net interest and penalties.
Property and Equipment, Net
Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful life of the related asset, generally three to five years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the term of the related lease. Maintenance and repairs that do not extend the life or improve the asset are expensed as incurred. Upon disposal of property and equipment, assets and related accumulated depreciation are removed from the accounts, and the related gain or loss is included in the results from operations.
Property and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If property and equipment are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. No impairment to any long-lived assets has been recorded in any of the periods presented.
The Company capitalizes certain costs related to developed or modified software solely for the Company’s internal use to deliver the Company’s services. The Company capitalizes costs during the application development stage once the preliminary project stage is complete, management authorizes and commits to funding the project, it is probable that the project will be completed, and that the software will be used to perform the function intended. Costs related to preliminary project activities and post-implementation activities are expensed as incurred.
The following table presents the estimated useful lives of the Company’s property and equipment:
Property and EquipmentUseful Life
Computer equipment and servers3 years
Capitalized internal-use software3 years
Office equipment and other5 years
Leased equipment and leasehold improvementsLesser of estimated useful life or
remaining lease term
Leases
Leases
Leases are reviewed and classified as capital or operating at their inception. The Company records rent expense associated with its operating lease on a straight-line basis over the term of the lease.
Net Loss Per Share
Net Loss Per Share
Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding. Net loss available to common stockholders represents net loss attributable to common stockholders reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities as the holders of the participating securities do not have a contractual obligation to share in any losses. Diluted loss per share adjusts basic loss per share for the potentially dilutive impact of stock options, warrants, restricted stock, and contingently issuable earnout shares. As the Company has reported losses for all periods presented, all potentially dilutive securities including stock options, warrants and contingently issuable earnout shares, are antidilutive and accordingly, basic net loss per share equals diluted net loss per share.
The Company considers certain restricted shares of Class A Common stock issued upon exercise of executive stock options but subject to continued vesting requirements (Note 13) to be participating securities.
Net loss per share calculations for all periods prior to the Business Combination have been retrospectively adjusted for the equivalent number of shares outstanding immediately after the Business Combination to effect the reverse recapitalization. Subsequent to the Business Combination, net loss per share was calculated based on the weighted average number of common stock then outstanding.
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. The Company has determined that its Chief Executive Officer is the CODM. The Company operates in a single operating segment as the CODM reviews financial information presented on a consolidated basis, at the Company level, for the purposes of making operating decisions, allocation of resources, and evaluating financial performance.
Recently Issued Accounting Pronouncements Not Yet Adopted; Recently Adopted Accounting Pronouncements
Recently Issued Accounting Pronouncements Not Yet Adopted
As an emerging growth company (“EGC”), the Jumpstart Our Business Startups Act (“JOBS Act”) allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are applicable to private companies. The Company has elected to use this extended transition period under the JOBS Act until such time as the Company is no longer considered to be an EGC.
In August 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception and it also simplifies the diluted earnings per share calculation in certain areas. The ASU is effective for public companies, excluding entities eligible to be smaller reporting companies, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020 and adoption must be as of the beginning of the Company’s annual fiscal year. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
In August 2018, the FASB issued ASU 2018-15, Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The implementation costs incurred in a hosting arrangement that is a service contract should be presented as a prepaid asset in the balance sheet and
expensed over the term of the hosting arrangement to the same line item in the statement of operations as the costs related to the hosting fees. For public business entities, this standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other entities, this standard is effective for fiscal years beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted for all entities, including adoption in any interim period. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after adoption. The Company will be required to adopt this standard in its annual period ending December 31, 2021 and is currently evaluating the impact of adopting this standard on its consolidated financial statements.
In June 2016, the FASB issued ASU 2016-13 (Topic 326), Financial Instruments — Credit Losses. ASU 2016-13 changes how to recognize expected credit losses on financial assets. The standard requires more timely recognition of credit losses on loans and other financial assets and also provides additional transparency about credit risk. The current credit loss standard generally requires that a loss actually be incurred before it is recognized, while the new standard will require recognition of full lifetime expected losses upon initial recognition of the financial instrument. Originally, ASU 2016-13 was effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. An entity should apply the standard by recording a cumulative effect adjustment to retained earnings upon adoption. In November 2019, FASB issued ASU No. 2019-10, Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). This ASU defers the effective date of ASU 2016-13 for non-public companies to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements for future periods and has not elected early adoption.
In February 2016, the FASB issued ASU 2016-02 (Topic 842), Leases, and issued subsequent amendments to the initial guidance or implementation guidance including ASU 2017-13, 2018-01, 2018-10, 2018-11, 2018-20 and 2019-01 (collectively, including ASU 2016-02, “ASC 842”), which supersedes the guidance in topic ASC 840, Leases. The new standard requires lessees to classify leases as either finance or operating based on whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether related expenses are recognized based on the effective interest method or on a straight-line basis over the term of the lease. For any leases with a term of greater than 12 months, ASU 2016-02 requires lessees to recognize a lease liability for the obligation to make the lease payments arising from a lease, and a right-of-use asset for the right to use the underlying asset for the lease term. An election can be made to account for leases with a term of 12 months or less similar to existing guidance for operating leases under ASC 840. The new standard will also require new disclosures, including qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. For non-public entities, ASU No. 2016-02 is effective for financial statements issued for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early adoption is permitted. The Company is in the initial stage of its assessment of the new standard and is currently evaluating the quantitative impact of adoption, and the related disclosure requirements. The Company expects that the adoption will result in the recognition of right-of-use assets and lease liabilities that were not previously recognized, which will increase total assets and liabilities on the Company’s balance sheet. The Company does not expect the adoption of Topic 842 to have a material impact to the statements of operations or to have any impact on its cash flows from operating, investing, or financing activities.
Recently Adopted Accounting Pronouncements
In November 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and also improves consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted this standard as of January 1, 2020, with no material impact on the Company’s consolidated financial statements.
In June 2018, the FASB issued ASU 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Non-Employee Share-Based Payment Accounting, which expands the scope of Topic 718, to include share-based payments issued to non-employees for goods or services. The new standard supersedes Subtopic 505-50. The Company adopted this standard as of January 1, 2020, with no material impact on the Company’s consolidated financial statements.
v3.20.4
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Summary of Useful Lives
The following table presents the estimated useful lives of the Company’s property and equipment:
Property and EquipmentUseful Life
Computer equipment and servers3 years
Capitalized internal-use software3 years
Office equipment and other5 years
Leased equipment and leasehold improvementsLesser of estimated useful life or
remaining lease term
Property and equipment consisted of the following as of December 31, 2020 and 2019:
December 31,
20202019
Capitalized internal-use software$6,167 $3,554 
Computer equipment and servers631 458 
Furniture and fixtures184 238 
Leasehold improvements114 143 
Construction in progress1,037 519 
Total property and equipment8,133 4,912 
Accumulated depreciation and amortization(2,841)(1,264)
Property and equipment, net$5,292 $3,648 
Schedule of Cash, Cash Equivalents and Restricted Cash
A reconciliation of the Company’s cash and cash equivalents in the Consolidated Balance Sheet to cash, cash equivalents and restricted cash in the Consolidated Statement of Cash Flows as of December 31, 2020 and 2019 is as follows:

December 31,
20202019
Cash and cash equivalents$262,728 $25,628 
Restricted Cash included in other long-term assets and other current assets as of December 31, 2020 and 2019, respectively
2,920 2,920 
Cash, cash equivalents and restricted cash$265,648 $28,548 
Schedule of Cash, Cash Equivalents and Restricted Cash
A reconciliation of the Company’s cash and cash equivalents in the Consolidated Balance Sheet to cash, cash equivalents and restricted cash in the Consolidated Statement of Cash Flows as of December 31, 2020 and 2019 is as follows:

December 31,
20202019
Cash and cash equivalents$262,728 $25,628 
Restricted Cash included in other long-term assets and other current assets as of December 31, 2020 and 2019, respectively
2,920 2,920 
Cash, cash equivalents and restricted cash$265,648 $28,548 
v3.20.4
Business Combination (Tables)
 12 Months Ended
Dec. 31, 2020
Business Combinations [Abstract]  
Schedule of Business Combination
The following table reconciles the elements of the Business Combination to the Consolidated Statement of Cash Flows and the Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2020:

Recapitalization
Cash - FEAC trust and cash, net of redemptions$689,979 
Cash - Private Placement Financing158,531 
Non-cash net assets assumed from FEAC— 
Less: cash consideration paid to Old Skillz stockholders(566,204)
Less: transaction costs and advisory fees(35,822)
Net Business Combination and Private Placement Financing246,484 
Less: non-cash net assets assumed from FEAC— 
Less: accrued transaction costs and advisor fees(16,058)
Net cash contributions from Business Combination and PIPE Financing$230,426 

The number of shares of common stock issued immediately following the consummation of the Business Combination (share numbers are not in thousands):

Recapitalization
Common stock, outstanding prior to Business Combination69,000,000
Less: redemption of FEAC shares(2,140)
Common stock of FEAC68,997,860 
FEAC sponsor shares6,350,200 
Earnout shares10,000,000 
Shares issued in Private Placement Financing15,853,052 
Business Combination and Private Placement Financing shares - Class A common stock101,201,112 
Old Skillz shares converted to New Skillz Class A common stock(1)
191,932,861 
Old Skillz shares converted to New Skillz Class B common stock(2)
76,663,551 
Total shares of common stock immediately after Business Combination369,797,524 

(1)The number of Old Skillz shares converted to Class A common stock was determined from 332,690,933 shares of Old Skillz Class B common stock outstanding immediately prior to the closing of the Business Combination, including shares of redeemable convertible preferred stock, converted at the Exchange Ratio, less 56,620,419 shares of New Skillz stock which were repurchased from Old Skillz stockholders as part of the Business Combination. All fractional shares were rounded down.
(2)The number of Old Skillz shares converted to Class B common stock was determined from the 102,614,847 shares of Old Skillz Class A common stock outstanding immediately prior to the closing of the Business Combination, including shares of convertible preferred stock, converted at the Exchange Ratio. All fractional shares were rounded down.
v3.20.4
Balance Sheet Components (Tables)
 12 Months Ended
Dec. 31, 2020
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 December 31, 2020 and 2019:
December 31,
20202019
Credit card processing reserve$5,854 $2,650 
Prepaid expenses3,772 2,460 
Other current assets865 4,354 
Prepaid expenses and other current assets$10,491 $9,464 
Schedule of Property and Equipment
The following table presents the estimated useful lives of the Company’s property and equipment:
Property and EquipmentUseful Life
Computer equipment and servers3 years
Capitalized internal-use software3 years
Office equipment and other5 years
Leased equipment and leasehold improvementsLesser of estimated useful life or
remaining lease term
Property and equipment consisted of the following as of December 31, 2020 and 2019:
December 31,
20202019
Capitalized internal-use software$6,167 $3,554 
Computer equipment and servers631 458 
Furniture and fixtures184 238 
Leasehold improvements114 143 
Construction in progress1,037 519 
Total property and equipment8,133 4,912 
Accumulated depreciation and amortization(2,841)(1,264)
Property and equipment, net$5,292 $3,648 
Schedule of Other Current Liabilities
Other current liabilities consisted of the following as of December 31, 2020 and 2019:
December 31,
20202019
Accrued sales and marketing expenses$7,204 $1,630 
Accrued compensation3,825 2,531 
End-user liability, net2,789 1,418 
Accrued developer revenue share907 540 
Other accrued expenses4,893 1,418 
Other current liabilities$19,618 $7,537 
v3.20.4
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Summary of Level 3 Inputs and Valuation Techniques
The table below reflects the fair value measurement of the Company’s Level 3 inputs as of September 10, 2020, the date on which the Redeemable Convertible Series E preferred forward contract liability was settled, prior to giving effect to the Business Combination:

Fair Value as of September 10, 2020Valuation TechniqueUnobservable Input DescriptionInput
Redeemable Convertible Series E preferred stock forward contract liability$21,688 Discounted cash flowFair value of Redeemable Convertible Series E preferred stock$9.17 
Reconciliation of Level 3 Liabilities The following table presents changes in Level 3 liabilities measured at fair value for the year ended December 31, 2020:
Series E forward contract liability
Fair value as of December 31, 2019$— 
Issuance of the Redeemable convertible Series E preferred stock forward contract liability$— 
Change in fair value$21,688 
Settlement of the Redeemable convertible Series E preferred stock forward contract liability$(21,688)
Fair value as of December 31, 2020$— 
v3.20.4
Long-Term Debt (Tables)
 12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Schedule of Long-term Debt
Components of long-term debt were as follows as of December 31, 2020 and 2019:
December 31,
20202019
2019 Mezzanine Term Loan$— $10,000 
Unamortized debt discount— (372)
Net carrying amount$— $9,628 
v3.20.4
Commitment and Contingencies (Tables)
 12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Summary of Lease Maturities
Future minimum payments under the Company’s non-cancelable leases as of December 31, 2020, are as follows:
Operating
Lease
Commitments
Year ended December 31,
2021$4,528 
20222,498 
20232,368 
20242,439 
20252,513 
Thereafter11,795 
Future minimum lease payments$26,141 
v3.20.4
Stock Based Compensation (Tables)
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Summary of Stock-Based Compensation Expense
The following table summarizes stock-based compensation expense recognized for the years ended December 31, 2020, 2019 and 2018, as follows:
202020192018
Research and development$6,110 $181 $361 
Sales and marketing4,505 111 114 
General and administrative13,142 945 6,205 
Total stock-based compensation expense$23,757 $1,237 $6,680 
Summary of Stock Option and RSU Activity
Stock option and RSU activity, prices, and values adjusted by the Exchange Ratio, during the year ended December 31, 2020 is as follows (in thousands, except for share, per share, and contractual term data):
Options OutstandingRestricted Stock Units
Number of
Shares
Available for
Issuance
Under the
Plan		Number of
Shares
Outstanding
Under the
Plan		Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value		Number of Plan shares outstandingWeighted-Average Grant Date Fair Value per share
Balance at December 31, 20193,855,385 38,794,307 $0.14 7.67$13,056 
Recapitalization Impact(975,027)(9,811,081)0.05 
Balance at December 31, 20192,880,358 28,983,226 $0.19 7.67$13,056 — $— 
Additional shares authorized62,903,028 
Options and restricted stock units granted(36,074,010)35,732,754 6.70 341,256 17.68 
Options exercised(1) and restricted stock units released
— (20,138,817)0.78 — — 
Options and restricted stock units canceled5,791,227 (6,172,670)0.51 — — 
Balance at December 31, 202035,500,603 38,404,493 $5.89 8.27$542,074 341,256 $17.68 
Exercisable at December 31, 201915,225,162 $0.08 6.85$8,492 
Exercisable at December 31, 202014,248,234 $0.18 6.45$282,364 
Unvested at December 31, 201913,758,064 $0.31 8.58$4,564 
Unvested at December 31, 202024,156,259 $9.25 9.34$259,710 
_____________________________
(1)The number of options exercised includes early exercises related to the Executive grants noted below.
Summary of Stock Option Valuation Assumptions
The assumptions used to estimate the fair value of stock options granted and the resulting fair values for the year ended December 31, 2020, 2019 and 2018 were as follows:
202020192018
Expected volatility
45.00% – 50.00%
47.17% – 55.47%
47.69% – 49.17%
Risk-free interest rate
0.27% – 1.44%
1.57% – 2.64%
2.60% – 3.06%
Expected term (in years)
4.14 – 6.25
5.00 – 6.86
5.49 – 6.13
Expected dividend yield———
Weighted average estimated fair value of stock options granted during the year$5.06$0.21$0.11
v3.20.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
The provision for income taxes consists of the following:
Year Ended December 31,
202020192018
Current:
Federal$— $— $— 
State115 — — 
Total Current115 — — 
Deferred:
Federal— — — 
State— — — 
Total Deferred— — — 
Provision for income taxes$115 $— $— 
Schedule of Effective Income Tax Rate Reconciliation
A reconciliation of the Company’s effective tax rate to the statutory U.S. federal rate of 21% is as follows:
Year Ended December 31,
202020192018
U.S. Federal provision (benefit)
At statutory rate$(25,693)$(5,956)$(5,608)
State taxes90 — — 
Valuation allowance26,245 6,320 5,671 
Stock based compensation(7,257)(182)(141)
Permanent differences6,730 (182)78 
Total$115 $— $— 
Schedule of Deferred Tax Assets and Liabilities
Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities for federal and state income taxes are as follows:
December 31,
20202019
Deferred tax assets:
Net operating loss carryforwards$47,864 $21,309 
Stock-based compensation2,492 1,646 
Reserves and accruals1,239 513 
Other291 2 
Total deferred tax assets$51,886 $23,470 
Less: valuation allowance(51,859)(23,455)
Deferred tax assets, net of valuation allowance$27 $15 
Deferred tax liabilities:
Fixed assets(27)(15)
Total deferred tax liabilities$(27)$(15)
Net deferred tax assets$— $— 
v3.20.4
Net Loss Per Share (Tables)
 12 Months Ended
Dec. 31, 2020
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share, Basic and Diluted The following table sets forth the computation of basic and diluted loss per Class A Common Stock and Class B Common Stock (in thousands, except for share and per share data):
Year Ended December 31,
202020192018
Numerator:
Net loss – Basic and diluted$(122,461)$(23,605)$(27,780)
Denominator:
Weighted average common shares outstanding – Basic and diluted
294,549,146 261,228,108 236,040,717 
Net loss per share attributable to common stockholders – Basic and diluted$(0.42)$(0.09)$(0.12)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
The following outstanding common stock equivalents were considered antidilutive, and therefore, excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented (share numbers are not in thousands):
Number of Securities
Outstanding at December 31,
202020192018
Convertible promissory notes— — 12,099,120 
Common and preferred stock warrants22,314,778 3,635,180 3,087,307 
Common stock options51,735,883 37,206,199 30,911,188 
Restricted stock units341,256 — — 
Earnout shares10,000,000 — — 
Total84,391,917 40,841,379 46,097,615 
v3.20.4
Description of the Business and Basis of Presentation (Details)
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Recapitalization exchange ratio 74.71%
v3.20.4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2020
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Concentration Risk [Line Items]        
Reduction to revenue, end-user incentives   $ 51,300 $ 27,700 $ 11,600
Sales and marketing expense, end-user incentive   91,500 45,200 18,700
Restricted Cash included in other long-term assets and other current assets as of December 31, 2020 and 2019, respectively   2,920 2,920  
Advertising costs   $ 136,800 53,500 25,300
Change to redemption value $ 866,000   $ 62,500 $ 18,800
Minimum        
Concentration Risk [Line Items]        
Useful life   3 years    
Maximum        
Concentration Risk [Line Items]        
Useful life   5 years    
Revenue | Customer Concentration Risk | Game Developer A        
Concentration Risk [Line Items]        
Concentration risk, percentage   59.00% 83.00% 70.00%
Revenue | Customer Concentration Risk | Game Developer B        
Concentration Risk [Line Items]        
Concentration risk, percentage   28.00%    
Revenue | Customer Concentration Risk | Game Developer C        
Concentration Risk [Line Items]        
Concentration risk, percentage     7.00% 16.00%
v3.20.4
Summary of Significant Accounting Policies - Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Dec. 31, 2017
Accounting Policies [Abstract]        
Cash and cash equivalents $ 262,728 $ 25,628    
Restricted Cash included in other long-term assets and other current assets as of December 31, 2020 and 2019, respectively 2,920 2,920    
Cash, cash equivalents and restricted cash $ 265,648 $ 28,548 $ 22,540 $ 7,025
v3.20.4
Summary of Significant Accounting Policies - Useful Lives (Details)
 12 Months Ended
Dec. 31, 2020
Computer equipment and servers  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Capitalized internal-use software  
Property, Plant and Equipment [Line Items]  
Useful life 3 years
Office equipment and other  
Property, Plant and Equipment [Line Items]  
Useful life 5 years
v3.20.4
Business Combination - Narrative (Details) - USD ($)
 1 Months Ended 12 Months Ended
Dec. 16, 2020
Sep. 30, 2020
Dec. 31, 2020
Dec. 31, 2019
Business Acquisition [Line Items]        
Recapitalization exchange ratio     74.71%  
Shares in escrow (in shares) 10,000,000      
Shares authorized (in shares) 635,000,000   635,000,000  
Common stock, par value (in dollars per share) $ 0.0001   $ 0.0001 $ 0.0001
Preferred stock, par value (in dollars per share) $ 0.0001   $ 0.0001 $ 0.0001
Common stock, shares authorized (in shares)     625,000,000 625,000,000
Preferred stock, shares authorized (in shares) 10,000,000   10,000,000 10,000,000
Stock sold, price per share (in dollars per share)   $ 43.11    
Aggregate consideration   $ 11,700,000    
Old Skillz, Stock Election Shareholders        
Business Acquisition [Line Items]        
Shares outstanding (in shares) 359,518,849      
Old Skillz, Cash Election Shareholders        
Business Acquisition [Line Items]        
Shares outstanding (in shares) 75,786,931      
Class A common stock, par value $0.0001 per share        
Business Acquisition [Line Items]        
Common stock, par value (in dollars per share)     $ 0.0001  
Common stock, shares authorized (in shares) 500,000,000   500,000,000 500,000,000
Number of shares issued in private placement (in shares) 15,853,052      
Stock sold, price per share (in dollars per share) $ 10.00      
Aggregate consideration $ 158,500,000      
Class B Common Stock        
Business Acquisition [Line Items]        
Common stock, par value (in dollars per share)     $ 0.0001  
Common stock, shares authorized (in shares) 125,000,000   125,000,000 125,000,000
Old Skillz, Stock Election Shareholders | Class A common stock, par value $0.0001 per share        
Business Acquisition [Line Items]        
Merger consideration in shares (in shares) 191,932,860      
Old Skillz, Stock Election Shareholders | Class B Common Stock        
Business Acquisition [Line Items]        
Merger consideration in shares (in shares) 76,663,551      
Old Skillz, Cash Election Shareholders        
Business Acquisition [Line Items]        
Cash consideration $ 566,204,152   $ 566,204,000  
Sponsor | Class A common stock, par value $0.0001 per share        
Business Acquisition [Line Items]        
Shares released if earnout conditions met (in shares) 5,000,000      
Old Skillz Stockholders | Class A common stock, par value $0.0001 per share        
Business Acquisition [Line Items]        
Shares released if earnout conditions met (in shares) 5,000,000      
v3.20.4
Business Combinations - Reconciliation to Statement of Cash Flows and Statement of Equity (Details) - USD ($)
 12 Months Ended
Dec. 16, 2020
Dec. 31, 2020
Business Acquisition [Line Items]    
Cash - Private Placement Financing   $ 158,531,000
Net Business Combination and Private Placement Financing   246,484,000
Less: accrued transaction costs and advisor fees   (16,058,000)
Net cash contributions from Business Combination and PIPE Financing   230,426,000
Old Skillz, Cash Election Shareholders    
Business Acquisition [Line Items]    
Less: cash consideration paid to Old Skillz stockholders $ (566,204,152) (566,204,000)
FEAC    
Business Acquisition [Line Items]    
Cash - FEAC trust and cash, net of redemptions   689,979,000
Less: transaction costs and advisory fees   (35,822,000)
Less: non-cash net assets assumed from FEAC   $ 0
v3.20.4
Business Combinations - Schedule of Shares Issued (Details) - shares
 12 Months Ended
Dec. 16, 2020
Dec. 15, 2020
Dec. 31, 2020
Business Combination, Shares Outstanding [Roll Forward]      
Common stock, outstanding prior to Business Combination (in shares) 56,620,419    
Earnout shares (in shares) 10,000,000    
Total shares of common stock immediately after Business Combination (in shares) 369,797,524 56,620,419  
Class A common stock, par value $0.0001 per share      
Business Combination, Shares Outstanding [Roll Forward]      
Common stock, outstanding prior to Business Combination (in shares) 102,614,847   212,000,000
Shares issued in Private Placement Financing (in shares) 15,853,052    
Business Combination and Private Placement Financing shares- Class A common stock (in shares) 101,201,112    
Total shares of common stock immediately after Business Combination (in shares)   102,614,847 292,000,000
Class B Common Stock      
Business Combination, Shares Outstanding [Roll Forward]      
Common stock, outstanding prior to Business Combination (in shares) 332,690,933   74,000,000
Total shares of common stock immediately after Business Combination (in shares)   332,690,933 78,000,000
Common stock of FEAC      
Business Combination, Shares Outstanding [Roll Forward]      
Common stock (in shares) 68,997,860    
FEAC sponsor shares      
Business Combination, Shares Outstanding [Roll Forward]      
Common stock (in shares) 6,350,200    
FEAC      
Business Combination, Shares Outstanding [Roll Forward]      
Common stock, outstanding prior to Business Combination (in shares) 69,000,000    
Less: redemption of FEAC shares (in shares)   (2,140)  
Total shares of common stock immediately after Business Combination (in shares)   69,000,000  
Old Skillz | Class A common stock, par value $0.0001 per share      
Business Combination, Shares Outstanding [Roll Forward]      
Old Skillz shares (in shares) 191,932,861    
Old Skillz | Class B Common Stock      
Business Combination, Shares Outstanding [Roll Forward]      
Old Skillz shares (in shares) 76,663,551    
v3.20.4
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Credit card processing reserve $ 5,854 $ 2,650
Prepaid expenses 3,772 2,460
Other current assets 865 4,354
Prepaid expenses and other current assets $ 10,491 $ 9,464
v3.20.4
Balance Sheet Components - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Property, Plant and Equipment [Line Items]      
Impairment charges $ 3,573 $ 0 $ 0
Depreciation and amortization 1,609 $ 711 $ 404
December 2019 Lease | Office space      
Property, Plant and Equipment [Line Items]      
Impairment charges $ 3,400    
v3.20.4
Balance Sheet Components - Property and Equipment, Net (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Line Items]    
Total property and equipment $ 8,133 $ 4,912
Accumulated depreciation and amortization (2,841) (1,264)
Property and equipment, net 5,292 3,648
Capitalized internal-use software    
Property, Plant and Equipment [Line Items]    
Total property and equipment 6,167 3,554
Computer equipment and servers    
Property, Plant and Equipment [Line Items]    
Total property and equipment 631 458
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Total property and equipment 184 238
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Total property and equipment 114 143
Construction in progress    
Property, Plant and Equipment [Line Items]    
Total property and equipment $ 1,037 $ 519
v3.20.4
Balance Sheet Components - Other Current Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Accrued sales and marketing expenses $ 7,204 $ 1,630
Accrued compensation 3,825 2,531
End-user liability, net 2,789 1,418
Accrued developer revenue share 907 540
Other accrued expenses 4,893 1,418
Other current liabilities $ 19,618 $ 7,537
v3.20.4
Fair Value Measurements - Narrative (Details) - USD ($)
$ in Thousands
Dec. 16, 2020
Dec. 31, 2020
Dec. 31, 2019
Class of Stock [Line Items]      
Cash and cash equivalents   $ 262,728 $ 25,628
Shares in escrow (in shares) 10,000,000    
Fair value $ 172,300    
Class A common stock, par value $0.0001 per share | Sponsor      
Class of Stock [Line Items]      
Shares released if earnout conditions met (in shares) 5,000,000    
Class A common stock, par value $0.0001 per share | Old Skillz Stockholders      
Class of Stock [Line Items]      
Shares released if earnout conditions met (in shares) 5,000,000    
v3.20.4
Fair Value Measurements- Unobservable Inputs (Details)
$ in Thousands
Sep. 10, 2020
USD ($)
Fair Value Disclosures [Abstract]  
Redeemable Convertible Series E preferred stock forward contract liability $ 21,688
Input 9.17
v3.20.4
Fair Value Measurements - Unobservable Input Reconciliation (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]  
Fair value as of December 31, 2019 $ 0
Issuance of the Redeemable convertible Series E preferred stock forward contract liability 0
Change in fair value 21,688
Settlement of the Redeemable convertible Series E preferred stock forward contract liability (21,688)
Fair value as of December 31, 2020 $ 0
v3.20.4
Long-Term Debt - Summary of Debt (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Unamortized debt discount $ 0 $ (372)
Net carrying amount 0 9,628
2019 Mezzanine Term Loan | Loans Payable    
Debt Instrument [Line Items]    
2019 Mezzanine Term Loan $ 0 10,000
Net carrying amount   $ 10,000
v3.20.4
Long-Term Debt - Narrative (Details) - USD ($)
 1 Months Ended 12 Months Ended
Jun. 30, 2020
Dec. 31, 2019
Dec. 31, 2020
Debt Instrument [Line Items]      
Net carrying amount   $ 9,628,000 $ 0
Loss on debt extinguishment $ 400,000    
Loans Payable | 2019 Mezzanine Term Loan      
Debt Instrument [Line Items]      
Face amount   40,000,000.0  
Face amount immediately available   30,000,000  
Face amount available upon milestone achievement   $ 10,000,000.0  
Interest rate   9.75%  
Net carrying amount   $ 10,000,000.0  
Debt repayment $ 10,000,000.0    
Prime Rate | Loans Payable | 2019 Mezzanine Term Loan      
Debt Instrument [Line Items]      
Basis spread on floating rate   5.00%  
v3.20.4
Commitment and Contingencies - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
May 31, 2019
Lessee, Lease, Description [Line Items]        
Lease liability to be paid $ 26,141      
Impairment charges 3,573 $ 0 $ 0  
Rent expense 6,500 1,900 $ 1,200  
Office space | May 2019 Lease        
Lessee, Lease, Description [Line Items]        
Lease liability to be paid       $ 25,600
Tenant improvement allowance       $ 2,500
Office space | December 2019 Lease        
Lessee, Lease, Description [Line Items]        
Lease liability to be paid   $ 8,800    
Impairment charges $ 3,400      
v3.20.4
Commitment and Contingencies - Lease Maturities (Details)
$ in Thousands
Dec. 31, 2020
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2021 $ 4,528
2022 2,498
2023 2,368
2024 2,439
2025 2,513
Thereafter 11,795
Future minimum lease payments $ 26,141
v3.20.4
Retirement Plans (Details) - USD ($)
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Retirement Benefits [Abstract]      
Contributions $ 100,000 $ 0 $ 0
v3.20.4
Stockholders' Equity (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended 2 Months Ended 12 Months Ended
Dec. 16, 2020
USD ($)
$ / shares
shares
Dec. 15, 2020
$ / shares
shares
Sep. 16, 2020
shares
Sep. 30, 2020
USD ($)
$ / shares
Sep. 30, 2019
USD ($)
$ / shares
Mar. 31, 2019
USD ($)
Jun. 30, 2018
May 31, 2020
USD ($)
$ / shares
Dec. 31, 2020
USD ($)
vote
$ / shares
shares
Dec. 31, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
USD ($)
Class of Stock [Line Items]                      
Recapitalization exchange ratio                 74.71%    
Shares authorized (in shares) 635,000,000               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 $ 0.0001  
Preferred stock, shares authorized (in shares) 10,000,000               10,000,000 10,000,000  
Preferred stock, par value (in dollars per share) | $ / shares $ 0.0001               $ 0.0001 $ 0.0001  
Warrant exercise price (in dollars per share) | $ / shares                 $ 11.50    
Shares issued for each share of preferred stock (in shares)   10                  
Aggregate consideration | $       $ 11,700              
Stock sold, price per share (in dollars per share) | $ / shares       $ 43.11              
Carrying value of long-term debt and accrued interest converted to redeemable convertible preferred stock | $         $ 9,800 $ 5,000     $ 0 $ 14,852 $ 0
Change in fair value | $                 $ 21,700    
Stock split             10        
Public Warrant                      
Class of Stock [Line Items]                      
Warrants outstanding (in shares)                 22,266,643    
Private Warrant                      
Class of Stock [Line Items]                      
Warrants outstanding (in shares)                 48,135    
Warrant exercise price (in dollars per share) | $ / shares   $ 1.4991                  
Minimum                      
Class of Stock [Line Items]                      
Duration to become exercisable                 30 days    
Maximum                      
Class of Stock [Line Items]                      
Duration to become exercisable                 12 months    
Class A common stock, par value $0.0001 per share                      
Class of Stock [Line Items]                      
Common stock, votes per share | vote                 1    
Common stock, shares authorized (in shares) 500,000,000               500,000,000 500,000,000  
Common stock, par value (in dollars per share) | $ / shares                 $ 0.0001    
Number of shares called by each warrant (in shares)                 1    
Aggregate consideration | $ $ 158,500                    
Stock sold, price per share (in dollars per share) | $ / shares $ 10.00                    
Class A common stock, par value $0.0001 per share | Private Warrant                      
Class of Stock [Line Items]                      
Number of shares called by each warrant (in shares)   1                  
Class B Common Stock                      
Class of Stock [Line Items]                      
Common stock, votes per share | vote                 20    
Common stock, shares authorized (in shares) 125,000,000               125,000,000 125,000,000  
Common stock, par value (in dollars per share) | $ / shares                 $ 0.0001    
Shares issued for each share of preferred stock (in shares) 10                    
Common stock                      
Class of Stock [Line Items]                      
Common stock issued upon conversion (in shares)     139,000,000.0                
Common stock | Old Skillz                      
Class of Stock [Line Items]                      
Common stock issued upon conversion (in shares)   122,000,000.0                  
Series D-1 Preferred Stock                      
Class of Stock [Line Items]                      
Aggregate consideration | $         $ 25,000            
Stock sold, price per share (in dollars per share) | $ / shares         $ 21.516            
Series E Preferred Stock                      
Class of Stock [Line Items]                      
Aggregate consideration | $               $ 65,000      
Stock sold, price per share (in dollars per share) | $ / shares               $ 43.11      
v3.20.4
Stock Based Compensation - Stock-Based Compensation Expense (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense $ 23,757 $ 1,237 $ 6,680
Research and development      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense 6,110 181 361
Sales and marketing      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense 4,505 111 114
General and administrative      
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]      
Total stock-based compensation expense $ 13,142 $ 945 $ 6,205
v3.20.4
Stock Based Compensation - Narrative (Details)
$ / shares in Units, $ in Thousands
 1 Months Ended 2 Months Ended 12 Months Ended
Dec. 16, 2020
USD ($)
installment
shares
Jun. 08, 2020
USD ($)
option
$ / shares
shares
May 14, 2020
USD ($)
option
shares
Apr. 15, 2020
USD ($)
option
$ / shares
shares
Apr. 30, 2019
USD ($)
shares
Apr. 29, 2019
USD ($)
option
$ / shares
shares
Aug. 31, 2020
USD ($)
shares
May 31, 2020
USD ($)
Dec. 31, 2020
USD ($)
$ / shares
shares
Dec. 31, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Unrecognized stock-based compensation expense                 $ 156,900    
Unrecognized stock-based compensation expense, period for recognition                 3 years 6 months 10 days    
Aggregate intrinsic value                 $ 89,900 $ 1,400 $ 500
Recapitalization exchange ratio                 74.71%    
Exercise price (in dollars per share) | $ / shares                 $ 9.25 $ 0.31  
Options, grant date fair value $ 172,300                    
Total stock-based compensation expense                 $ 23,757 $ 1,237 6,680
General and administrative                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Total stock-based compensation expense                 13,142 945 6,205
Sales and marketing                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Total stock-based compensation expense                 4,505 111 114
Research and development                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Total stock-based compensation expense                 6,110 181 $ 361
Executive Officer                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Options, grant date fair value             $ 23,500        
Total stock-based compensation expense                 $ 2,300    
Options granted (in shares) | shares             2,757,886        
Class B Common Stock                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Value of outstanding common stock                   700  
Common stock acquired               $ 11,000      
Class B Common Stock | General and administrative                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Total stock-based compensation expense               2,300   $ 500  
Class B Common Stock | Sales and marketing                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Total stock-based compensation expense               700      
Class B Common Stock | Research and development                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Total stock-based compensation expense               $ 400      
Restricted stock                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares issued (in shares) | shares                 13,300,000 8,200,000  
Legacy Equity Incentive Plans                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting period                 36 months    
Expiration period                 10 years    
2020 Omnibus Incentive Plan                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares authorized (in shares) | shares                 47,841,859    
Percentage of stock outstanding                   5.00%  
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) | shares                 24,669,278    
2020 Omnibus Incentive Plan | Class B Common Stock                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares authorized (in shares) | shares                 8,172,581    
2020 Omnibus Incentive Plan | Common Class A and B                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares authorized (in shares) | shares                 15,000,000    
2020 Omnibus Incentive Plan | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Expiration period                 10 years    
2019 CEO Executive Grant                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares issued (in shares) | shares         8,970,517            
Number of stock options | option           2          
Exercise price (in dollars per share) | $ / shares           $ 0.43          
Outstanding principal         $ 3,800            
Interest rate         2.55%            
Promissory note term         9 years            
2019 CEO Executive Grant | Class A common stock, par value $0.0001 per share                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Number of stock options | option           2          
2019 CEO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting period           4 years          
Options, grant date fair value           $ 1,700          
Total stock-based compensation expense                 $ 700    
Vesting percentage, waived 100.00%                    
2019 CEO Executive Grant, First Option | Stock options | 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) | shares           2,990,172          
2019 CEO Executive Grant, Second Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Options, grant date fair value           $ 900          
2019 CEO Executive Grant, Second Option | Stock options | 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) | shares           5,980,344          
2019 CEO Executive Grant, Second Option | Stock options | Minimum                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Company valuation           $ 600,000          
2019 CEO Executive Grant, Second Option | Stock options | Maximum                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Company valuation           $ 2,700,000          
2020 CEO Executive Grant                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares issued (in shares) | shares     9,921,314                
Exercise price (in dollars per share) | $ / shares       $ 1.15              
Outstanding principal     $ 11,400                
Interest rate     0.58%                
Promissory note term     9 years                
2020 CEO Executive Grant | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting period       4 years              
Options, grant date fair value       $ 21,500              
Total stock-based compensation expense                 3,800    
Vesting percentage, waived 100.00%                    
2020 CEO Executive Grant | Stock options | 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) | shares       9,921,314              
2020 CRO Executive Grant                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares issued (in shares) | shares     2,779,042                
Number of stock options | option     2 2              
Exercise price (in dollars per share) | $ / shares       $ 1.15              
Outstanding principal     $ 3,200                
Interest rate     0.58%                
Promissory note term     9 years                
2020 CRO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting period       4 years              
Options, grant date fair value       $ 3,500              
Total stock-based compensation expense                 600    
Vesting percentage, waived 100.00%                    
2020 CRO Executive Grant, First Option | Stock options | Class B Common Stock                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares authorized (in shares) | shares       1,852,695              
2020 CRO Executive Grant, Second Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Options, grant date fair value       $ 2,000              
2020 CRO Executive Grant, Second Option | Stock options | Class B Common Stock                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares authorized (in shares) | shares       926,347              
2020 CRO Executive Grant, Second Option | Stock options | Minimum                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Company valuation       $ 1,500,000              
2020 CRO Executive Grant, Second Option | Stock options | Maximum                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Company valuation       $ 2,700,000              
2020 CTO Executive Grant                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Number of stock options | option   2                  
Exercise price (in dollars per share) | $ / shares   $ 1.33                  
2020 CTO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting period   4 years                  
Options, grant date fair value   $ 9,000                  
Total stock-based compensation expense                 900    
Vesting percentage, waived 100.00%                    
2020 CTO Executive Grant, First Option | Stock options | Class B Common Stock                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares authorized (in shares) | shares   1,520,736                  
2020 CTO Executive Grant, Second Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Options, grant date fair value   $ 3,700                  
2020 CTO Executive Grant, Second Option | Stock options | Class B Common Stock                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Shares authorized (in shares) | shares   919,862                  
2020 CTO Executive Grant, Second Option | Stock options | Minimum                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Company valuation   $ 1,800,000                  
2020 CTO Executive Grant, Second Option | Stock options | Maximum                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Company valuation   $ 3,000,000                  
Option Agreements                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Options, grant date fair value $ 93,400                    
Total stock-based compensation expense                 $ 800    
Number of installments | installment 3                    
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) | 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) | shares 9,960,000                    
Tranche one | Executive Officer                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage             25.00%        
Tranche one | Legacy Equity Incentive Plans                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage                 25.00%    
Tranche one | 2020 Omnibus Incentive Plan | Restricted stock units                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting period                 1 year    
Tranche one | 2019 CEO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage           2.08%          
Tranche one | 2020 CEO Executive Grant                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage       25.00%              
Tranche one | 2020 CRO Executive Grant, First Option                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage       25.00%              
Tranche one | 2020 CTO Executive Grant, First Option                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage   25.00%                  
Tranche one | Option Agreements                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage 33.33%                    
Trading days 10 days                    
Multiplier on volume weighted-average price on closing date 300.00%                    
Tranche two | Executive Officer                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage             6.25%        
Tranche two | Legacy Equity Incentive Plans                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage                 25.00%    
Tranche two | 2019 CEO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage           50.00%          
Tranche two | 2020 CEO Executive Grant                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage       6.25%              
Tranche two | 2020 CRO Executive Grant, First Option                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage       6.25%              
Tranche two | 2020 CTO Executive Grant, First Option                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage   6.25%                  
Tranche two | Option Agreements                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage 33.33%                    
Multiplier on volume weighted-average price on closing date 400.00%                    
Tranche three | Legacy Equity Incentive Plans                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage                 25.00%    
Tranche three | 2019 CEO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage           100.00%          
Tranche three | 2020 CEO Executive Grant | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage       50.00%              
Tranche three | 2020 CRO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage       50.00%              
Tranche three | 2020 CTO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage   50.00%                  
Tranche three | Option Agreements                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage 33.33%                    
Multiplier on volume weighted-average price on closing date 500.00%                    
Tranche four | Legacy Equity Incentive Plans                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Vesting percentage                 25.00%    
Tranche four | 2020 CEO Executive Grant | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage       100.00%              
Tranche four | 2020 CRO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage       100.00%              
Tranche four | 2020 CTO Executive Grant, First Option | Stock options                      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                      
Accelerated vesting percentage   100.00%                  
v3.20.4
Stock Based Compensation - Stock Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Number of Shares Available for Issuance Under the Plan    
Beginning balance (in shares) 2,880,358  
Additional shares authorized (in shares) 62,903,028  
Options and restricted stock units granted (in shares) (36,074,010)  
Options canceled (in shares) 5,791,227  
Ending balance (in shares) 35,500,603 2,880,358
Number of Shares Outstanding Under the Plan    
Beginning balance (in shares) 28,983,226  
Options granted (in shares) 35,732,754  
Options exercised (in shares) (20,138,817)  
Options canceled (in shares) (6,172,670)  
Ending balance (in shares) 38,404,493 28,983,226
Exercisable (in shares) 14,248,234 15,225,162
Unvested (in shares) 24,156,259 13,758,064
Weighted- Average Exercise Price    
Beginning balance (in dollars per share) $ 0.19  
Options granted (in dollars per share) 6.70  
Options exercised (in dollars per share) 0.78  
Options canceled (in dollars per share) 0.51  
Ending balance (in dollars per share) 5.89 $ 0.19
Exercisable, weighted-average exercise price (in dollars per share) 0.18 0.08
Unvested, weighted-average exercise price (in dollars per share) $ 9.25 $ 0.31
Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value    
Options outstanding, weighted-average remaining contractual term 8 years 3 months 7 days 7 years 8 months 1 day
Exercisable, weighted-average remaining contractual term 6 years 5 months 12 days 6 years 10 months 6 days
Unvested, weighted-average remaining contractual term 9 years 4 months 2 days 8 years 6 months 29 days
Options outstanding, aggregate intrinsic value $ 542,074 $ 13,056
Exercisable, aggregate intrinsic value 282,364 8,492
Unvested, aggregate intrinsic value $ 259,710 $ 4,564
Restricted stock units    
Number of Plan shares outstanding    
Outstanding at December 31, 2019 (in shares) 0  
Restricted stock units granted (in shares) 341,256  
Restricted stock units released (in shares) 0  
Restricted stock units canceled (in shares) 0  
Outstanding at December 31, 2019 (in shares) 341,256 0
Weighted-Average Grant Date Fair Value per share    
Unvested at December 31, 2019 (in dollars per share) $ 0  
Granted (in dollars per share)   $ 17.68
Vested (in dollars per share)   0
Forfeited (in dollars per share)   0
Unvested at December 31, 2020 (in dollars per share) $ 17.68 $ 0
Previously Reported    
Number of Shares Available for Issuance Under the Plan    
Beginning balance (in shares) 3,855,385  
Ending balance (in shares)   3,855,385
Number of Shares Outstanding Under the Plan    
Beginning balance (in shares) 38,794,307  
Ending balance (in shares)   38,794,307
Weighted- Average Exercise Price    
Beginning balance (in dollars per share) $ 0.14  
Ending balance (in dollars per share)   $ 0.14
Retroactive application of recapitalization    
Number of Shares Available for Issuance Under the Plan    
Beginning balance (in shares) (975,027)  
Ending balance (in shares)   (975,027)
Number of Shares Outstanding Under the Plan    
Beginning balance (in shares) (9,811,081)  
Ending balance (in shares)   (9,811,081)
Weighted- Average Exercise Price    
Beginning balance (in dollars per share) $ 0.05  
Ending balance (in dollars per share)   $ 0.05
v3.20.4
Stock Based Compensation - Valuation Assumptions (Details) - Common stock options - $ / shares
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected volatility, minimum 45.00% 47.17% 47.69%
Expected volatility, maximum 50.00% 55.47% 49.17%
Risk-free interest rate, minimum 0.27% 1.57% 2.60%
Risk-free interest rate, maximum 1.44% 2.64% 3.06%
Expected dividend yield 0.00% 0.00% 0.00%
Weighted average estimated fair value of stock options granted during the year (in dollars per share) $ 5.06 $ 0.21 $ 0.11
Minimum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term (in years) 4 years 1 month 20 days 5 years 5 years 5 months 26 days
Maximum      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Expected term (in years) 6 years 3 months 6 years 10 months 9 days 6 years 1 month 17 days
v3.20.4
Income Taxes - Components of Income Tax Provision (Benefit) (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Current:      
Federal $ 0 $ 0 $ 0
State 115 0 0
Total Current 115 0 0
Deferred:      
Federal 0 0 0
State 0 0 0
Total Deferred 0 0 0
Provision for income taxes $ 115 $ 0 $ 0
v3.20.4
Income Taxes - Effective Income Tax Rate Reconciliation (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Income Tax Disclosure [Abstract]      
At statutory rate $ (25,693) $ (5,956) $ (5,608)
State taxes 90 0 0
Valuation allowance 26,245 6,320 5,671
Stock based compensation (7,257) (182) (141)
Permanent differences 6,730 (182) 78
Provision for income taxes $ 115 $ 0 $ 0
v3.20.4
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Deferred tax assets:    
Net operating loss carryforwards $ 47,864 $ 21,309
Stock-based compensation 2,492 1,646
Reserves and accruals 1,239 513
Other 291 2
Total deferred tax assets 51,886 23,470
Less: valuation allowance (51,859) (23,455)
Deferred tax assets, net of valuation allowance 27 15
Deferred tax liabilities:    
Fixed assets (27) (15)
Total deferred tax liabilities (27) (15)
Net deferred tax assets $ 0 $ 0
v3.20.4
Income Taxes - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Operating Loss Carryforwards [Line Items]    
Increase in valuation allowance $ 28.4  
Federal    
Operating Loss Carryforwards [Line Items]    
Net operating loss carryforwards 201.3  
Operating loss carryforwards not subject to expiration $ 165.3  
State    
Operating Loss Carryforwards [Line Items]    
Net operating loss carryforwards   $ 64.9
v3.20.4
Net Loss Per Share - Computation of Net Loss Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Numerator:      
Net loss – Basic and diluted $ (122,461) $ (23,605) $ (27,780)
Net loss – Basic and diluted $ (122,461) $ (23,605) $ (27,780)
Denominator:      
Weighted average common shares outstanding - basic and diluted (in shares) [1] 294,549,146 261,228,108 236,040,717
Net loss per share attributable to common stockholders - basic and diluted (in dollars per share) [1] $ (0.42) $ (0.09) $ (0.12)
[1] Retroactively restated for the reverse recapitalization as described in Notes 1 and 2.
v3.20.4
Net Loss Per Share - Antidilutive Shares (Details) - shares
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total (in shares) 84,391,917 40,841,379 46,097,615
Convertible promissory notes      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total (in shares) 0 0 12,099,120
Warrants      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total (in shares) 22,314,778 3,635,180 3,087,307
Common stock options      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total (in shares) 51,735,883 37,206,199 30,911,188
Restricted stock units      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total (in shares) 341,256 0 0
Earnout shares      
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]      
Total (in shares) 10,000,000 0 0
v3.20.4
Subsequent Events (Details) - Subsequent Event
Jan. 31, 2021
shares
Class B Common Stock  
Subsequent Event [Line Items]  
Shares to be released from escrow (in shares) 10,000,000
Sponsor | Class A common stock, par value $0.0001 per share  
Subsequent Event [Line Items]  
Shares to be released from escrow (in shares) 5,000,000
Old Skillz Stockholders | Class A common stock, par value $0.0001 per share  
Subsequent Event [Line Items]  
Shares to be released from escrow (in shares) 5,000,000