Finally! Skillz Stock Just Passed a Crucial Test. Time to Buy?
Skillz (NYSE: SKLZ) reported 2022 second-quarter financial results early in August that revealed a significant milestone. It finally lowered sales and marketing expenses to less than 100% of revenue.
As the Federal Reserve started raising interest rates, it increased the cost of capital for businesses. Investors became less interested in companies like Skillz, which generated massive losses on the bottom line. Skillz's increasing focus on profitability is good news for shareholders, but is it enough to make investors buy the stock now?
In its most recent quarter, which ended on June 30, Skillz's revenue totaled $73.3 million. In that same time, Skillz spent $73.2 million in sales and marketing. That's the first time in several quarters that Skillz's revenue surpassed spending on sales and marketing, albeit by a slight margin. Still, the proportional decrease in sales and marketing spending hurt meaningfully. Skillz's revenue of $73 million in Q2 was $16.2 million lower than the $89.5 million reported in that same quarter last year. Further, paying monthly active users fell to 420,000 in Q2 from 460,000 last year.
Source Fool.com
