Firy reported second-quarter 2026 revenue growth, driven by its RZR performance advertising business, while its Skillz (NYSE:SKLZ) gaming segment faced operational headwinds. The company also highlighted a recent $730 million court judgment against Papaya Gaming and announced plans to redeem $80 million of debt ahead of its December maturity.
Chief Executive Officer Andrew Paradise called the quarter “the most consequential period in the company’s recent history,” citing the June rebrand, the Papaya judgment and efforts to improve the company’s capital structure and operating performance.
RZR Reaches $10 Million in Quarterly Revenue
RZR, Firy’s AI-powered performance advertising business, generated more than $10 million in second-quarter revenue for the first time. Revenue rose 6% sequentially and 75% year over year, while the business posted its fourth consecutive profitable quarter, according to Paradise.
The company said RZR’s growth is being supported by increased spending from existing clients, new customer wins and product offerings across Android and iOS user acquisition and retargeting, as well as connected television advertising. RZR processes more than 6 million queries per second across more than 10 billion devices, Paradise said.
Gaming remained RZR’s largest advertiser category, representing about 70% of second-quarter revenue, down from approximately 80% in the preceding quarter. Paradise said the shift reflects expanding activity in consumer applications, retail and entertainment.
During the question-and-answer session, Paradise said most of RZR’s gaming customers are independent of the Skillz platform and include major game businesses such as King and Niantic, now part of Scopely. He said mobile remains an important advertising channel despite slower new-device growth over the past five years.
Chief Financial Officer Alex Walsh said RZR grew net revenue from $11 million in 2024 to $27 million in 2025, aided by the rollout of iOS user-acquisition products and 168% net retention. For 2026, Firy expects RZR revenue to nearly double year over year. Walsh said the business has infrastructure in place that should allow revenue growth with relatively limited cost increases.
Paradise also cited early results in connected television, including RZR’s partnership with LG as an exclusive gaming advertiser, and said the company sees a “bright future” for CTV in 2027.
Skillz Works Through Operational Issues
Revenue in the Skillz gaming business increased modestly from the first quarter, including a net $1.5 million benefit from two one-time items. Excluding those items, Skillz revenue declined approximately 3% sequentially, in line with an 8% decline in paying monthly active users.
Paradise said he has assumed interim leadership of the Skillz business while Firy recruits a dedicated platform CEO. The company said it has visibility toward a return to sequential growth in the fourth quarter, though Walsh said that outlook depends on product and content improvements.
Sales and marketing expense was $13.6 million, down from $17.3 million in the first quarter. Walsh said about $1.5 million of that decrease reflected lower end-user incentives, which fell to $19 per paying monthly active user from $21, with the remaining reduction tied to paid acquisition.
Walsh said the company did not expand user acquisition because it was addressing an operational issue and did not want to acquire users into a funnel being repaired. Instead, Firy increased research and development spending to $6.9 million from $5.1 million sequentially, directing funds toward retention and engagement product work.
“Product first, then content, then spend,” Walsh said, adding that user-acquisition spending could increase as contribution profit supports it. Games operated and owned by Skillz accounted for 40% of second-quarter gross merchandise value.
Papaya Judgment and Balance Sheet Actions
Firy said a federal judge rejected Papaya Gaming’s post-trial challenges and awarded the company approximately $730 million in its false-advertising litigation. Paradise said the judgment was more than 70% above the original jury award.
The company said it remains confident in the record while recognizing that no appellate result is guaranteed. Paradise said Firy intends to assert its rights as Papaya’s largest creditor in Israeli and U.S. proceedings. He also said Papaya has stated that it is no longer running bots, which Firy believes could support fairer competition in its core U.S. market.
Litigation expenses during the quarter neared $11 million, largely due to the Papaya trial. Walsh said litigation proceeds will not be recognized in Firy’s financial statements until they are collected, while the company expects litigation costs to decline in future periods.
Separately, Firy announced an $80 million debt redemption that it said will save approximately $2.8 million in interest expense before maturity. The redemption will leave $50 million in debt outstanding, which matures Dec. 15. Walsh said the company expects to pay off the remaining debt and is evaluating refinancing and other alternatives to strengthen liquidity and its capital structure.
Firy ended the quarter with approximately $164 million in cash and cash equivalents and $130 million in debt before the announced redemption. Walsh said management prefers to maintain a $30 million cash buffer for operating conditions. He also cited $15 million remaining from the AviaGames settlement, federal and state net operating loss carryforwards, the company’s Las Vegas building and its preferred 10% stake in Exit Games as balance-sheet assets.
Firy expects revenue to more than double from 2025 through 2028 and anticipates generating modest positive operating cash flow in 2027, with further acceleration expected in 2028 and beyond.
About Skillz (NYSE:SKLZ)
Skillz Inc (NYSE: SKLZ) operates a mobile e-sports platform that connects game developers, advertisers and players through skill-based competition. By integrating its software development kit into a variety of casual and midcore mobile titles, the company enables in-app tournaments and head-to-head matches in which users compete for virtual or cash prizes. Skillz’s marketplace also offers real-time leaderboards, live events and social features designed to enhance player engagement and retention.
The company’s core offering includes developer tools and analytics that help game studios monetize through entry fees, in-game purchases and ad revenue sharing.
