Transcript: Motorsport Video games Q1 2026 Earnings Convention Name

Motorsport Video games (NASDAQ:MSGM) reported first-quarter monetary outcomes on Wednesday. The transcript from the corporate’s first-quarter earnings name has been offered under.

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Abstract

Motorsport Video games reported Q1 2026 revenues of $4 million, greater than double year-on-year, pushed by elevated gross sales of Le Mans Final and Race Management subscriptions.

Participant engagement for Le Mans Final continues to develop, with a file 8,800 concurrent gamers, and additional updates are deliberate to coincide with real-world occasions.

Race Management, a proprietary platform, is changing into a major income stream, with month-to-month recurring revenues exceeding $0.2 million, and is gaining traction with main companions like Genesis and Logitech.

The corporate repurchased shares from Pushed Life-style Group, retired Class B shares, and secured a $3 million credit score facility from Citibank, strengthening company governance and monetary flexibility.

Future plans embrace bringing Le Mans Final to PlayStation and Xbox, additional funding in simulation know-how, and creating a brand new undertaking leveraging current platforms and partnerships.

Full Transcript

OPERATOR

for standing by and welcome to Motorsport Video games Inc. First Quarter 2026 Earnings Name as a reminder, immediately’s convention is being recorded. I wish to flip the convention over to Ben Rossiter Turner from Motorsport Video games. Please go forward. Thanks and welcome TO Motorsport Video games First Quarter 2026 Earnings Convention Name and webcast. On immediately’s name is Motorsport Video games Chief Govt Officer Stephen Hood and Chief Monetary Officer Stanley Beckley. By now everybody ought to have entry to the corporate’s first quarter 2026 earnings press launch filed immediately after markets shut. That is accessible on the Investor Relations part of Motorsport Video games website@www.motorsportgames.com. in the course of the course of this name, administration might make ahead trying statements with throughout the that means of US Federal securities legal guidelines. These statements are primarily based on administration’s present expectations and beliefs and contain dangers and uncertainties that might trigger precise outcomes to vary materially from these described in these ahead trying statements. Besides as required by regulation, the Firm undertakes no obligation to replace any ahead trying assertion made on this name or to replace or alter its ahead trying statements, whether or not because of new info, future occasions or in any other case. Please confer with immediately’s press launch and the Firm’s filings with the SEC, together with its most up-to-date quarterly report on Type 10Q for the quarter ended March 31, 2026 for an in depth dialogue on sure dangers that might trigger precise outcomes to vary materially from these expressed or implied in any ahead trying statements made immediately. In immediately’s convention name we are going to confer with sure non GAAP monetary measures comparable to adjusted EBITDA as we talk about the primary quarter 2026 monetary outcomes. You can see a reconciliation of those non GAAP measures to their most instantly comparable GAAP measures in addition to different associated disclosures. Within the press launch issued earlier immediately, which can also be accessible on the Investor Relations part of Motorsport Video games website@www.motorsportgames.com. and now I would like to show over the decision to Stephen Hood, Chief Govt Officer of Motorsport Video games.

Stephen Hood (Chief Govt Officer)

Stephen thanks Ben Good afternoon everybody and thanks for becoming a member of The Motorsport Video games first quarter 2026 earnings name. We’ve began 2026 from a place of actual monetary energy. Revenues of $4 million in Q1 have greater than doubled yr on yr. We’ve as soon as once more generated optimistic working earnings, posted considerably improved adjusted EBITDA and proceed to develop our money place from operations. The continued supply of Le Mans final content material or downloadable content material or DLC plus the ever bettering monetization of race management are key to these revenues. The monetary independence now we have now constructed pushed principally by the constant industrial success our major gaming title, Le Mans final, and the recurring income we’re producing by racecontrol is what has given us the power to behave decisively within the early weeks of this quarter, each for the good thing about all our shareholders and to set the corporate up for its subsequent stage of development. I’ll come again to that shortly. First on Le Mans final, participant engagement continues to speed up. On March thirty first we as soon as once more recorded a brand new all time participant peak, greater than 8,800 concurrent gamers on Steam. This new peak was decided across the launch of model 1.3, introducing Circuit de Barcelona, Catalonia, the Ducane LMP3 race automobile and Logitech Trueforce assist. This development in participant numbers is just not a one off. We’ve constantly reported participant development since Launch. Within the first quarter of 2025 we had a peak of 4,000 gamers and a median of simply over 1,300. Peak concurrent gamers grew 118% yr over yr. Nonetheless, the metric we observe most carefully is common concurrent customers as a result of it strips out the spikes from content material releases and reveals whether or not persons are really sticking round. That quantity grew 169%. The ground is rising, not simply the ceiling. Waiting for the second quarter, now we have an replace deliberate for launch in June to coincide with The Actual World 24 Hours of Le Mans, the spotlight of the World Endurance Championship upon which our recreation is predicated. The persistent cadence of significant enhancements that has outlined our work over the previous two years continues and continues to be funded by the corporate’s personal working efficiency. I wish to take a second to discuss Race Management particularly as a result of I believe it deserves to be understood not simply as a characteristic supporting Le Mans final, however as a standalone platform enterprise in its personal proper. Race Management is our proprietary matchmaking, competitors and reside service platform. It’s the infrastructure layer that powers organized racing for our group and more and more our for these companions who wish to attain that group. Month-to-month recurring revenues have exceeded $0.2 million, and the primary three months of 2026 have been among the many strongest intervals of development now we have seen since launch. However what excites us essentially the most is just not the place Race Management is immediately, it’s how rapidly it may add meaningfully to our development profile. As we proceed to put in options and performance, the roadmap forward is substantial, and every addition compounds the platform’s worth to each our gamers and our industrial companions. What makes Race Management notably engaging from a monetary perspective is its margin profile. As a platform enterprise constructed on infrastructure we already personal and function, incremental income carries considerably extra favorable EBITDA contribution than our content material enterprise. It’s within the truest sense a top quality income stream, recurring, scalable and deeply embedded within the day by day conduct of our most engaged gamers. Past direct subscription income, Race Management is changing into the activation layer of alternative for automotive producers, motorsport sequence and world client manufacturers searching for direct engagement with a extremely focused, extremely passionate viewers. Our current collaboration with Genesis, the posh automotive model and WEC newcomer, demonstrates what that appears like in apply, and we’re delighted that Logitech, one of many world’s main gaming {hardware} producers, has chosen RaceControl as a platform to energy the Logitech G Problem Esports sequence. These should not peripheral partnerships, they’re a validation that that race management has develop into an infrastructure that critical organizations wish to entry. The mixture of Le Mans Final’s ongoing industrial momentum, RaceControl’s rising recurring income layer, and our constant working profitability offers us with helpful flexibility going forwards. Progress on bringing Le Mans Final to PlayStation and Xbox in collaboration with our improvement companions continues as deliberate. We’re deepening funding in our proprietary simulation know-how which is the long run retention engine for the core of our market. We’re strengthening the group with focused hires throughout engineering platform and strategic management and we’re within the formative phases of making ready a brand new long run undertaking. This new title will leverage every little thing now we have constructed from our simulation know-how, our reside service infrastructure, our race management platform and the group relationships now we have cultivated by our common racing recreation Le Mans Final. This isn’t a speculative greenfield undertaking, however one that’s being designed to take one other large stride within the firm’s output with the identical accessible self-discipline that has outlined our reemergence as a premier racing recreation developer. We imagine this represents a major long run worth creation alternative and we sit up for sharing extra in the end on console. Particularly, our precise timing for the discharge of Le Mans final stays topic to additional improvement progress. The work undertaken is advanced. Realistically, we count on to announce extra particulars and launch as we enter 2027. As we transfer into the latter phases of the undertaking and construct confidence in our anticipated launch window. As beforehand talked about, we’re taking a cautious high quality first strategy and plan to pick one of the best launch window moderately than ship out of economic necessity. Our current and future participant base could be very vocal about their need for a console launch for Le Mans final and we’re happy to substantiate that improvement is progressing properly. I might now like to show to a sequence of company actions we executed up to now few weeks which mark a major step ahead for the corporate. We repurchased 904,395 shares of our Class A typical inventory from Pushed Life-style Group llc. As a part of that transaction, all Class B shares which had carried a ten occasions voting benefit had been retired, that means each share now holds equal voting energy. Shareholders additionally authorized an enlargement of the awards accessible below our worker fairness plan, giving us an essential instrument to incentivise and retain the folks driving our development. Earlier than I hand over to Stanley, I wish to step again and replicate on what this second represents for Motorsport Video games. The company actions we executed this quarter, the repurchase of shares from Pushed Life-style, the retirement of Class B voting rights, the Citibank credit score facility, should not merely transactional steps. They’re a direct reflection of how far this firm has come. And I wish to take a second to thank Pushed Life-style. They had been with us at inception and their early assist was vital in getting a number of video games to the place we’re immediately. Their determination to retain a minority shareholding within the firm is just not solely a vote of confidence in our future, it was additionally a realistic end result from our stability sheet. By retaining an fairness stake moderately than a full money exit, we had been in a position to obtain the identical strategic end result. The retirement of all Class B supervoting shares and the return of equal voting rights to all shareholders, whereas deploying much less money to take action. These actions additionally level ahead our energy in monetary place, constructed from operations, has given us the power to behave decisively. We’ve returned larger possession and strategic affect to the corporate, secured further flexibility by the Citibank facility and positioned ourselves for the subsequent part of development. All the things now we have constructed has been purposeful. The simulation know-how, the reside service infrastructure, race management, the group, the industrial partnerships. We’ve been constructing a basis, one which we proceed to advance, all while demonstrating its worth, supporting merchandise like Le Mans Final. We’re not but able to share the total element of what that basis will assist subsequent. However I wish to be direct. We’ve a product roadmap we imagine has the potential to drive very significant income and revenue development in 2027 and past. And we count on to debate it intimately on our Q3 earnings name. What I can inform you immediately is that our subsequent stage of development is not going to require us to begin from scratch. It would leverage every little thing now we have already confirmed. Our know-how, our platform, our viewers and our operational self-discipline. The chance profile of what comes subsequent is basically completely different from the normal recreation improvement wager as a result of the muse is already in existence and producing returns. We sit up for telling you way more. For now, I am going to hand over to Stanley Beckley, our Chief Monetary Officer.

Stanley Beckley (Chief Monetary Officer)

Thanks, Stephen and good night, everybody. As with earlier earnings calls, I will not offer any ahead trying steering immediately. As a substitute I’ll deal with offering an replace on our monetary outcomes and highlights from the primary quarter of 2026. Revenues for the quarter had been 4.0 million, up by 2.3 million or 129.3% when in comparison with the identical interval within the prior yr. The rise in revenues was Primarily attributable to a 1.6 million improve from gross sales of Le Mans final and a 0.7 million improve in race Management subscriptions in comparison with the identical prior yr interval. Month-to-month recurring revenues for Race Management subscriptions now exceed 0.2 million. Administration plans to develop this essential income stream as we proceed to diversify our product combine and work in direction of our objective of changing into a multi format and multi title online game developer and writer. Web earnings for the primary quarter of 2026 and 2025 was roughly $1.0 million respectively. Web earnings attributable to Class A typical inventory was 0.06 per share for the primary quarter of 2026 in comparison with internet earnings per share of 0.33 for a similar interval within the prior yr. We’re reporting adjusted EBITDA of 1.5 million for the primary quarter of 2026 in comparison with $0.6 million for a similar interval within the prior yr. The development in adjusted EBITDA of 0.9 million was primarily as a result of similar components driving the beforehand mentioned change in internet earnings for the primary quarter of 2026 when in comparison with the identical interval within the prior yr, in addition to a rise in inventory primarily based compensation in comparison with the prior yr interval because it pertains to liquidity. As of March 31, 2026 we had money and money equivalents of 5.9 million which decreased to three.8 million as of April 2026 as a result of Firm’s 3.7 million repurchase of its shares from Pushed Life-style Group LLC on April 22, 2026 partially offset by money inflows from operations. Administration believes that this share repurchase from Pushed Life-style will strengthen our company governance construction and place the corporate for its subsequent stage of development while underscoring our confidence in our enterprise and liquidity place. Through the three months ended March 31, 2026, we generated a median optimistic money circulate from operations of roughly 0.5 million per 30 days. That was primarily attributable to elevated profitability and the capitalization by internally developed software program. We at present don’t have any buy dedication liabilities. Moreover, our working Capital as of March 31, 2026 was 5.2 million versus 4.2 million as of December 31, 2025. Underscoring a a lot improved stability sheet and liquidity, place administration stays assured within the firm’s product roadmap as we work in direction of porting Le Mans final on console over the subsequent a number of months. We additionally secured a 3 million revolving line of credit score from Citibank in February 2026. As of March 31, 2026, there was no quantity owed to Citibank below the revolving line of Credit score. As of April 30, 2026, there was $1.2 million owed to Citibank below this evolving line of credit score. Thanks all on your time. And now I’ll flip the decision again to Stephen for closing remarks.

Stephen Hood (Chief Govt Officer)

In closing, the story of Q1 is an easy one. Le Mans final continues to develop. Our monetary place continues to strengthen, and that energy is now actively translating into motion for our shareholders. Meaning meaningfully improved governance for the long run well being of the enterprise. It means continued funding in our group, our know-how and the alternatives we are actually able to pursue. We’re not working a number of video games from a place of necessity. We’re working it from a place of energy, with choices, with conviction, and with a transparent sense of the place we’re taking this firm. The long run we’re constructing isn’t just for the subsequent quarter, it’s for the subsequent decade. Thanks all for becoming a member of us immediately. I sit up for updating you on our continued progress. Now hand it again to the operator.

OPERATOR

Thanks. If you would like to ask a query, press Star one in your keypad. To go away the queue at any time, press Star two. As soon as once more, that’s Star one to ask a query. And our first query immediately will come from Anja Soderstrom with Sidoti and Firm. Your line is now open. Please go forward.

Alex

Hello, that is Alex on for Anja. Thanks for taking questions. My first query is on the Le mans final model 1.3 that you simply talked about. It drew a file 8800 participant peak in March, which is a powerful milestone. And I am curious, how has engagement trended for the reason that launch? And will you discuss slightly bit about what the roadmap might seem like for the rest of 2026? Hello Alex, it is Stephen. Thanks on your query. I believe to be completely trustworthy, it is trending upward. We talked particularly not simply in regards to the peaks, however really the common concurrence, the stickiness of the product and what we have seen over the historical past of the product, and positively since 1.3 stays true, is that with extra content material and extra publicity, we’re constructing a file variety of Gamers which are sticking round, shopping for the content material and taking part. We have seen that groundswell beginning to observe the product. We’ve not proactively actually spent advertising {dollars} in attempting to speed up that. So it is actually natural development of these participant numbers. We do have new content material packs which are deliberate for this yr, which shall be no shock to anyone. They’ve confirmed highly regarded each time we add extra vehicles, extra observe content material and develop. The sport providing, which is constructed round Le Mans and the World Endurance Championship by its nature is kind of singular. We discovered that we attain new gamers, so now we have an thought and an idea for brand spanking new observe content material that may attain further markets. As a result of usually we discovered we’re extremely robust in Europe, which isn’t any shock given Le Mans historical past and its location, and we have dined out very properly on that. However with a view to take this recreation internationally, we’re beginning to take a look at further content material that will appeal to folks that are not naturally purchased into the Le Mans idea or European content material. So now we have bought extra issues to disclose sooner or later, however I am fairly enthusiastic about that. I believe it’ll maintain climbing. Nice context. Thanks. And also you spoke about this within the ready remarks slightly bit. You already know that Reis Management continues to develop as, as one other, , recurring income driver. Might you inform us slightly bit about the place you see recurring income, , as a proportion of whole enterprise going and, , over the subsequent 12 months or so? Sure.

Stanley Beckley (Chief Monetary Officer)

Hello Alex, I can take that. So we at present do not present ahead trying steering, however I can talk about how properly danger management is finished. And in Q1 2026, for instance, it was a much bigger share of our revenues. Q1 2026 supply generated danger management subscription revenues of 0.8 million, which was 19% of the overall revenues of 4 million for the quarter in comparison with Race Management subscriptions solely, accounting for six% of our revenues in Q1 2025. So I can not converse an excessive amount of about the place we see it going by way of particular numbers, however we do count on it to proceed rising as the sport turns into extra common and extra models are offered. However we’re attending to the purpose the place income stream is extra diversified with danger management subscriptions encompassing a larger share of our whole revenues.

Stephen Hood (Chief Govt Officer)

Obtained it. Thanks for sharing. And final one from us. Are you able to discuss slightly bit in regards to the Components one alternative, , what you are doing there immediately and the way you see it evolving and , what kind of pipeline and different associated income alternatives seem like for that. Alex, I suppose this one was most likely for me, the Components one Alternative, I believe is all the time attention-grabbing. Components One is a large motorsport world over worldwide markets. It is a no brainer for us to be fascinated by that area. That is one of many explanation why we had been very happy to supply our know-how to energy Components one Arcade. So each arcade venue and each exercise that they supply all over the world and all their amenities, together with the brand new pop up amenities, is powered by know-how owned by and operated by Motorsport Video games. That know-how really powers Le Mans Final, a later model of that know-how anyhow. So one of many causes we did that was to beat this idea that our know-how, as a boutique sim racing software program developer, which is what we’re immediately, very specialised software program firm, can produce one thing that’s accessible for a a lot bigger market. As a result of folks usually suppose that sim racing software program is the protect of possibly child in a bed room with a simulator rig. That is the form of stuff I’ve at residence. However anyone can stroll in off the road and luxuriate in our know-how in an F1 arcade venue. From grandma to 10 yr outdated youngsters, to mum, dad, pals, it is a household leisure expertise powered by simracing software program. That foot within the door. With F1 Arcade, the group behind that and Liberty who’re a part of that operation, it is simply a part of our technique to construct our relationship with Components one, reveal the viability of the software program, the benefit and the ability of the software program. I imply, keep in mind F1 Arcade selected to not use the official Components One recreation, however as an alternative selected Motorsport video games software program software program produced by our developer, Studio397. And that may be a essential form of optimistic step in constructing relationship, surfacing the know-how and actually enabling our engineers to supply Components One by F1 Arcade leading edge software program. And while there’s an unique settlement in place with Digital Arts in the meanwhile, like all software program developer, we’d be fascinated by increasing our choices sooner or later. F1 Arcade is ready to develop, however we’re exploring prospects about what we may assist by way of single seater racing sooner or later. One aspect of which might be Components One. So I believe it might be hypothesis proper now. There is not something definitive, however we would definitely be fascinated by increasing our providing. Thanks for all of the background. That is all from us.

OPERATOR

Thanks right now. There aren’t any additional questions in queue. It will convey us to the tip of The Motorsport Video games first quarter 2026 earnings name. We admire your time and participation. You could now disconnect.

Disclaimer: This transcript is offered for informational functions solely. Whereas we attempt for accuracy, there could also be errors or omissions on this automated transcription. For official firm statements and monetary info, please confer with the corporate’s SEC filings and official press releases. Company members’ and analysts’ statements replicate their views as of the date of this name and are topic to alter with out discover.

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