Motorsport Games (NASDAQ:MSGM) reported sharply higher first-quarter revenue and improved adjusted EBITDA, driven by continued sales of Le Mans Ultimate and growth in its RaceControl subscription platform, executives said on the company’s Q1 2026 earnings call.
Chief Executive Officer Stephen Hood said the company “started 2026 from a position of real financial strength,” citing revenue of $4.0 million for the quarter, which more than doubled from the prior-year period. Chief Financial Officer Stanley Beckley said revenue rose by $2.3 million, or 129.3%, compared with Q1 2025.
Profitability and Liquidity Improve
Motorsport Games reported net income of approximately $1.0 million for both Q1 2026 and Q1 2025. Net income attributable to Class A common stock was $0.06 per share in the latest quarter, compared with $0.33 per share in the same period last year.
Adjusted EBITDA was $1.5 million in Q1 2026, up from $0.6 million in the prior-year period. Beckley said the $0.9 million improvement was primarily due to the same factors that drove net income, along with an increase in stock-based compensation.
As of March 31, 2026, the company had $5.9 million in cash and cash equivalents. Beckley said that figure decreased to $3.8 million as of April 2026 following a $3.7 million share repurchase from Driven Lifestyle Group LLC on April 22, partially offset by operating cash inflows.
During the quarter, Motorsport Games generated average positive operating cash flow of approximately $0.5 million per month, which Beckley said was primarily due to increased profitability and capitalization for internally developed software. Working capital was $5.2 million at March 31, up from $4.2 million at the end of 2025. The company said it currently has no purchase commitment liabilities.
The company also secured a $3.0 million revolving line of credit from Citibank in February 2026. No amount was outstanding under the facility as of March 31, but Beckley said $1.2 million was owed under the line of credit as of April 30.
Le Mans Ultimate Engagement Continues to Rise
Hood said the company’s primary gaming title, Le Mans Ultimate, continued to see rising player engagement. He said the game reached a new all-time peak of more than 8,800 concurrent players on Steam on March 31, around the release of version 1.3.
That update introduced Circuit de Barcelona-Catalunya, the Duqueine LMP3 race car and Logitech TRUEFORCE support. Hood said peak concurrent players grew 118% year over year, while average concurrent users increased 169%.
“The floor is rising, not just the ceiling,” Hood said, emphasizing that average concurrent users are a key metric because they show whether players continue engaging beyond spikes tied to content releases.
In response to a question from Sidoti & Company, Hood said engagement has been “trending upward” and that growth has been largely organic, without significant marketing spending to accelerate player numbers. He said additional content packs are planned for 2026, including cars and tracks, and that the company is considering track content aimed at reaching markets beyond its historically strong European audience.
Motorsport Games plans a June update to coincide with the real-world 24 Hours of Le Mans, Hood said.
RaceControl Becomes a Larger Revenue Driver
Executives highlighted RaceControl as a growing recurring revenue platform. Hood described RaceControl as the company’s proprietary matchmaking, competition and live service infrastructure, serving both its gaming community and commercial partners.
Hood said monthly recurring revenue from RaceControl has exceeded $0.2 million, and that the first three months of 2026 were among the platform’s strongest growth periods since launch. He also said the platform carries a favorable margin profile because it is built on infrastructure the company already owns and operates.
Hood pointed to collaborations with Genesis, the luxury automotive brand and World Endurance Championship newcomer, as well as Logitech, which selected RaceControl to power the Logitech G Challenge Esports Series.
Beckley said the company expects RaceControl to become a larger share of overall revenue as Le Mans Ultimate grows, though he said Motorsport Games is not providing forward-looking guidance.
Governance Changes and Product Roadmap
Hood also discussed recent corporate actions, including the repurchase of 904,395 Class A common shares from Driven Lifestyle Group LLC. As part of that transaction, all Class B shares, which had carried 10 votes per share, were retired. Hood said that means “every share now holds equal voting power.”
Shareholders also approved an expansion of awards available under the company’s employee equity plan, which Hood said will help incentivize and retain employees.
Hood said Driven Lifestyle retained a minority shareholding in Motorsport Games, which he described as both a “vote of confidence” and a pragmatic outcome that allowed the company to retire the super-voting Class B shares while using less cash than a full exit would have required.
Looking ahead, Hood said development continues on bringing Le Mans Ultimate to PlayStation and Xbox in collaboration with development partners. However, he said the company expects to announce more launch details as it enters 2027, after further development progress.
Hood said Motorsport Games is also deepening investment in its simulation technology, strengthening its team with targeted hires and preparing a new long-term project. He said the new title will leverage the company’s simulation technology, live service infrastructure, RaceControl platform and community relationships.
The company expects to discuss its product roadmap in more detail on its Q3 earnings call, Hood said, adding that management believes it has the potential to drive meaningful revenue and profit growth in 2027 and beyond.
Formula One-Related Opportunity Discussed
During the question-and-answer session, Hood also addressed Motorsport Games’ work related to Formula One. He said the company’s technology powers Formula 1 Arcade venues and pop-up facilities, through software developed by Studio 397.
Hood said the relationship helps demonstrate that the company’s simulation racing technology can serve a broader entertainment market, not only dedicated sim racing players. He noted that Electronic Arts currently has an exclusive agreement for Formula One gaming, but said Motorsport Games would be interested in expanding its offerings in the future.
“There isn’t anything definitive,” Hood said, while adding that the company is exploring possibilities in single-seater racing, including areas that could involve Formula One.
About Motorsport Games (NASDAQ:MSGM)
Motorsport Games, Inc is a publicly traded developer and publisher of interactive motorsport entertainment, headquartered in Miami, Florida. The company specializes in creating officially licensed racing simulation titles and managing associated esports competitions. By focusing exclusively on the motorsport genre, Motorsport Games aims to deliver authentic digital experiences that mirror the rules, tracks and vehicles of real-world racing series.
The company’s core activities include the development of video games under licenses from major sanctioning bodies such as NASCAR, the Fédération Internationale de l’Automobile (FIA) and International Motor Sports Association (IMSA).
