Motorsport Games (NASDAQ:MSGM) said its first-half revenue rose 74% year over year to $7.6 million as the company continued to expand its Le Mans Ultimate racing title and its RaceControl subscription platform.
Chief Executive Officer Stephen Hood said the company has now generated positive operating income for six consecutive quarters, with Le Mans Ultimate and RaceControl serving as the primary drivers of the business. Chief Financial Officer Peter Hansen-Chambers, who joined the company effective July 1, said GAAP net income was positive for a sixth consecutive quarter.
RaceControl Subscription Revenue Accelerates
Management highlighted RaceControl, Motorsport Games’ free-to-join player platform with premium subscription tiers, as an increasingly important recurring-revenue business. The platform is used by players competing online in Le Mans Ultimate and provides the company a direct relationship with its player community, Hood said.
RaceControl subscription revenue totaled approximately $1.4 million in the first half, compared with approximately $0.3 million in the prior-year period, representing growth of nearly 349%. The platform produced annual recurring revenue at a run rate of approximately $2.9 million, compared with $1.2 million for all of 2025.
RaceControl represented 18% of total first-half revenue, up from 7% in the first half of 2025 and less than 1% for full-year 2024. Paid subscribers exceeded 40,500 at the end of June, rising more than 230% from a year earlier, according to Hansen-Chambers.
During the question-and-answer session, Hansen-Chambers said the company has acquired subscribers organically so far, keeping acquisition costs low. He said Motorsport Games believes it has additional opportunity to convert RaceControl account holders into paying subscribers before pursuing paid subscriber-acquisition efforts.
He added that the subscription attach rate has remained relatively consistent and that the company has initiatives underway to improve retention. Motorsport Games did not provide financial guidance.
Le Mans Ultimate Expands Content Offering
Hood said player engagement for Le Mans Ultimate accelerated during the quarter, with April becoming the company’s highest-ever month for average daily active users. The company has sold more than 500,000 base-game units and more than 1.2 million individual downloadable-content items since the game’s launch, he said.
After the quarter ended, Motorsport Games released version 1.4 of Le Mans Ultimate in July. The update added Daytona and Laguna Seca as the first installment of the newly introduced U.S. Track Pass, expanding the game’s content beyond its core Le Mans and European racing focus.
Management expects the second and third U.S. Track Pass packs to arrive in September and December, respectively. Hansen-Chambers said the initial release had received a “very good reaction” from the community and was performing better than management had expected. The company said it is also evaluating additional Le Mans Ultimate content for 2027.
Hood said the company does not expect to add completely unrelated racing content to its Le Mans title. To move beyond the content opportunities available within Le Mans Ultimate, however, Motorsport Games would need to release a new title. The company said it expects to provide more details on its longer-term roadmap during its next earnings call.
Profitability, Cash Flow and Capital Structure
First-half GAAP net income was $1.2 million, compared with $5.3 million in the prior-year period. Hansen-Chambers noted that the 2025 comparison included nonrecurring items, including gains related to settlement agreements and a $3.3 million foreign-currency exchange gain that did not recur this year.
Second-quarter adjusted EBITDA was $0.8 million, compared with $1.4 million in the year-earlier quarter. The CFO said the prior-year figure benefited from nonrecurring gains related to discounts negotiated on certain outstanding vendor invoices. For the first half, adjusted EBITDA more than doubled to $2.2 million from $1 million a year earlier.
The company reported adjusted diluted earnings per share of $0.19 for the second quarter, compared with $0.25 a year earlier. First-half adjusted diluted EPS was $0.33, compared with $0.24 in the prior-year period.
Motorsport Games generated average operating cash flow of approximately $0.5 million per month during the first half, driven by increased profitability and capitalization of internally developed software. Cash and cash equivalents stood at $3.9 million as of June 30.
During the quarter, the company spent $3.7 million to repurchase Class A shares from Driven Lifestyle Group. The transaction retired all outstanding Class B super-voting shares, leaving all outstanding common shares with equal voting rights, Hood said.
The company also has a $3 million revolving credit facility from Citibank, of which $1.2 million had been drawn as of June 30. Citibank extended the facility’s maturity to February 2028 in May.
Console Development Continues
Hood said development of Le Mans Ultimate for PlayStation and Xbox consoles remains on plan. He described the work as complex because of the challenge of bringing a high-fidelity simulation experience to console platforms, but said the launch could broaden the game’s reach to players without gaming PCs or dedicated simulator equipment.
Management also pointed to a broader long-term project that it said would leverage its simulation technology, RaceControl platform, live-service infrastructure, F1 Arcade and player relationships. Details of that roadmap are expected on the company’s third-quarter call.
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).
