MIRAMAR, Fla., Nov. 06, 2025 (GLOBE NEWSWIRE) -- Motorsport Games Inc. (NASDAQ: MSGM) ("Motorsport Games" or "the Company") today reported financial results for its third quarter ended September 30, 2025. The Company has also posted the third quarter 2025 earnings slides highlighting key milestones that occurred during the period, which are accessible on the Company's investor relations website.
"We are very pleased to once again generate net income for the Company this quarter" commented Stephen Hood, President and Chief Executive Officer of Motorsport Games. "We believe this sustained increased revenue, primarily driven by our Le Mans Ultimate title, alongside improved profitability showcases our markedly improved operational efficiency and that our products are showcasing market fit."
"Q3 2025 player engagement statistics have been particularly pleasing, reaching all new heights of daily and peak concurrent users for Le Mans Ultimate, particularly around the Version 1.0 release out of Early Access and following that with incredible sales and attachment rates for the release of the European Le Mans Series ("ELMS") content in late September."
"With improving financial stability, we believe the Company now has the ability to forge a new path utilizing the unique technology we own and continue to advance. I'm delighted to announce a console port of Le Mans Ultimate is now in early production and the Company is looking forward bringing this unique experience to PlayStation and Xbox gaming consoles with a current estimated delivery between late 2026 and early 2027."
Third Quarter 2025 Business Update
-- Revenues of $3.1 million for Q3 2025 compared to $1.8 million in Q3 2024,
an improvement of $1.3 million or 71.9%.
-- Net income attributable to Class A common stock was $0.14 per share in Q3
2025, compared to net loss per share of $0.18 in Q3 2024.
-- Generated cash from operations of $2.3 million during the nine months
ended September 30, 2025.
-- Released first ELMS content alongside enhanced custom liveries, regional
servers and more on September 23, 2025, featuring the iconic Silverstone
Circuit - home of motorsport in the United Kingdom, alongside the Ligier
JS P325 LMP3 race car, offering players an all-new prototype class and
one of endurance racing's most exciting formats.
Select Financial Highlights for the Three Months Ended September 30, 2025
Consolidated revenue for the third quarter of 2025 was approximately $3.1 million compared to approximately $1.8 million for the same period in the prior year, an increase of approximately $1.3 million, or 71.9%. Gross profit was $2.5 million compared to $1.1 million for the same period in the prior year, an increase of $1.4 million, while gross profit margin increased to 80.7% from 60.2%.
Net income for the third quarter of 2025 was $0.8 million, compared to net loss of $0.6 million for the same period in the prior year, an improvement of approximately $1.4 million or 234.1%. The increase in net income is driven by an increase in consolidated revenue of $1.3 million, decreases of $1.3 million and $0.1 million in operating expenses and cost of revenues, respectively, offset by a decrease of $1.4 million in other operating income. Net income attributable to Class A common stock was $0.14 per share for the third quarter of 2025, compared to net loss per share of $0.18 for the same period in the prior year.
Adjusted EBITDA(1) for the third quarter of 2025 was $1.1 million, compared to $0.1 million for the same period in the prior year. The improvement in Adjusted EBITDA of $1.0 million was primarily due to the same factors driving the previously discussed change in net income for the third quarter of 2025 when compared to the same period in the prior year, as well as a decrease in stock-based compensation compared to the prior year period.
The following table provides a reconciliation from net income (loss) to Adjusted EBITDA(1) for the third quarter of 2025 and 2024, respectively:
Three Months Ended Three Months Ended
September 30, 2025 September 30, 2024
--------------------- ---------------------
Net income (loss) $ 768,537 $ (537,025)
Interest expense, net 1,434 29,852
Depreciation and
amortization (1) 289,396 566,411
----------------- --- ----------------
EBITDA 1,059,367 23,238
Stock-based
compensation - 26,889
----------------- --- ----------------
Adjusted EBITDA $ 1,059,367 $ 50,127
================= === ================
(1) Includes $279,945 and $537,705 of amortization expenses
included in cost of revenues for the three months
ended September 30, 2025 and 2024, respectively.
Cash Flow and Liquidity
As of September 30, 2025, the Company had cash and cash equivalents of approximately $4.1 million, which increased to $4.5 million as of October 31, 2025. During the nine months ended September 30, 2025, the Company generated an average positive cash flow from operations of approximately $0.3 million per month that was primarily due to increased profitability, $0.8 million from the Wesco Insurance Company settlement in June 2025 and $0.5 million from a settlement agreement with HC2 Holdings 2 Inc. in March 2025.
(1) Use of Non-GAAP Financial Measures
Adjusted EBITDA (the "Non-GAAP Measure") is not a financial measure defined by U.S. generally accepted accounting principles ("U.S. GAAP"). Reconciliations of the Non-GAAP Measure to net income (loss), its most directly comparable financial measure, calculated and presented in accordance with U.S. GAAP, are presented in the tables above.
Adjusted EBITDA, a measure used by management to assess our operating performance, is defined as EBITDA, which is net income (loss) plus interest expense, depreciation and amortization, less income tax benefit (if any), adjusted to exclude: (i) gain from settlement of license liabilities and other agreements; (ii) impairment of intangible assets; (iii) loss contingency expense; and (iv) stock-based compensation expenses.
The Company uses the Non-GAAP Measure to manage its business and evaluate its financial performance, as Adjusted EBITDA eliminates items that affect comparability between periods that the Company believes are not representative of its core ongoing operating business. Additionally, management believes that using the Non-GAAP Measure is useful to its investors because it enhances investors' understanding and assessment of the Company's normalized operating performance and facilitates comparisons to prior periods and its competitors' results (who may define Adjusted EBITDA differently).
The Non-GAAP Measure is not a recognized term under U.S. GAAP and does not purport to be an alternative to revenue, income from operations, net income, or cash flows from operations or as a measure of liquidity or any other performance measure derived in accordance with U.S. GAAP. Additionally, the Non-GAAP Measure is not intended to be a measure of free cash flows available for management's discretionary use, as it does not consider certain cash requirements, such as interest payments, tax payments, working capital requirements and debt service requirements. The Non-GAAP Measure has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for the Company's results as reported under U.S. GAAP. Management compensates for the limitations of using the Non-GAAP Measure by using it to supplement U.S. GAAP results to provide a more complete understanding of the factors and trends affecting the business than would be presented by using only measures in accordance with U.S. GAAP. Because not all companies use identical calculations, the Non-GAAP Measure may not be comparable to other similarly titled measures of other companies.
Conference Call and Webcast Details
The Company will host a conference call and webcast at 5:00 p.m. ET today, November 6, 2025, to discuss its financial results. The live conference call can be accessed by dialing 1-833-316-1983 or 1-785-838-9310 and using Conference ID "MOTOR". Alternatively, participants may access the live webcast on the Motorsport Games Investor Relations website at https://ir.motorsportgames.com under "Events."
About Motorsport Games:
Motorsport Games is a racing game developer, publisher and esports ecosystem provider of official motorsport racing series. Combining innovative and engaging video games with exciting esports competitions and content for racing fans and gamers, Motorsport Games strives to make racing games that are authentically close to reality. The Company is the officially licensed video game developer and publisher for iconic motorsport racing series including the 24 Hours of Le Mans and the FIA World Endurance Championship, recently releasing Le Mans Ultimate Version 1.0 featuring new cars, updated 2025 content and additional improvements. Motorsport Games also owns the industry leading rFactor 2 and KartKraft simulation platforms. rFactor 2 also powers F1$(R)$ Arcade through a partnership with Kindred Concepts. Motorsport Games is also an award-winning esports partner of choice for the 24 Hours of Le Mans, creating the renowned Le Mans Virtual Series. Motorsport Games is building a virtual racing ecosystem where each product drives excitement, every esports event is an adventure, and every race inspires.
For more information about Motorsport Games visit: www.motorsportgames.com.
Forward-Looking Statements
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