Why Is Motorsport Games (MSGM) Stock Down Over 21% After Hours Today?

Motorsport Games Inc. (NASDAQ:MSGM) shares fell sharply in after-hours trading on Wednesday after the racing game developer reported first-quarter 2026 financial results.

Motorsport Games shares dropped 21.50% to $3.98 in after-hours trading on Wednesday after closing the regular session down 4.70% at $5.07.

Motorsport Games develops racing titles, including Le Mans Ultimate and simulation platform rFactor 2.

Revenue Growth Continues

The company reported first-quarter 2026 revenue of approximately $4 million, up 129.3% year-over-year from $1.8 million. Gross profit rose to $3.5 million from $1.3 million, while gross margin expanded to 87.2% from 73.5%.

Net income remained relatively flat at approximately $1 million compared with the same quarter last year. Earnings attributable to Class A common stock fell to $0.06 per share from $0.33 per share a year earlier.

Adjusted EBITDA improved to $1.5 million from $0.6 million a year earlier.

President and CEO Stephen Hood said the company's turnaround strategy and Le Mans Ultimate momentum continued driving financial performance.

"We are very pleased to report another quarter of strong financial performance, with revenues more than doubling year on year," Hood said.

What Investors Need To Know

Motorsport Games said Le Mans Ultimate reached a record peak of more than 8,800 concurrent players following the Version 1.3 update release in March.

The company also secured a $3 million revolving credit facility with Citibank earlier this year and repurchased more than 904,000 shares of Class A common stock in April.

As of March 31, 2026, Motorsport Games held approximately $5.9 million in cash and cash equivalents.

Trading Metrics, Technical Analysis

Motorsport Games has a market capitalization of approximately $29.3 million, with a 52-week high of $5.56 and a low of $2.10.

Over the past 12 months, MSGM shares have gained nearly 102%.

Benzinga's Edge Stock Rankings indicate that MSGM shares currently maintain positive short, medium and long-term price trends.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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