Motorsport Games (MSGM) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenues reached $4.0 million, up 129.3% year-over-year, driven by Le Mans Ultimate and RaceControl subscriptions.

• Net income for Q1 2026 was $1.0 million, matching Q1 2025, despite the prior year including a $0.5 million legal fee reimbursement.

• Adjusted EBITDA improved to $1.5 million from $0.6 million in Q1 2025.

• Gross profit margin rose to 87.2% from 73.5% year-over-year, reflecting higher revenues and reduced amortization.

• Share repurchase of 904,395 shares and cancellation of all Class B shares completed in April 2026, returning equal voting rights to all shareholders.

Financial highlights

• Gross profit for Q1 2026 was $3.5 million, up from $1.3 million in Q1 2025, with an 87.2% margin.

• Operating expenses totaled $2.5 million, up from $1.9 million in Q1 2025, mainly due to higher stock-based compensation and payroll.

• Cash and cash equivalents were $5.9 million as of March 31, 2026, decreasing to $3.8 million after a $3.7 million share repurchase.

• Working capital improved to $5.2 million from $4.2 million at year-end 2025.

• Net income margin for Q1 2026 was 23.6%.

Outlook and guidance

• Management expects continued growth from RaceControl and new content, with plans to bring Le Mans Ultimate to console platforms.

• No formal forward-looking guidance provided, but management remains confident in the product roadmap and operational momentum.

• Plans to organize the 2026/27 Le Mans Virtual Series and expand esports segment outside of Le Mans.

• Focus on growing recurring revenue through subscriptions and in-game purchases.

• Management expects cash on hand and operating cash flow to fund operations for at least one year.