Motorsport Games Reports Third Quarter 2024 Financial Results
Motorsport Games (NASDAQ: MSGM) reported Q3 2024 financial results showing improvement in key metrics. Revenue increased 6.4% to $1.8 million, with gross profit rising to $1.1 million and margin expanding to 60.2%. The company achieved net income of $0.01 million compared to a $3.6 million loss in Q3 2023. Notable developments include the release of new DLC for Le Mans Ultimate and implementation of innovative game features. However, with cash reserves at $0.8 million as of September 30, 2024, the company indicates it needs additional funding to continue operations and is exploring strategic alternatives including potential equity/debt financing and asset sales.
Motorsport Games (NASDAQ: MSGM) ha riportato risultati finanziari per il terzo trimestre del 2024 che mostrano un miglioramento nei principali indicatori. I ricavi sono aumentati del 6,4% a $1,8 milioni, con un profitto lordo che è salito a $1,1 milioni e un margine che si è espanso al 60,2%. L'azienda ha registrato un reddito netto di $0,01 milioni rispetto a una perdita di $3,6 milioni nel terzo trimestre del 2023. Sviluppi significativi includono il rilascio di nuovi DLC per Le Mans Ultimate e l'implementazione di caratteristiche innovative nel gioco. Tuttavia, con riserve di liquidità pari a $0,8 milioni al 30 settembre 2024, l'azienda indica di avere bisogno di ulteriore finanziamento per continuare le operazioni ed è alla ricerca di alternative strategiche, incluse potenziali finanziamenti tramite capitale/debito e vendite di asset.
Motorsport Games (NASDAQ: MSGM) reportó resultados financieros del tercer trimestre de 2024, mostrando mejoras en métricas clave. Los ingresos aumentaron un 6,4% a $1,8 millones, con un beneficio bruto que se elevó a $1,1 millones y un margen que se expandió al 60,2%. La compañía logró un ingreso neto de $0,01 millones en comparación con una pérdida de $3,6 millones en el tercer trimestre de 2023. Los desarrollos notables incluyen el lanzamiento de nuevos DLC para Le Mans Ultimate y la implementación de características innovadoras en el juego. Sin embargo, con reservas de efectivo de $0,8 millones al 30 de septiembre de 2024, la empresa indica que necesita financiamiento adicional para continuar sus operaciones y está explorando alternativas estratégicas, incluidas la financiación potencial de capital/deuda y la venta de activos.
모터스포츠 게임즈 (NASDAQ: MSGM)는 2024년 3분기 재무 결과를 발표하며 주요 지표에서 개선을 보였습니다. 수익은 $1.8백만으로 6.4% 증가하였고, 총 이익은 $1.1백만으로 상승하며 마진은 60.2%로 확대되었습니다. 이 회사는 2023년 3분기의 $3.6백만 손실에 비해 $0.01백만의 순이익을 달성했습니다. 주요 발전 사항으로는 르망 얼티밋의 새로운 DLC 출시와 혁신적인 게임 기능의 구현이 포함됩니다. 그러나 2024년 9월 30일 기준 현금 보유가 $0.8백만인 이 회사는 운영을 계속하기 위해 추가 자금이 필요하다고 언급하며, 자본/부채 금융 및 자산 매각을 포함한 전략적 대안을 모색하고 있습니다.
Motorsport Games (NASDAQ: MSGM) a publié les résultats financiers du troisième trimestre 2024, montrant des améliorations dans les indicateurs clés. Les revenus ont augmenté de 6,4 % pour atteindre $1,8 million, avec un bénéfice brut passant à $1,1 million et une marge s'élevant à 60,2 %. L'entreprise a réalisé un bénéfice net de $0,01 million par rapport à une perte de $3,6 millions au troisième trimestre 2023. Les développements notables incluent la sortie de nouveaux DLC pour Le Mans Ultimate et la mise en œuvre de fonctionnalités de jeu innovantes. Cependant, avec des réserves de liquidités de $0,8 million au 30 septembre 2024, l'entreprise indique qu'elle a besoin de financements supplémentaires pour continuer ses opérations et explore des alternatives stratégiques, y compris un potentiel financement par actions/dettes et des ventes d'actifs.
Motorsport Games (NASDAQ: MSGM) hat die Finanzzahlen für das dritte Quartal 2024 veröffentlicht, die Verbesserungen bei den wichtigsten Kennzahlen zeigen. Der Umsatz stieg um 6,4% auf $1,8 Millionen, während der Bruttogewinn auf $1,1 Millionen anstieg und die Marge auf 60,2% expanded. Das Unternehmen erzielte einen Nettogewinn von $0,01 Millionen im Vergleich zu einem Verlust von $3,6 Millionen im dritten Quartal 2023. Erwähnenswerte Entwicklungen sind die Veröffentlichung neuer DLCs für Le Mans Ultimate und die Implementierung innovativer Spielfunktionen. Allerdings hat das Unternehmen zum 30. September 2024 einen Bargeldbestand von $0,8 Millionen, was darauf hinweist, dass es zusätzliches Kapital benötigt, um die Geschäftstätigkeit fortsetzen zu können und strategische Alternativen erkundet, einschließlich potenzieller Eigen- oder Fremdfinanzierung sowie des Verkaufs von Vermögenswerten.
- Revenue increased 6.4% year-over-year to $1.8 million
- Gross profit margin improved to 60.2% from 50.9%
- Net income of $0.01 million versus $3.6 million loss in Q3 2023
- Operating expenses reduced by $0.5 million through headcount reductions
- Adjusted EBITDA improved to $0.1 million from -$2.5 million loss
- Cash position decreased to $0.5 million as of October 31, 2024
- Insufficient cash to fund operations over next year
- Negative cash flow from operations of $0.7 million in first nine months
- Ongoing monthly cash burn of approximately $0.1 million
- Additional funding required to continue operations
Insights
The Q3 2024 results show mixed signals. While achieving
The gaming division shows some positive product momentum with Le Mans Ultimate's DLC releases and new features like co-op mode and save states. However, these developments appear insufficient to drive meaningful revenue growth. The
MIAMI, Nov. 14, 2024 (GLOBE NEWSWIRE) -- Motorsport Games Inc. (NASDAQ: MSGM) (“Motorsport Games” or “the Company”) today reported financial results for its third quarter ended September 30, 2024. The Company has also posted the third quarter 2024 earnings slides highlighting key milestones that occurred during and subsequent to the period, which are accessible on the Company’s investor relations website.
“The business has continued to take useful strides in Q3 2024 with further product updates, business streamlining and in the assessment of undertaking of the previously announced ‘strategic alternatives,’” remarked Stephen Hood, President and Chief Executive Officer of Motorsport Games.
“Our second downloadable content (DLC) offering for Le Mans Ultimate completed the 2024 Hypercar grid whilst a free update to all players has enabled new gameplay opportunities that capture the spirit of Le Mans. An innovative co-op mode allows players to compete alongside their friends at a time convenient to them and save states have been added to the Race Weekend mode, adding a new dimension to the single player experience designed to enable more players to enjoy our offering in an increasingly busy market. Players can expect another major uplift in the game next month with the release of the first GT3 cars, a hotly requested content update available as a mix of DLC which includes a free car alongside new game functionality that is sure to further boost the vitality of what has been a strong opening 2024 for Le Mans Ultimate.”
Hood continued, “From a business perspective, the work to turn the business around has not stopped. We are pleased to see an improvement in several key financial performance indicators, highlighting that the business is now in a stable position for the next phase of growth. We recently announced that Motorsport Games is considering ‘strategic alternatives’ and the Motorsport Games board of directors and I are in the process of reviewing the options available to us with a view to improve our long-term funding needs in order to produce the great game experiences we have proved that we can offer under our new business structure. The number of expressions of interest received serves to reinforce our belief in the opportunities ahead.”
Third Quarter 2024 Business Update
| ● | Net income attributable to Motorsport Games Inc. of | |
| ● | Net income attributable to Class A common stock was | |
| ● | Released Le Mans Ultimate Innovative Co-op Game Mode, Save & Load System and 2024 Pack 2 DLC in September 2024. | |
| ● | Raised |
Select Financial Highlights for the Three Months Ended September 30, 2024
Revenue for the third quarter of 2024 was
Net loss for the third quarter of 2024 was
Adjusted EBITDA(1) for the third quarter of 2024 was
The following table provides a reconciliation from net loss to Adjusted EBITDA (loss)(1) for the third quarter of 2024 and 2023, respectively:
| Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | |||||||
| Net loss | $ | (573,025 | ) | $ | (3,534,132 | ) | ||
| Interest expense, net | 29,852 | 230,190 | ||||||
| Depreciation and amortization (1) | 566,411 | 501,399 | ||||||
| EBITDA | 23,238 | (2,802,543 | ) | |||||
| Loss contingency expenses | - | 232,359 | ||||||
| Stock-based compensation | 26,889 | 105,524 | ||||||
| Adjusted EBITDA | $ | 50,127 | $ | (2,464,660 | ) | |||
| (1) | Includes |
Cash Flow and Liquidity
As of September 30, 2024, the Company had cash and cash equivalents of approximately
Based on its cash and cash equivalents position and the average monthly cash burn, the Company does not believe it has sufficient cash on hand to fund its operations over the next year and that additional funding will be required in order to continue operations. In order to address its liquidity short fall, the Company is actively exploring several options, including, but not limited to: i) additional funding in the form of potential equity and/or debt financing arrangements or similar transactions; ii) other strategic alternatives for its business, including, but not limited to, the sale or licensing of the Company’s assets in addition to its recent sales of its NASCAR license and Traxion; and iii) further cost reduction and restructuring initiatives.
There can be no assurances that the Company will be able to secure additional liquidity through the means referenced above, nor can there be any assurances that the Company can sufficiently reduce costs and restructure its business to sufficiently lower its cash burn to sustainable levels and therefore meet its ongoing cash requirements. Further, other factors can impact the Company’s liquidity position, including, but not limited to, the Company’s level of sales and expenditures, as well as accounts receivable, and accrued expenses. For additional information regarding the Company’s liquidity, see the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2024 to be filed with the Securities and Exchange Commission (the “SEC”).
(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 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 the Company’s operating performance, is defined as EBITDA, which is net loss plus interest expense, depreciation and amortization, less income tax benefit (if any), adjusted to exclude: (i) loss contingency expenses; and (ii) 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/loss from operations, net (loss) 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 14, 2024, to discuss its financial results. The live conference call can be accessed by dialing 1-800-579-2543 or 1-785-424-1789 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 in Early Access. Motorsport Games also owns the industry leading rFactor 2 and KartKraft simulation platforms. rFactor 2 also serves as the official sim racing platform of Formula E, while also powering F1 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
Certain statements in this press release, the related conference call and webcast which are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are provided pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements or information in this press release, the related conference call and webcast that are not statements or information of historical fact may be deemed forward-looking statements. Words such as “continue,” “will,” “may,” “could,” “should,” “expect,” “expected,” “plans,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, but are not limited to, statements concerning (i) the implementation of a major uplift in the Le Mans Ultimate game next month with the release of the first GT3 cars; (ii) the Company’s current position allowing for the next phase of growth; (iii) improving the Company’s long-term funding needs in order to produce the great game experiences it has proved it can offer under its new business structure; (iv) not having sufficient cash on hand to fund operations over the next year and additional funding being required in order to continue operations; (v) obtaining additional funding in the form of potential equity and/or debt financing arrangements or similar transactions; (vi) entering into strategic alternatives for the Company’s business, including, but not limited to, the sale or licensing of the Company’s assets in addition to its recent sales of its NASCAR license and Traxion; and (vii) the Company’s ability to improve its liquidity through further cost reduction and restructuring initiatives.
All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside of the Company’s control and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to: (i) difficulties, delays or less than expected results in achieving the Company’s growth plans, objectives and expectations, including delays in the implementation of a major uplift in the Le Mans Ultimate game next month with the release of the first GT3 cars, failure to improve the Company’s long-term funding needs in order to produce the great game experiences it has proved it can offer under its new business structure, decreased sales of the Company’s products due to the disposition of key assets, further changes in the Company’s product roadmap, the Company’s inability to deliver new products and/or new content or features for existing products, and/or the Company’s inability, in whole or in part, to continue to execute its business strategies and plans, such as due to less than anticipated customer acceptance of its new game titles and/or less than anticipated benefits from its future technologies, the Company experiencing difficulties or the inability to launch its games as planned, less than anticipated performance of the games impacting customer acceptance and sales and/or greater than anticipated costs and expenses to develop and launch its games, including, without limitation, higher than expected labor costs, the Company’s inability to establish partnerships with additional service providers to come onboard to the Company’s ecosystem and, in addition to the factors set forth in (ii) through (vi) below, the Company’s continuing financial condition and ability to obtain additional debt and/or equity financing to meet its liquidity requirements, such as the going concern qualification on the Company’s annual audited financial statements posing difficulties in obtaining new financing on terms acceptable to the Company, or at all; (ii) difficulties, delays in or unanticipated events that may impact the timing and scope of new or planned products, features, events or other offerings; (iii) less than expected benefits from implementing the Company’s management strategies and/or adverse economic, market and geopolitical conditions that negatively impact industry trends, such as significant changes in the labor markets, an extended or higher than expected inflationary environment, a higher interest rate environment, tax increases impacting consumer discretionary spending and/or quantitative easing that results in higher interest rates that negatively impact consumers’ discretionary spending; (iv) greater than anticipated negative operating cash flows such as due to higher than expected development costs, higher interest rates and/or higher inflation, or failure to achieve the expected savings under any cost reduction and restructuring initiatives; (v) difficulties and/or delays in resolving the Company’s liquidity and capital requirements due to reasons including, without limitation, difficulties in securing funding that is on commercially acceptable terms to the Company or at all, such as the Company’s inability to complete in whole or in part any potential debt and/or equity financing transactions or similar transactions, any inability to achieve cost reductions, including, without limitation, those which the Company expects to achieve through any cost reduction and restructuring initiatives, as well as any inability to consummate one or more strategic alternatives for the Company’s business, including, but not limited to, the sale or licensing of the Company’s assets, and/or less than expected benefits resulting from any such strategic alternative; and/or (vi) difficulties, delays or the Company’s inability to successfully complete any cost reduction and restructuring initiatives, in whole or in part, which could result in less than expected operating and financial benefits from such actions, as well as delays in completing any cost reduction and restructuring initiatives, which could reduce the benefits realized from such activities; higher than anticipated restructuring charges and/or payments and/or changes in the expected timing of such charges and/or payments; and/or less than anticipated annualized cost reductions from any cost reduction and restructuring initiatives and/or changes in the timing of realizing such cost reductions, such as due to less than anticipated liquidity to fund such activities and/or more than expected costs to achieve the expected cost reductions.
Factors other than those referred to above could also cause the Company’s results to differ materially from expected results. Additional examples of such risks and uncertainties include, but are not limited to: (i) the Company’s ability (or inability) to maintain existing, and to secure additional, licenses and other agreements with various racing series; (ii) the Company’s ability to successfully manage and integrate any joint ventures, acquisitions of businesses, solutions or technologies; (iii) unanticipated operating costs, transaction costs and actual or contingent liabilities; (iv) the ability to attract and retain qualified employees and key personnel; (v) adverse effects of increased competition; (vi) changes in consumer behavior, including as a result of general economic factors, such as increased inflation, higher energy prices and higher interest rates; (vii) the Company’s inability to protect its intellectual property; and/or (vii) local, industry and general business and economic conditions.
Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the Company’s filings with the SEC, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, its Quarterly Reports on Form 10-Q filed with the SEC during 2024, as well as in its subsequent filings with the SEC. The Company anticipates that subsequent events and developments may cause its plans, intentions and expectations to change. The Company assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing the Company’s plans and expectations as of any subsequent date.
Website and Social Media Disclosure
Investors and others should note that we announce material financial information to our investors using our investor relations website (ir.motorsportgames.com), SEC filings, press releases, public conference calls and webcasts. We use these channels, as well as social media and blogs, to communicate with our investors and the public about our company and our products. It is possible that the information we post on our websites, social media and blogs could be deemed to be material information. Therefore, we encourage investors, the media and others interested in our company to review the information we post on the websites, social media channels and blogs, including the following (which list we will update from time to time on our investor relations website):
| Websites | Social Media | |
| motorsportgames.com | Twitter: @msportgames | |
| Instagram: msportgames | ||
| Facebook: Motorsport Games | ||
| LinkedIn: Motorsport Games |
The contents of these websites and social media channels are not part of, nor will they be incorporated by reference into, this press release.
Contacts:
Investors:
Media:
Appendix:
The following tables provide a comparative summary of the Company’s financial results for the periods presented:
| MOTORSPORT GAMES INC. AND SUBSIDIARIES | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | 1,802,946 | $ | 1,693,871 | $ | 6,713,635 | $ | 5,162,356 | ||||||||
| Cost of revenues | 716,723 | 831,479 | 2,154,997 | 2,946,382 | ||||||||||||
| Gross profit | 1,086,223 | 862,392 | 4,558,638 | 2,215,974 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing [1] | 175,532 | 358,120 | 631,467 | 1,411,318 | ||||||||||||
| Development [2] | 848,528 | 1,566,839 | 2,780,630 | 5,751,741 | ||||||||||||
| Impairment of intangible assets | - | - | - | 4,004,627 | ||||||||||||
| General and administrative [3] | 1,946,897 | 1,526,614 | 5,548,989 | 7,459,957 | ||||||||||||
| Depreciation and amortization | 47,151 | 75,614 | 184,013 | 277,822 | ||||||||||||
| Total operating expenses | 3,018,108 | 3,527,187 | 9,145,099 | 18,905,465 | ||||||||||||
| Gain from settlement of license liabilities | - | - | 3,248,000 | - | ||||||||||||
| Other operating income | - | - | 250,000 | - | ||||||||||||
| Loss from operations | (1,931,885 | ) | (2,664,795 | ) | (1,088,461 | ) | (16,689,491 | ) | ||||||||
| Interest expense | (29,852 | ) | (230,190 | ) | (90,480 | ) | (674,060 | ) | ||||||||
| Other income (expense), net | 1,388,712 | (639,147 | ) | 1,010,001 | 369,345 | |||||||||||
| Net loss | (573,025 | ) | (3,534,132 | ) | (168,940 | ) | (16,994,206 | ) | ||||||||
| Less: Net (loss) income attributable to non-controlling interest | (582,852 | ) | 29,375 | (1,270,382 | ) | 98,356 | ||||||||||
| Net income (loss) attributable to Motorsport Games Inc. | $ | 9,827 | $ | (3,563,507 | ) | $ | 1,101,442 | $ | (17,092,562 | ) | ||||||
| Net income (loss) per Class A common share attributable to Motorsport Games Inc.: | ||||||||||||||||
| Basic and Diluted | $ | 0.00 | $ | (1.31 | ) | $ | 0.39 | $ | (6.73 | ) | ||||||
| Weighted-average shares of Class A common stock outstanding: | ||||||||||||||||
| Basic and Diluted | 3,024,366 | 2,720,328 | 2,823,274 | 2,538,863 | ||||||||||||
[1] Includes related party expenses of
[2] Includes related party expenses of
[3] Includes related party expenses of 37,500 and
A photo accompanying this announcement is available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/70e0f341-d4f7-44fc-9928-92dad825399f
FAQ
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