Motorsport Games (MSGM) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue increased 6.4% year-over-year to $1.8 million, with gross profit margin rising to 60.2% and net loss narrowing to $0.6 million, reflecting improved operational efficiency and cost reductions.

• Adjusted EBITDA for Q3 2024 was $0.1 million, a turnaround from a $2.5 million loss in Q3 2023.

• Released major Le Mans Ultimate updates, including co-op mode and DLC, and expanded Race Control platform features.

• Raised $1.0 million in gross proceeds from a registered direct offering in July 2024.

• Strategic alternatives, including asset sales and licensing, are under consideration to secure additional financing and support future growth.

Financial highlights

• Q3 2024 revenue was $1.8 million (+6.4% YoY), with gross profit of $1.1 million and gross margin of 60.2%.

• Net loss for Q3 2024 was $0.6 million, a significant improvement from a $3.5 million loss in Q3 2023.

• Adjusted EBITDA was $0.1 million, compared to a $2.5 million loss in the prior year period.

• Net income per Class A share was $0.00, versus a net loss of $1.31 per share in Q3 2023.

• Cash and cash equivalents were $0.8 million as of September 30, 2024, declining to $0.5 million by October 31, 2024.

Outlook and guidance

• Management expects continued net cash outflows and operating losses as investment in new titles continues.

• No forward-looking financial guidance provided for the period.

• Additional funding is required to support ongoing operations; strategic alternatives, asset sales, and cost reductions are being explored.

• Major Le Mans Ultimate update with GT3 cars is anticipated in the next month.