Motorsport Games Inc. (NASDAQ: MSGM) delivered robust top-line growth in the second quarter of 2026, reporting revenues of $3.54 million, a 36.6% increase compared to $2.6 million in Q2 2025. The company’s quarterly earnings per share (EPS) came in at $0.08, beating the analyst consensus estimate of $0.06 by 33.33%. This result represents a significant improvement over the prior year’s GAAP net income, although the EPS figure reflects a 90.24% decrease from the $0.82 per share recorded in the same period last year.

The beat on both revenue and earnings highlights the company's operational strength despite the absence of non-recurring gains that inflated prior-year results. For the first half of the year, total revenues climbed to $7.6 million, representing a 74% surge from the $4.4 million recorded in the same period last year. CEO Stephen Hood noted that the company has now posted positive operating income for six consecutive quarters.

Revenue Drivers and Margin Expansion

The company’s growth was underpinned by strong performance in both its core title and its emerging platform business. Gross profit margin expanded significantly, rising to 84.7% in H1 2026 from 78.8% in the prior year period. This margin improvement occurred alongside an 86.9% increase in gross profit, which reached $6.4 million for the six months ended June 30, 2026.

Key operational highlights include:

• Le Mans Ultimate: The base game has sold over 500,000 units, with approximately 1.2 million individual downloadable content (DLC) pieces sold since launch. Version 1.4, released in July 2026, introduced Daytona and Laguna Seca circuits, driving the highest single-day revenues since the game’s Early Access launch. CEO Stephen Hood stated that April was the highest-ever month for average daily active users.
• RaceControl Platform: Subscription revenues for this player platform surged to approximately $1.4 million in H1 2026, up from $0.3 million in the prior year period—a 348.9% increase. As of June 30, 2026, RaceControl had more than 40,500 paid subscribers, reflecting organic growth of over 230% compared to June 2025. On a run-rate basis, RaceControl is now generating annual recurring revenue of approximately $2.9 million.

What the Numbers Show

A critical shift in Motorsport Games’ business model is visible in the revenue mix. RaceControl subscription revenues accounted for approximately 18% of total revenues in H1 2026, a substantial increase from just 7% in H1 2025 and less than 1% in full-year 2024. This indicates a successful transition from a one-time purchase model toward recurring revenue streams, supported by the platform’s materially better margin profile due to self-operated infrastructure.

The divergence between the GAAP EPS decline and the Non-GAAP beat underscores the impact of prior-year non-recurring items. While GAAP EPS fell 90.24% year-over-year due to the absence of a $2.3 million foreign exchange gain and a $0.8 million settlement gain from Wesco in Q2 2025, the Non-GAAP adjusted EPS of $0.19 still exceeded the market's expectation for core operational performance.

Leadership Changes and Capital Structure

Peter Hanson-Chambers joined as Chief Financial Officer effective July 1, 2026, bringing experience from Codemasters and Hutch. He emphasized the importance of cultural and strategic improvements. Additionally, the company completed the purchase of a significant amount of Class A common stock from Driven Lifestyle Group, which retired all outstanding Class B shares. Every outstanding share of common stock now carries equal voting rights.

Adjusted Metrics and Liquidity

On a Non-GAAP adjusted basis, diluted net income per share was $0.19 in Q2 2026, down from $0.25 in the prior year, largely due to increased development expenses nearly tripling year-over-year as the company invested in Le Mans Ultimate and RaceControl. However, for the six-month period, Non-GAAP Adjusted diluted net income per share rose to $0.33 from $0.24 in the prior year.

Adjusted EBITDA for Q2 2026 was $0.8 million, down from $1.4 million in Q2 2025, reflecting the absence of prior-year non-recurring gains and increased stock-based compensation. For H1 2026, Adjusted EBITDA improved to $2.2 million from $1.0 million.

Liquidity remains stable with working capital at $2.9 million as of June 30, 2026, up from $2.2 million a year earlier. The company held cash and cash equivalents of approximately $3.9 million and maintains a $3 million revolving line of credit with Citibank, N.A., of which $1.2 million was drawn as of the end of the quarter. In May 2026, Citibank extended the maturity of that facility to February 2028.

Motorsport Games Inc. (NASDAQ: MSGM), a racing game developer, publisher, and esports ecosystem provider, will report its financial results for the second quarter of 2026 on Friday, August 14, 2026, after market close. The announcement provides investors with an update on the company's operational and financial performance during the period. Management will host a conference call and webcast on the same day at 5:00 p.m. ET to discuss the results in detail.

Participants may access the webcast on the Company’s investor relations website at ir.motorsportgames.com under "Events." The webcast will be available live and remain accessible as a recording for 12 months following the date of the call. Alternatively, the call may be accessed live by dialing 1-800-420-1459 or 1-203-518-9861 and using Conference ID "MOTOR".

Company Overview

Motorsport Games 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. The company recently released Le Mans Ultimate Version 1.4, featuring new cars, updated content, and additional improvements. Motorsport Games also owns the industry-leading rFactor 2 and KartKraft simulation platforms.

rFactor 2 powers F1 Arcade through a partnership with Kindred Concepts. Additionally, Motorsport Games serves as an award-winning esports partner for the 24 Hours of Le Mans, creating the renowned Le Mans Virtual Series. The company aims to build a virtual racing ecosystem where each product drives excitement and every race inspires.

Investor Communication Channels

Investors and others should note that the Company announces material financial information using its investor relations website, SEC filings, press releases, public conference calls, and webcasts. The Company uses these channels, as well as social media and blogs, to communicate with its investors and the public. Information posted on these platforms could be deemed material.

The contents of these websites and social media channels are not part of, nor will they be incorporated by reference into, this press release. For more information about Motorsport Games, visit www.motorsportgames.com .