MIRAMAR, Fla., Aug. 14, 2026 (GLOBE NEWSWIRE) -- Motorsport Games Inc. (NASDAQ: MSGM) ("Motorsport Games" or "the Company") today reported financial results for its second quarter ended June 30, 2026. The Company has also posted second quarter 2026 earnings slides highlighting key milestones that occurred during and subsequent to the period, which are accessible on the Company's investor relations website.

"We are delighted to report a sixth consecutive quarter of profitability, with revenues for the first half of the year growing strongly against the same period last year," commented Stephen Hood, President and Chief Executive Officer of Motorsport Games. "What is particularly pleasing is that our gross margin has expanded alongside that growth. We are not simply growing, we are growing more efficiently, and we believe that is the clearest evidence yet that the transformation of this business is now consistent and repeatable."

"I am also delighted to share that we have now sold more than half a million units of the Le Mans Ultimate base game alongside more than 1.2 million individual pieces of downloadable content. Subsequent to the period, we released Version 1.4, bringing the Daytona and Laguna Seca circuits to Le Mans Ultimate and extending our content beyond the European racing world for the first time. The initial results of this expansion are very promising with the U.S. Track launch date reporting the highest single day revenues since the game's initial launch in Early Access."

Hood continued, "Furthermore, we believe RaceControl should now be recognized not as a feature that supports Le Mans Ultimate, but as a platform business in its own right. Mid-way through its second year, subscription growth has been substantial, it carries a materially better margin profile than our content business because it runs on infrastructure we operate ourselves, and it is embedded in the daily habits of every one of our players. RaceControl is now central to how we intend to grow, and we look forward to sharing further news on the next stage of growth for the platform on our next earnings call."

Second Quarter 2026 Highlights and Subsequent Business Update

During the second quarter of 2026, Motorsport Games continued to grow subscription revenue within its RaceControl platform while investing deliberately in the next phase of the Company's growth.

   -- Generated revenues of $3.5 million in Q2 2026 compared to $2.6 million in 
      Q2 2025, an increase of $0.9 million, or 36.6%; revenues for the six 
      months ended June 30, 2026 were $7.6 million, compared to $4.4 million 
      for the same period in 2025, an increase of $3.2 million or 74.0%. 
   -- RaceControl subscription revenues grew to approximately $1.4 million for 
      the six months ended June 30, 2026, up from approximately $0.3 million 
      for the same period in 2025, an increase of approximately 348.9%. 
      RaceControl is currently generating approximately $2.9 million in annual 
      recurring revenues, up from approximately $1.2 million for the full year 
      2025. As of June 30, 2026, RaceControl had more than 40,500 paid 
      subscribers, an increase of more than 230% compared to June 30, 2025, 
      achieved entirely through organic growth. 
   -- Gross profit margin for the six months ended June 30, 2026 increased to 
      84.7%, compared to 78.8% for the same period in 2025. 
   -- Non-GAAP Adjusted diluted net income per share(1) was $0.33 in H1 2026, 
      compared to $0.24 in H1 2025. 
   -- Released Le Mans Ultimate Version 1.4 in July 2026, featuring new 
      American track packs, including Daytona and Laguna Seca race circuits, 
      along with other game improvements. Le Mans Ultimate has now sold over 
      500,000 units of the base game and approximately 1.2 million individual 
      downloadable content (DLC) units since launch. 
   -- Achieved a new all-time peak of more than 8,800 concurrent players in 
      March 2026 following the release of Le Mans Ultimate Version 1.3 and 
      recorded its highest-ever month for average daily active users in April 
      2026. 
   -- Completed the repurchase of 904,395 shares of Class A Common Stock from 
      Driven Lifestyle Group LLC, resulting in the retirement of all 
      outstanding shares of Class B Common Stock and the elimination of 
      super-voting rights, simplifying the Company's capital structure and 
      establishing equal voting rights for all shareholders. 
   -- Peter Hansen-Chambers was appointed as the Company's Chief Financial 
      Officer effective July 1, 2026, as the Company works to expand its 
      product portfolio and diversify revenue lines beyond its existing titles. 

Select Financial Highlights for the Three Months Ended June 30, 2026

Revenues for the second quarter of 2026 were approximately $3.5 million compared to approximately $2.6 million for the same period in the prior year, an increase of approximately $0.9 million, or 36.6%. For the six months ended June 30, 2026, revenues were approximately $7.6 million compared to approximately $4.4 million for the same period in the prior year, an increase of approximately $3.2 million, or 74.0%. Gross profit for the second quarter of 2026 was $2.9 million compared to $2.1 million for the same period in the prior year, an increase of $0.8 million. For the six months ended June 30, 2026, gross profit was $6.4 million compared to $3.4 million for the same period in the prior year, an increase of approximately $3.0 million, or 86.9%, with gross profit margin achieving 84.7%, compared to 78.8% for the same period in the prior year. RaceControl, the Company's free-to-join player platform which offers premium subscription tiers, generated subscription revenues of approximately $1.4 million for the six months ended June 30, 2026, compared to approximately $0.3 million for the same period in the prior year, an increase of approximately 348.9%, and representing approximately 18.0% of the Company's total revenues for the six months ended June 30, 2026, compared to approximately 7% for the first half of 2025 and less than 1% for the full year 2024.

Net income for the second quarter of 2026 was approximately $0.2 million, compared to approximately $4.2 million for the same period in the prior year, representing the sixth consecutive quarter of positive net income. Q2 2025 net income is comprised of several non-recurring gains unrelated to our core operations, including $2.3 million in gains on foreign exchange rates and a $0.8 million gain from the Wesco Settlement Agreement, neither of which recurred in the current period. The Company also increased its investment in development during the second quarter of 2026, with development expenses nearly tripling year-over-year, primarily reflecting continued investment in growing Le Mans Ultimate and RaceControl with new content and features. On an adjusted basis, which management believes better reflects the Company's underlying operating performance, the Company remained profitable: Non-GAAP Adjusted diluted net income per share((1) was $0.19 in the second quarter of 2026, compared to $0.25 for the same period in the prior year. However, for the six months ended June 2026, Non-GAAP Adjusted diluted net income per share was $0.33 compared to $0.24 in the same prior year period. The Company's management believes that these six-month figures provide a more useful overview of the Company's recent performance given the non-recurring gains in Q2 2025 highlighted above.

Adjusted EBITDA((1) for the second quarter of 2026 was $0.8 million compared to Adjusted EBITDA((1) of $1.4 million for the same period in the prior year. The decrease in Adjusted EBITDA is primarily due to the same non-recurring gains, including discounts negotiated on a few outstanding vendor invoices in the prior year, as well as increased expenses this year resulting from the Company's increased investment in development during the current period, offset by an increase in stock-based compensation. Adjusted EBITDA for the six months ended June 2026 was $2.2 million compared to $1.0 million in the same prior year period, primarily driven by the increase in revenues between the two periods and growth in gross profit margin.

Cash Flow and Liquidity

During the six months ended June 30, 2026, the Company generated an average positive cash flow from operations of approximately $0.5 million per month, primarily due to increased profitability and the capitalization of internally-developed software. During the second quarter of 2026, the Company also completed the repurchase of 904,395 shares of its Class A Common Stock from Driven Lifestyle Group LLC, resulting in the retirement of all outstanding Class B Common Stock and establishing equal voting rights for all shareholders. Working capital as of June 30, 2026 was $2.9 million, compared to $2.2 million as of June 30, 2025. As of June 30, 2026, the Company had cash and cash equivalents of approximately $3.9 million. The Company maintains a $3 million revolving line of credit from Citibank, N.A., secured in February 2026 and extended in May 2026 to a maturity date of February 20, 2028, of which $1.2 million was drawn as of June 30, 2026.

((1) Use of Non-GAAP Financial Measures

Adjusted EBITDA and Non-GAAP Adjusted diluted net income per share (the "Non-GAAP Measures") are not financial measures defined by U.S. generally accepted accounting principles ("U.S. GAAP"). Reconciliations of these Non-GAAP Measures to net income and diluted net income per share, their most directly comparable financial measures, calculated and presented in accordance with U.S. GAAP, are presented in the Appendix to this press release.