Motorsport Games Reports Third Quarter 2026 Financial Results

(NASDAQ: MSGM) Motorsport Games Inc. reported financial results for its third quarter ended September 30, 2026. The company achieved its seventh consecutive quarter of profitability, with net income of $0.7 million in Q3 2026. Revenues for the third quarter were $3.8 million, up from $3.1 million in Q3 2025, an increase of $0.7 million or 21.8%. Revenues for the nine months ended September 30, 2026 were $11.3 million, compared to $7.4 million for the same period in 2025, an increase of $3.9 million or 52.3%, and slightly exceeding the company’s full-year 2025 revenues of $11.3 million. RaceControl subscription revenues grew to approximately $2.0 million for the nine months ended September 30, 2026, up from approximately $0.7 million for the same period in 2025, an increase of approximately 186.2%. RaceControl is currently on track to generate approximately $3.4 million in annual recurring revenues (ARR), up from approximately $2.9 million as of June 30, 2026. As of September 30, 2026, RaceControl had more than 45,000 paid subscribers, an increase of more than 157% compared to September 30, 2025. The company released Le Mans Ultimate Version 1.4 on July 28, 2026, featuring U.S. Track Pack 1, and Version 1.4.2 on September 22, 2026, featuring U.S. Track Pack 2. As of October 31, 2026, Le Mans Ultimate has sold over 2 million combined units of the base game and individual DLC units since launch. During a 24 Hours of Le Mans Special Event in October 2026, the game achieved a new all-time peak record of 11,941 concurrent players. Income from operations was $1.2 million in Q3 2026, compared to $0.8 million in Q3 2025, an increase of 52.4%. Gross profit margin for the third quarter of 2026 increased to 88.0%, compared to 80.7% for the same period in 2025. Gross profit margin for the nine months ended September 30, 2026 increased to 85.8%, compared to 79.6% for the same period in 2025. Adjusted EBITDA was $1.8 million in Q3 2026, compared to $1.0 million in Q3 2025, an increase of 75.7%. For the nine months ended September 30, 2026, Adjusted EBITDA was $4.0 million, compared to $2.0 million for the same period in 2025, an increase of 99.0%. Non-GAAP Adjusted diluted net income per share was $0.51 during the nine months ended September 30, 2026, compared to $0.45 during the same period in the prior year. Cash and cash equivalents were $5.4 million as of September 30, 2026, compared to $4.1 million a year earlier. Working capital was $4.2 million, compared to negative $2.2 million as of December 31, 2024. Deferred revenue was $1.6 million, the highest quarter-end balance since the company’s IPO. The company repurchased 904,395 shares of Class A Common Stock for $3.7 million in the second quarter of 2026. In August 2026, 414,747 shares of Class A Common Stock were issued upon the exercise of outstanding warrants, generating proceeds of approximately $0.9 million. The company capitalized $1.7 million of internally-developed software in the nine months ended September 30, 2026, compared to $0.7 million in the prior-year period. Development expense for the third quarter of 2026 was $0.1 million, compared to $0.4 million for the same period in the prior year, reflecting the recognition of approximately $0.69 million of UK Video Games Tax Relief. The company maintains a $3 million revolving line of credit from Citibank, N.A., of which $1.2 million was drawn as of September 30, 2026.