• Revenue (Q4 2024): $2.0 million, up 13% from the same period in the prior year.
• Net Loss (Q4 2024): $2.9 million, compared to net income of $2.7 million in the prior year.
• Adjusted EBITDA Loss (Q4 2024): $2.5 million, compared to an adjusted EBITDA of $0.4 million in the prior year.
• Full Year Revenue (2024): $8.7 million, up $1.8 million from the prior year.
• Full Year Net Loss (2024): $3.0 million, compared to $14.3 million in 2023.
• Adjusted EBITDA Loss (2024): $3.9 million, improved from $9.3 million in 2023.
• Net Cash Used in Operations (2024): Approximately $3.2 million, with an average monthly net cash burn of $0.3 million.
• Cash and Cash Equivalents (Dec 31, 2024): $0.9 million, increased to $1.2 million by February 28, 2025.
• Subscription Service Revenue (First 21 Days): Over $120,000 in gross revenues.
• Active Subscribers: Nearly 6,000 as of the latest update.

• Warning! GuruFocus has detected 3 Warning Signs with MSGM.

Release Date: March 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Le Mans Ultimate launched with strong potential and received positive feedback from consumers and industry influencers.
• Significant update to Le Mans Ultimate in December led to a surge in player numbers and positive reception.
• Organic growth achieved without investment in paid marketing, demonstrating strong word-of-mouth influence.
• Introduction of a subscription service via RaceControl.gg generated over $120,000 in gross revenues in the first 21 days.
• Settlement with Luminous improved financial position by $180,000 and resolved a long-standing issue.

Negative Points

• Net loss for the fourth quarter of 2024 was $2.9 million, a significant decrease compared to the prior year's net income.
• Adjusted EBITDA loss for the fourth quarter of 2024 was $2.5 million, compared to a positive adjusted EBITDA in the prior year.
• Cash position remains a concern with only $1.2 million as of February 28, 2025, insufficient to fund operations over the next year.
• Exploration of additional funding options indicates ongoing liquidity challenges.
• Net cash used in operations for 2024 was approximately $3.2 million, highlighting continued financial strain.

Q & A Highlights

Q: Can you provide an update on the financial performance for the fourth quarter and full year 2024? A: Stanley Beckley, Chief Financial Officer, reported that revenues for the fourth quarter were $2.0 million, a 13% increase compared to the same period last year, driven by higher digital game sales from the release of Le Mans Ultimate. However, the net loss for the quarter was $2.9 million, compared to a net income of $2.7 million in the prior year, primarily due to increased other expenses and the absence of a $3.0 million gain from a NASCAR license sale in 2023.

Q: How has the launch of Le Mans Ultimate impacted the company's performance? A: Stephen Hood, Chief Executive Officer, highlighted that Le Mans Ultimate has been positively received, with significant updates leading to increased player numbers and sales. The game has gained traction without paid marketing, relying on organic word of mouth. This success has improved the company's financial health and opened new opportunities for partnerships and potential console ports.

Q: What are the company's plans for future growth and development? A: Stephen Hood mentioned that Motorsport Games is exploring strategic alternatives, including potential equity and debt financing, as well as the sale or licensing of assets. The company is also focused on expanding its subscription service and exploring console ports for Le Mans Ultimate, driven by strong player demand.

Q: Can you elaborate on the company's liquidity position and cash flow management? A: Stanley Beckley stated that as of December 31, 2024, the company had $0.9 million in cash, which increased to $1.2 million by February 28, 2025. Despite a reduced average monthly cash burn, additional funding will be required to sustain operations over the next year. The company is actively exploring funding options to address this liquidity shortfall.

Q: What strategic initiatives have been implemented to improve the company's financial position? A: Stephen Hood noted that the company has undertaken cost reductions and restructuring initiatives, including headcount reductions and strategic licensing deals. Additionally, the recent settlement with Luminous and a favorable legal ruling have improved the financial position, reducing liabilities and enhancing stockholders' equity.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.