"We are very pleased to report another quarter of strong financial performance, with revenues more than doubling year on year. The progress we have made in transforming this business is now visibly consistent. We have once again generated positive operating income, supported by the ongoing momentum of our Le Mans Ultimate title and the steady expansion of our RaceControl subscription platform," commented Stephen Hood, President and Chief Executive Officer of Motorsport Games.
"Player engagement with Le Mans Ultimate has continued to accelerate into 2026. In March, we recorded an all-time peak of more than 8,800 concurrent players upon the release of Version 1.3. This update introduced Circuit de Barcelona-Catalunya, the Duqueine D09 LMP3 race car, and Logitech Trueforce support, amongst other improvements, and has been particularly well received, reinforcing the consistent relentless cadence of meaningful improvements our community has come to expect from our development team. Within this release we also saw the fruit of some early console development improvements with a new user interface framework that is vital for release on these platforms."
"With the financial stability we have now established, we have begun to explore the next phase of growth for Motorsport Games. Le Mans Ultimate has demonstrated that our technology platform, our development approach and our community engagement strategy can deliver a profitable, scalable business, and we continue to work on plans to expand our portfolio, taking Le Mans Ultimate to console and future possible titles. Our recent share repurchase from Driven Lifestyle Group LLC is a direct reflection of how far the Company has come, our strengthened financial position has given us the ability to act, returning greater ownership and strategic influence to the Company and ultimately to the benefit of all shareholders."
First Quarter 2026 Highlights and Subsequent Business Update
●
Generated revenues of $4.0 million in Q1 2026 compared to $1.8 million in Q1 2025, an improvement of $2.3 million, or 129.3%.
●
Generated net income of $1.0 million in Q1 2026, in line with $1.0 million in Q1 2025. Q1 2025 net income included $0.5 million reimbursed to us for legal fees pursuant to the Innovate Settlement Agreement entered on March 27, 2025.
●
Net income attributable to Class A common stock was $0.06 per share in Q1 2026, compared to net income per share of $0.33 in Q1 2025.
●
Adjusted EBITDA of $1.5 million in Q1 2026, an improvement of $0.9 million, compared to $0.6 million in Q1 2025.
●
Released Le Mans Ultimate Version 1.3 in March 2026, introducing Circuit de Barcelona-Catalunya, the Duqueine D09 LMP3 race car, new track layouts, Logitech Trueforce support and performance improvements.
●
Secured a $3.0 million revolving line of credit with Citibank in February 2026 to support the Company's continued product investment and platform roadmap.
●
Entered into a Share Repurchase Agreement with Driven Lifestyle Group LLC on April 22, 2026, pursuant to which the Company purchased 904,395 shares of its Class A Common Stock and cancelled all outstanding shares of its Class B common stock.
Select Financial Highlights for the Three Months Ended March 31, 2026
Revenue for the first quarter of 2026 was approximately $4.0 million compared to approximately $1.8 million for the same period in the prior year, an increase of approximately $2.3 million, or 129.3%. Gross profit was $3.5 million compared to $1.3 million for the same period in the prior year, an increase of $2.2 million, while gross profit margin increased to 87.2% from 73.5%.
Net income for the first quarter of 2026 and 2025 was approximately $1.0 million, respectively. Net income attributable to Class A common stock was $0.06 per share for the first quarter of 2026, compared to net income per share of $0.33 for the same period in the prior year.
Adjusted EBITDA(1) for the first quarter of 2026 was $1.5 million, compared to Adjusted EBITDA(1) of $0.6 million for the same period in the prior year. The improvement in Adjusted EBITDA of $0.9 million was primarily due to the same factors driving the previously discussed change in net income for the first quarter of 2026 when compared to the same period in the prior year, as well as an increase in stock-based compensation compared to the prior year period.
The following table provides a reconciliation from net income to Adjusted EBITDA(1) for the first quarter of 2026 and 2025, respectively:
Three MonthsEndedMarch 31, 2026
Three MonthsEndedMarch 31, 2025
Net income
$
951,573
$
1,022,613
Interest expense, net
3,205
13,010
Depreciation and amortization (1)
176,049
252,057
EBITDA
1,130,827
1,287,680
Gain from settlement of purchase commitment liabilities
-
(175,460
)
Gain from Settlement Agreement
-
(500,000
)
Impairment of intangible assets
27,928
-
Stock-based compensation
375,031
-
Adjusted EBITDA
$
1,533,786
$
612,220
(1)
Includes $169,533 and $233,931 of amortization expenses included in cost of revenues for the three months ended March 31, 2026 and 2025, respectively.
Cash Flow and Liquidity
As of March 31, 2026, the Company had cash and cash equivalents of approximately $5.9 million, which decreased to $3.8 million as of April 2026, due to the Company's $3.7 million repurchase of its shares from Driven Lifestyle Group LLC on April 22, 2026, partially offset by a $1.2 million drawdown from a business loan agreement with Citibank, N.A. and cash inflows ...
