Motorsport Games Reports Fourth Quarter & Full Year 2024 Financial Results
MIAMI, March 20, 2025 (GLOBE NEWSWIRE) -- Motorsport Games Inc. (NASDAQ:MSGM) ("Motorsport Games" or "the Company") today reported financial results for its fourth quarter and fiscal year ended December 31, 2024. The Company has also posted the fourth quarter and fiscal year-end 2024 earnings slides highlighting key milestones that occurred during and subsequent to the period, which are accessible on the Company's investor relations website.
"2024 was a revitalizing year for the company with improved revenues, reduced cash burn and the release of our new title Le Mans Ultimate in Early Access," commented Stephen Hood, President and Chief Executive Officer of Motorsport Games.
"The most recent updates to the game in December 2024 and February 2025 delivered significant uplift to player numbers and consumer sentiment for the title. These releases included the popular LMGT3 category of cars from famous manufacturers such as Ferrari, McLaren and Porsche and were accompanied by noteworthy feature improvements including hosted servers and the release of a brand-new optional subscription service that out-of-the-gate performed above internal expectations, creating a new and valuable revenue stream for the company."
Hood continued, "These successes translate into the improved health of the company with revenue from greater sales across the product, downloadable content and the new subscription offering. The perception of the company, the game, and its potential has opened new conversations with potential partners, publishers or partners for projects such as console ports of Le Mans Ultimate or business investment."
Fourth Quarter 2024 and Subsequent Business Update
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Revenues of $2.0 million in Q4 2024 compared to revenues of $1.7 million in Q4 2023, an improvement of $0.3 million or 13%;
●
Net loss attributable to Class A common stock was $0.94 per share for the year ended December 31, 2024, compared to a net loss per share of $5.56 for the year ended December 31, 2023;
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Reached a milestone of 100,000 net unit sales of Le Mans Ultimate in Q4 2024, the official game of the FIA World Endurance Championship and the 24 Hours of Le Mans;
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Launched RaceControl's new subscription offering in December 2024 reflecting strong user engagement and demand for integrated services of this type; and
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In February 2025, released further updates to Le Mans Ultimate to further bolster content and the content available to players by adding three more LMGT3 category cars along with significant game play improvements.
Financial Results for the Three Months Ended December 31, 2024
Revenue for the fourth quarter of 2024 was $2.0 million compared to $1.7 million for the same period in the prior year, an increase of $0.3 million, or 13.0%. Gross profit was $0.9 million compared to $1.1 million for the same period in the prior year, a decrease of $0.2 million, while gross profit margin decreased to 45.8% from 61.4%.
Net loss for the fourth quarter of 2024 was $2.9 million, compared to net income of $2.7 million for the same period in the prior year, a decrease of $5.6 million. The increase in net loss is driven by an increase in other expenses of $2.2 million, which is primarily comprised of foreign currency losses incurred remeasuring transactions denominated in a currency other than U.S. dollars. Furthermore, in Q4 2023, other operating income included a $3.0 million gain related to the sale of our NASCAR License to iRacing in October 2023. Consequently, net loss attributable to Class A common stock was $0.89 per share for the fourth quarter of 2024, compared to net income of $0.97 for the same period in the prior year.
Adjusted EBITDA loss(1) for the fourth quarter of 2024 was $2.5 million, compared to Adjusted EBITDA(1) of $0.4 million for the same period in the prior year. The reasons for the decrease in Adjusted EBITDA are the same as those discussed in respect of the change in net income (loss) for the period and comparative quarter, as well as a decrease in stock-based compensation compared to the prior year period.
The following table provides a reconciliation from net loss to Adjusted EBITDA(1) for the fourth quarter of 2024 and 2023, respectively:
Three Months EndedDecember 31, 2024
Three Months EndedDecember 31, 2023
Net (Loss) Income
$
(2,879,131
)
$
2,671,021
Interest expense, net
30,277
98,929
Depreciation and amortization (1)
833,920
602,800
EBITDA
(2,014,934
)
3,372,750
Gain on sale of NASCAR License
(500,000
)
(3,037,341
)
Stock-based compensation
47,221
81,242
Adjusted EBITDA
$
(2,467,713
)
$
416,651
(1)
Includes $514,166 and $489,582 of amortization expenses included in cost of revenues for the three months ended December 31, 2024 and 2023, respectively.
Financial Results for the Year Ended December 31, 2024
Revenue for the full year 2024 was $8.7 million compared to $6.9 million for the prior year period, an increase of $1.8 million, or 25.7%. Gaming segment revenues represented 100% and 95.8% of the Company's total 2024 and 2023 revenues, respectively, increasing by $2.1 million, or 31.2%, when compared to the prior year. The increase in Gaming segment revenues was primarily due to $3.0 million in digital game and downloadable content sales relating to sales of Le Mans Ultimate released on PC in February 2024, offset by $0.5 million and $0.4 million in lower revenues for NASCAR and rFactor 2 titles, respectively. Esports segment revenues represented 0% and 4.2% of our total 2024 and 2023 revenues, respectively, decreasing by $0.3 million, or 100%, when compared to the prior year. The decrease in Esports segment revenue was due to us not organizing a Le Mans Virtual Series ("LMVS") event in 2024, resulting in no earned sponsorship or events revenue in 2024. Consolidated gross profit was $5.5 million for the full year 2024 compared to $3.3 million for the prior year period, an increase of $2.2 million, while gross profit margin increased to 62.9% from 47.6%.
Net loss for the full year 2024 was $3.0 million, or $0.94 per share, compared to a net loss of $14.3 million, or $5.56 per share, for the same period in the prior year, an improvement of $11.3 million, or $4.62 per share. Lower cost of goods sold and operating expenses were key contributors to the decrease in net loss for the full year 2024 when compared to the prior year period, partially offset by an increase in other operating income.
Adjusted EBITDA loss(1) was $3.9 million for the full year 2024, compared to Adjusted EBITDA loss(1) of $9.3 million for the same period in prior year, an improvement of $5.4 million. The decrease in Adjusted EBITDA loss(1) was primarily due to the same factors driving the previously discussed change in net loss for the full year 2024 when compared to the prior year period.
The following table provides a reconciliation from net loss to Adjusted EBITDA loss(1) for the fiscal years ended December 31, 2024 and 2023, respectively:
Twelve Months EndedDecember 31, 2024
Twelve Months EndedDecember 31, 2023
Net Loss
$
(3,048,071
)
$
(14,323,185
)
Interest expense, net
120,757
772,989
Depreciation and amortization (1)
2,589,437
2,115,430
EBITDA
(337,877
)
(11,434,766
)
Gain from settlement of license liabilities
(3,248,000
)
-
Loss contingency expenses
-
232,359
Impairment of intangible assets
-
4,004,627
Gain on ...
