Can you discuss the growth trajectory of RaceControl's recurring revenue and current retention rates?

RaceControl has an annual recurring revenue run rate of $2.9 million, with a consistent attach rate to subscriptions. The company anticipates continued growth, noting a 349% year-on-year growth in H1 2026. Specific initiatives are in place to improve retention, which are currently working well. The focus is on keeping the game exciting with new content to encourage subscriptions. “At the moment, we've got a run rate of $2.9 million for the year. The attach rate to subscription seems to be relatively consistent, and we're able to forecast that relatively accurately. So we feel quite confident in its continued growth throughout the rest of the year.”

What are your key priorities in your new role as CFO?

The new CFO, Peter Hansen-Chambers, aims to help the company become a high-performing business, focusing on cultural aspects and ensuring the team has the energy and foundation for the next phase of growth. He believes the company has a great team and product but can achieve much more. “I think first and foremost, I think there's some aspects about sort of how we approach sort of culturally, I mean, ultimately, I want to achieve help us to become a high-performing business, and that's kind of multifaceted and probably require a lot longer to discuss.”

Can you discuss subscriber acquisition costs and the competitive environment?

The company currently acquires subscribers organically, resulting in very low costs and high margins. While paid acquisition might be explored in the future, the current focus is on converting existing RaceControl account holders into subscribers, as the value proposition is strong. The conversion rate is exceeding the traditional mobile free-to-play target of 5%. “I still think there's scope for us to further grow in terms of converting RaceControl account holders into subscribers. I think we believe the value proposition is strong enough -- and I think we have to experiment with our communication and probably test some things in terms of maybe the way that we package some subscriptions, incentives, et cetera, learning from other industries.”

MSGM

Motorsport Games (MSGM) Q2 FY26 earnings call: the analyst Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 14, 2026

Source: earnings call transcript

Executive summary

Motorsport Games Q2 FY26 — RaceControl Drives High-Margin Growth

Motorsport Games delivered a strong quarter, highlighted by the rapid growth of its RaceControl platform, which is emerging as a high-margin, recurring revenue stream. Le Mans Ultimate continues to drive player engagement and content sales, while console development progresses as planned. The company is focused on leveraging its ecosystem and technology to transition from a recovery phase to sustained long-term growth and shareholder value creation.

Highlights

First half revenue grew 74% year-on-year to $7.6 million.
Gross profit margin expanded to 84.7% in H1 2026, up from 78.8% a year ago.
RaceControl subscription revenue for H1 2026 was $1.4 million, up 349% year-on-year.
The company achieved positive GAAP net income for the sixth consecutive quarter, reaching $1.2 million in H1 2026.
RaceControl ended June with over 40,500 paid subscribers, an increase of more than 230% since June last year.

Concerns

Q2 2026 adjusted EBITDA was $0.8 million, down from $1.4 million in Q2 2025, primarily due to non-recurring gains in the prior year.
Q2 2026 adjusted diluted EPS was $0.19, down from $0.25 a year ago, influenced by the same non-recurring gains.

Product announcements

Product	Type	Timeline
Le Mans Ultimate U.S. Track Pack (Daytona and Laguna Seca)	launch	July (after Q2 end)
Le Mans Ultimate U.S. Track Pack 2 and 3	roadmap	September and December
New Game Title	roadmap	next earnings call

Deals & partnerships

Driven Lifestyle Group Purchase of Class A common stock and retirement of Class B shares. $3.7 million

Completed the purchase of a significant amount of Class A common stock from Driven Lifestyle Group, which retired all outstanding Class B shares, ensuring every outstanding share of common stock now carries equal voting rights.

Citibank Revolving credit facility. $3 million extended to February 2028

Secured a $3 million revolving credit facility from Citibank in February 2026, with $1.2 million drawn as of June 30, 2026. The maturity was extended to February 2028 in May 2026.

What to watch in Q3 FY26

RaceControl Growth and Retention

next quarter

Current Exceeding 5% conversion rate

Target Continued growth in subscribers and recurring revenue

Why it matters

RaceControl is a key driver of high-margin, recurring revenue and player lifetime value, central to the company's long-term strategy.

Yes, at the moment, we've got a run rate of $2.9 million for the year. The attach rate to subscription seems to be relatively consistent, and we're able to forecast that relatively accurately. So we feel quite confident in its continued growth throughout the rest of the year.

Find out whether MSGM delivers this. Inve re-checks your case every morning.

Q&A highlights

How is the first USA Track Pack trending, and what is the roadmap for additional content releases through 2027?

The first USA Track Pack has performed better than hoped, receiving a very good community reaction. Two additional content packs are planned for release later in the year (September and December). The company is actively exploring content for 2027 and will share more on a new title in the next earnings call.

“Yes, I mean, so far, we've seen a very good reaction from our community to that release. It, in fact, has been performing better than we had hoped, which is good. It's been a strong initial release.”

asked by Unknown Analyst · answered by Peter Hansen-Chambers

2 min read 6 chapters

Detailed narrative

RaceControl Platform Evolution

RaceControl is increasingly central to Motorsport Games' strategy, offering a free-to-join player platform with premium subscription tiers. This SaaS model enables direct player relationships, promotes new content, and converts engaged players into subscribers, expanding the experience and increasing player monetization.

RaceControl's high-margin recurring revenue and ability to increase player lifetime value (LTV) are key strategic advantages, with the company continuing to invest in its growth and engagement.

Le Mans Ultimate Performance & Content Roadmap

Le Mans Ultimate continues to be a primary growth engine, with player engagement accelerating. April marked the highest-ever month for average daily active users. The game has sold over 0.5 million base units and more than 1.2 million individual pieces of downloadable content (DLC).

Post-quarter-end, the company released the U.S. Track Pack (version 1.4) in July, adding Daytona and Laguna Seca, with Packs 2 and 3 expected in September and December, respectively. The company is exploring future content for 2027 and plans to share details on a new title in the next earnings call.

Console Development Progress

Development of Le Mans Ultimate for PlayStation and Xbox platforms is proceeding as planned. This initiative aims to bring a high-fidelity simulation experience to the home console market, widening the company's reach to an underserved segment of players who may not have access to high-end gaming PCs. The learnings from this complex project are expected to benefit future releases and contribute to the company's growth.

Financial Performance & Efficiency

The company has demonstrated consistent revenue growth and gross profit margin expansion over the past 3.5 years, indicating efficient scaling. First half 2026 revenue was $7.6 million, up 74% year-on-year, with gross profit growing 86.9% to $6.4 million. Gross profit margin expanded to 84.7%.

The company achieved positive GAAP net income for the sixth consecutive quarter, reporting $1.2 million in H1 2026, and adjusted EBITDA of $2.2 million for H1 2026, more than double the prior year.

Capital Structure & Leadership

Motorsport Games completed the purchase of $3.7 million in Class A common stock from Driven Lifestyle Group, retiring all outstanding Class B shares and simplifying its capital structure to ensure equal voting rights for all common stock. Peter Hansen-Chambers joined as Chief Financial Officer, bringing extensive experience from other gaming companies.

Stanley Beckley continues as Chief Accounting and Compliance Officer, reflecting an expansion of the finance team to support the company's growth trajectory.

Strategic Vision

The company is increasingly focused on its next stage of growth, leveraging its simulation technology, RaceControl platform, live service infrastructure, and the success of Le Mans Ultimate. Management views Motorsport Games as a boutique game studio building an entire ecosystem for racing and driving fans, with long-term bets paying off and foundations in place to deliver on its roadmap.

Further details on this roadmap are anticipated in the next earnings call.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.