Motorsport Games Inc. Q4 FY2025 earnings call

• Stephen Hood noted record profitability with 30% year-over-year revenue growth, consistent positive quarterly cash flow, and improved cash position. • Le Mans Ultimate had five major updates in 2025, exited early access in July, introduced European Le Mans series content, version 1.2 with anti-cheat, driver badge system, Live Steward, Team Online Championships, and engineer mode. • Average concurrent players on Steam increased from ~796 in Jan 2025 to nearly 3,000 in Dec 2025, and to over 8,700 in Jan 2026. • Race Control is a key pillar, with over 400k registered accounts, ~26k active paying subscribers, and growing monthly recurring revenue. • Progress on bringing Le Mans Ultimate to consoles, with external partners working on console versions. • Actively recruiting marketing talent to raise awareness ahead of console launch. • Peter Hanson Chambers joined as consultant to shape next steps.

For the fourth quarter of 2025, revenues were $3.8 million, up 95% year-over-year. Higher digital game sales from Le Mans Ultimate and DLC were drivers. Net income for the quarter was $0.8 million vs. net loss of $2.9 million prior year. For full year 2025, revenues were $11.3 million, up 30% year-over-year. Primarily due to $5.8 million increase from Le Mans Ultimate sales (including DLC) and $1.2 million from Race Control, offset by $4.4 million decrease from NASCAR title sale. Net income was $6.8 million vs. net loss of $3.1 million prior year. Race Control had over 400,000 registered accounts, over 26,000 active paying subscribers, and ~$0.2 million monthly recurring revenue by end of 2025, with strong growth in first two months of 2026.

• No specific forward-looking guidance provided. • Focus on scaling the platform built, including expanding Le Mans Ultimate to consoles and exploring next product. • Race Control's monthly recurring revenue showing strong growth in first two months of 2026. • Expecting to continue building momentum through 2026 and beyond by scaling the established model.

Q: With development costs declining year over year, what's the main driver?

A: Capitalized ~$1.1 million of development costs for upgrades/enhancements to Le Mans Ultimate, released ~7 DLC packs since launch, and payroll costs down due to restructurings.

Q: How is AI driving development costs down and used?

A: AI is in development pipelines and products, used in rapid iteration to put out updates resonating with players, beneficial for driving creative advantage.

Q: Expectations for Le Mans Ultimate on PlayStation and Xbox?

A: Product on track, likely early to mid-2027 launch, addressable market huge as there's lack of high-end racing simulations on console, expected to impact revenue and margins positively.

Q: Customer acquisition cost and AI's role?

A: Very little marketing spend in past two years, growth organic. AI used in development and answering customer queries, leveraged for rapid iteration to bring more content to players.

Q: Continued growth of Le Mans and balance sheet?

A: LMU franchise made up for NASCAR license revenue loss, LMU revenues 78% of 2025 annual revenues vs. 34% prior year. Risk control subscriptions 11% of total revenues in 2025 vs. <1% prior year. Cash flow positive, generated average monthly positive cash flow of ~$0.3 million in 2025, cash and cash equivalents $6 million at end of Feb 2026, secured $3 million revolving line of credit from Citibank